Almost six months after the first draft version dropped, Ohio now has a two-year state budget bill.
Now it heads to Gov. Mike DeWine for his signature and potential vetoes.
The Ohio House and Senate approved the final budget on Wednesday. It spends about $100 billion a year in state and federal funds, roughly the same as the state spent in 2025.
Republicans approved the budget in a largely party-line vote, with Democrats opposed.
In a floor speech, state Rep. Brian Stewart, who led budget negotiations for House Republicans, touted the bill’s income and property tax cuts.
“Government is not entitled to the fruits of Ohio’s labor, and our residents deserve to keep as much of their own money as they possibly can,” Stewart said. “This budget sends the signal to job creators, workers, families, to everyone in America that is looking to build a better life, we are rolling out the welcome mat.”
Meanwhile, state Rep. Bride Rose Sweeney, Democrats’ lead budget negotiator in the House, described the budget as inadequately funding schools to help cut taxes for the rich and to use hundreds of millions of dollars to build a stadium for the Cleveland Browns.
“Budgets are about choices. The legislature could have chosen differently,” Sweeney said. “And at the end of the day, I can’t support some of the biggest choices in this budget.”
The budget was unchanged from the version unveiled after midnight on Wednesday. But more details emerged later in the morning as legislative researchers frantically analyzed lawmakers’ final touches, which were introduced about 12 hours before lawmakers met to approve the bill.
Here are some highlights.
Browns get to the goal line
The budget sets aside $1.7 billion from the state’s $4.8 billion Unclaimed Fund, a place where lapsed bank accounts and other abandoned property end up, to help pay for professional sports stadiums.
Of that money, $600 million will help the Cleveland Browns’ owners build a new domed stadium development in Brook Park, moving from the team’s current downtown location. The rest will go to other “qualifying projects,” which could be the Cincinnati Bengals or other teams that want a cut in the future. The budget contains language describing how teams would repay the money with increased taxes associated with their projects.
Marc Dann, the former Democratic state attorney general, and Jeff Crossman, a former Democratic state lawmaker, held a news conference outside the Statehouse on Wednesday in which they called the financing maneuver unconstitutional and promised to sue to stop it.
The budget also contains language waiving the state’s “Art Modell law” – passed after the Cleveland Browns left for Baltimore in the 1990s – for teams moving within Ohio. Cleveland Mayor Justin Bibb had cited the law when he sued the team in January over its plans to move to the suburbs.
Big income tax change
Ohio established its income tax in 1972. Since then, it has always been a progressive system, meaning bigger earners pay bigger rates.
The budget that passed Wednesday ends that practice, imposing a “flat” or regressive system, similar to the sales tax, where just about everyone pays the same rate no matter what they earn.
That new top tax rate of 2.75% is lower than any surrounding state and lower than any time in the past five decades. Stewart called it the second-lowest flat tax in the country. About 96% of the $1.1 billion in annual lost revenue under the most recent change will stay in the pockets of those earning $138,000 or more, according to one estimate.
Jake Zuckerman explains some of the history of Ohio’s income tax and what it means in an economy when doctors and CEOs pay the same tax rate as servers and librarians.
Property taxes
Lawmakers have been under great pressure to cut property taxes after recent historically large increases in property values translated to proportionately larger tax bills, despite the complex safeguards that were supposed to prevent the huge increases.
The new budget’s most sweeping property tax-related change forces schools to return money to taxpayers if their reserve funds grow too large. School districts would trigger the refund if the money in their reserve fund exceeds 40% of their annual operating budget, a number that’s halfway between what the House and Senate proposed. Extra money wouldn’t count against the 40% limit, though, if schools keep the cash in a separate fund for construction and maintenance projects.
The change could result in a multi-billion-dollar tax refund for property owners in the near future, although it will be interesting to see what kinds of accounting maneuvers local schools may use to try to keep their extra money.
The budget also makes a bunch of more incremental changes that will squeeze local school districts and local governments and limit their ability to seek certain types of tax increases.
