Senate Approves Final Budget Reducing Tax Burden By $1 Billion with Flat Tax and Substantial Property Tax Relief
COLUMBUS—State Senator Sandra O'Brien (R-Ashtabula) and her colleagues in the Ohio Senate approved the state's new Biennial Operating Budget maintaining the Upper Chamber's commitment of fiscal responsibility to the taxpayers.
"I'm proud to support this transformational and fiscally responsible operating budget for Ohio," said Senator O'Brien. "By implementing reforms to property taxes and supporting all Ohioans with a flat state income tax, this budget is an investment in Ohio's future. I look forward to seeing the significant effects from this budget across the 32nd Senate District."
"Our constitutionally balanced budget represents an historic investment in the people of Ohio," said Senate President Rob McColley. "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 Senate and House worked through the points of difference between each chamber's "as passed" version of the budget in an efficient and effective manner over the last week.
"I am very pleased with the professionalism and good faith negotiations with our colleagues in the House," said Senate Finance Chairman Senator Jerry Cirino. "This budget continues to build the foundation for strong economic growth here at home, because a healthy economy equals a healthy Ohio."
Acting with Meaningful Property Tax Reform
Ohio homeowners hit with troubling property tax increases have been adamant about the General Assembly modernizing the property tax system and improving local tax transparency.
Over the last forty years, revisions have weakened the anti-inflationary guardrails as originally intended. Among them are emergency and replacement levies that skirted those guidelines.
"There is no excuse for retirees who worked hard to pay off their homes to ever have to worry about losing their homes because of skyrocketing property taxes," said Senate President McColley.
The budget will abolish any new emergency or new replacement levies and require improved rules and plain language for future ballot issues to provide more transparency for voters when considering levy requests.
The Senate also recognized the importance of maintaining home rule and local control on property tax matters by enhancing the role of County Budget Commissions.
Budget Commissions consist of the local elected county prosecutor, auditor, and treasurer, and the budget empowers the commission to review and even reduce the financial impact on property owners.
School districts will be permitted to maintain a 40% surplus for their operating budget carryovers year to year, with an allowance for capital projects, but any excess will have to be returned to the taxpayers. Collectively Ohio's 611 districts amassed a $10.5 billion cash carryover last year.
Increased Funding for Local Food Banks
Local food banks across Ohio received additional funding in the budget through the Temporary Assistance for Needy Families (TANF) Block Grant program. This allows food banks, such as Country Neighbor in Ashtabula County, to purchase and distribute food products, support Innovative Summer Meals programs for children, and provide equipment for food pantries and soup kitchens. This funding will also allow food banks and food pantries to serve more families eligible under the TANF program.
Reducing Income Tax Burden with Fair Flat Tax
The last decade the Republican Senate has prioritized reducing the income tax burden on Ohioans. The Senate reached a milestone in the new Operating Budget by building on that progress with the implementation of a flat income tax.
The 2.75% flat rate will take effect in tax year '26, while tax year '25 will also see an immediate reduction of the highest bracket, which will drop from 3.5% to 3.125%.
"The first thing moms and dads see on payday is the often disappointing amount of taxes taken out of their hard work," said President McColley. "I'm proud of the progress we have been able to make over the last decade by reducing the overall number of income tax brackets from nine down to two."
Anyone making $26,050 or less will pay ZERO state income tax.
Nearly $1 Billion More for K-12 Public Schools
The operating budget builds on the historic investments over the last two budgets that poured more than an additional $3 billion into public education.
This budget adds nearly a billion dollars more into Ohio's public schools.
Every district will receive at least the same amount as FY '21.
77% of districts will receive an increase over what they received in FY '25 in the first year of the budget, and 75% of districts will receive an increase in the second year compared to FY '25.
Districts will also receive additional state aid for significant academic improvement as well as those that have received a 4-to-5 Star rating from the Department of Education and Workforce.
"We want all children to have the opportunity to reach their God given potential," said President McColley. "Results matter, and we want to reinforce that message by recognizing the importance of performance in public schools."
The Senate encourages parents to get involved in their schools, and believes that more information is better, especially for voters. That is why, the budget will require candidates for school board races to have their political party affiliation designated on the ballot.
Growing Ohio's Economy By Reducing the Bureaucracy Burden
Ohio's $60.23 billion budget is balanced as required by the Constitution and includes more than $1 billion in tax relief to Ohioans.
It reflects the kitchen table common sense that says the way to grow an economy and a budget, is by reducing the burden of bureaucracy that comes with higher taxes and regulations.
Over the last several budgets, reducing the tax burden has resulted in economic growth and additional revenue for the state.
Consumer spending represents two-thirds of the economy, and when people have more discretionary income for their families, Ohio becomes a great place to live, work, and raise a family.
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