COLUMBUS — Gov. Mike DeWine’s proposed tax hikes on tobacco, marijuana, and sports betting are out.

Republican leaders of the Ohio House of Representatives on Tuesday unveiled their first counteroffer to the two-year general fund budget that Mr. DeWine unveiled in February. They hope to send their version of House Bill 96 to the Senate on April 9.

The proposal would guarantee that no school district in the state will receive less funding than it received this year, a total of about $500 million more over the current fiscal year and about $200 more than the governor’s budget proposed.

But that’s less than what was envisioned by the Fair School Funding Plan formula, which is just four years into what was supposed to be a six-year phase-in.

Addressing calls from back home for relief from local property tax bills, the plan would require school districts carrying year-to-year balances of more than 25 percent of their prior year’s operating budgets to have school property tax bills lowered to compensate.

“They’re going to continue to receive an increase [in funding] from the state ... but those property evaluations aren’t going down," House Speaker Matt Huffman (R., Lima) said. “So simply what we’re trying to do is say if you have a carry-over balance of more than 25 percent, your local tax board shall reduce the taxes pro rata in those school districts so those folks will get immediate tax relief.”

Rep. Brian Stewart (R., Ashville), chairman of the House Finance Committee, said 528 of Ohio’s 609 school districts are carrying a total cash balance of $10.8 billion.

More than half of all school districts in the state faced less funding under Mr. DeWine’s proposal. That was due, in part, to the formula being updated to reflect how much a district could expect to collect in taxes from rising property valuations. But the formula was not updated for inflation to reflect how much it would cost to educate a student in that district.

Mr. Stewart characterized proposed changes to the funding formula in the House plan as a bridge between this budget and a new funding formula in the next.

It would expand eligibility for and increase the amount of vouchers targeting children with autism from $32,445 to $34,000 and would give students with educational savings accounts 75 percent of the broader EdChoice voucher. Otherwise, it largely maintains voucher expansions included in the governor’s proposal.

The House plan does not include any major, across-the-board income or other tax cuts. But it would reduce the tax paid for the extraction of coal from 10 cents per ton to 8 cents and eliminate the $250 fee paid to plug orphaned and abandoned oil and gas wells. Both would be in the name of fostering energy generation.

It would also eliminate Mr. DeWine's proposed $10 vehicle registration and $3 title certificate fee increases to fund the highway patrol.

A final budget must reach the governor’s desk by June 30.

Tobacco, weed, and gambling

Mr. DeWine had proposed raising the tax on cigarettes by $1.50 to $3.10 — with an equivalent increase in separate taxes on other tobacco and nicotine products — to generate about $450 million a year.

That would have provided about 40,000 families with tax credits of up to $1,000, depending on income, for each child age 6 and younger. With no tax hike there will be no child tax credit.

Mr. DeWine wanted to double the tax on sports betting to 40 percent to help pay for professional sports facilities as well as youth sports. The House proposal will instead set up $600 million in taxpayer-backed borrowing toward a $3.4 billion domed stadium in Brook Park, Ohio, sought by owners of the Cleveland Browns.

Mr. Huffman said the state would reap more benefits from expanded economic development tied to that project than what would be paid on that debt.

Mr. DeWine has argued that Ohio taxpayers in general should not be asked to foot the bill for such projects and that the funds should instead come from those making money off gambling on sports.

He had proposed doubling to 20 percent the tax that voters approved on adult-use marijuana sales. He wants to use the proceeds to fund a laundry list of items, among them local jails, driver training, law enforcement training, addiction treatment, suicide prevention, and poison control.

The House plan would earmark 20 percent of marijuana proceeds for five years to local governments with retail dispensaries within their borders.

The Ohio Municipal League, which represents cities and villages, objected to the temporary nature of that earmark.

“Many of our members across the state allowed this new type of commerce to operate in their communities with the understanding that the revenue sharing system included in Issue 2 in 2023 would be meaningful and sustained,” it said. “Changing the rules in the middle of the game is a deep concern to our local leaders and their constituents.”

The House budget proposal would retain the current 10 percent tax on marijuana sales approved by voters.

“The budget, as is right now, does not address the needs of everyday Ohioans and does not go far enough to bring improvements to the lives of our citizens and communities,” said House Minority Leader Allison Russo (D., Upper Arlington). 

"Ohioans deserve a budget that benefits our children by properly funding public education, necessary programs to help our communities succeed and grow, and well overdue property tax relief we know Ohioans want,” she said. “We’re not there yet."

The House plan would also:

● Continue erosion of the State Board of Education by reducing it to five members who would be appointed by the governor.

● Create a pilot program to share child-care costs through which employers and employees would each pay 40 percent of the tab and the state would pick up 20 percent.

● Retain Mr. DeWine’s plan to increase local governments’ share of state tax revenue to 1.75 percent, but it would replace libraries’ percentage share with a flat appropriation going forward.

● Increase direct instructional aid for public universities and colleges by 2 percent a year in exchange for a promise that tuition would not rise more than 3 percent.

● Eliminate the governor’s plan to make a seat belt violation a primary offense that alone may warrant being pulled over.

● Retain the governor’s language to eliminate expanded Medicaid coverage for about 770,000 lower-income Ohioans if federal reimbursement should drop below the current 90 percent.

First Published April 1, 2025, 7:30 p.m.