Ohio’s budget continues to grow and is projected to increase a whopping 78.5% between fiscal 2016 and fiscal 2027.
Ohio Gov. Mike DeWine unveiled his two-year executive budget this week, calling for $108.6 billion in spending in fiscal 2026 and $110.7 billion in fiscal 2027. According to the Legislative Service Commission (LSC), the state’s budget stood at slightly more than $62 billion in fiscal 2016.
The budget continues to balloon as the state’s population has remained relatively flat, growing just 2.1% between 2016 and 2024, from about 11.6 million residents to more than 11.8 million.
“Our goal for all Ohioans is to allow them to live up to their God-given potential, and the opportunity to achieve whatever their version is of the American Dream,” Spectrum News 1 quoted DeWine.
“I worry more about my kids, my grandkids, my great-grandkids,” the governor added. “And so much of the budget is for, you know, our kids.”
In prepared testimony to the House Finance Committee, Wendy Zhan, director of the Legislative Service Commission, said total General Revenue Fund (GRF) tax revenue in fiscal 2026 is projected to be $29.5 billion, an increase of 3.4% or $960.6 million from fiscal 2025.
“Major GRF taxes are generally forecast to grow faster in the first year of the biennium, as economic growth in that year is expected to be stronger,” Zhan said in the testimony. “There is a projected increase of 3.8% in total sales and use tax revenue in fiscal year 2026, driven by solid income growth and retail sales activity that is consistent with historical norms.”
Some lawmakers gave it a frosty reception even before fully delving into the spending plan.
“In reviewing [the] budget released yesterday, the lack of policy proposals on Property Tax Reform is disappointing but not a limiter to work the Ohio Legislature will do on this important issue,” state Rep. David Thomas, R-Jefferson, said in a post to X.
The budget’s personal income tax forecast takes into account the lowering of the marginal tax rate for the higher bracket to 3.5% and condensing the nonbusiness income tax brackets to two starting in 2024. The rate could further change as state lawmakers are considering Senate Bill 3, which would lower the state’s income tax rate.
Nearly half of the budget — 45.2% or more than $99.1 billion — of the proposed fiscal 2026 and 2027 allocations go to Medicaid. The proposed fiscal 2026 allocation is a 9.6% increase over the estimated fiscal 2025 budget.
Separately, the Buckeye Institute has published a new policy brief, Building a Responsible, Pro-Growth Budget. The Columbus-based think tank said the policy offers ideas state lawmakers should embrace to “begin improving Ohio’s tomorrow today.”
The group outlined five policies lawmakers should include in the fiscal year 2026-27 budget: embrace fiscal discipline, pursue pro-growth tax policies, reform outdated local government systems, fulfill the school choice promise and align higher education with the 21st century.
Lawmakers should tie spending increases to “dynamic inflation and population growth” and apply the state appropriation limit. The group said that if a limit had been in place in the last budget, Ohio could have saved roughly $9 billion, making future budgets more sustainable.
“Ohio’s more constrained fiscal environment requires a budget that manages current resources effectively and lays the foundation for sustainable, long-term prosperity,” Greg R. Lawson, co-author of the paper and a research fellow at The Buckeye Institute, said in a release. “By taking strategic, responsible steps to restrain public spending, promote economic growth, and reform failed government and education systems, Ohio can better align fiscal, tax, and education policies with the economic realities of the 21st century.”
