Ohio committee backs property-tax cap with $360 million school backfill, tables owner-occupancy restriction

The Ohio House Ways and Means Committee on March 1 favorably reported House Bill 186 after accepting amendments that keep an inflation-based cap on property-tax increases and direct state dollars to limit near-term revenue losses for school districts.

The committee approved an amendment that preserves the bill's core inflation cap, with that cap to take effect in 2026, and accepted language that uses about $360 million from the sales tax holiday fund to "backfill" schools until each district's next property revaluation. Vice Chair Representative Thomas, who explained the amendment, said, "The core of the bill stays the same with the inflation cap starting in 2026 on second half bills." He added that the funding would come from the sales tax holiday fund.

Why it matters: The bill aims to limit unvoted increases in property-tax revenue by tying growth to inflation, while the state-provided backfill is intended as a glide path to protect school budgets until revaluations occur. Supporters said the approach balances taxpayer relief with protections for local education funding.

Discussion and amendments Committee members debated whether the state should provide additional years or amounts of backfill. Ranking Member Troy said the funding represented progress but asked whether the state would consider adding another $100 million to fully hold districts harmless: "So I've said it was time for the state to get some skin in the game, and I guess we are moving in that direction." Chair and proponents responded that the bill is not retroactive and that the backfill is meant as a conservative, time-limited measure: "So the cap starts next year in 2026, does not pull money out of school accounts from payments this year or last year," Representative Thomas said.

Representative Troy offered an amendment to restrict the HB186 credit to owner-occupied and agricultural property, arguing the larger draft would extend credits to vacation homes, out-of-state companies and rentals and that targeting would reduce state costs. The committee voted to lay that amendment on the table by roll call, recorded in the hearing transcript as an 8'0 vote in favor of tabling and 4 opposed. Representative Richardson said the accepted approach was appropriate: "I just wanna say this is the right thing to do that to hold our schools harmless."

Votes and next steps The committee voted 11'1 to favorably report House Bill 186 and recommended referral to the Committee on Rules and Reference. Members asked Legislative Service Commission staff to harmonize and engross the accepted amendments and substitute language.

Details and limits The bill implements an inflation cap beginning in 2026 on the second-half property tax bills and uses an appropriation from the sales tax holiday fund to partially offset the effect on school districts until their next revaluation. Proponents emphasized the backfill covers a transitional period only and said the measure is not a retroactive payment for prior years.

What's next LSC will harmonize accepted amendments and engross the bill; the committee recommended HB186 be re-referred to Rules and Reference for further processing.