Gov. Mike DeWine has approved a legislative package that will save taxpayers an estimated billions of dollars over the next three years by limiting how much future increases in property values can trigger automatic tax hikes. The change will result in a corresponding loss in future revenue to schools and other local governments.
DeWine signed House Bill 124, House Bill 129, House Bill 186, House Bill 309, and House Bill 335 in his ceremonial Statehouse office on Friday. The governor’s signature means the bills take effect in 90 days – delivering a top priority for legislative Republicans ahead of next year’s midterm election.
“These bills bring about meaningful, impactful tax relief that brings about clarity, and no longer will people see the spikes they have seen,” DeWine said. “This action by the legislature on the bills that I signed were absolutely necessary.”
Republicans had been studying how to cut property taxes for two years, regularly calling the issue the number-one topic they hear about from voters. Debate bogged down over disagreement about how the state should pay for property tax cuts – whether through its general revenue, or through tax funding cuts from schools and other governments. The bills hit another speed bump over the summer when DeWine, at the urging of school officials, vetoed a different property tax bill – prompting lawmakers to head back to the drawing board.
In the meantime, voters angry about the spikes in their tax bills began organizing a campaign to abolish property taxes altogether by amending the state constitution. The amendment campaign, led by grassroots groups, has been trying to collect the hundreds of thousands of voter signatures required to put the measure on the November 2026 ballot. It’s unclear whether the effort will have the resources and sophistication needed to actually qualify.
House Speaker Matt Huffman and other legislative leaders cited the brewing tax revolt – which would radically defund local governments if it were to pass – while pressuring lawmakers to act quickly to cut taxes. The legislature finally passed the bills earlier this month.
Together, these property tax bills would:
- Cut expected future increases in property taxes by as much as $3 billion. This would work by capping the automatic tax increases that result solely from rising property values. It also would retroactively cut taxes in communities where rising taxes have exceeded inflation since 2022.
These “inflation cap credits” only would apply in communities where school districts’ tax rates are at what’s called the 20-mill floor – a term that refers to the minimum tax rate schools are guaranteed under state law. About 80% of Ohio’s current communities currently are at this level. Generally speaking, communities in rural and exurban areas where voters have approved fewer property tax levies are more likely to be at the 20-mill floor.
The $3 billion number is an estimate from the Legislative Service Commission, the nonprofit research arm of the legislature. The actual number could vary based on what property values actually do in the future, and whether voters in these communities end up approving additional tax levies before the bills are fully phased in three years from now. Some critics of the bill believe funding cuts for schools will prompt communities to seek tax increases, dampening the bills’ effects.
- Set aside $410 million in one-time funding for schools to temporarily compensate them for any lost funding resulting from the inflation cap.
- Tweak tax law to change how the 20-mill floor is calculated. Currently, certain types of property tax levies don’t count when calculating this number. The bill eliminates those exemptions, which should mean more communities will rise above the 20-mill floor, a change that’s meant to reduce future automatic tax increases. Currently, Ohio has a historically large percentage of school districts on the 20-mill floor – which due to how Ohio’s complex tax formula works, is a product of the recent property value hikes, and also is a factor in why so many property owners have seen large tax spikes recently.
- Hike taxes on many landlords by a total of $300 million to help pay for an equal tax cut for property owners. One of the bills does so by expanding the “owner occupancy tax credit” for homeowners, while eliminating another exemption for landlords and other residential property holders who don’t live in the homes they own. A group representing real estate investors unsuccessfully had urged DeWine to strike this language.
- Give greater authority to the county budget commission, a panel of county elected officials, to unilaterally reduce voter-approved tax levies.
