07/02/2025

Calfee Update: OH Governor signs budget and vetoes 67 items

MCAO Members: 

Governor Mike DeWine (R) signed House Bill 96, the state’s FY 2026-2027 budget, late last night, in time for the bill to be in effect for the new fiscal year. 

 

DeWine vetoed 67 items – up from 44 items in the last budget.  The vetoes covered a wide range of topics, but a significant number of the vetoes focused on eliminating provisions that:

 

1. gave additional control to the General Assembly over spending by state agencies
2. limited state agency rulemaking authority
3. authorized transfers of cash and earned interest from dedicated purpose funds to the General Revenue Fund
4. limited local government authority to use certain property tax levies and to use the proceeds of enacted tax levies

 

Property tax reforms have been a big topic of discussion at the General Assembly, with many members committed to enacting reforms to lower property tax burdens, the Governor’s veto message implies that he felt the budget was not the appropriate vehicle for these reforms and committed to convening a working group of legislators, agency officials, school officials, community members and property tax experts to work on property tax reform.

 

Other significant vetoes include:

 

1. Requirement for state agencies to create return to work plans for state employees – the Governor said that his executive order from earlier this year achieves this goal and the language in the bill creates conflicting requirements
2. Sports facility grants – the Governor removed select provisions in order to create one cap and to remove minimum cost thresholds for eligibility, saying these would create a perverse incentive to drive up project costs to qualify for state funding
3. Nonchartered education savings accounts – the veto removes this program.  The Governor said nonchartered schools have deliberately chosen not to be chartered, and thus receive less state regulation, due to strongly held beliefs.  State funding should not go to schools with lower state accountability, citing the possibility that state funds would go to schools like the former Bishop Sycamore school.
4. Sales tax exemptions on newspapers and films – the budget had removed certain sales tax exemptions granted to transactions that supported the production and distribution of newspapers and films.  The veto restores those exemptions, with the Governor saying the exemptions help promote civil discourse in the state.
5. Sunsets on the Historic Building Rehabilitation and the Film & Theater Production and Capital Improvement Tax Credits – the bill had called for each tax credit program to sunset after FY 2027.  The veto message removes the sunset language, saying the programs have been valuable for economic development in Ohio communities.

 

With the signing of House Bill 96, all appropriations became immediately effective, thus ensuring funding would be in place for the new fiscal year.  Unless House Bill 96 provides a specific effective date, all other provisions will go into effect in 90 days – Monday, September 29, 2025. 

 

The General Assembly does have the option to vote to override any or all of the Governor’s vetoes.  Veto override votes must begin in the chamber that introduced the bill – the House in this case.  The House would need a vote of 60 members to override a veto and the Senate would then need 20 votes.  The final vote on House Bill 96 was 59-38 in the House and 23-10 in the Senate.  A veto override vote can be called at any time during the current session – the current session ends on December 31, 2026.

 

Please feel free to reach out to us if you have any questions, either about House Bill 96 or the veto message, the full text of which is attached.

 

Click Here to Read the full HB 96 Veto Messages

 

Maryellen K. Corbett
Attorney at Law
614.621.7754 Office
614.621.0010 Fax

Calfee, Halter & Griswold LLP
1200 Huntington Center
41 South High Street
Columbus, OH 43215-3465