Tax and Finance

The Ohio General Assembly has finalized its two-year, $60 billion biennial budget, advancing it to Gov. Mike DeWine after bipartisan conference agreement and separate votes in both chambers.

Key components of the budget include:

• Flat income tax: Beginning in 2026, the current two-bracket system will shift to a flat 2.75% rate for all Ohioans earning above $26,050, reducing revenue by over $1 billion
• School funding adjustments: A compromise sets a 40% cap on school districts’ allowable carryover of property tax collections, after initial House and Senate proposals of 30% and 50%, respectively
• Browns stadium financing: The budget establishes a sports facilities fund using unclaimed state funds, diverting $1.7 billion total, with $600 million earmarked for the Browns’ domed stadium in Brook Park
• An elimination of the data center sales tax exemption on certain purchases currently offered by the Ohio Department of Development. This elimination would create uncertainty around many projects in Ohio that provide both direct and indirect jobs for Ohioans, as well as tax revenue

The completed budget will now be sent to Gov. DeWine, who may then sign it—potentially with line‑item vetoes—or reject specific sections by June 30. 6/25/2025

The final version of the state budget bill, House Bill 96, contains revisions to the manufacturers’ sales and use tax exemptions. The OMA supports the continuity of this important exemption intended to prevent business inputs from tax liability.

HB 96 proposes to begin imposing sales tax on newspaper advertisements and related print publications. Those exemptions began at the same time as the Ohio sales tax, many decades ago. Unless Governor DeWine exercises a line-item veto on the provision, Ohio will be one of the few states with such taxes. Some question if the move to tax newspapers is retribution for criticism by the press. 6/25/2025

The OMA’s Tax & Finance Committee this week met the day after the legislature finalized the state operating budget, diving deep into the key wins and provisions that affect manufacturers most.

State Rep. Dave Thomas (R-Jefferson) joined the committee to discuss the budget process, explain key provisions in the bill, and efforts to reform property taxes in Ohio. 6/25/2025

State lawmakers from both chambers this week kicked off the first of two weeks of budget negotiations, with major disputes over K-12 school funding and financing for a new Cleveland Browns stadium.

Gov. Mike DeWine and Senate Republicans want to stick with the current funding model for schools, while House Republicans propose a temporary formula that Democrats argue shortchanges some districts. Despite the disagreements, all sides expect record-high spending for schools.

Meanwhile, how to pay for a new Browns stadium has split negotiators: DeWine supports using sports-betting tax revenue, the House wants long-term bonds, and the Senate suggests tapping $600 million from unclaimed funds. Lawmakers face a June 25 deadline to reach a compromise before the governor must sign the final budget by July 1.

The state budget will be covered extensively at the OMA Tax & Finance committee next week. 6/17/2025

The Ohio House and Senate have each passed their own versions of the two-year state budget, now heading to a conference committee to reconcile hundreds of differences. Key disagreements include:

• Income tax: The Senate backs a flat 2.75% rate for all earners above $26,050 by 2026, which would phase out the top bracket and cut state revenue by over $1 billion. The House retains the current progressive structure without major changes
• Public library funding: The House packages library funding into the main budget; the Senate supports Gov. DeWine’s plan to link it to the general revenue fund percentage
• Cleveland Browns stadium: The House proposes issuing $600 million in bonds, while the Senate would tap unclaimed state funds for a performance grant instead
• School funding: The Senate followed Governor Mike DeWine, allocating state dollars to the Fair School Funding Plan formula, while the House version of the budget only ensured every district received more than the previous year. Cleveland.com has compiled a table to show current funding levels and the plans by DeWine, the House, and the Senate for every district in Ohio

Next up: a closed-door conference committee will negotiate a unified budget, which must pass both chambers and then receive the governor’s approval—subject to potential line-item vetoes—before the June 30 fiscal deadline. 6/12/2025

The Ohio Senate this week unveiled their version of the state budget that includes significant tax reforms and funding allocations. A key feature is the introduction of a flat income tax rate of 2.75% for all Ohioans earning over $26,050 annually, replacing the current two-bracket system. This change is expected to reduce state tax revenue by over $1 billion over two years.

