Ohio Senate approves $xx‑billion biennial budget, enacts flat tax and measures on schools, housing and unclaimed funds

COLUMBUS — The Ohio Senate passed amended substitute House Bill 96 on June 10, a two‑year operating budget for fiscal 2026–27 that includes a transition to a 2.75% flat individual income tax, adjustments to the Fair School Funding plan, new housing and infrastructure programs, and a plan to use a portion of long‑unclaimed funds to seed a sports and cultural facilities account. The measure passed 23–10.

The budget, presented as the Senate’s comprehensive spending and policy plan for 07/01/2025–06/30/2027, would move Ohio toward a single rate income tax that sponsors say will “put money back in taxpayers’ pockets.” Finance committee chair Senator Serino described the bill as the result of months of work and said it provides additional state aid for K‑12 education while offering tax relief and new economic development incentives.

Supporters said the package includes a near‑complete phase‑in of the Fair School Funding plan with a guarantee that no district will receive less than it did in fiscal 2021, and a new performance component and enrollment growth supplement. The bill also would give county budget commissions broader authority to reduce millage collections on voter‑approved levies in certain circumstances, impose a 50% carryover cap on school district reserves with limited exceptions, and create measures supporters say increase transparency on levies and reserve use.

The measure contains a set of housing and economic development initiatives. It funds a $25 million residential economic development district grant program targeted to jurisdictions near large job projects, a $100 million rural infrastructure revolving loan fund to support water/sewer extensions for housing developments, and restores or expands several housing programs including investments in Welcome Home Ohio and the Ohio Housing Trust Fund. The budget also includes allocations for a variety of tax‑credit programs aimed at redevelopment and economic growth, including transformational mixed‑use development credits, opportunity zone credits, historic rehabilitation credits and film/theater credits.

A controversial component of the Senate plan would direct up to $1.7 billion of aged, long‑unclaimed state funds into a new sports and cultural facilities fund; the budget text calls for a $600 million performance grant to the Cleveland Browns and sets aside funds for other future projects. Finance committee floor remarks said the proposal would use unclaimed funds aged more than 10 years and includes safeguards for claimants, while proponents said the approach avoids new debt and risk to the state’s credit rating.

Environmental and water quality funding also appears: the package adds money for H2Ohio and nutrient‑reduction efforts. Supporters pointed to a $170 million H2Ohio allocation over the biennium and additional funding for agricultural conservation practices.

The bill drew sustained opposition from Democrats and some Republicans who said it undercuts priorities they and constituents raised during the hearings. Ranking member Senator Hicks Hudson urged a “no” vote, arguing the tax cut disproportionately benefits high‑income households, that the Fair School Funding plan is underfunded relative to 2025 cost inputs, and that the bill cuts or fails to fully fund programs Democrats described as essential — including public school supports, food banks, lead abatement, certain public‑health initiatives and library funding. Other speakers criticized provisions that would trigger reductions in Medicaid coverage if federal matching funds fell, and measures that change how local levies and district reserves are treated.

Lawmakers debated dozens of floor amendments on issues including ash‑tree removal in waterways, school‑funding technical changes, property‑tax relief proposals and healthcare provisions tied to federal Medicaid funding. Several amendments were laid on the table during consideration; multiple lawmakers said additional cleanup and conference work would be required before final enactment.

Votes at a glance: amended substitute House Bill 96 — Passed 23 ayes, 10 nays. (Final tally recorded on the Senate floor.)

Because the bill contains both large spending decisions and policy changes — from tax code restructuring to school funding mechanics and housing programs — sponsors said it represents a package of trade‑offs negotiated among committees. Opponents said the package shifts burdens to working families and local governments while favoring tax cuts and incentive programs designed to attract investment.

Senator Serino recommended passage; Senator Hicks Hudson spoke at length against the bill and urged colleagues to oppose it. Several other senators on both sides highlighted discrete provisions they supported, including investments in mental‑health crisis services, quick‑response opioid teams, university research and residency expansions, and rural infrastructure programs.

The bill now moves to the House (concurrence/conferral steps as applicable) for final action and any conference committee work that will reconcile differences between chambers.

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Votes and formal actions tied to this article are recorded in the meeting actions array. The transcript contains extended floor debate and roll calls that provide the evidentiary basis for the summary above.