During a fourth hearing on House Bill 186 on Wednesday, the House Ways and Means Committee accepted an amendment that removes a provision in the bill that had altered the school funding formulaspecifically, a change intended to ensure school districts would remain whole if local property tax revenue growth were capped.

Vice Chair Thomas moved Amendment AM1360582 to delete the bills provision that would have changed how the stateschool funding formula treats local revenue reductions; the amendment was accepted without objection. The vice chair said the provision was removed to allow the budget process time to determine how the state school funding formula will be handled in the budget, and to avoid contradictory statutory language.

Lawrence County Chief Deputy Auditor Chris Klein, testifying for Lawrence County and the County Auditors Association of Ohio (CAAO), said the original version of HB 186 included a "qualifying valuation" certification change that would have preserved school funding levels if local revenue growth were capped. Klein and other auditors said removing that certification language in the current amendment could cause districts to face a double shortfall: a cap on local revenue growth plus no adjustment to state funding calculations for valuation changes reported to the state Department of Education and Workforce.

Klein told the committee the original compromise allowed inflation-based revenue growth while preventing large tax bill spikes caused by rapid valuation swings. "Under the current state formula, schools are assumed to receive 20 mills of local funding," Klein said. "If House Bill 186 caps local revenue growth and inflation without adjusting how valuations are reported to [the Department of Education and Workforce], school districts face a funding shortfall from both state and local sources." He urged the committee to restore or rework the certification language so the bill does not create new instability and force districts back to the ballot.

Representatives from school districts and school-funding stakeholders also testified in writing or appeared as interested parties. Paul Imhoff and Nicole Piscatani said their organizations appreciate efforts to provide property tax relief but object to the amendment as written, calling it a step backward that could resurrect "phantom revenue" issues.

Committee members said they would continue to work on the item in coordination with the state budget process and that final decisions on school funding mechanics will be addressed in the budget.

The committee accepted the amendment and concluded the fourth hearing on HB 186.