COLUMBUS, Ohio (WCMH) -- Ohio lawmakers sent the state’s $60 billion operating budget to the governor’s desk on Wednesday.
The budget bill spends billions of dollars, creates tax cuts and includes policy items. Gov. Mike DeWine does have the authority to line item veto any provision in the budget.
The budget passed on party lines without any Democratic support. Senate Democratic Leader Nickie J. Antonio (D-Lakewood) said it's the first time since 2001 that all Senate Democrats voted against the state operating budget.
Here are some highlights.
Tax cuts
One of the focal points of the budget debate has been an income tax cut. It phases the state income tax down to a flat tax over two years. The state income tax reduction is estimated to save Ohioans who make over $100,000 about $1.7 billion.
“The house is agreeing with the Senate to rescind a lot of small income and sales tax exemptions,” Ohio House Finance Chair Brian Stewart (R-Ashville) said. “Individually, it's not that much money at issue, but when you put them all cumulatively together, it’s a sizable amount of money that we’re going to return to the state.”
“[Republicans] are choosing to serve a sliver of the state and it’s the sliver that needs the least support,” Ohio House Minority Leader Dani Isaacsohn (D-Cincinnati) said. “And so, it is possible to have a bipartisan budget if we serve the majority of the people in Ohio. But when we serve such a small sliver of the state, it lends itself to a partisan line vote."
The budget will phase down the state income tax to the flat rate of 2.75% over two years. For tax year 2025, it reduces the top bracket from 3.5% to 3.125%. For tax year 2026, everyone reaches the 2.75% rate.
Lawmakers have been at odds about property tax relief during this budget cycle too. The budget creates a “carry-over cap” for school districts. Under the bill, schools can only carry over 40% of their budget, otherwise it will be returned to the property tax payer. It is estimated to save property owners billions of dollars. Isaacsohn called it “fake property tax relief.”
“What we need is real property tax relief where the state shoulders the burden. The state is the entity that can afford to the provide the relief, the responsibility should be on the state,” he said. “So, any policy or proposal that doesn’t have the state providing direct tax relief to the people of Ohio is just not going to cut it.”
“I think people lose track of the fact that state government gets zero dollars in property taxes,” Stewart said. “And so, when we’re trying to talk about where relief is going to come from, it’s going to come from the local level.”
Some spending items
While the budget makes cuts, it also spends big.
For example, the budget spends $53,600,000 in both fiscal year 2026 and 2027 on the H2Ohio program. The program was created by DeWine’s administration and is run by three state agencies to achieve one goal: ensuring Ohioans have access to clean and safe water. The governor was asking for more money in the program, but lawmakers fell short of appropriating that extra money.
“This has been a program that we believe is, is, is very important. Clean water in the state of Ohio is essential to us,” DeWine said. “H2Ohio has been expanded beyond a focus on Lake Erie, continues to have a major focus on Lake Erie, but it also has a focus on all clean water throughout the state. If you look at the big picture about water, you certainly have to have to include the lead pipes that we have in the state of Ohio.”
The budget also allocates a one-time $10 million for school bus safety efforts in the state. The Ohio Deaf and Blind Education Services is also seeing an investment of more than $65 million over two years.
Browns stadium
A highly debated portion of the bill has been whether the state should give the Cleveland Browns $600 million to help the team by a new stadium. And if so, how?
Ultimately, state lawmakers ended on a proposal that will get the $600 million to the Browns through the state’s unclaimed funds program.
Right now, the state has $3.7 billion in unclaimed funds. $1.7 billion of that will be taken out now, to be used for the “Ohio Cultural and Sports Facility” fund. Under this budget, $1 billion will be put into the fund: $600 million for the Cleveland Browns and $400 million to be used on other projects.
The proposal, if signed into law by DeWine, is already facing a lawsuit. DannLaw plans to file class action lawsuit challenging the provision if it does take effect.
“The Ohio Supreme Court has been crystal clear: unclaimed funds are not state property -- it’s private property,” attorney and former state representative Jeffrey Crossman said. “This case is about protecting Ohioans’ constitutional rights and stopping the legislature from liquidating private property and turning it into a billionaire’s building fund. Ohioans shouldn’t have to race the clock to reclaim what’s already theirs.”
School funding
A provision known as the “fair school funding plan” will not fully be phased in under this budget.
School funding for public schools has been a contentious part of this budget. While Ohio public schools may see an increase in fiscal years ’26 and ’27, advocate worry that abandoning the fair school funding plan will only hurt schools in the long run.
“This budget makes a choice not to deliver,” Ohio House Finance Ranking Member Bride Rose Sweeney (D-Westlake) said.
According to Ohio House Speaker Matt Huffman (R-Lima), if the fair school funding plan was fully phased in, schools would have seen a $1.8 billion increase. But Huffman said that “pretty much would’ve wiped out other funding we did for daycare, a whole number of other things.”
The budget also asks schools to update their funding data, which, due to rising property values, some argued might make local governments look wealthier than they may actually be.
Some policy items
The budget also creates new laws in the state, despite no price tag being attached. Here are a few:
The budget bill “establishes state policy recognizing only two sexes, male and female, which are not changeable and are grounded in fundamental and incontrovertible reality.”
Previously, Ohio House Speaker Matt Huffman (R-Lima) said this simply lays out guiding policy in the state.
“This simply ends the discussion in the state of Ohio which I think most voters, most citizens of Ohio agree with, and it also prevents us from having months and months and weeks of arguments if we do it in a bill or otherwise,” Huffman said.
The bill also prohibits a government entity from placing menstrual products in the men's restroom of a public building. Previously, Chairman Stewart said a provision like this is just “common sense.”
The bill also includes restrictions on what SNAP benefits, formerly known as food stamps, can be spent on.
The state’s operating budget requires Ohio’s director of job and family services to submit a request to the United States Department of Agriculture (USDA) for a waiver to restrict SNAP benefits from being used to buy “sugar-sweetened beverages” in Ohio. If the wavier is not approved, then the state is directed to resubmit for the waiver each year until it is.
Stewart said the measure solely impacts soda pop; he said drinks like milk, juice or Pedialyte will not be impacted by the waiver should the state receive it.
The governor must enact the budget by July 1.
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