Late Wednesday night, the House concurred with several changes the Senate made, including increasing the 2.5% owner occupied tax rollback to 15.38% over four years by eliminating the 10% nonbusiness tax credit, an additional $400 million taxpayer savings annually.
Here’s the tax savings breakdown according to legislative service estimates:
- House Bill 129 revises the school funding formula calculation costing school districts roughly $609 million in lost revenue over three years.
- House Bill 186 caps tax increases in 20-mill floor school districts to the rate of inflation, gives a tax credit to homeowners who paid windfalls after value adjustments and now includes the boosted owner-occupied tax rollback. Tax relief amounts to $2.47 billion over three years.
- House Bill 335 limits inside millage increases for all taxing bodies to the inflation rate producing an estimated revenue loss of $620 million to $763 million over three years.
- House Bill 309 gives local budget commissions more power to rein in spending they deem unnecessary, cost savings can’t be estimated.
“Through this package of bills, Ohioans will begin to see real and direct relief from rising property taxes,” said Ohio House Speaker Matt Huffman, R-Lima. “I commend members of the House and Senate for working together to get these bills across the finish line and to the governor.”
The last time lawmakers attempted tax reform — within the framework of the biennium budget — Gov. Mike DeWine vetoed all but one measure. He said the measures could harm schools and children and he set up his own property tax working group to examine the issue. The newly passed school funding tweak and budget commission provisions were among the vetoes.
This news outlet asked DeWine’s spokesman Dan Tierney how the governor feels about these bills, which have gone through numerous amendments and hearings in both chambers. He said since many aspects of the bills were recommended by the governor’s working group and assuming the language is as “advertised” the bills will likely be signed. He said school leaders were able “to be a part of discussion” through the working group so things are a bit different this time around.
“An argument could have been previously that schools could not plan for what the budget put in place,” he said. “Now if the legislature does take action, there has been input from schools and we can say that they could have the opportunity to plan for this.”
Senate Democrats introduced a host of amendments — 18 during the Local Government Committee meeting and 13 during the session. These amendments included expanding the Homestead exemption, installing a “circuit breaker” income tax credit, repealing data center tax incentives and other initiatives. They all failed.
Minority Leader Sen. Nickie Antonio, D-Lakewood said while she is glad they adopted the increased owner-occupancy tax credit, they missed an opportunity to provide real relief by waylaying the amendments and not addressing the state’s contribution to school funding.
“One of my frustrations that I think I share with many of the people in the state of Ohio right now is that the people are looking for property tax relief through reform,” she said. “While I applaud the effort that’s been had through all of the legislation, the committees, all the work that’s been done, I still think there are things that have been missed that would have provided relief for some of the people that need it the most.”
She said “we should all be concerned” about to the grassroots group from Cuyahoga County, Citizens for Property Tax Reform, that is attempting to put a constitutional amendment to eliminate property taxes entirely on the statewide November 2026 ballot.
Their spokeswoman Beth Blackmarr told this media outlet she’s not “going to look a gift horse in the mouth” referring to the bolstered owner-occupancy credit, but it still isn’t likely enough.
“They’re either going to have to do enough to quiet Ohio citizens down or I think they’re going to have to shift the system,” she said.
“The fact that it applies to owner-occupied properties, it’ll be a help,” she said. “Anything they do in the direction of property tax reform is good. I think there’s going to be more to come because that’s not going to compete with what we’re doing. That certainly doesn’t get property tax off our homes which is the ultimate.”
Most of the “cost” for these tax reforms will be borne at the local level with foregone revenue, though under HB 186 the state is providing a temporary $465 million offset over two years to school districts, keeping revenues steady at 2024 levels.
It would pay for this using the state’s Expanded Sales Tax Holiday Fund by canceling Ohio’s expanded sales tax holiday at least in 2026. Instead of a two-week sales tax holiday that Ohio had this year, there would be a three-day holiday for back-to-school items.
The Senate amendment to the 2.5% rollback would be revenue neutral to the state since they are increasing one credit by eliminating another.
HB 129 is projected to actually save the state some money. The state reimburses local governments and schools for the Homestead exemptions and 12.5% owner-occupied and non-business credits. With lower local revenues the state will pay approximately $55 million less over three years.
Former Ashtabula County auditor Rep. David Thomas who was hand-picked by Republican leadership to shepherd property tax reform, sponsored all four of the bills. He told this news outlet they aren’t finished reforming but future measures will not be as ”monumental" as what they have done.
Lawmakers frequently tout the fact they spent $2 billion annually supporting local services. Thomas said more state dollars won’t likely be spent.
“No extra spending, we have essentially spent far above what I thought we would with House Bill 186,” Thomas said. “The bills we did are a perfect example of not using more taxpayer money to offset growing taxpayer money, but changing policies that government gets less and the correct people are getting the credits they should be.”
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