Cuyahoga County school districts could lose nearly $111 million in state funding if Ohio eliminates its personal income tax without finding replacement revenue, according to a new policy analysis. Cleveland City School District alone stands to lose an estimated $67.7 million, or 9.2% of its operating revenue for the 2025-2026 school year, under the proposal pushed by Republican gubernatorial candidate Vivek Ramaswamy. The findings come from a report examining what elimination of the tax would mean for schools across the state.
The analysis was published by Innovation Ohio and Ohioans United for Public Education, two groups that, as Cleveland.com reports, oppose Ramaswamy in the governor's race. Ramaswamy wants to eliminate the Ohio income tax but has shared few details about how he would accomplish it, according to the same report. Innovation Ohio spokesperson Caitlin Johnson said the income tax provides 21% of revenue in the state's General Revenue Fund, which in turn funds school foundation payments to all 600 of Ohio's school districts — a distribution process defined under Ohio Revised Code. The Ohio Legislature describes the fund as drawing unrestricted revenue from the personal income tax, sales tax and other sources.
Which Districts Would Feel It Most
Report authors say income tax elimination could cause steep decreases in local school district operating revenues if the state finds no replacement funds. Beyond Cleveland's projected $67.7 million loss and 21% cut in state funding, Lorain City School District could lose $14 million, or 14.3% of operating revenue, alongside its own 21% state funding cut. Painesville City School District could lose $6.4 million, equal to 16.3% of operating revenue, while also facing a 21% cut in school foundation funding.
Maple Heights City School District could lose $6.2 million, or 11.7% of operating revenue, and East Cleveland City School District could lose $6 million, or 13.2%. Brunswick City School District's estimated loss is $5.8 million, or 6.1%, while Olmsted Falls City School District could lose $2.9 million, or 5.5%. Fairport Harbor Exempted Village School District could lose $1.2 million, amounting to 12.2% of its budget. Outside Cuyahoga County, Steubenville City School District could lose 17.1% of revenue, or just over $6 million, without replacement income tax revenue.
Wealthier suburban districts would see smaller percentage hits, the report notes, because they receive relatively low state funding to begin with. Rocky River could lose $763,472, just 1.5% of district operating revenues, and Cleveland Heights-University Heights could lose 2.2% of operating revenues. The analysis states that wealthier districts would be hit least because Ohio's school funding scheme already expects them to rely on local property taxes for most school funding, while lower-income rural areas could be affected most because they depend more heavily on state school funding.
Statewide Numbers and a Disputed Total
Statewide Numbers and a Disputed Total Across Ohio's public school system, the report projects roughly $2.4 billion in cuts to total funding for Ohio's public school system, nearly 10% of total school funding. Replacing that estimated $2.4 billion reduction locally would require an approximately 20% statewide increase in property taxes, the report found, while covering the full roughly $9.8 billion in lost income-tax revenue primarily through sales tax could require statewide sales-tax collections to rise by about 65%. Innovation Ohio and Ohioans United for Public Education have published school-cut data for all 600 Ohio school districts online.
Ramaswamy's campaign website says income tax elimination would occur in phases, beginning with capital-gains taxes, and the candidate has argued that lower taxes would grow businesses and generate revenue to replace what's lost. Speaking with statenews.org, Ramaswamy said a first step of a few hundred million dollars is achievable in 2027, calling it the start of a longer path toward zero income tax over 10 years or sooner. The outlet also reported that neither gubernatorial campaign has given a firm answer on how it would pay for its proposed tax plans.
Waste, Fraud, and a Familiar Local Government Playbook
Ramaswamy has also championed cutting government waste and fraud as a potential source of school revenue, backing national and state Republican efforts to root out fraud in Ohio Medicaid. According to the report, alleged Medicaid fraud uncovered so far has amounted to mostly small sums, with most cases under $10,000. Caitlin Johnson said she was skeptical that any such new revenue would actually reach classrooms.
The report also points to history: the John Kasich administration cut state contributions to the Local Government Fund, resulting in numerous cuts at the local level, and Ohio cities have been unable to restore that support despite years of effort. If state revenue isn't added, districts may need to ask voters for new levies or cut educators, classroom materials, extracurriculars and other items, the analysis warns.
Evan Machan criticized Cleveland.com and The Plain Dealer for what he called carrying water for Democrats, and said Ramaswamy wants to return more dollars to classrooms, cut bureaucratic waste and raise standards. Rob McFee countered that educators are already doing more with less, criticizing Republican tax breaks and private-school assistance. Michael McGovern said Ramaswamy's agenda would severely harm public schools and that his tax plan would shift resources from children to the wealthy.
A Cautionary Tale From Kansas
A Cautionary Tale From Kansas In Kansas, income-tax cuts were followed by revenue shortfalls, school funding reductions and higher sales taxes; the cuts were repealed in 2017.
Ohio's income tax currently generates roughly $10 billion annually, accounting for nearly one-quarter of the state's operating revenue, and is projected to raise $9.82 billion in fiscal year 2027 — 21% of the General Revenue Fund and 33% of state-source tax revenue. Replacing that money through growth alone would require roughly a 34% increase in total state tax collections, according to the analysis.
Painesville's Own Ballot Fight
Painesville's Own Ballot Fight The funding pressure isn't hypothetical for every district. Painesville City School District voters will decide Nov. 3 whether to approve a new continuous 1.25% earned income tax for current expenses, according to the News-Herald. The district's financial forecast currently projects a negative cash balance by the start of fiscal year 2029 if the levy doesn't pass. Painesville has already reported spending cuts exceeding $4 million between last year and this year while facing rising operating costs and state funding reductions — a preview, critics of the income-tax elimination plan argue, of what more districts statewide could face without replacement revenue. Ohio's governor's race is scheduled for Nov. 3, 2026.
