Tax and Finance

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

This week, Ohio Governor Mike DeWine unveiled the initial details of his two-year state budget proposal.

Highlights include:

• A new $1,000 per child (6 and under) tax credit, funded by a $1.50 per pack increase in tobacco taxes.
• Increasing subsidized childcare.
• Expanded school-based healthcare.
• $100 million to increase housing in rural areas.
• $8 million to assist local governments with cybersecurity.
• Increasing the sports gaming tax to 40% (current tax rate is 20%) to fund a new fund for supporting major and minor league sports stadiums and to reduce high school sports/activity fees for students.

The Ohio House began hearings on their version of the budget this week, which will continue until mid-to-late April, after which the Senate will make their own amendments before conferencing on an agreed budget and sending it to DeWine for signature and line-item vetoes.

OMA staff are still analyzing the proposed budget and will have deeper analysis on OMA priorities coming soon.

Be sure to register for the OMA’s Feb. 20th Tax & Finance Committee for an in-depth breakdown on the state budget process and key OMA priorities. 2/5/2025

Earlier this week, defense contractor and manufacturer Anduril received approval from the state for $452 million in tax credits for the next 30 years.

In exchange for the credit, the California-based autonomous weapons developer is required to maintain operations on-site for 33 years and bring more than 4,000 new production and services jobs by 2035.

Anduril announced two weeks ago plans to spend about $900 million on their new “Arsenal-1” complex south of Rickenbacker International Airport to build drones, missiles, and other high-tech unpiloted military weapons. When completed, estimated in 2035, the complex would employ 4,008 workers with an average hourly wage of $63.61, making the average annual pay $132,000. 1/28/2024

Reacting to a plan by the Cleveland Browns to construct a new domed stadium outside of Cleveland proper, Ohio Attorney General Dave Yost joined with attorneys for the City of Cleveland in a game of smash mouth lawsuits.

If the sports club is allowed to relocate, Ohioans could be on the hook to pay for the new stadium using taxpayer dollars. We reported recently, the Browns are lobbying for state funds in the soon-to-be-introduced state budget. 1/14/2024

Kimberly Murnieks, Director of the Office of Budget and Management told reporters this week that the state is in a strong financial position heading into the 2025/26 budget year.

Murnieks, who was appointed by Governor DeWine in 2019, touted a healthy bottom line for the state, in addition to a strong “rainy-day fund” of over $3.8 billion, which can be used for uncertainties like natural disasters. 1/14/2024

Just weeks before the state budget bill is set to be introduced at the Statehouse, Ohio’s new Senate President tempered the notion that taxpayers would subsidize a significant share of construction costs to build a possible new stadium in Brook Park, outside of Cleveland.

According to Cleveland.com, Senate President Rob McColley said he opposes “handouts” such as the proposal lobbyists for the 3-14 Browns organization are attempting to advance looking for a reported $600 million in state share toward the total $2.4 billion price tag to develop the new site. Stay tuned. 1/6/2024