Op-ed: Let’s Talk About…Spending
BY LIZZIE MARGOLIUS
In part one of this series, we went into detail about the various forms of taxes and taxes specific to Ohio. In part two, we are going to talk about state and local spending.
This past summer, the Ohio General Assembly passed its largest budget to date of $65.8 billion for a two-year period. That’s a 6% growth of the previous budget and a 37% growth in ten years. While overall spending is up, spending per capita is also up at 34%. The state of Ohio ranks 43rd in the nation for population growth rate, meaning 42 other states are growing their populations at a faster pace than Ohio. Ohio has grown half a percent or less each year since 2000, apart from 2020 where we gained 0.88%, and 2021 where we lost 0.27%.
By 2050 Ohio is projected to lose almost 6% of its population due to mortality and fertility declines, along with changes in migration patterns. Much of that loss (86%) will come from ages 64 and below, meaning Ohio will be depopulating and growing older, so less of our state population will be of prime earning years to pay into Ohio’s tax system, placing an even bigger burden on those in the state who have income, or pay various taxes like property taxes.
Within Ohio itself, 68 of our 88 counties are experiencing population loss. There are only 20 counties in Ohio that are growing in population, most of which surround the Columbus area (plus a few in the southwest and northeast). Athens County saw the largest percentage loss of 6% and Cuyahoga County saw the largest population loss of almost 27,000 people. Ohio is in trouble, as a majority of Ohio continues to decline in population, revenue, and jobs, while drug overdoses have become all too prevalent, making us the 7th highest in the nation for drug overdose deaths. Ohioans who live in the 20 counties that are growing are going to continue to see an increase in cost of living as people flock to those counties for jobs, housing, and resources driving further demand.
With our state budget growing, and our population not keeping pace, you might be wondering where the money is being spent. About 70% of our state dollars are spent on Medicaid and education (both higher education and K-12) and almost 17% goes to state employee payroll and operating expenses. Thanks to Kasich, who expanded Medicaid under Obamacare, Medicaid has now grown 65% ($4 billion) in the last ten years. Medicaid is eating up most of our state taxes and is also the reason why the state budget keeps ballooning year after year.
At the local level about 55% of local spending goes towards education and administration. 10% goes towards social services and another 10% goes towards housing and environment (whatever that means). Local tax revenue, on average, is increasing 3% or more each year. Property tax revenue, which makes up most of local tax revenue, increased 34% from 2010-2022 (recent 2023-2025 data has not yet been released by Legislative services commission). About 60-65% of property taxes (varies by county and district) go to the local school district. In my case 20% of my taxes go to the township, 12% to the county, 5% to the city and the rest to various services.
Unfortunately, there are many people who do not understand that levies are tied to their property taxes. I’ve knocked on hundreds of doors and spoken to thousands of people across Ohio who do not understand that when they voted “yes” for a levy, they were increasing (for the most part) their property taxes. There are over 7 different types of levies, some are fixed and don’t increase with your property value, some go down as your property value goes up, and others are tied directly to your property value, so as your home value goes up, the levy goes up in equal proportion. Along with not understanding how levies work, many people don’t understand how much they pay in property taxes. When the monthly mortgage and taxes automatically come out of your account, it’s very easy to overlook how much your monthly bill is made up of taxes vs. principal vs. interest.
Since most of your state and local spending is spent on schools, it’s time to focus on school spending. 80% of school spending in Ohio goes towards salaries and benefits. Ohio spends 49% more on administrative costs in education than the national average. Ohio ranks 47th in the nation on spending that goes to instruction and 9th in the nation on spending that goes to administration. On average, each school district in Ohio (over 600 districts) has 3 administrators making $100,000+/year. In Ohio, administration has grown 87% since 2010, but school enrollment has declined 10%. Teachers account for only 45% of full-time school workers.
“Public school spending has steadily increased over the past 20 years, outpacing inflation, and nearly doubling from $13 billion in 2000 to $25.8 billion in 2022. This increase is largely due to higher spending on salaries and benefits. Enrollment in public schools has also declined, resulting in a higher per-student spending.” – Ohio Auditor of State, Keith Faber.
Average per-student spending in Ohio in 2024 was $18,000, a 30% increase in five years. K-12 education costs $230,000, but by 8th grade only 32% of students are proficient in math and reading.
Not only are administrative costs increasing without positively impacting student performance, but about 25% of our school superintendents are collecting a paycheck and a pension at the same time. The practice known as “retire, rehire” is a legal loophole that encourages this practice by not penalizing people who retire and go back to work within 30 days. The Ohio legislature has yet to successfully close that loophole. Double dipping of pension funds costs Ohioans $1 billion annually.
Loopholes are legal, but costly and Ohio would be well served to pass some hearty legislation that closes them. With all these facts, it’s not hard to see that Ohio is in dire shape with declining county populations, increased spending, and little to show for it in the way of making Ohio a more prosperous state.
In our third and final article of the series, we will talk about practical solutions to fixing Ohio’s tax and spending problems. It won’t be easy, and at times, it may even be painful, but it’s necessary to make Ohio fiscally strong and give Ohioans, across the state, financial peace.
