School business officials warn House panel that House Bill 186 could create major funding gaps and constitutional issues

COLUMBUS — At the House Ways and Means Committee’s third hearing on House Bill 186, witnesses representing school business officials warned the committee the bill’s property-tax credit mechanics would create sizable revenue losses for districts, raise constitutional questions about uniform taxation and equal protection, and mostly affect districts already at the 20-mill floor.

Katie Johnson, executive director of the Ohio Association of School Business Officials, told the committee that the Legislative Service Commission’s fiscal note projects property-tax credits under House Bill 186 would total “nearly $42,000,000 in tax year 2025 and increase to $64,000,000 in 2026.” She said the bill’s state funding adjustment would only offset “approximately 30 to 40% of the lost revenue and wouldn't begin until fiscal year 2027.”

“House Bill 186 would create an immediate and significant funding gap for school districts while raising constitutional concerns,” Johnson said, citing Article 12, Section 2 of the Ohio Constitution, which requires that real property be taxed by a uniform rule according to value, and Article 1, Section 2 (equal protection). She said the bill’s district-specific credit factors—tied to reappraisal timing, local valuation changes and inflation measures—would produce different effective assessment ratios for identical homes depending on district.

“Identical $200,000 homes in different districts would pay different effective tax rates solely based on which district they're located in,” Johnson said, and that the state Supreme Court has “specifically ruled that such varying assessment ratios violate the constitutional requirement of uniform taxation.”

Tara Stacy, treasurer/CFO for Springboro Community City Schools and a NOASBO board member, described the local consequences. She told the committee that combining additional millage into the 20-mill floor or changing which levies count against the floor would not automatically generate more state funding and could force districts to “immediately go back to the voters to recoup whatever monies we lost.” Stacy said her district would lose “about $2.5 million in anticipated revenue” under one proposal and that new levies would not receive the previous rollback rate, making replacement more expensive.

Multiple committee members pressed witnesses on which districts would be most affected. Johnson and Stacy said districts at or near the 20-mill floor—typically rural and poorer districts—would bear the largest share of the revenue loss; wealthier suburban districts that receive less state aid would be less likely to be at the floor. Johnson said the state-local funding split was about 38% state support for fiscal year 2025 and that a stronger state commitment to the Fair School Funding Formula would help.

Representative Troy and other members suggested alternate approaches—tightening what counts against the 20-mill floor, expanding homestead or circuit-breaker relief, or a longer-term property-tax reform effort. Tara Stacy and Johnson cautioned that retroactive changes to what counts against the floor could undermine voter intent and legal frameworks for levies approved under existing rules.

Jim Cook, a 23-year member of a local board of education, proposed a compromise intended to stabilize budgeting: a three-year minimum inflation rate of 9% to be used in the bill’s calculations, arguing that multi-year averages produce more predictable revenue for small districts. Cook said the higher minimum would “shield the district from low GDP rates, while at the same time having minimal effect on the taxpayer credit.”

Committee members asked the witnesses for further analysis. Johnson said the association has internal projections and would share district-level breakdowns to help the committee understand which districts would be affected; she cautioned that Legislative Service Commission runs would be the authoritative fiscal figures.

No motion to adopt changes or votes on House Bill 186 took place during the hearing. Committee members and witnesses requested continued dialogue and additional data to explore alternatives that could provide targeted relief without disrupting school funding uniformity or causing immediate budget shortfalls for districts.