Ohio lawmakers passed a new two-year state budget, one that implements a flat income tax, limits the amount of cash school districts can carry over, and sends hundreds of millions of dollars to a new professional sports stadium.
Both chambers of the Ohio General Assembly voted Wednesday afternoon in favor of Substitute House Bill 96, which a House and Senate Conference Committee approved early Wednesday morning. The budget now goes to Republican Gov. Mike DeWine, who must sign it by June 30.
“Our constitutionally balanced budget represents an historic investment in the people of Ohio,” Ohio Senate President Rob McColley, R-Napoleon, said in a release. “Taxes are kitchen table issues for every family, and I’m pleased we completed the mission of substantial property tax and income tax relief.”
The biennial budget, which calls for $90.5 billion in General Fund and $200.7 billion in total spending over two years, includes the implementation of a 2.75% flat income tax, property tax relief, $650 million more for K-12 public schools, and $600 million for a new Cleveland Browns stadium in Brook Park.
According to Senate Republicans, the budget eliminates new emergency or new replacement levies. Additionally, it requires future ballot issues to use plain language, which proponents said will give voters more transparency.
“With the passage of this budget, Ohio takes a bold step toward becoming the most free and prosperous state in the country,” Americans for Prosperity–Ohio State Director Donovan O’Neil said in a statement.
“Lawmakers delivered meaningful wins for families by flattening the income tax, empowering every parent with education savings accounts, restoring accountability in local property taxes, and reining in unnecessary regulations,” O’Neil added. “Just as important, they did it without raising taxes and while demonstrating real spending restraint.”
The final budget also modified how much “budget surplus” school districts can keep. Ohio’s 611 districts collectively accumulated $10.5 billion in carryovers last year.
Under the plan, school districts can maintain a 40% surplus for their operating budget carryovers from year to year, with an allowance for capital projects. However, any excess will have to be returned to taxpayers.
“This needed to be addressed,” Ohio Sen. Jerry C. Cirino, R-Kirtland, said in a release.
Perhaps one of the highest-profile aspects of the budget is the money for a new Cleveland Browns stadium. Both the Ohio House and the Ohio Senate included $600 million for the stadium, but they used different approaches to dole out the cash.
In the end, lawmakers stuck with the Senate’s plan, which calls for using $600 million in unclaimed funds that proponents said “have been sitting idle for decades.”
“We project that the state will actually receive a return on its investment,” Cirino said in a statement. “Every four years the Brook Park project will be evaluated against incremental tax revenue forecasts, and any shortfall will be covered by the Cleveland Browns organization through an escrow amount of $100 million.”
Republicans said the budget includes an additional $1 billion for Ohio’s public schools. Every district will receive at least the same amount as they did in fiscal 2021.
More than three-quarters (77%) of districts will receive an increase over what they received in fiscal 2025 in the budget’s first year, while 75% will receive an increase in the second year compared to fiscal 2025.
“The budget that passed both chambers of the Ohio General Assembly contains a lot of good, pro-growth policies—a flat income tax, closing tax loopholes, reining in Medicaid, and smart property tax reforms,” Greg R. Lawson, a research fellow at The Buckeye Institute, said in a statement. “There is always more to do, including bolder student-focused education reforms as well as local government reforms, but this budget keeps Ohio moving forward.”
Despite the hullabaloo from Republicans, the budget was a partisan affair, and Buckeye State Democrats lambasted the bill.
“We were elected to make choices for the people of Ohio, and we believe that this budget is making the wrong choices,” Signal Akron quoted Ohio Rep. Bride Rose Sweeney, D-Westlake, the House Democrats’ lead negotiator, as saying. “They made choices that are really good for billionaires, that are really good for the top, and it is the average Ohioans we did very little for.”
