Gov. Mike DeWine will release his two-year state budget Monday; it's the final spending plan of his two terms in office. Among the many things to watch for in the 2025-26 budget, two things stand out: what he proposes for K-12 public school funding and if he does anything with income tax cuts.
This budget is set to include the final installment of the implementation of the Fair School Funding plan that started in 2021, which aims to calculate state funding for students through a formula based on a district’s property value and household income. The full cost of the implementation was $2 billion, so it was set to be phased in over three budgets.
House Speaker Matt Huffman (R-Lima) has said he doesn't think the spending increase in that plan is sustainable, and that previous lawmakers can't hold future legislators to this proposal.
But tax cuts have been part of the last seven budgets:
- 2011: final year of a 21% across-the-board tax cut begun under Republican former Gov. Bob Taft
- 2013: 10% income tax cut
- 2015: 6.3% income tax cut
- 2017: income tax eliminated for people making under $10,650 and nine tax brackets reduced to eight
- 2019: 4% income tax cut, income tax eliminated for people making under $21,750, tax brackets reduced from eight to six
- 2021: income tax eliminated for people making under $25,000, restructuring of six brackets to four with 3% income tax cut for lowest three brackets and 16.8% income tax cut with elimination of top bracket (income over $221,300)
- 2023: four tax brackets reduced to two (2.75% and 3.5%), resulting in 14.8% cut for lower bracket and 12.3% cut for upper bracket; elimination of commercial activity tax for nearly all Ohio businesses
DeWine hasn’t proposed an income tax cut in a budget since becoming governor in 2019, and hinted he wouldn’t since this time either since this budget is leaner as pandemic-era federal funds have ended. But GOP lawmakers will likely want to try to add one if he doesn’t.
The budget must be signed by the end of June.