These are pretty technical, and include:
- Eliminating a few types of tax levies local governments currently can ask voters to approve, including blocking all local governments from seeking “replacement” levies that typically result in a tax increase.
- Tightening a rule for what kinds of tax levies count toward the “20 mill floor” in state law that guarantees school districts a minimum amount of property tax collections. The change likely will result in less money for school districts when property values go up. State budget analysts estimate the change could cost some districts “tens of millions to over $100 million annually.”
- Barring school districts from seeking any new tax levies if their “carryover” balance exceeds 100%, while again exempting construction-related funds from counting against that limit.
The budget also offers an optional new power to county commissioners who want to cut local property taxes. It creates an optional new, county-level 2.5% “homestead exemption,” available to people who live in a home they own.
K-12 funding includes reward for better-performing districts
The budget allocates $16.41 billion over two years to K-12 public schools, a little more than the $16.14 billion that DeWine initially proposed.
It amounts to a slight increase in school funding compared to 2025. But state officials opted not to base the funding on school districts’ current costs – instead they chose to use cost data from 2022. By doing so, they avoided delivering a much larger increase that school districts say they need to reflect recent inflation.
The budget also sets aside $108 million in extra money for school districts where students are considered high performing. Democrats have said this will result in extra money going to more affluent areas, since students in poor areas tend to do worse in school. Republicans say they’re trying to reward schools that do a good job of educating students.
In addition, the budget also includes an incremental expansion of state Republicans’ ongoing project to increase government funding for private schools. It sets aside $35.1 million annually to fund savings accounts that families with kids attending religious private schools could use to cover their educational expenses.
In addition, the budget makes a school-related change voters might notice at election time. It converts elected school board positions from nonpartisan jobs to partisan ones, which means candidates could run under the Republican or Democratic party label.
Medicaid
Notably, the budget includes the “trigger law” that would end healthcare coverage for people who got covered under Medicaid expansion if the federal government cuts what it currently contributes to the program. Currently, 764,000 people are covered under Medicaid expansion, which grew to cover poor, working Ohioans without children.
The final version of the budget also restores a House-backed provision that offers Medicaid coverage for mental health and addiction treatment for people who are incarcerated and are due to be released within 90 days.
But it also keeps House language that repealed a DeWine policy that automatically enrolled all Medicaid-eligible babies in Medicaid until they are 3 years old.
Otherwise, the budget largely keeps intact funding rollbacks Senate Republicans said they added to try to control the program’s long-term costs.
The doctor is (still) in
Dr. Amy Acton laid out why she’s running for governor in an appearance on Wednesday at the City Club of Cleveland.
Acton dedicated part of her speech to describing her political viability – something state Democrats debate as they wait for former U.S. Sen. Sherrod Brown to potentially jump into the race. Vivek Ramaswamy, a billionaire entrepreneur, is the prohibitive frontrunner on the Republican side of the race.
Acton said actors across the political spectrum have been conducting polling on her since 2020. Her negatives – a number that refers to how many people hold a negative opinion about someone in public life – have never gone above 23%. She said one recent poll – commissioned by a group that ended up endorsing her last week – showed her leading Ramaswamy in a hypothetical matchup.
“I have a very strange constituency that does not know party,” Acton said. She said she formed an “inexplicable” bond with voters during the pandemic, later chalking up some of her cross-party appeal to appearances on conservative talk radio. “You can believe some pretty wild MAGA conspiracies and somehow give me a pass.”
Otherwise, Acton described her rough upbringing in Youngstown, saying it was the only thing DeWine asked about when he recruited her to run the state health department in 2018. Acton said her childhood included periods of abuse, neglect and homelessness.
She also talked about policy, including praising a local court decision on Tuesday that found the state’s system for funding private schools to be unconstitutional.
Asked by an audience member to name what three things she’d veto in the new state budget, Acton struggled to come up with a specific answer.
“It’s hard to pick one because the whole thing is that devastating. He [DeWine] can’t add in the good things he’s trying to do,” Acton said.