The budget also allocates $600 million for the construction of a new domed stadium for the Cleveland Browns in Brook Park. Unlike the House’s debt and bond funding approach, the Senate proposes using a performance grant program funded by unclaimed funds managed by the Department of Commerce .

In education, the Senate’s budget increases public school funding by approximately $100 million compared to the House’s proposal. It also modifies the cap on school district cash reserves, raising it from 30% to 50% and allowing for additional funds earmarked for construction projects, provided they are used within three years.

The budget also includes investments in workforce development to strengthen Ohio’s talent pipeline. The Industry Sector Partnership (ISP) Grant has retained its proposed levels from the executive budget at $10 million to support business-education collaborations.

The TechCred program has also remained at its proposed level of $50.4 million, which will continue to help employers offset upskilling costs. Tech Prep, which ensures high-quality career-technical education programs for students, has been suggested to receive up to $4 million each fiscal year for competitive grants.

Senate leaders aim to pass the budget by June 12 to allow time for negotiations with the House ahead of the June 30 deadline. 6/4/2025

A proposed amendment to Ohio’s Constitution seeks to repeal local property taxes in Ohio. If approved, the majority funding source of public schools would be displaced, forcing taxing alternatives. The Dayton Daily News profiles the pros and detractors of the proposal. Interested manufacturers will want to join the conversation at upcoming OMA public policy committee meetings. 5/28/2025

The Ohio Manufacturers’ Association this week voiced strong support for House Concurrent Resolution 8, which urges Congress to make the 2017 Tax Cuts and Jobs Act (TCJA) permanent.

In testimony before the House Government Oversight Committee, the OMA highlighted how the TCJA spurred record investment, job creation, and wage growth across Ohio’s manufacturing sector. 5/19/2025

This week, House Bill 288, also known as the “Prompt Pay” bill, was introduced in the Ohio House.

The bill, which has been introduced and opposed by the OMA in the past, mandates payment terms in construction contracts and eliminates the owner’s right to negotiate by requiring payment within 30 days (or face an exorbitant 18% interest penalty). 5/20/2025

Ohio’s tax revenues came in slightly over forecasts in April, according to data from the Office of Budget and Management, Hannah News Service reports.

While income tax projections missed their mark by over eight percent, about $1.1 billion, versus expectations of $1.2 billion, sales and CAT tax collections made up for the miss. Sales tax overshot its mark, collecting 6.5 percent over estimates, with CAT taxes nearly doubling expectations.

Compared to FY24, tax collections are up $787.7 million, or 3.5 percent. 5/7/2025

Two independent state offices have called into question the projected Browns’ tax revenue projections for a proposed Brook Park stadium.

The Ohio Legislative Services Commission (LSC), the bipartisan office that reviews statehouse legislation, and the Office of Budget and Management (OBM) both believe that revenue projections from the Haslem family are overstated.

LSC projects the Stadium would need to sell out the 70,000-seat venue 21 times per year, in addition to 10 sold-out Browns games, to reach the estimated figure. 4/29/2025

The Ohio House of Representatives last week voted out its version of the state’s next budget, which includes $600 million in bonds toward a new Browns stadium, significant overhauls to funding for public schools and libraries, and reignites the possibility of a high speed rail in Ohio.

Notable changes also include the removal of a $1,000 per year and per child tax credit that Ohio Governor Mike DeWine says should be included.

The state budget is now under consideration in the Ohio Senate, where negotiations will take place between the two chambers and send the finalized budget to DeWine’s desk by June 30. 4/15/2025

The Ohio House this week passed their version of the state operating budget, making significant changes to the version sent to them by Governor Mike DeWine.

Among top priorities, the House cut education funding by $351 million and instituted a 30% cap on carry-over dollars from previous district budgets.

