COLUMBUS, Ohio (WCMH) -- Ohio Senators made several changes to the state’s two-year, $60 billion spending bill on Tuesday afternoon.
Ohio Gov. Mike DeWine introduced an executive budget at the start of the year, which became House Bill 96. The House worked on it, made changes and passed it in April. Since then, the Senate has been hearing testimony on different aspects of the proposal; Tuesday marked the Senate’s first round of changes, with another likely coming next week.
After that, Senate and House members will have until the end of June to come to an agreement on the multi-billion-dollar spending bill.
Some of the Senate’s key changes target property tax relief, school funding, Cleveland Browns stadium funding, and iGaming.
Income Tax Cuts and Property Tax Relief
Ohio Senators added a provision in the budget to create a flat income tax rate. If passed, the flat income tax rate of 2.75% would become effective starting in tax year 2026.
Right now, income tax rates are in three brackets. This is the second budget in a row to change the state’s income tax structure.
“We are going to continue down that path and finally get to a flat income tax rate here in the state of Ohio,” Senate President Rob McColley (R-Lima) said.
The income tax debate has long been had at the Ohio Statehouse, with some even proposing eliminating the tax completely.
On the property tax front, Ohio Senate leaders increased a budget carry-over cap for public school districts to 50% as a way to provide Ohioans property tax relief.
“However, there is going to be an ability for school districts to go over and above and beyond that 50% cap, put money into a capital fund that they can use for maintenance of their buildings, they can use for debt service, they can use for a variety of things,” McColley said.
This is how it works: if the school district you are living in carries over more than 50% of its budget from year to year, then the excess money will go back to homeowners in a new form of property tax relief. This is estimated to help Ohioans in 292 of the state’s 600+ districts.
The Ohio House first added this provision to the budget, but House leaders initially wanted the cap to sit at 30%.
While Democratic leaders in the Senate said 30% is certainly better than 50%, Ranking Member of Senate Finance Paula Hicks-Hudson (D-Toledo) said too many school districts have urged lawmakers “not to impose any cap.” Senate Minority Leader Nickie Antonio (D-Lakewood) added that this is the legislature “micromanaging” school districts and punting the responsibility of property tax relief off to public schools.
There is another form of property tax relief in the budget, through an expansion of the homestead exemption program. Homestead exemption decreases the total taxable amount of someone’s home. If the Senate budget passes as written, the reduction amount goes from $28,000 to $32,000 and increases the income threshold to qualify from $40,000 to $42,500.
“We are taking steps to reduce this trauma that higher valuations are causing,” Ohio Senate Finance Chair Jerry Cirino (R-Kirtland) said.
School Funding
Public school funding is also a big piece of the budget. Senators decided to reimplement what has become known as the “fair school funding plan” after House members stripped it, calling it unsustainable.
“That was something that many of our members of our caucus thought was important, they felt it was a deal we entered into years ago and we owed it to the communities to continue with the implementation,” McColley said.
In the Senate’s plan, K-12 public schools in the state will see an increase in funding of more than $600 million over the next two years.
“There are districts that will get less as they did in 2025, but no one will get less as they did in 2021, as the fair school funding plan was meant to do,” Cirino said.
The fair school funding plan was created back in 2021 to be phased in over three budget cycles.
Antonio said the Senate bill is following some of the ideas of fair school funding plan, “but it is very much manipulated.”
Cleveland Browns and iGaming
The Cleveland Browns asked lawmakers for money for a new stadium early on in the process. Senate members gave the greenlight for a $600 million to the Browns through the use of unclaimed funds.
The state has $3.7 billion in unclaimed funds. Cirino said $1.7 billion of that will be taken out now, to be used for stadium and other development/culture projects. Out of that $1.7 billion will come the $600 million for the Cleveland Browns.
Cirino said the funds will only be removed if and put into that pot of money if they have not been claimed for ten years. About $100 million gets added into unclaimed funds each year, so Cirino said this will always be solvent.
“With the addition coming in every year, we’ll be able to support other projects going forward in the state,” Cirino said. “What this does is it takes idle money and puts it to work.”
The Browns will still need to make an investment in order to get that money – a deposit of $50 million to start as well as a $50 million line of credit in case it is needed to make up for lost costs.
As for something that did not make the cut: iGaming. Lawmakers have been working on a proposal to legalize iGaming in the state. Despite work in both chambers, no proposal ended up in this version of the budget. Still, McColley said it is not completely out of the picture.
“No expansion of gambling is in the bill; it remains to be seen whether it will be put in the budget at all,” he said. “We would rather take the time to get this right if we are going to do it at all. It’s obviously a big policy shift. We don’t need [to legalize iGaming] to balance our budget as it currently stands, so I wouldn’t view [this] as an indication one way or another, other than we need more time.”
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