The state’s biennial budget, approved by the General Assembly, makes significant changes to Ohio’s tax structure.

Many of the changes are to property taxes, which has been a main focus of the Republican-led state Legislature.

A significant change limits school districts to having only up to 40% of their annual operating budget in their cash reserves. But there is a provision that the 40% limit could be exceeded if the money is kept in a separate fund for construction and maintenance projects.

It also gives county budget commissions control over tax rates and levies, permitting them to cut property tax rates if revenues exceed expenditures — even if voters approved ballot initiatives for that funding.

State Rep. David Thomas, R-Jefferson, who represents a portion of Trumbull County, introduced the budget commission legislation and several other bills that were incorporated into the state budget.

The budget mandates government entities pass resolutions to accept unvoted property tax increases and lift about 200 of the state’s 611 school districts off the 20 Mill Floor by including emergency levies in their guaranteed tax rates. It also pauses that floor when rates are decreased below 20 mills by the county budget commission.

The state Legislature in 1977 approved a bill that guarantees each of the 611 school districts in Ohio receive at least 20 mills, even though about 400 of the districts are below that guaranteed amount. That permits schools below that 20-mill floor to collect the full 20 mills.

Thomas had wanted to eliminate the 20 Mill Floor altogether, but said he was pleased with the bill.

“It’s monumental,” Thomas said. “This is the biggest step we’ve taken since the crisis” of about three years ago when property valuations skyrocketed in Ohio, causing taxes to increase for a number of homeowners.

Thomas, the House Republicans’ pointman on property tax reform, said the bill’s change “will make a huge difference for Ohioans. I wanted to go stronger and did not get everything I believe our taxpayers need, but this is a huge step.”

Thomas said he will work through the summer recess on other property tax reform bills.

State Rep. Lauren McNally, D-Youngstown, said the bill raids school districts’ savings accounts rather than having the state provide property tax relief. She said the bill will force more schools to put levies on the ballot or for schools to close.

Thomas said this bill will give voters more control over how they fund their school districts.

The bill passed in the Senate 23-10 and in the House 59-38. All Democrats voted no for the budget for the first time in 24 years. There was one Republican senator and five Republican House members who voted against the bill.

Gov. Mike DeWine, a Republican, has until July 1 to sign the bill into law. He can line-item veto any provision, which would then have to be overrode by the House and Senate, which would likely have the votes to do so.

The bill also removes the ability for any government entity to seek replacement and emergency levies as well as renewal levies with an increase in collections.

The budget drops the state income tax to a flat rate of 2.75% over two years, benefiting wealthy Ohioans.

The budget gives an overall small increase to public school funding, but will reward schools with larger enrollments and higher student performance.

About one-third of school districts will see cuts in state funding, Thomas said.

McNally said the new formula guts public schools.

McNally said: “I am very disappointed in this budget. We have had nearly six months of testimony, meetings, amendments and research, only for it to be completely ignored. Under this budget, Ohioans are going to suffer and will have to make sacrifices to make ends meet. When I talk to constituents, they are worried about properly funded schools, real property tax relief and basic things like clean water — none of which this budget delivers.”

State Rep. Nick Santucci, R-Niles, said the budget delivers “critical investments in education, workforce development and community revitalization. It lowers the cost of higher education, supports our workforce and boosts funding for brownfield cleanup and site readiness — helping turn blighted properties into housing and economic opportunities.”

State Sen. Sandra O’Brien, R-Lenox, whose district includes all of Trumbull County, said, “I’m proud to support this transformational and fiscally responsible operating budget for Ohio. By implementing reforms to property taxes and supporting all Ohioans with a flat state income tax, this budget is an investment in Ohio’s future.”

State Sen. Al Cutrona, R-Canfield, called it a “transformative” budget and said it provides “necessary relief and support to the hardworking men and women of Ohio.”

LOCAL FUNDING

The state budget also included about $4 million in funding for projects in the Mahoning Valley.

That includes $2 million for the Eastern Ohio Military Affairs Commission to be used in construction and repair projects at the Youngstown Air Reserve Station, the Youngstown-Warren Regional Airport and the Camp James A. Garfield Military Training Center.

There is also $625,000 for the Youngstown State University Excellence Training Center. The Senate version had $1.25 million for the center.

The center opened in 2021 with $7 million in state capital funding and $5 million from the U.S. Economic Development Administration and the Appalachian Regional Commission. The center provides workforce development training for advanced manufacturing, such as robotics, automation and 3D printing.

The funding will go towards expanding the center.

There is also $500,000 for stadium maintenance and improvements for the Mahoning Valley Scrappers and a $185,000 reappropriation for the village of Poland.

The Ohio Department of Natural Resources last year awarded that money to the village, but it was incorrectly earmarked.

It was supposed to go to the village’s Forest Connector project — and now it will.

The budget includes $250,000 for the Eastgate Regional Council of Governments to support the study of the construction of an oil and natural gas pipeline along state Route 11 in Mahoning, Trumbull, Columbiana and Ashtabula counties.

A study would take about a year.

The potential pipeline could promote development of large companies in the four counties, Cutrona said.

Also, the budget restores $210,000 a year for two years to Eastgate.