Schools relieved by Ohio governor's budget veto, brace for potential GOP challenges

Central Ohio School Districts have given Governor Mike DeWine a passing grade for his line-item vetoes in the next state budget, removing limits on school districts’ carryover savings and other changes impacting school levies.

“I think we are optimistic,” Westerville City Schools Treasurer Nicole Marshall told ABC 6/FOX 28. “We were definitely grateful for Governor DeWine and all of the vetoes that he made.”

Marshall was among the first school treasurers ABC 6/FOX 28 heard raise financial alarms over a plan in the GOP-backed budget to provide property tax relief by capping school districts' year-to-year carryover balances. The state budget limited district savings at 40% of their annual budgets.

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Olentangy Local Schools Treasurer Ryan Jenkins and South Western City Schools Treasurer Hugh Garside also shared similar concerns about how the plan could decimate strategically acquired cash reserves of school districts, resulting in likely substantial local budget cuts and more frequent levy requests.

“A lot of the big provisions that we were really, really concerned about around property tax reform, he did veto all of those,” Marshall said.

DeWine said he understands property tax increases have created financial problems for Ohioans, especially those on fixed incomes.

However, he said the General Assembly’s plan undermined schools working to be financially responsible. No Democrats voted to approve the budget.

“I felt that these ideas were thoughtful, but I was also concerned that imposing them now, all of them at once, on our local schools would create a huge, huge problem,” DeWine said.

Olentangy Schools Assistant Director of Communications Amanda Beeman said the district appreciated the effort lawmakers put into the budget, but the district was pleased with the governor’s veto on the carryover provision.

“As a high-performing public school district, we believe that Governor DeWine’s veto of the proposed 40% carryover limit is in the best interest of our stakeholders and supports our ability to be responsible stewards of public funds while meeting the needs of our growing student population,” Beeman said. “As the final version of the state budget is signed into law, Olentangy Schools remains committed to our mission to facilitate maximum learning for every student.”

South Western City Schools Executive Director of Communications Evan Debo described the carryover veto as a “critical” decision.

“Through Governor DeWine's critical line-item veto regarding carryover fund caps, a necessary balance has now been reached in the state budget that honors tax reform efforts, while also protecting financial safeguards vital to student success,” Debo said.

House Speaker Matt Huffman (R-Lima) said House Republicans are eager to begin work on potentially overriding DeWine’s vetoes.

“As with every budget, there are always some disagreements on specific provisions,” Huffman said in a written statement. “While disappointed in the vetoes, I am in the process of talking with members of our caucus, many of whom have already expressed an eagerness to return to the Statehouse soon to consider veto overrides. Particularly in the area of property tax relief passed by the legislature, our caucus is mindful of the urgency many Ohioans are feeling.”

State Rep. David Thomas (R-Jefferson) has been instrumental in developing the GOP’s property tax reforms. He echoed the sense of urgency to address concerns from taxpayers.

“This is the number one thing that voters across Ohio are really demanding that we do,” Thomas said. “We have to do these reforms now to be effective to decrease tax bills for January of 2026. That has to be our priority. So, however that works and however fast we can do it, that's what our goal is.”

ABC 6/FOX 28 asked him if the governor and treasurers were wrong about the financial ramifications for school finances.

“I think there's actually a bigger problem for our taxpayers,” Thomas said.

DeWine agreed the issue needed to be addressed, and he’s proposed putting together a working group that will include lawmakers, school officials, agency officials, community members, and property tax experts to develop a different solution.

Marshall said she’d be willing to participate in that effort.

“I would love to be part of that work group, if given the opportunity, which I do plan to reach out to his office to let them know,” she said. “I hope that this isn't a partisan conversation about what school districts need, in terms of resources, in order to support kids.”

Ohio Senate President Rob McColley (R-Napolen) said the governor’s vetoes on property tax reform were “puzzling.”

He said the measures would’ve contained the rate of growth of property tax across the state, added more accountability to local taxing subdivisions, and would have created more ballot transparency to levies.

“These are kitchen table issues that hard-working families understand, and the General Assembly needs to strongly consider acting on their behalf to implement these vital changes that would return the property tax system to its cost-controlled guardrails as originally intended,” McColley said.

DeWine’s vetoes included the following items:

20-Mill Floor Calculation. This item requires that emergency and substitute tax levies, incremental growth levies, conversion levies, and the property tax portion of combined income tax and property tax levies be included in the 20-mill floor calculation for school funding purposes. The DeWine-Tressel Administration recognizes the great need for property tax reform in Ohio and will convene a working group that will include legislators, agency officials, school officials, community members, and property tax experts to ensure this critical topic is given the attention deserved. Therefore, a veto of this item is in the public interest.

School District Property Tax Levy Restrictions. This item eliminates the authority for political subdivisions to levy replacement property tax levies and the authority for school districts to levy fixed-sum emergency, substitute emergency levies, and combined school district income tax and fixed-sum property tax levies. These levies serve as important tools for school districts as they seek to maintain their long-term financial stability. The DeWine-Tressel Administration recognizes the great need for property tax reform in Ohio and will convene a working group that will include legislators, agency officials, school officials, community members, and property tax experts to ensure this critical topic is given the attention deserved. Therefore, the veto of this item is in the public interest.

School District Board of Education Members. This item makes local school boards of education and educational service center (ESC) governing boards partisan offices by requiring candidates for these boards to be nominated by primary election and to appear on the general ballot with a political party designation. Today, local school board members run as nonpartisan candidates without any party affiliation. Local school boards and ESC governing boards have historically been non-partisan offices, and this has served the interests of students and communities well. This provision could also have a chilling effect on potential candidates who do not want to run for partisan office but are otherwise well-suited and well-qualified to serve on their local school board. Moreover, making these positions partisan offices would prohibit classified local employees from seeking these offices, potentially eliminating strong candidates. Therefore, a veto of this item is in the public interest.

Property Tax: County Budget Commission Authority & Procedure. This item gives county budget commissions the authority to unilaterally reduce a levy passed by voters for a school district or other taxing authority under certain circumstances. This breaches the approval of such millage by the voters. Further, this item requires the Ohio Department of Taxation to calculate tax rates for certain fixed-sum levies that are currently addressed by county officials at the county level. The tax commissioner does not receive sufficient information from county auditors to calculate these rates and the timelines in this item would result in delays to taxpayers regarding their tax information for proper filing. Therefore, the partial veto of this item is in the public interest.

Cash Balance Carry-Over. This item would require county budget commissions to reduce rates on current school district expense levies in certain circumstances where a district’s carry-over balance is more than 40% of its general fund expenditures in the prior year. The budget commission would be mandated to reduce rates on current expense levies until the carry-over balance is decreased to below the 40% threshold. While the intention to save taxpayer dollars is understandable, this item would significantly limit the amount of funding that school districts can carry over year-to-year, resulting in more districts asking taxpayers to pass levies more often, which could very well exacerbate property tax increases instead of reducing them. While seeking periodic taxpayer approval of levies is appropriate, this item is contrary to local control and will undermine efforts by school districts to manage their finances responsibly and follow best business practices. Further, the increased levy cycle could cause more levies to fail due to levy fatigue, impacting the overall financial stability of school districts. Therefore, a veto of this item is in the public interest.