Mike DeWine Creates a Faux Property Tax Reform Group As Ohio Continues To Fall Behind
DeWine should correct his oversight and appoint several outsiders to represent the interests of homeowners and businesses. He won’t, but he should.
The latest private sector job date from the U.S. Bureau of Labor Statistics (BLS) indicates that Ohio’s unemployment rate is 4.9%, which is the 4th highest rate in America. Ohio’s unemployment rate has jumped 0.6-points over the last year, which also is the 4th highest jump in America. Only the District of Columbia, Nevada, California, and Michigan have higher unemployment rates. Right-to-work neighbors Indiana, West Virginia, and Kentucky all saw their unemployment rates get BETTER over the last year, as forced unionization states Pennsylvania, Michigan, and Ohio got WORSE. Ask yourself what other policy difference explains why the three former states are doing better than the three latter states?
Politicians love to cite Ohio’s “record low unemployment rate” based on looking JUST at Ohio’s current rate versus Ohio’s historical rates, but that approach is a fairly dishonest way to look at the issue. A more honest approach is to compare how Ohio is doing versus the other forty-nine states and D.C., especially states in our region. If other states are doing better, than arguably Ohio has work to do. With the 4th highest unemployment rate, Ohio clearly has serious work to do.
As you know, it isn’t just Ohio’s high unemployment rate that shows things are working right. The two graphics below show that Ohio is perpetually lagging behind most of the other states. The first graphic shows Ohio’s private sector job growth since 1990 compared to other forced unionization states and to right-to-work states. As you can see, Ohio’s growth is roughly half of the other forced unionization states and nearly one-fourth the rate of right-to-work states. That is thirty-fives years of losing, my friends.
The second graphic shows the net percentage job growth since the pandemic in February 2020. After eight years of John Kasich’s policies plus another six-and-a-half years of Mike DeWine’s policies all backed by a supermajority Republican legislature and the allegedly magical JobsOhio economic development entity, one would expect Ohio would have exited the pandemic far stronger than most other states, especially states controlled by the Left. Unfortunately, Ohio continues to fall behind when it comes to private sector job growth with a bottom third ranking of 35th at just 2.2% net growth over five-and-a-half years. Speaking of JobsOhio, Intel announced yet another delay of the Licking County facility. Word on the street is that Intel is slowing things down in the hopes it finds a buyer of the facility. If it doesn’t find a buyer, Intel will shut Ohio down like it did the new facilities it was building in Poland and Germany, thereby shifting its focus to Oregon and Arizona. I think it is safe to say that Intel is yet another JobsOhio failure.
One area connected to job growth that needs improvement involves broad tax reform. While Ohio’s state income tax is fairly competitive with states that have an income tax, when it comes to combined state and local sales taxes, Ohio’s 7.3% rate comes in as the 21st highest in America. However, the effective sales tax rate on median U.S. household income in Ohio is 12.75%, which is the 9th highest in the United States. In terms of property taxes, Ohio’s $2,823 median property tax ranks as the 19th highest in America. Thus, when combining Ohio’s state and local income taxes plus Ohio’s state and local sales taxes plus Ohio’s local property taxes, the overall burden is high compared to other states. It is no surprise that Ohio isn’t deemed a place to grow a business or a family due to its overall tax burden and its pro-union laws.
These disadvantageous positions are why Ohio isn’t attracting Gen Z college graduates as well as other states. Believe it or not, Akron is Ohio’s highest ranked city for Gen Z at 45th, with “booming” Columbus next at 55th, Cincinnati at 60th, Dayton at 65th, Cleveland at 74th, and Youngstown at 107th. I've previously discussed how Ohio lost on net over 700,000 Ohioans ages 10 to 54 from 2000 to 2020 when those up-and-coming workers and existing workers fled to other, more prosperous states. The next census will tell us if that brain drain continued into the 2020s. We do know Ohio’s population is barely growing, with a majority of counties losing population and jobs.
In terms of property tax reform, as reported last week:
Ohio Gov. Mike DeWine on Monday announced the 11 members who will serve on a Property Tax Reform Working Group he’s forming to recommend ways to provide relief to homeowners and businesses while ensuring schools, police and other local services remain funded.
In addition to working group co-chairs Bill Seitz, a former state legislator, and Pat Tiberi, a former Columbus-area congressman who serves as president and CEO of the Ohio Business Roundtable, its members will include:
Krista Bohn, Allen County Treasurer
Chris Galloway, Lake County Auditor
Matt Nolan, Warren County Auditor
Steve Patterson, Mayor of Athens
Dr. John Marschhausen, Superintendent of Dublin City Schools
Stephanie Starcher, Superintendent of Fort Frye Local Schools
Denise Driehaus, Hamilton County Commissioner
Gary Scherer, Pickaway County Commissioner
Jeff Chattin, Pike County Commissioner
Its first meeting will be held on Thursday. DeWine wants the working group to issue a report with concrete proposals by September 30.
So, to summarize, DeWine appoints a group to guide Ohio on property tax reform comprised of nothing but former and current government workers with not ONE property tax reformer, homeowner advocate, or tax policy expert like me or O2 Visiting Fellow Mary McCleary (or anyone at the Buckeye Institute). We call such a commission a faux commission aimed at arriving at a pre-determined “solution” that isn’t a solution, but a faux solution aimed at maintaining the status quo. Hat tip to subscriber Chuck for flagging this story for me.
As long-time followers know, I have long-served as the lone voice in Ohio advocating for local tax reform. In my run for Ohio governor in 2023, I included local tax reform as a core item in my agenda. There is a simple reality when it comes to local taxes: if you refuse to deal with the ever-rising personnel costs (pay, health care, and pension contributions) of local government workers, especially teachers and administrators, the only other way to control costs is to consolidate local governments to reduce the head count costs related to running government. With personnel costs swallowing 90% or more of local taxes collected, nothing else really matters. Thus, you are left with eliminating positions that are unnecessary.
As I have said, with a majority of counties losing population over the last two decades, it makes sense to consolidate Ohio’s eighty-eight counties and 600+ school districts by eliminating some county commissions, boards of education, and support staff. If you consolidate where it makes sense, you can slow the increases required to fund the rest of local government. Property taxes bring in over $19 billion. Ohioans aren’t going to eliminate that source of revenue and replace it with what would be America’s highest local sales tax rate given Ohio’s already high state and local sales tax rate. Ohioans, however, would consolidate administrative entities if it put a cap on or greatly slowed future tax increases. DeWine’s "working group” members are the very type of people who would be eliminated under a consolidation approach. Don’t expect them to advocate for such a common sense idea. The status quo is funding their gold-plated government benefits, especially those very generous government pensions. To be clear, we don’t need to eliminate counties or schools—just consolidate three county commissions or school boards down to one tri-county commission or tri-school board, with the unnecessary commissioners/school board members, their staffs, their buildings, their pensions, health care costs, and other costs being eliminated.
The bottom line is DeWine should correct his oversight and appoint several outsiders to represent the interests of homeowners and businesses. He won’t, but he should.
P.S. The graphic below is an EXCELLENT example of meaningless journalism. The Wall Street Journal contained this graphic focused on rent housing subsidies. The graphic measures the raw number of subsidies in each state, highlighting the states with the most subsidies. Not surprisingly, the graphic shows that nine of the eleven most populous states also have the highest usage of federal rental housing subsidies. It is a meaningless graphic. A proper apples-to-apples comparison across the state would have normalized for population differences to find out which states use federal rental housing subsidies the most AFTER ADJUSTING FOR POPULATION, as we do every month for out various private sector job graphics (see graphs mentioned above).
