Senate Substitute Budget Bill Misses the Mark on Fair School Funding
This week, the Ohio Senate Finance Committee adopted a substitute bill to House Bill 96, the state budget bill for Fiscal Years (FY) 2026 and 2027. The bill outlines the Senate’s first changes to the House-passed bill. OEA believes that the Senate Substitute version of the budget fails to prioritize the 90% of students who attend public school.
On Thursday, June 5, 2025, OEA President Scott DiMauro testified on the Senate’s proposed changes before the Senate Finance Committee. You can watch the entire testimony here. A copy of the testimony outlining our positions can be read here. You may view funding simulations for districts here, and career technical simulations here. Click here, for the simulations of performance supplements.
Below are the major policy changes contained within the Substitute measure.
School Funding
- Reinstates the Fair School Funding Plan framework and phases in years 5 and 6 but fails to update the base cost components.
- Guarantees district funding at FY 2021 levels.
- Amends the House-passed per-pupil enrollment growth to be $225 in FY 2026 for districts whose enrollment grew by at least 5% and $250 in FY 2027 for districts whose enrollment grew by at least 3%.
- Creates a new measure to provide districts funding based on state report card performance.
- Under the Senate funding proposal, 146 districts would receive less money from the state next year than this year, and 180 districts would see state revenue decline between FY 2026 and FY 2027.
School District Carryover Balances
- Raises the threshold for carryover balances from 30% to 50% before the County Budget Commission is required to reduce a school district’s property tax collections.
- Allows a school district to adopt a resolution to reserve a portion of the carryover balances for current or future permanent improvement expenses to be utilized within the next three years. These funds would not count toward the 50% threshold. However, the funds would be used to reduce property taxes if not used within three years.
- Under the 50% threshold, approximately 239 school districts would be impacted.
- Requires school boards to submit appropriations, revenue, and fund balance assumptions for the current fiscal year in addition to three-year projections of operational revenue and expenditures.
Property Taxes
- Requires school boards to obtain a two-thirds vote from all members to put a tax levy on the ballot.
- Requires that current emergency and substitute tax levies be included in calculating a school district’s 20-mill floor or a joint vocational school district’s 2-mill floor for property tax purposes.
- Eliminates the following types of levies: replacement property tax levy, fixed-sum emergency levy, substitute levy, and combined school district income tax and fixed-sum property tax levy, generally beginning with elections held on or after Jan. 1, 2026.
- Prohibits a school district from proposing a current expense levy if it has a general fund carryover balance of over 100%.
- Requires current expense levy ballot language to include the percentage and dollar amount of general fund carryover balances.
- Prohibits a school district or other education-related taxing authority from combining a renewal levy with an increase to an existing levy and making other changes. Increase the reduction amount of the standard property tax homestead exemption from $28,000 to $32,000 while increasing the income threshold from $40,000 to $42,500. It also increases the enhanced homestead exemptions for disabled veterans and surviving spouses from $56,000 to $59,000.
School Vouchers
- Removes a provision in the House-passed bill that would have established “education savings accounts” for students who attend non-chartered public schools.
- Expand eligibility for the Jon Peterson and Autism voucher programs by expanding eligibility to students from age 3 to 22, non-chartered private school students, and those who are home-schooled. It also allows these services to be provided virtually.
Other Provisions
- Retains OEA opposed language that requires a school district superintendent to assign teachers based on the “best interests of the students” and prohibits them from using seniority or continuing contract status as the primary factor in determining assignments. Specifies that the law pertaining to teacher assignments prevails over conflicting provisions of collective bargaining agreements entered into on or after the provision’s effective date.
- Reinstates OEA supported language that requires the Ohio Department of Education and Workforce (ODEW) to annually collect school district employment and vacancy data for teachers, paraprofessionals, bus drivers, providers of specialized services, principals, assistant principals, and any other positions determined by the department.
- Retains language that proposes the creation of a transportation workgroup to annually monitor and review the student transportation system and develop recommendations for changes to student transportation needs.
- Retains language that allows evaluation to be used as a “measure of progression” in the resident educator program.
Income Tax
- Reduces Ohio state income tax to a flat rate of 2.75% starting in the tax year 2026.
- Maintains that Ohioans earning less than $26,050 pay no state income tax.
- Reduces the marginal tax paid on income over $26,050 in tax year 2023 for those making less than $100,000 and in tax year 2026 for all taxpayers. Taxpayers with higher incomes will begin to phase out eligibility for the joint filer credit and personal, dependent, and spousal deductions.
- Reduces revenue to the state by $1.68 billion over the biennium.
OEA will provide a detailed summary of the bill next week once the Ohio Senate Finance Committee accepts the omnibus amendment.
Advocates Host Townhall on the Impact of Federal Medicaid Cuts
On Tuesday, June 3, 2025, OEA members and staff joined other advocates to learn about the impact of proposed federal cuts to Medicaid in the current federal spending proposal currently before the U.S. Senate. Nearly 3 million Ohioans depend on Medicaid for health care coverage. Hundreds of thousands of students benefit from Medicaid in Schools and the Children’s Health Insurance Program (CHIP). In collaboration with Policy Matters Ohio, participants heard from organizers and experts in state and national organizations. See NEA’s resources on the impact of these programs by the federal proposal.
To find the recording and all the resources sent to participants of Tuesday night’s call, please click here.
Next Week at the General Assembly
Here is your weekly snapshot of notable legislative developments, committee hearings, and bill activity at the Ohio Statehouse. Please review the updates below and take note of key actions or opportunities to engage.
Top Legislative Priorities This Week
House Bill 96 – State Operating Budget for Fiscal Years 2026 and 2027
- Status: Currently pending before the Ohio Senate Finance Committee.
- Summary: The Senate adopted a Substitute version of HB 96 on Tuesday, June 3, 2025. See the above article for details.
- OEA Position: Interested Party
Next Steps: The Ohio Senate Finance Committee heard public testimony on their substitute bill this week. The Senate Finance Committee is expected to adopt an omnibus amendment, and the full Senate will vote to pass the budget next week.
Important Committee Hearings Next Week
Ohio Senate Finance Committee
While the Ohio Senate Finance Committee has yet to schedule hearings for the week of June 9, 2025, it is anticipated that the committee will schedule hearings focused on adopting omnibus and stand-alone amendments to their version of HB 96. To view committee hearings on the Ohio Channel Live, please click here.
Get Involved
Take Action:
- Please continue sending letters to your Ohio Senators about the importance of fully updating and funding the Fair School Funding plan using OEA’s action alert.
- OEA and allies are planning a rally to Fight for Fair School Funding at the Ohio Statehouse on June 25, 2025. To RSVP for the rally, please click here.
For an archive of past Legislative Watch releases, visit the Legislative Watch archive.