Senate Approves Final Budget Reducing Tax Burden By $1 Billion with Flat Tax and Substantial Property Tax Relief

COLUMBUS—State Senator Steve Wilson (R-Maineville) and his 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 operating budget that is both fiscally responsible and economically substantial for all of Ohio," said Senator Wilson. "Implementing a flat state income tax and providing reform on property taxes gives significant support to citizens across our state. I look forward to seeing the benefit these policies will have throughout the 7th 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."

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. 

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.

Over the years the system began operating outside of 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 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 new replacement levies and require improved rules and plain language for future levy requests that 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 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, 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.

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 party affiliation designated on the ballot.  

Investment In Higher Education and Academic Freedom

The General Assembly established five centers of civics and government as part of the prior budget.

The Centers located at Wright State University, Miami University, Ohio State University, Cleveland State University, and The University of Toledo have been well received in their mission of promoting intellectual diversity.

Watch a recent President's Podcast with two professors from Ohio State and Senator Cirino about the rise of these vital programs   

The budget fully funds the operating needs of all five centers with $34 million over the biennium. They operate independently from their host campuses, and focus on delivering courses and  curricula based on critical thinking and thoughtful debate. 

Fiscally Responsible Budgets

The Industrial Commission budget along with the Bureau of Workers Compensation (BWC) budget was reviewed and approved by the General Assembly.

The Ohio Industrial Commission is responsible for provding a process for fair and impartial resolutions of disputed workers compensation claims, adjudicating 85,000 claims annually. Funded through the Administrative Cost Fund surcharge applied to employers’ workers compensation premiums, their request of $107.4 million over the biennium is the lowest budget since FY 2018-19. 

The Bureau of Workers' Compensation provides insurance coverage for Ohio business and employees, serving 258,000 public and private employers across the state. Funded by employer premiums, Ohio has the 5th lowest workers' compensation premiums in the nation. The BWC board of directors approved a 6% reduction in private employer premiums this year which follows a 7% rate cute in 2024, saving employers $60.1 million over the next fiscal year.

Each budget passed unanimously through the Ohio House and Senate. 

Growing Ohio's Economy By Reducing the Bureaucracy Burden

Ohio's $60.23 billion operating 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 red tape.

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.

 ###