Ohio lawmakers completed a significant override of Governor Mike DeWine’s budget vetoes in October 2025, fundamentally altering how local governments and school districts can structure future property tax levies. This action by the General Assembly, combined with other ongoing reform efforts, represents the most substantial change to Ohio’s property tax system in nearly five decades and carries far-reaching implications for municipalities, school districts, and taxpayers across the state.
Background: Budget Bill, Vetoes & Legislative Override
The recent property tax reforms originated within Ohio’s biennial operating budget (House Bill 96) for fiscal years 2025-2027, which Governor DeWine signed on June 30, 2025. However, concerned about potential impacts on school district funding, DeWine exercised his line-item veto authority to strike dozens of provisions from the budget, including several property tax measures that had gained legislative support.
The vetoed provisions would have restricted certain types of property tax levies and imposed new oversight mechanisms on local government spending. DeWine’s primary concern centered on the potential for these reforms to harm school district operations and force cuts to educational services.
Following the vetoes, the General Assembly initiated override proceedings. The House successfully overrode one key veto provision in July 2025, and the Senate completed the process in October with a 21-11 vote, achieving the minimum 20 votes required for passage.
Types of Levies Affected by the Reform
The provisions at issue specifically target three categories of property tax levies that will no longer be permitted after January 1, 2026:
- Emergency Levies: Designed as fixed-sum levies that generate specific dollar amounts annually for school district operations. Unlike standard operating levies, emergency levies maintained consistent revenue regardless of property value fluctuations.
- Substitute Emergency Levies: These levies allowed school districts to combine or replace existing emergency levies while incorporating a growth factor for new construction added to the tax base. Substitute levies provided built-in revenue increases when new taxable property entered the district.
- Combined Income Tax and Fixed-Sum Property Tax Levies: A hybrid structure allowing school districts to propose both income tax components and fixed-sum property tax elements within a single ballot measure.
Changes Implemented by the Reform
Effective January 1, 2026, Ohio school districts and other local taxing authorities will no longer be able to place the eliminated levy types on voter ballots. The reform does not affect existing levies of these types that are currently in place or those appearing on the November 2025 ballot.
Moving forward, local governments will be limited to two primary levy structures: renewal levies (which extend existing levies at their current effective rates without tax increases) and new levies (which must be clearly presented as tax increases to voters). This change aims to increase transparency by eliminating what lawmakers characterized as potentially misleading levy language that could obscure actual tax impacts.
The legislation preserves existing emergency levies but prevents new levies of these types from being proposed. Districts currently relying on these mechanisms for revenue will need to develop alternative funding strategies or seek new levies under the remaining available structures when existing levies impacted by these changes expire.
Impact on School Districts and Communities
School District Funding Challenges:
The elimination of these levy options may create significant operational challenges for school districts, particularly those that have historically relied on emergency or substitute levies for substantial portions of their budgets. Some districts report that these restricted levy types represent 15-20% of their total operating budgets.
School districts with expiring emergency or substitute levies will face messaging difficulties when seeking renewals. Instead of presenting familiar “renewal” language to voters, districts must now propose what appear to be entirely new levies, potentially reducing voter approval rates. As one superintendent noted, voters find it “easier to vote yes” on renewals versus new levy proposals
Financial and Operational Implications:
The restricted options may force some districts to seek larger, less frequent levy requests rather than smaller, more manageable increases over shorter periods of time. Districts in fiscal distress may face particular challenges, as emergency levies previously provided crucial flexibility during budget crises.
Several districts have already indicated concerns about upcoming renewals. Districts with multiple expiring emergency levies report uncertainty about how to maintain existing service levels without the structural advantages these levy types provided.
Community and Taxpayer Effects:
Proponents argue the reforms increase transparency and prevent what they characterize as “stealth” tax increases through replacement levies that reset effective tax rates without clear voter understanding. County officials supporting the changes contend that calling long-standing levies “emergency” measures was misleading to voters.
However, the reforms may result in more frequent levy campaigns as districts lose flexibility in structuring requests. This could increase campaign costs and voter fatigue while potentially reducing approval rates for necessary school funding.
Broader Municipal Impact:
The impact of these changes is not limited to school districts, however. Townships and other local governments also lose these structural options for future levy requests. Township officials report that the changes reduce their flexibility in planning long-term operations, particularly during periods when property tax measures face increased voter resistance.
The reforms occur against a backdrop of significant property value increases across Ohio, with some areas experiencing 30-70% valuation growth over recent years. This context intensifies the debate over balancing taxpayer relief with adequate funding for essential services.
How KJK Can Help
Property tax reforms of this magnitude create complex compliance and strategic planning challenges for municipal clients, school districts and taxpayers. KJK can provide valuable assistance in navigating the transition to new levy structures, ensuring compliance with revised statutory requirements, and developing alternative funding strategies that align with both legal constraints and operational needs.
Contact
For guidance on adapting to Ohio’s evolving property tax landscape and structuring compliant levy proposals under the new framework, contact KJK attorneys James J. Scherer (JJS@kjk.com), Steven Marrer (SAM@kjk.com) or Rich Morehouse (RAM@kjk.com) for assistance.