The House also agreed to put $600 million in bonds toward a new Browns stadium, the centerpiece of a 176-acre mixed-use project proposed by the Haslam family, which owns the team. The state plans to repay the bonds, with interest, using increased sales-tax revenues, income-tax revenues, and commercial activity-tax revenues from the entire Brook Park project. 4/8/2025

This week, the Ohio House of Representatives unveiled their version of the 2026-27 State Operating budget, making significant changes to Ohio’s public school funding formula, child care costs, and helping finance the new Cleveland Browns stadium.

House Republicans will put approximately $226 million more towards public K-12 education than Governor Mike DeWine had proposed but will cap how much school districts can carry over in their operating budgets.

The House Republicans also rejected DeWine’s proposal to double Ohio’s gambling tax in order to help fund the new Cleveland Browns stadium. Instead, opting to grant the state authority to issue and sell up to $600 million in state bonds to help finance the project in Brook Park. 4/1/2025

The two GOP frontrunners for Ohio Governor both endorsed the elimination of Ohio’s state income tax this week.

Vivek Ramaswamy, who first touted the idea at a campaign kickoff event last month, believes that the work done by the state legislature in the past is a good start, but more can be done.

“It’s going to be a combination of growth and cutting unnecessary expenditures,” Ramaswamy said. “It’s not going to be immediate. I haven’t promised that it’s going to be immediate, but what I’ve said is we’re going to bring it down and put us on a path, on a clear, credible, pro-growth path to zero income tax.”

Ohio Republicans have slashed income taxes over the past two decades, taking tax brackets from nine down to two.

Ohio’s Attorney General Dave Yost, who is also running, concurred with Ramaswamy but cautioned about moving too fast.

“Doing it with a chainsaw, one fell swoop without a plan to actually do it smart is going to create chaos and harm among some of our most vulnerable voters,” Yost said. “The difference between bold and reckless is whether you have a plan to do it.” 3/17/2025

The Senate Transportation Committee this week made a round of changes to House Bill 54, the biennial state transportation budget.

The Senate revisions incorporated at least forty alterations, including the removal of the House-added airport improvement fund and the passenger rail compact.

Senators also strengthened a provision regarding proof of citizenship when registering to vote at an Ohio Bureau of Motor Vehicles deputy registrar.

The OMA will continue to monitor the legislation that also governs the shipments of freight by rail and common carrier. 3/12/2025

The National Association of Manufacturers (NAM) this week weighed in on the Trump administration’s tariff proposals ahead of the State of the Union.

In a statement on Tuesday, NAM President Jay Timmons outlined the negative impact tariffs would have on the U.S. manufacturing sector and outlined key actions the administration should take to bolster the industry.

“The stakes couldn’t be higher for manufacturers right now,” Timmons said. “Many manufacturers are operating on thin margins, and the tariffs imposed today will further strain their resources.” 3/4/2025

This week, State Senator George Lang introduced a resolution to the Ohio Senate urging Congress to make the Trump administration’s 2017 Tax Cuts and Jobs Act permanent.

In 2017, the Tax Cuts and Jobs Act changed the tiered corporate tax rate to a flat 21%. The act also changed the income level of individual tax brackets, lowered tax rates, and increasing the standard deductions and family tax credits.

Many of these cuts are scheduled to expire in 2025 while the majority of business tax cuts expire in 2028.

OMA President Ryan Augsburger co-authored an op-ed for the Columbus Dispatch with NAM President Jay Timmons supporting these tax cuts and urging Congress to renew these reforms. 2/20/2025

This week, the OMA held its first Tax & Finance Committee of 2025, featuring:

• A deep dive on the upcoming state operating budget and anticipated tax cut proposals
• Discussion with Ohio House Ways and Means Committee Chair Bill Roemer
• A presentation by OMA Connections Partner RSM on the impacts of the Trump administration’s tariff policies and what that means for Ohio manufacturers

2/20/2025

A recent Gongwer report highlighted ODJFS’ proposal to impose a new fee on businesses to fund what the agency notes as a long-overdue upgrade of the state’s unemployment benefits IT system.

While business groups acknowledge the need for modernization, they also emphasize the importance of addressing the long-standing solvency issues of the Unemployment Trust Fund. The OMA will analyze and discuss this proposal at the Feb. 20 Tax and Finance Committee meeting. 2/7/2025