Manchester Supports Budget Reducing Tax Burden By $1 Billion with Flat Tax and Substantial Property Tax Relief

COLUMBUS—State Senator Susan Manchester (R-Waynesfield) and her colleagues in the Ohio Senate approved the state's new Biennium Operating Budget maintaining the Upper Chamber's commitment to fiscal responsibility to the taxpayers.

"I am proud that once again, we have balanced Ohio's budget while cutting taxes," said Senator Manchester. "This biennial budget sets our state on the path to even greater success with the development of a flat income tax and property tax reform. It is a win for all Ohioans when we are guided by a fiscally responsible and balanced budget." 

"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." 

Reducing Income Tax Burden with Fair Flat Tax

The last decade has seen a shift toward reducing the income tax burden on Ohioans. The Senate reached a milestone with the new Operating Budget by implementing the phase-in 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 MColley. "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. 

Support for Ohio's Farmers

Providing increased funding for farmers and agricultural production, Senator Manchester succeeded in making sure Ohio's rich agricultural industry was supported in the budget. This includes an increase in funding to H2Ohio which supports watersheds used across the state by local farmers. Ohio's sales tax exemption for grain bins and land tile was also included in the legislation.

Acting with Meaningful Property Tax Reform

Ohio homeowners hit with troubling property taxes increases have been adamant about the General Assembly modernizing the property tax system.

Over the years the system began operating outside of the anti-inflationary guardrails as originally intended.
Among them, levies that skirted those guidelines are emergency and replacement levies.

"There is no excuse for retirees who worked hard to pay off their homes to ever have to worry about losing a home because of skyrocketing property taxes," said Senate President McColley. "This budget makes meaningful reforms immediately."

The budget will abolish any new emergency or replacement levies, and require improved rules and plain language for future levy requests a school district or local municipality might ask voters to approve.

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 county prosecutor, auditor, and treasurer, and the budget empowers the commission to review 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, 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.

Investing in Families, Housing, and Childcare

The budget maintains the Senate's $100 million investment to address a shortage of housing in Ohio.

The REDD program will invest $10 million for Residential Economic Development Districts which will help plan for and provide homes for a rapidly growing workforce in metro Ohio that were selected for mega development sites.

$90 million will be directed into a revolving loan fund that will help prepare sites in rural Ohio for infrastructure and housing construction.

Often the geography and lack of site ready areas in southern Ohio makes larger scale housing plans unaffordable for developers compared to places located near larger cities.

The Senate's commitment to Ohio's families continues with a $20 million investment for Ohio's Fatherhood Commission which will run the Responsible Fatherhood Initiative.

Recently national leaders joined President McColley to support the effort to address the startling statistic that 53% of Ohio's children live in single parents homes.

"We have learned that children living without both parents are much more at risk of living in poverty," said President McColley. "We know that dads provide stability at home, and this program is vital in teaching young men, who grew-up without a father, how to be a father."

As Ohio's workforce continues to expand five years after COVID, there is a need now more than ever for access to childcare.

The new budget maintains the General Assembly's commitment to childcare, allocating more than $100 million for the Choice Voucher Program that supports families earning up to 200% of the Federal Poverty Level (FPL).

The budget also increases funding by 19% for early childhood education which provides educational service for children who are at least three but too young for kindergarten. Families earning up to 200% of the FPL qualify for the program, and the investment totals $260 million.

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 the way to grow an economy, and a budget is by reducing the burden of bureaucracy that comes with higher taxes and red tape.

Over the last several budgets, reducing the tax burden has resulted in economic growth and additional tax revenue. 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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