DeWine study: Ramaswamy’s tax promise could mean new taxes on groceries and health care

Vivek Ramaswamy has spent his campaign telling Ohioans that lower taxes will put more money back in their pockets. When he launched his campaign for governor in February 2025, he went much further than promising ordinary property-tax relief: he said Ohio should bring property taxes down “immediately — eventually down to zero.”

But a February analysis prepared for Republican Gov. Mike DeWine by the Ohio Office of Budget and Management shows just how expensive that promise could become for the same families it was supposed to help.

OBM estimated that replacing the revenue lost from abolishing local property taxes through the state sales tax could require a rate approaching 15% to 18%. To keep the rate from climbing quite that high, the office said Ohio could instead broaden the sales-tax base to include food, health care or other goods and services that are currently exempt.

That means a policy sold as a massive tax cut for homeowners could force state leaders into a different choice: impose historically high sales taxes on Ohio consumers, begin taxing necessities the state currently exempts, or allow deep cuts to the local services property taxes now support.

There is an important qualification. The OBM memorandum was written to analyze a separate citizen-led constitutional amendment that would abolish property taxes statewide. It was not commissioned as an analysis of Ramaswamy’s campaign platform, and Ramaswamy has not proposed a grocery tax or a tax on prescription medicine.

But the fiscal problem OBM examined is directly relevant to the promise Ramaswamy chose to make: eliminating property taxes. At his official campaign launch, Ramaswamy said, “We need to bring down property taxes in this state immediately, eventually down to zero,” according to the Statehouse News Bureau. The ballot amendment and Ramaswamy’s campaign rhetoric were not identical proposals, but they shared the same basic endpoint for real-property taxpayers — taking the tax to zero.

More than $20 billion has to come from somewhere

Ohio does not levy a statewide property tax. Property taxes are collected locally by counties and other political subdivisions and are a major source of funding for schools, police and fire departments, EMS, libraries, services for seniors and people with disabilities, and other local government operations.

OBM told DeWine that property taxes, including real property and public-utility personal-property taxes, generate about $24 billion a year for local governments across Ohio — roughly equal to the revenue Ohio receives from its state income and sales taxes combined. The memo said replacing another $20 billion or more if local property-tax revenue were abolished would be “fiscally impractical and economically harmful.”

The scale of the problem is what turns Ramaswamy’s original promise from an anti-tax slogan into a much harder governing question. Eliminating a tax does not eliminate the schools, sheriff’s deputies, firefighters, ambulances, libraries and local services it pays for. Unless those services are cut, the money has to be collected somewhere else.

OBM examined what that could look like.

A 15% to 18% state sales tax

Ohio’s state sales-tax rate is currently 5.75%. OBM, after consulting with the Ohio Department of Taxation, estimated that replacing local property-tax revenue through the sales tax could require the state rate to approach 15% to 18% — a level the agency said would be significantly higher than any other state.

The DeWine administration warned that rates that high could push consumers, particularly in border counties, to shop outside Ohio and could damage local businesses. DeWine himself was even more direct, telling reporters that replacing the lost money could push sales taxes into the high teens and calling the result “absolutely devastating,” according to the Statehouse News Bureau.

For working Ohioans, the practical effect would be difficult to miss. A household that received property-tax relief could face a much larger tax bill every time it bought taxable goods. Renters, who do not receive a property-tax bill directly, would also pay the higher sales tax.

And because Ramaswamy has separately continued to advocate for phasing out Ohio’s state income tax, replacing lost property-tax collections with higher income taxes would run directly against another signature piece of his agenda. OBM estimated that an income-tax replacement could require statewide rates of roughly 11% to 15%.

Groceries and health care could enter the tax base

The other option identified by OBM is even more politically explosive. Rather than allowing the sales-tax rate itself to rise all the way toward 15% to 18%, state lawmakers could collect money from purchases that Ohio currently chooses not to tax.

“To moderate the potential rate increase, the sales tax base could be broadened to tax food, healthcare, or other goods or services that are currently exempt,” the OBM analysis states.

Under current Ohio law, food purchased for human consumption off the premises where it is sold — ordinary groceries taken home from a store — is exempt from the state sales tax. The law also exempts prescription drugs, insulin and a range of prescribed medical equipment and supplies.

