If efforts to abolish property taxes in Ohio are successful, townships may have only one option to continue funding services: become cities.
Townships are mostly funded by property taxes — about 66% — according to the Ohio Township Association. They use those taxes to pay for services like police and firefighters, road and cemetery maintenance, and waste disposal.
As a city or municipality, those governments could impose income taxes on residents to fund those services instead.
«This whole thing of just doing away with property taxes without (coming up with a way) to supplement what you’re taking away is just insane,» said Randy Gonzalez, a former longtime Jackson Township fiscal officer and trustee. «What would happen to these townships? They would literally have to file bankruptcy.»
Gonzalez was once a major proponent of Jackson Township — a community of about 43,000 people — becoming a city in the early 1990s when he was a township trustee so the community could adopt income taxes. But he now opposes incorporation because of the bureaucracy he believes it would create.
A constitutional amendment to abolish property taxes could appear on the November ballot if the grassroots group pushing the effort collects the necessary 413,000 signatures.
But the debate, spurred by soaring property taxes in recent years, has prompted fear for townships and schools, and a new bill from state Rep. David Thomas, R-Jefferson and state Rep. Adam Matthews, R-Lebanon. The legislation would eliminate the requirement that townships get the support of nearby cities to become cities and leave it solely for the township’s voters to decide whether to incorporate.
Townships are eligible to become cities if they meet certain population, density, size and property tax criteria set by the state. Under this bill, townships, of which there are about 1,308 statewide today, would need at least 5,000 residents to incorporate as a city, and at least 1,000 people per square mile.
In the most recent example of a nearby township becoming a city, Green Township in southern Summit County, voted to merge with Green Village in 1991, and became the City of Green the following year.
«Some townships may want to streamline and lower the threshold to incorporate into cities, especially in light of the proposed referendum to abolish property taxes,» state Sen. Jane Timken, R-Jackson Township, said in a statement. «Incorporating to a city has challenges as well. In the legislature, we have to be willing to come up with solutions to help solve the problem. I am happy to work with our local townships on a solution.»
State Rep. Jim Thomas, R-Jackson Township, a former Jackson Township trustee, wrote in a text message that he is not familiar with the process by which townships can become cities. And that he would have to look into the proposed bill.
«My hope is that the constitutional amendment to abolish property taxes in Ohio will fail,» he wrote. «Many important items are funded by property taxes including schools, police and fire, libraries, etc.»