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Ohio’s state capital budget moved forward this week after the Republican-led legislature finalized a package of property tax reforms. These reforms had been a major sticking point in negotiations.
Lawmakers reached the agreement as the General Assembly worked toward the close of the 2025 legislative session.
The compromise resolved months of debate over how to address rising property tax bills. This allows the state to proceed with long-planned capital investments.
According to a report by Cleveland.com, with Governor Mike DeWine having enacted five major property tax reform measures, leaders in both the Ohio House and Senate are now more confident. They feel ready to advance the state’s capital budget.
While the issue may seem technical, the capital budget has wide-reaching implications for communities across Ohio. Separate from the state’s operating budget, it concentrates on funding construction and infrastructure repair projects.
What the budget will support
With the dispute settled, the capital budget—which funds projects such as parks, schools, water systems, mental health facilities, and other public infrastructure—is now positioned for final approval.
The spending plan supports construction and improvement projects across Ohio. These include initiatives in Hamilton County and other local communities.
Republican leaders had previously insisted that progress on the capital budget be paired with changes to Ohio’s property tax system. They cited concerns from homeowners facing sharp increases following recent property reappraisals.
The agreement reflects those concerns by placing new limits. These limits control how much certain property tax revenues can grow when property values rise.
As part of the deal, lawmakers approved House Bill 186 and House Bill 335, two measures aimed at reducing automatic tax increases that occur without voter approval.
House Bill 186 applies to school districts operating at the state’s 20-mill floor. It limits revenue growth tied to rising property values by capping increases at the rate of inflation, unless voters approve additional levies. House Bill 335 focuses on “inside millage,” the unvoted property taxes collected by cities, counties, and townships, similarly restricting revenue growth to inflation.
What comes next
Supporters of the reforms say the changes provide predictability for homeowners. They prevent tax collections from increasing solely due to valuation spikes rather than voter-approved policy decisions.
The Journal-News had reported that the compromise was driven in part by strong feedback from residents. This feedback came from counties such as Butler and Hamilton, where recent reappraisals led to significant increases in property tax bills.
With the legislation now enacted, attention shifts to implementation.
County auditors will be responsible for adjusting tax calculations to reflect the new limits, while state agencies and local governments prepare to move forward with capital projects authorized under the budget.
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Commissioners approve $1.3 B Hamilton County budget for 2026
