It’s time for a new solution, rather than asking taxpayers to support a school levy.
When school levy campaigns come around, supporters often claim that passing levies will boost property values. “It’s an investment in your home,” they say. “Good schools mean higher property values.” But what if the opposite is true? What if adding new levies on top of already-high property taxes actually drives people away and causes communities to decline economically?
Recent events in Ohio have revealed a serious flaw in the “levies increase property values” argument—and the truth should worry every homeowner and taxpayer.
The Property Value Myth
Let’s address the elephant in the room: property values in Ohio have increased significantly due to county reassessments. The higher property values had nothing to do with school levies. County auditors across the state revalued properties based on market conditions, neighborhood trends, and actual sales data. Home values rose because of market forces, not because voters approved of a school levy.
This shows that property values increase regardless of school levies. In fact, those reassessments have made it more difficult for schools to pass levies—in the November 2024 election, only 51% of tax questions passed compared to 70% the year before. When property values grow naturally and property taxes go up as a result, voters are less inclined to approve additional taxes.
The research that supporters cite weakens their own argument. Studies showing a “$20 return for every dollar spent” usually measure the connection between state aid (which doesn’t raise local taxes) and property values, not local levies. In other words, the increase in value came from lower local taxes, not higher ones. One study explicitly noted that housing values rose partly because state aid allowed districts to cut local property taxes.
The Real Impact: Higher Taxes Drive People Out
Here’s what levy supporters don’t tell you: High property taxes are causing residents to leave communities now. By 2025, extremely high property taxes in cities around the country are prompting internal migration as retirees and others move to more affordable places.
This results in what economists call a “death spiral,” and it’s especially damaging when it unfolds quickly. Think about what happens when county reassessments sharply raise property taxes, followed just a few months later by a new permanent levy that adds another layer of taxation.
The Affordability Crisis Cascade:
- Reassessment dramatically increases property taxes based on higher home values
- A new levy passes, adding another tax burden just months later
- Fixed income and moderate-income residents can no longer afford their homes
- Those who can afford to leave do so, taking their income and spending power with them
- Those who can’t afford to leave become “tax-trapped” in homes with declining property values
- The commercial tax base suffers as residential income declines and consumer spending drops
- Empty storefronts appear as businesses lose customers and close their doors
- The city enters economic decline with a shrinking tax base
- Schools eventually need another levy to maintain revenue, restarting the entire cycle
The Tax Base Erosion Cycle
Once this spiral begins, it’s incredibly difficult to stop. Here’s how the cycle perpetuates itself:
- Higher taxes cause mobile residents to leave the community.
- Property values decline and the tax base shrinks.
- The school district needs to levy more taxes to maintain the same revenue.
- More people leave, and the cycle repeats itself.
This isn’t just theory. Research shows that property taxes directly affect property prices. If property tax rates are high, buyers will pay less. If taxes are low, they will pay more. Higher property tax burdens make homes less affordable for buyers, which lowers sale prices and causes a downward spiral in property values.
Who Gets Hurt the Most?
The people who suffer most in this scenario are those who can least afford it:
- Retirees on fixed incomes who have paid off their mortgages now face tax bills they simply cannot afford. They’re forced to choose between leaving the community they’ve lived in for decades or struggling to pay ever-increasing taxes.
- Working families who are already stretched thin face the prospect of paying hundreds more per month in property taxes. For many, this tips the balance from “barely manageable” to “we have to move.”
- Lower-income residents often become trapped. They can’t afford to move, but they also can’t afford to stay. Their property values decline, they fall behind on taxes, and they end up in financial distress.
Meanwhile, higher-income, more mobile residents leave first because they have the resources to relocate. This creates a community with a declining average income, less consumer spending, and a weakening economy.
The Commercial Consequences
As residential property owners face difficulties and some leave, local businesses begin to suffer. Consumer spending drops, foot traffic declines, and revenue diminishes. Ultimately, businesses shut down, leaving empty storefronts that further reduce property values and make the community less appealing to prospective new residents.
This commercial decline then reduces the tax base even further, putting more pressure on residential property owners to make up the shortfall. The death spiral accelerates.
Questions To Consider
Before automatically supporting new levies, communities should ask:
- Have property tax revenues already increased substantially due to reassessment?
- Are we at risk of pricing fixed-income residents out of their homes?
- What is the cumulative tax burden when we add this levy to recent reassessment increases?
- Are there alternative funding mechanisms that don’t rely solely on residential property taxes?
- What is our plan if the tax burden drives residents and businesses away?
The Bottom Line
The claim that school levies boost property values is not backed by evidence, especially regarding local levies. Often that claim is false. Property values rise because of market dynamics, desirable locations, and economic growth. Levies only add to the tax burden, and when that burden becomes too heavy, it pushes people away.
We’ve already seen property values rise sharply through reassessment, showing that levies aren’t needed for property value growth. Now, adding permanent new levies on top of those increases risks causing an economic downturn that could keep our community in decline for years. It’s time for an honest conversation about sustainable school funding that doesn’t rely on continuously increasing the tax burden on homeowners who are already struggling with the highest property tax bills they’ve ever seen. Our community’s economic future may depend on it.