Demolish any proposal making it harder to amend constitution
There are many compelling reasons Ohioans should demolish any proposal to make it harder for them to amend their state constitution. The most logical and hard-headed: Maintaining their ability to influence how they are taxed.
Since the 1850s, not including bond issues, Ohioans have decided more than 40 tax-related proposals to amend the state constitution. Since 1912, all have been decided by simple majority vote.
The most significant, in terms of creating a more equitable tax system, were approved with less than 60 percent of the vote. Among them:
On Sept. 3, 1912, by a 52-48 vote, Ohioans approved an amendment authorizing a state income tax. Its strongest supporters were farmers and other rural landowners worried about a growing state placing too much dependence on real estate taxes.
On Nov. 7, 1933, during the Great Depression, Ohioans approved an initiative long revered by fiscal conservatives — a 10-mill limit on unvoted property taxes. It got 59.7% of the vote.
On Nov. 4, 1980, Ohioans approved an amendment authorizing the legislature to classify property into two categories for tax purposes – residential/agricultural and all others. This was essential to correct a complex formula that overtaxed residential/agricultural real estate and undertaxed tangible personal property. It got 53% of the vote.
Secretary of State Frank LaRose and 36 Republican state lawmakers want to require all future proposed amendments to the constitution to obtain 60% of the vote to win passage.
Such a high barrier would make it extremely difficult for Ohioans to hold state lawmakers accountable on tax policy.
As of 2020, Ohioans paid about $18 billion annually in real estate taxes, $15.2 billion in state and county sales taxes, and $10.6 billion in state income taxes. State lawmakers also set the rules for administration of municipal income taxes, which total about $6 billion.
Over the last two decades, Republican legislative majorities have whittled away at the state income tax and greatly expanded reliance on sales taxes. The result has been a massive shift of the tax burden from the richest Ohioans to the middle class.
For example, in 2013 the legislature decided owners of limited liability companies, “S corporations,” partnerships and other pass-through entities will pay no income tax on their first $250,000 of income.
The Ohio Department of Taxation’s 2022 annual report shows that, for 2019, there were 280,840 state tax returns filed by those reporting incomes of $200,001 or more. Their effective tax rate: 1.39%.
In contrast, there were 1,523,682 returns filed by those reporting incomes between $40,001 and $80,000. Their effective tax rate: 1.7%.
The message from Ohio’s lawmakers: We believe middle-income construction workers, nurses, teachers, and truck drivers should pay a higher tax rate than affluent, self-employed accountants, lawyers and lobbyists who structure their businesses as pass-through entities.
Now Statehouse Republicans are talking about more reductions in the state income tax, or perhaps eliminating it altogether. That would shift even more of the tax burden from the wealthiest to the middle class, putting increasing pressure on real estate and sales taxes.
While chopping income taxes, lawmakers in 2013 increased the state sales tax to 5.75%. All 88 counties also levy permissive piggyback sales taxes. The most common combined rate, in 53 counties, is 7.25%. Cuyahoga County levies the highest rate — 8%.
For three decades, lawmakers also have been stealthily and steadily expanding the sales tax base to include more and more services.
Given these trends, why would Ohio’s citizens decide to disarm themselves of their ability to effectively utilize their 111-year-old right to initiate amendments and pass them by a simple majority vote?
Over the decades, from time to time, Ohioans have decided to use their constitutional rights of direct democracy to make major and minor course corrections on tax policy, overriding a General Assembly too beholden to monied interests.
It’s highly unlikely Ohio’s pragmatic electorate will choose to forfeit that power.
Mike Curtin is a former Columbus Dispatch editor and associate publisher, two-term state lawmaker and former member of the Ohio Constitutional Modernization Commission.