Ohio Local Government Property Tax Revenues Analysis

Local Government Tax Revenues Legislative Budget Office lsc.ohio.gov lsc.ohio.gov

Property tax revenues reach new high in 2022 Net Property Taxes Collectible by Property Type Net property taxes collectible for tax year (TY) 2022 reached an all-time high of $19.5 billion, an increase of 3.2% ($612 million) from 2021, which was the previous peak year. From 2010 to 2022, net taxes collectible on real property rose 33.8%, while taxes on tangible personal property (TPP) increased 197%. The TPP growth was related to new gas pipelines placed into service in Ohio, largely due to shale drilling. The TPP tax has largely been phased out, and now only public utilities, including certain pipeline operators, are subject to the tax. Property taxes in Ohio primarily fund local governments, with a small portion retained by the state to cover tax administration costs. About three-fifths of the property tax revenue is allocated to school districts. $25 $20 $2.3 $2.2 $2.1 $2.0 $1.5 $1.3 $15 $1.3 $1.1 $1.0 $0.9 Billions $0.9 $0.8 $0.8 $10 $12.8 $12.9 $13.0 $13.4 $13.7 $13.9 $14.4 $14.8 $15.3 $15.6$16.2 $16.7 $17.2 $5 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Sources: Ohio Department of Taxation; Legislative Service Commission Real Tangible Personal lsc.ohio.gov lsc.ohio.gov Legislative Budget Office

Ohios local governments rely heavily on property taxes Ohio s Local Tax Revenue by Source, FY 2021 In FY 2021, local tax revenue in Ohio totaled $27.94 billion, an increase of $1.42 billion (5.4%) from FY 2020. Property taxes collected in FY 2021 accounted for $18.26 billion. Individual and corporate income taxes were $6.22 billion. Sales and use taxes provided $2.76 billion. Other taxes generated $0.71 billion. Sales and Use Taxes 9.9% Income Taxes 22.3% Total: $27.94 billion Other Taxes 2.5% Property Taxes 65.3% Source: U.S. Census Bureau s Annual Survey of Local Government Finances lsc.ohio.gov lsc.ohio.gov Legislative Budget Office

Local tax revenue growth averaged 2.8% per year from 2010 to 2021 Ohio s Local Tax Revenue Growth, FY 2010-FY 2021 7.0% 6.0% 5.4% 5.1% 4.6% 5.0% 3.6% 3.6% 3.4% 4.0% 3.0% 2.3% 2.1% 2.1% 1.8% 2.0% 1.0% 0.0% -0.2% -1.0% -0.8% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: U.S. Census Bureau s Annual Survey of Local Government Finances Between FY 2010 and FY 2021, total local tax revenue grew at an average annual rate of 2.8%. Growth rates varied annually, with a notable decrease of 0.2% in FY 2019 and significant increases of 4.6% in FY 2020 and 5.4% in FY 2021. Apart from the decline in FY 2019, local tax revenue generally experienced modest growth since FY 2011. During this period, revenue growth was fastest in the sales and use taxes category, averaging 3.2% per year, followed by property taxes at 2.8% annually. Income taxes grew at an average rate of 2.7% per year, while other taxes increased by 1.1% annually. lsc.ohio.gov lsc.ohio.gov Legislative Budget Office