This question comes up in almost every conversation about tax reform. More importantly, it deserves a serious and fact-based answer.

Schools would not suddenly disappear. However, policymakers would need to change how they fund them.

First, we need to understand how the current system works. Then we can evaluate what alternatives might look like.

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Start With the Accounting

Before proposing new taxes, we should examine the money that already exists in the system.

Recent financial reports show that Ohio school districts collectively hold about $10.5 billion in carryover or surplus balances statewide.

Naturally, those numbers raise several important questions.

For example:

• How much of that money is legally restricted?
• How much serves as operating reserves versus capital reserves?
• How much varies between wealthy and under-funded districts?
• Do districts request new levies while large balances remain unused?

Without clear, district-by-district transparency, the public cannot properly evaluate claims about financial need.

Therefore, transparency should come first. Policy decisions should follow.

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How Schools Are Already Funded

Property taxes represent only one piece of the education funding system.

In reality, Ohio schools receive money from several different sources.

These include:

• State foundation funding
• Federal programs such as Title funding and special education
• Ohio Lottery profits
• Local income taxes in some districts
• Bond issues for capital improvements
• Voter-approved operating levies

Because these revenue streams already exist, the debate should not focus on whether schools would have funding.

Instead, the real question is how that funding should be structured fairly.

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What Happens to Schools if Property Taxes Disappear?

When people ask what happens to schools, the discussion often turns emotional. However, the core issue involves funding structure, not the existence of education itself.

In other words, removing property taxes does not eliminate schools. Instead, it forces policymakers to choose a different funding model.

That reality raises several policy questions.

For example:

• Should school funding depend on rising home values?
• Should seniors on fixed incomes face the risk of losing their homes to support school funding?
• Should governments provide financial transparency before requesting additional taxes?

Education clearly matters. Strong schools benefit communities, families, and local economies.

However, accountability and transparency matter as well.

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Possible Alternatives to Property Tax Funding

If lawmakers removed property taxes from school funding, they would need to replace that revenue through other methods.

Several possible models exist.

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Consumption-Based Funding

First, policymakers could increase the statewide sales tax or create a dedicated consumption tax for education.

Advantages

• Broad tax base
• Visitors contribute
• Revenue grows alongside economic activity

Potential concerns

However, sales taxes can place a heavier burden on lower-income households.

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Income-Based School Funding

Another option relies more heavily on income-based school funding.

Under this model, districts could expand school income taxes or implement a statewide education income tax.

Advantages

• Connects taxes to ability to pay
• Removes dependence on property values

Potential concerns

Meanwhile, income tax revenue can fluctuate when employment levels change.

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Flat Per-Parcel or Education Service Fee

Another alternative would replace value-based property taxes with a flat education service fee per household or occupied property.

Advantages

• Removes dependence on inflated home values
• Creates predictable funding levels

Potential concerns

However, some critics argue this approach could raise equity concerns for lower-income homeowners.

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Hybrid School Funding Model

Finally, policymakers could combine several funding methods into a hybrid system.

For example, a hybrid model could include:

• State funding as the primary source
• Local voter-approved levies that do not rely on property values
• Allocations based on enrollment or student population

Under this structure, funding shifts away from home valuation and toward the number of students schools actually serve.

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What Happens to School Levies and Bonds?

Today, most local school funding depends on property valuation.

For example:

• Operating levies typically rely on property millage rates.
• Bond issues for construction depend on assessed property values.

If policymakers eliminated property taxes, they could redesign these levies in several ways.

Possible alternatives include:

• Income-based levies
• Sales-tax add-ons dedicated to schools
• Flat per-household education fees
• Commercial activity taxes or business-based funding

Each option would require careful policy design and voter approval.

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The Real Policy Question

Ultimately, the question is not simply what happens to schools if property taxes disappear.

Schools will continue to operate. Communities will still fund education.

Instead, the real policy debate centers on this question:

Should education funding depend on the market value of someone’s home — or on the actual cost of educating students?

That decision will shape the future of school funding policy.