House committee advances property-tax inflation cap with $360 million school backfill

The Ohio House Ways and Means Committee voted to favorably report House Bill 186 on a bipartisan 11-1 vote after accepting amendments that set an inflation cap on unvoted property-tax growth starting in tax year 2026 and provide a temporary state backfill for affected school districts.

The measure, as amended, places an inflation-based cap on second-half property-tax bills beginning in 2026. Committee members said the bill will not take money from current-year school accounts and is not retroactive. Vice Chair Representative Thomas, who presented the amendment, said the state will backfill the difference for schools until their next revaluation “to the tune of roughly $360,000,000 from the sales tax holiday fund.”

Why it matters: The amendment’s backfill is intended to give school districts time to adjust budgets between revaluations while implementing a policy that would prevent unvoted property-tax increases above inflation moving forward. Committee members described the change as a middle path between fully protecting past unvoted increases and leaving schools immediately exposed to revenue losses.

Key provisions and debate - Inflation cap timing: The cap on year-over-year unvoted property-tax growth takes effect in 2026 on second-half bills, according to committee discussion. Committee leaders repeatedly stated the measure is not retroactive.

- School backfill: Vice Chair Representative Thomas explained that the state will use remaining balances in the sales-tax holiday fund to backfill schools’ revenue losses until each district’s next county revaluation. Thomas said the amount dedicated for that purpose is “roughly $360,000,000.”

- Targeting amendment tabled: Representative Troy offered an amendment to limit the bill’s credit to owner-occupied and agricultural property, excluding vacation homes, out-of-state-owned property and rental properties. The committee voted to lay that amendment on the table by roll call, 8 to 4. Representative Thomas moved to table the amendment; the chair then called the roll. The committee’s chairs and members later accepted the other technical and harmonizing changes.

Quotes from the hearing “First, no retroactivity in this bill,” said Representative Thomas, the vice chair of the committee, as he explained the timing of the cap and the state backfill. “We are using state dollars, but they are taxpayer dollars, and we should be very frugal and very conservative with how we are using those taxpayer dollars.”

“I just want to say this is the right thing to do that to hold our schools harmless,” said Representative Richardson during floor discussion before the final vote.

Representative Troy, the ranking member, urged additional future consideration: “If we agree that it is finally time for the state to put some skin in the game, then why not commit the additional $100,000,000 necessary to truly hold our kids harmless… Is this something that you … would be willing to work with us on in the future?”

Formal actions and outcome - Motion to amend HB 186 with amendment L_136_0063 (-10) (mover: Vice Chair Representative Thomas). The committee accepted the amendment by…