by Nicole Piscitani • June 9, 2025
The fiscal year 2026-27 budget will soon be one step closer to being finalized. On June 3, the Ohio Senate unveiled its amended version of House Bill (HB) 96, the biennial budget bill. The changes accepted by the Senate Finance Committee drastically changed many provisions of the House-passed version of the budget.
School-funding formula
The Senate’s proposal continues years five and six of the Fair School Funding Plan phase-in with guarantees, ensuring that no district receives less state aid than it received in fiscal year (FY) 2021. School districts that are experiencing growth have a slightly different growth calculation than the one proposed by the House. The Senate increases the growth supplement to $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%.
The Senate also developed a performance supplement based on a school district’s state report card. The supplement provides additional revenue in FY 2026 and FY 2027 to districts that received any of the following on the state report card for the 2023-24 school year:
- an overall performance rating of four or more stars;
- a performance rating of three or more stars on the Progress component;
- a higher performance rating on the Progress component than the district received for that component on its 2022-23 report card.
The supplement payment is calculated as a district's current year enrollment multiplied by $26, times the greater of the number of stars the district received for its overall performance rating or its progress component rating. Furthermore, the Senate creates an Education Demonstration Projects fund with $15 million over the biennium and requires the fund to issue grants for primary education-related demonstration projects. The Ohio Department of Education and Workforce (ODEW) must solicit proposals from organizations with a demonstrated record of increased student achievement or improved test results and distribute grants by Jan. 1, 2026.
Lastly, the Senate made changes to the disadvantaged pupil impact aid (DPIA). Under the Senate’s formula, ODEW would be required for FY 2026 and FY 2027 to calculate a district’s DPIA by using a weighted number of economically disadvantaged students equal to the sum of:
- the number of economically disadvantaged students reported for the district for FY 2025, as of June 1, 2025, multiplied by 75% for FY 2026 and 65% for FY 2027;
- the number of directly certified economically disadvantaged students for the fiscal year multiplied by 25% for FY 2026 and 35% for FY 2027.
Cash balance carryover
The Senate made slight changes to the carryover provisions of the House-passed version of the budget. First, the Senate increased the threshold from 30% to 50% before a county budget commission must reduce a school district's property tax collections. However, the Senate also inserted a provision that would allow a school district to designate a portion of the carryover amount for capital purposes. A school district would be permitted to adopt a resolution reserving an amount of carryover balance for current or future permanent improvement expenses to be used within the next three years that will not count toward the 50% threshold. If the designated portions are not used for this purpose within three years, the money will be used to reduce property taxes.
Property taxes
It was anticipated that the Senate version of HB 96 would contain property tax reform provisions, as indicated by the Senate President Rob McColley (R-Napoleon) and several senators during budget testimony and questioning of witnesses. The Senate did include several provisions; the major provisions are included below. It is important to note that two state representatives held a press conference on their property tax bill, HB 335, the day following the Senate’s unveiling of its amended budget. The House may now push to include portions of HB 335 in the conference committee. The Senate’s property tax provisions are:
- requires that current emergency and substitute tax levies be included in the calculation of a school district's 20-mill floor or a joint vocational school district's two-mill floor for property tax purposes;
- allows a county budget commission to reduce millage on any voter-approved tax levy, aside from a debt levy, if the commission finds it reasonably necessary or prudent to avoid unnecessary, excessive or unneeded property tax collections;
- 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 or other education-related taxing authority from combining a renewal levy with an increase to an existing levy;
- requires that school districts obtain approval from the county budget commission before adjusting inside millage in a manner that increases tax rates.
The Senate Finance Committee will accept some additional changes through an omnibus amendment on June 10 and will likely vote HB 96 out of committee. The entire Senate may vote on the bill on June 11, with the House voting to not concur with the Senate changes. If the House votes to not concur, HB 96 will enter the conference committee. The General Assembly needs to have HB 96 finalized and sent to Gov. Mike DeWine for his action by June 30, 2025 — the end of the fiscal year.