The Ohio legislature has enacted a new state budget, with measures that will lower property taxes and income taxes for its residents. This move, seen as a bid to enhance Ohio's economic competitiveness, arrives amidst statewide concerns over financial burdens on taxpayers. According to a report by the Ohio House of Representatives, the state now boasts "historic property tax relief" while also claiming the nation’s second-lowest income tax rate.
Under the newly passed budget, which Speaker of the Ohio House of Representatives Matt Huffman (R-Lima) and State Representative Brian Stewart (R-Ashville) unveiled, property taxes for Ohioans are set to decrease starting January 2026. The budget includes provisions that require school districts with unspent cash exceeding 40% of their general budget to offer property tax relief, which could lead to a collective savings of over $2.5 billion for taxpayers. Huffman heralded the initiative, "We are empowering local school districts and governments to do the right thing and return some of their unspent money back to the taxpayers that gave it to them," according to a statement obtained by the Ohio House of Representatives.
Supporters of the budget tout its potential to strengthen the state's economy through the implementation of a flat tax. The budget proposes a reduction of the top income tax bracket from 3.5% to 3.125% in tax year 2025, and a further cut to 2.75% in tax year 2026. The shift toward a flat tax aims to simplify the system and is anticipated to foster a more competitive stance against neighboring states.
State Representative Brian Stewart, who acted as the Finance Chairman, expressed that the budget sends a welcoming message to all sectors of the national economy. "This budget provides historic income tax relief, and meaningful, broad-based property tax relief for every Ohioan," Rep. Stewart told the Ohio House of Representatives. "It has been an honor to serve as Chairman of the Finance Committee and to work with Speaker Huffman to deliver a conservative, common-sense, balanced budget for Ohio."
