Ohio Legislature Overrides Veto, Reshapes Local Tax Levy Authority

Ohio’s Senate recently joined the House, voting in favor of overriding the Governor’s Veto Item No. 66. This veto override has the effect of eliminating certain types of tax levies for local governments in Ohio, including the elimination of new fixed-sum emergency and substitute levies for school districts, as well as replacement levies for all political subdivisions.

The Ohio General Assembly passed the State’s 2026/2027 Biennial Budget Bill (Am. Sub. H.B. 96) on June 30, 2025, which included the Governor’s veto of 67 items. Ohio’s House voted to override Veto Item No. 66 on July 21, 2025. By virtue of Veto Item No. 66, a series of amendments to Ohio’s Budget Bill, the Governor sought to preserve the ability of school districts to utilize emergency and substitute levies, as well as to maintain the use of replacement levies. With the results of property tax reform proposals having been released by the Governor’s Property Tax Working Group on September 30, 2025, the Ohio Senate voted in favor of overriding Veto Item No. 66 on October 1, 2025, completing the veto override, and eliminating the future use of emergency levies and substitute levies that are not in effect by November 2025.

With the override of Veto Item No. 66, emergency and substitute levies that are currently in effect will not be able to be renewed or replaced after January 2026, nor will new emergency or substitute levies be permitted, leaving fewer levies that are excepted from the 20-mill floor (and 2-mill floor). Continuing substitute levies may remain in place. Interestingly, the General Assembly is currently considering legislation, such as H.B. 129, which would, if enacted, authorize the renewal of existing emergency and substitute levies upon expiration, counteracting at least some of the effectiveness of the override of Veto Item No. 66.

In addition, the override of Veto Item No. 66 will make it necessary for political subdivisions to have carryover balances within 100% of the prior year’s expenses in order to place a current expense levy on the ballot.

The override of Veto Item No. 66 is one example of property tax reform efforts in Ohio, which is presently a quickly changing landscape.  

If you have any questions about these changes or other matters in conjunction with property tax reform in Ohio, please contact your Dinsmore & Shohl bond counsel to discuss your needs and how we can help meet them.