Ohio’s Property Tax Repeal Could Mean a 20% Sales Tax, DeWine Warns

If Ohio voters abolish property taxes this November, as some grassroots organizers are pushing for, Gov. Mike DeWine says the replacement could come straight out of the checkout line. 

Referencing an Ohio Office of Budget Management (OBM) analysis, DeWine told reporters last week that sales tax rates would need to reach almost 20% to fill the gap left by the lost revenue from property taxes.

“It would be devastating for Ohio families,” he said.

The warning lands as grassroots campaigns in the state push a proposed constitutional amendment that would eliminate taxes on real property and bar any future version of them.

Organizers say the effort is a response to sticker-shock reassessments across the state. But the new memo suggests repeal would blow a $24 billion hole in local government budgets, jeopardizing funding for schools, police and fire departments, libraries, parks, and senior services unless lawmakers find a replacement on an unprecedented scale.

The memo’s bottom line: a $24 billion annual hole

An early-February memo from Ohio’s OBM puts a hard number on what property tax abolition would erase: roughly $24 billion a year from taxes on real property and public utility personal property. 

The memo frames that as a budget-scale loss, about on par with what the state collects from income and sales taxes combined.

“If that [abolition] were to happen, it would create an immediate and severe crisis,” DeWine told Ohio Township officials at the Winter Conference General Session in early February. “Many local services that depend on property tax funding would disappear almost overnight.”

And that overnight transformation would be huge. The memo estimates that local property taxes account for about 65% of local tax revenue in Ohio.

“No one likes paying taxes, but some taxes are necessary to maintain essential services,” DeWine continued. “Eliminating property taxes would also mean a loss of local control. Today, voters can approve or reject levies in their communities. If funding shifted entirely to the state level, that local authority would largely disappear.”

The replacement reality

And even if Ohio wanted to backfill local budgets quickly, the memo argues there’s no easy swap available.

Ohio already reimburses local governments for revenue lost to homestead exemptions for seniors and residents with disabilities, along with tax credits for residential homeowners. Those reimbursements cost the state more than $2 billion a year, making the prospect of finding tens of billions more to replace property taxes a fundamentally different order of problem.

For another, property taxes offer some of the most stable, predictable revenue to local governments. This is a fact that DeWine is hitting hard in his outreach to townships.

“Property taxes are relatively predictable unlike income and sales taxes which fluctuate more with economic conditions. These fluctuations make budgeting for public services more uncertain,” DeWine said.

That stability is part of what makes replacement so fraught. The OBM estimates that if Ohio tried to plug the hole primarily through sales taxes, the statewide rate would need to rise to roughly 15% to 18%. 

The memo warns that jumps of that magnitude could change consumer behavior, driving tax avoidance and pushing spending across state lines, ultimately undermining the very revenue the state would be counting on.

“Such astronomical increases would drive citizens and businesses to tax avoidance, pushing consumer spending out of state especially in border counties, harming small businesses and local economies,” the memo warns.

To blunt the size of a rate hike, the memo says lawmakers could broaden what the sales tax applies to, potentially taxing categories that are currently exempt, including food, health care, or other goods and services. But it cautions that base-broadening would require major statutory changes and, in some cases, constitutional changes.

If lawmakers leaned instead on income taxes, the memo estimates the necessary increase would be roughly 11% to 15% statewide. And if the burden shifted to the county level, some jurisdictions could require increases as steep as 27%—a shift that would move Ohio from a low-tax outlier toward the upper tier of income-tax states.

How rising assessments turned into an abolition campaign

With no easy replacement on the table, the key question is why the abolition movement has gained so much traction anyway. The answer, in Ohio, starts with reassessments and the sticker shock that followed.

Under a quirk of Ohio law, counties conduct a full reappraisal every six years. That time frame typically shields homeowners from regular increases, but the 2024 round—which landed squarely after pandemic-era run-ups in home prices—triggered residential values to jump by more than 30% in some areas, setting the stage for steep tax increases.

The backlash was swift. Beth Blackmarr, media representative for Citizens for Property Tax Reform, the grassroots group leading the abolition push, told Realtor.com® in May 2025 that some longtime homeowners were suddenly facing property tax bills higher than their original mortgage payment. 

Blackmarr said she “hit the floor” when her own notice arrived. Her home’s assessed value had climbed 51.9%, bringing what she described as a massive tax hike.

State leaders have tried to respond. Lawmakers passed additional relief measures in 2025, and DeWine has argued recent changes should help smooth out the worst spikes. But organizers say the fixes don’t go far enough, and they’re still pressing for a constitutional amendment that would abolish taxes on real property and prohibit any future version of them.

DeWine is warning that if voters take that leap, Ohio could face a cascading local funding crisis.

“If that passed, it would just be devastating to all kinds of local governments, starting with schools but also police and fire and we would be in a huge crisis in the state of Ohio,” DeWine said.

But the movement has remained undeterred. After missing the deadline in 2025, organizers are working to gather and submit 600,000 signatures by July 1 to make the November ballot.