Ohio committee advances property-tax inflation cap, approves $360 million school backfill

The Ohio House Ways and Means Committee on March 1 voted to favorably report House Bill 186, a measure that would cap unvoted property tax growth to inflation beginning in tax year 2026 and provide a temporary state backfill for school districts until their next property revaluation.

Committee members approved an amendment (L_136_0063 -10) that retains the bill’s core inflation cap on so-called “second-half” tax bills while directing roughly $360,000,000 from the sales tax holiday fund to compensate school districts for lost property-tax revenue until each district’s next revaluation. Vice Chair Representative Thomas, who moved the amendment, said the change “keeps schools essentially full moving forward until their next revaluation.”

The committee’s action sends the bill to the Rules and Reference Committee; the committee vote to report the bill was 11–1.

Why it matters: House Bill 186 would limit growth in certain property tax bills to a rate tied to inflation starting in 2026, a policy change meant to prevent large, unvoted increases in property tax bills. Lawmakers added a temporary state-funded glide path so school districts receive a one-time backfill from the sales tax holiday fund pending their next revaluation.

Supporters and questions Vice Chair Thomas, who described the legislation as the product of extensive bipartisan staff work, said the measure is intended to ensure “property taxes should not increase above inflation without a vote,” and to provide districts time to budget for the change.

Ranking Member Representative Troy praised the state contribution but pressed whether the $360 million would be sufficient in later years, noting Legislative Service Commission (LSC) estimates that 109 districts and joint vocational school districts (JVSDs) could see $50,000,000 less revenue in 2027, with that number rising to 152 districts in 2028. Troy asked whether lawmakers would consider additional funding; Thomas replied the committee has an “open mind” but defended the $360 million as a middle path, saying, “we should be very frugal and very conservative with how we are using those taxpayer dollars.”

A proposed amendment by Representative Troy to limit the credit to owner-occupied and agricultural property was debated and then laid on the table by an 8–4 vote. Troy argued that, as drafted, House Bill 186 would apply credits to vacation homes, out-of-state owners and rental properties, and said targeting owner-occupied residences would better focus relief and reduce state costs. Opponents of that change argued the cap should apply broadly, including to renters and small-business property owners.

Votes and formal actions - Motion: Amend HB186 with L_136_0063 -10 (description: retain inflation cap starting 2026; backfill schools until next revaluation with ~ $360,000,000 from the sales tax holiday fund). Mover: Vice Chair Representative Thomas. Outcome: Amendment accepted (voice/consent as announced). See actions array for the formal motion and vote to report the bill.

- Motion: Table Representative Troy’s amendment to limit the HB186 credit to owner-occupied and agricultural property. Outcome: Laid on the table by a vote of 8–4 (roll called in committee).

- Motion: Favorably report House Bill 186 and re-refer to Rules and Reference. Mover: Vice Chair Representative Thomas. Outcome: Favorably reported; committee vote 11–1.

What the bill does not do Committee members repeatedly clarified that the measure is not retroactive to prior tax years: the cap takes effect for 2026 and later bills, and Thomas said, “this is not a retroactive bill.” The state backfill covers the period until districts’ next revaluations rather than guaranteeing funding beyond each district’s next cycle.

Next steps LSC was asked to harmonize and engross accepted amendments and substitute language. The committee’s favorable report refers the bill to the House Rules and Reference Committee for further consideration.

Ending note Committee leaders described the package as a significant step in property-tax reform but said additional, targeted measures (for example, circuit-breaker style relief or other senior-targeted aid) remain under discussion in ongoing work on property-tax policy.