On Tuesday afternoon, Ohio Senate lawmakers introduced a series of amendments to House Bill 96, the biennial state budget that must be finalized by June 30. Among these changes, the GOP-majority Senate Finance Committee proposed flattening the state income tax structure. This would transition from the current two-bracket system to a single rate of 2.75% for all taxpayers by the 2026 tax year. If enacted, this measure is projected to save high-income earners significantly while costing the state over $1 billion, according to estimates from the Ohio Legislative Service Commission. Additionally, the bill addresses school district reserve limits and funding mechanisms for Cleveland Browns' stadium projects, among other provisions.
The proposed flat tax rate has sparked debate about its potential economic impact. Senate President Rob McColley argued that reducing the tax burden on high earners could stimulate economic growth, citing examples of states with similar policies experiencing more robust financial expansion compared to Ohio. Meanwhile, HB 96 includes a provision limiting school districts' cash reserves. Initially set at 30%, the Senate version raises this cap to 50% and introduces an overflow allowance for construction-related expenses, requiring use within three years.
Another significant change involves funding for the Cleveland Browns' new domed stadium project. While maintaining the $600 million allocation, Senate lawmakers replaced the House's debt and bond structure with a performance grant program. This program would draw funds from unclaimed assets managed by the Department of Commerce’s Division of Unclaimed Funds. Senator Jerry Cirino justified this approach by noting that these funds remain dormant for extended periods before being claimed by the state.
Further adjustments include preserving the House amendments regarding library funding methods, shifting from a fixed percentage to a line item in the long term. The budget also plans to eliminate the Ohio Elections Commission starting in January 2026. Despite support from Republican leaders, two out of three Democratic members of the Senate Finance Committee opposed the amendments during a procedural vote. Senate President McColley aims to conduct a floor vote on the bill by June 12, allowing sufficient time to reconcile differences between the House and Senate versions.
Beyond the immediate fiscal implications, these amendments reflect broader discussions on taxation, education finance, and infrastructure investment in Ohio. By addressing concerns such as tax equity and public spending efficiency, lawmakers aim to craft a balanced budget that aligns with both statewide priorities and local needs. As negotiations continue, stakeholders anticipate further refinements to ensure the final document meets legislative deadlines and achieves consensus across party lines.