OBM did not say lawmakers would necessarily choose to tax all of those items, and it did not spell out exactly which health-care purchases would be included in a broader tax base. The memo identified taxing food and health care as possible ways to raise more money and reduce the otherwise enormous sales-tax rate required to replace property-tax revenue.

That is still a striking consequence of the zero-property-tax idea. Ramaswamy’s pitch was that Ohioans should keep more of their money because “it is your money, not the government’s.” The DeWine administration’s analysis shows that taking one major tax to zero without eliminating the public costs it finances could simply move the tax collector from the homeowner’s mailbox to the grocery checkout line, the pharmacy counter and countless other purchases.

The other choice: cut police, fire and schools

If Ohio abolished property taxes and did not replace the money with another major tax, OBM said the consequences would be severe.

Property taxes account for about 65% of local tax revenue in Ohio, according to the memo. Roughly three-fifths of property-tax revenue supports local school districts. OBM warned that abolition without replacement would force schools to lay off personnel, increase class sizes, close schools and cut programs.

For police, fire and EMS, the agency forecast station closures — especially in smaller communities and townships — along with dramatically reduced staffing and slower emergency response times.

The memo’s conclusion used language more commonly associated with partisan campaign attacks than state budget documents: eliminating local property taxes without replacing the revenue would “quite literally ‘defund’ the police” as well as fire departments, schools, libraries, senior centers and other local services.

That warning is especially uncomfortable for Ramaswamy, whose current campaign platform also promises to “crush crime” and support law enforcement. His own campaign plan calls for lower taxes while promising stronger public safety. OBM’s analysis demonstrates the financial collision that occurs if property-tax cuts are taken far enough without a credible replacement source.

Ramaswamy has backed away from zero

Ramaswamy no longer campaigns on abolishing property taxes outright.

By February, the Statehouse News Bureau reported that he had backed away from elimination and was instead promising “the biggest property tax rollback in the history of our state.” In July, he made the change explicit when questioned about how local services would be funded, saying he wanted to roll property taxes back to pre-pandemic levels — “not eliminate them, OK?” — according to the Ohio Capital Journal.

There is no evidence that the OBM memo caused that retreat. Ramaswamy had already begun softening his position before the February analysis, and his current proposal is materially different from complete abolition.

His campaign now says he would roll property-tax levels back to where they were before the end of the COVID-19 pandemic. The campaign says existing debt obligations would be honored, new construction would not be affected and local governments would continue to operate “with greater discipline.” A March campaign ad also promised the rollback while maintaining strong education and dependable police and fire services.

What the campaign’s published property-tax plan does not provide is a statewide dollar figure for the revenue that would disappear under the rollback or a detailed replacement mechanism showing how every affected school district and local government would be made whole. Ramaswamy has argued that economic growth can provide additional revenue and a financial cushion to protect important local services.

That leaves the underlying question raised by the DeWine analysis unresolved even after Ramaswamy abandoned the zero-tax endpoint: if Columbus orders a major reduction in local property-tax collections while promising that police, fire and schools will remain protected, what pays for the difference?

Property-tax relief is real. So is the bill.

Ohio’s property-tax problem is not imaginary. Homeowners in communities across the state have faced steep increases as property values have risen, and there is broad bipartisan pressure for relief. The choice is not between accepting every existing property-tax increase and abolishing the tax altogether.

But the DeWine administration’s analysis puts a price tag on the kind of sweeping promise Ramaswamy used to launch his campaign. More than $20 billion in annual local revenue cannot disappear without consequences. Either government spends dramatically less, another tax rises, the tax base expands, or some combination of all three occurs.

That is also why the possibility of taxing groceries and health care cannot fairly be described as Ramaswamy’s own proposal. It is not. It is one of the potential consequences Ohio’s budget office identified when calculating how the state could replace the revenue from the policy endpoint Ramaswamy himself once promised.

Ramaswamy has now moved away from that endpoint. But the episode exposes the weakness in the original pitch: he offered Ohioans the politically irresistible half of the equation — a tax bill heading toward zero — without showing them the other half.

DeWine’s budget office did.

The money does not simply disappear with the property tax. Under the state’s analysis, Ohio families could end up paying it somewhere else — potentially through dramatically higher sales taxes or new taxes on necessities that are exempt today.

Related: Ramaswamy’s property tax plan risks 50,000 teacher jobs.