Ohio Republican lawmakers tried this past summer to cut property taxes by more than $1 billion. But Gov. Mike DeWine, a Republican who worried the budget bill measure would hurt school districts, foiled the plan with a veto.
Legislators now are trying a different approach to provide immediate relief to some property owners by reworking an old bill that is quickly gaining steam in the Ohio House.
House Bill 186 – first introduced in March – originally was designed to slow the growth of future property taxes by capping the growth of tax rates in certain school districts at the rate of inflation. The bill would have given property owners a discount on their taxes equal to the property tax increases beyond the rate of inflation.
But Republican lawmakers recently reworked the bill to give property owners an immediate tax cut in the form of a retroactive tax credit. This would go to any property owner in school districts where the state’s property tax formula has failed to blunt the effect of recent large property value increases.
The nonpartisan Legislative Service Commission estimates HB 186 would cut property taxes by $1.7 billion over three years, cutting local funding to public schools by the same amount.
The bill is an alternative to the measure that DeWine vetoed over the summer that would have forced school districts to return unspent money to taxpayers if district bank accounts grew too large. Lawmakers set the “carryover cap” at 50% of the school district’s annual expenses – which could have meant school districts would have had to return as much as $2.17 billion. It appears Republicans don’t have the votes in the House to overturn the veto on this measure.
Rep. David Thomas, the co-sponsor of HB 186, described during a recent legislative committee hearing how he’d gone back to the drawing board following DeWine’s veto.
“We’re not taking money from bank accounts of schools,” Thomas said during a Sept. 26 hearing where the updated HB 186 was unveiled. “There were other policies that did that. That’s not what this is. We’re essentially saying had the legislature acted as we should have back in 2022, what would our taxpayers be experiencing in 2026?”
School officials react with alarm as final vote nears
Ohio House Republican leaders had been considering holding a final vote on HB 186 as soon as Wednesday.
But state Rep. BIll Roemer, who chairs the House committee reviewing the bill, said Monday the bill is still getting final tweaks and likely won’t be approved until later this month. If the House passes the bill, it then would need approval from the Republican-controlled Senate before heading to DeWine’s desk for his signature or veto.
School officials, meanwhile, have reacted to the emergence of the newly expanded HB186 with alarm.
They supported the previous version that would have capped future tax increases. But they oppose it now because the the relief would apply retroactively and, therefore, take away money school districts were counting on receiving in the coming years.
The current debate between lawmakers and districts goes back to the central argument in Columbus over skyrocketing property taxes: Any cuts in property taxes – which nearly all lawmakers say their constituents desperately want – would come at the direct expense of public schools.
Paul Imhoff, a lobbyist with the Buckeye Association of School Administrators, which represents public school superintendents, said during a legislative committee hearing last week that pulling back funds will force cuts to services.
“We’re going to be looking at things like layoffs, etc., that impact kids,” he said.
If the bill passes, property tax refunds would start in June. Katie Johnson, executive director of the Ohio Association of School Business Officials, said this could pose cash flow issues for school districts, forcing some into immediate fiscal emergency.
“For these retroactive reductions to apply in June, I think you’d see I would say the vast majority of school districts not be able to make payroll,” Johnson said.
Roemer told Signal that school districts should be able to manage. Even with the proposed cut, most districts still will be getting more money than they got in 2022, he said. And Roemer said the “carryover cap” idea, which school officials also panned, will be on hold at least for now as lawmakers focus on HB 186.
“They [schools] can say we need every penny to operate,” Roemer said. “But people are hurting in Ohio. And we need to try to get as much tax relief as possible to the people who are hurting.”
Bill wouldn’t benefit property owners everywhere
HB 186 would deliver the property tax cuts specifically in school districts where local tax rates are at what’s called the 20-mill floor – or the state’s minimum tax rate for schools. In these districts, property owners have seen especially large spikes in the past several years, due to how the state’s property tax formula is designed.
Generally, school districts in less populous areas where voters have approved fewer tax levies are more likely to be at the 20-mill floor. Legislative researchers say nearly 80% of school districts are at the 20-mill floor and would get a tax cut from HB186.
But districts in more densely populated areas where local taxes are higher – including many urban and larger suburban districts – are likely to be above the 20-mill floor, which means the bill wouldn’t have any effect there.
This geographic imbalance is why State Rep. Chris Glassburn, a Cuyahoga County Democrat, has questioned whether HB 186 actually would achieve one of lawmakers’ main political goals: Thwarting a proposed constitutional amendment that would abolish property taxes completely.
All but two of Cuyahoga’s 31 school districts are above the 20-mill floor and thus wouldn’t get any tax cut if HB 186 is passed. Glassburn said this reality would help fuel the campaign to put the amendment up for a statewide vote in 2026. Some of the leaders of the effort are from Cuyahoga County, Glassburn said.
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Bill wouldn’t benefit property owners everywhere
Thomas, the Republican who’s co-sponsoring HB 186, said that’s why there are several other property tax-related bills on deck.
These include two bills that are scheduled to be voted out of committee on Wednesday and then could head to the House floor for a final vote later in the day.
One of them, House Bill 129, would cut property taxes by $330 million over three years, with the money being taken away from schools, by making technical changes to how the 20-mill floor is calculated.
The other, House Bill 335, would give county budget commissions — panels that consist of the county auditor, prosecutor and treasurer — greater authority to reduce tax levies under certain conditions.
A study group convened by DeWine also recently released a list of 20 recommended property tax law changes for lawmakers to consider.