Governor Mike DeWine submitted the Executive Budget “Blue Book” to the legislature on February 3. For months, Capital Square observers had speculated that lawmakers would receive an “austerity budget.” Federal funds that had allowed lawmakers to spend significantly more on a variety of programs over the past four years, are winding down. 

Despite revenue, and thus spending, expectations, the Executive Budget from Governor DeWine forecasts an increase in revenue for both Fiscal Years 2026 and 2027.

Overall, the Executive Budget proposes a 2.9% increase in spending in FY2026 vs. FY2025, and a 1.9% increase in spending in FY2027 vs. FY2026. The Administration forecasts an overall increase of 7.1% in GRF revenue over the biennium, an 11% increase in federal supporting funding, but a nearly 19% decline in dedicated purpose funding.

Much of the new revenue the administration is forecasting is the result of increases in so-called “sin taxes”. This includes an increase in the cigarette tax by $1.50 per pack, as well as application of the tax to a wide variety of nicotine-infused products that currently skirt the tax; an increase in the cannabis tax, and a doubling of the gambling activity tax from 20% to 40%, the majority of which is intended to help built sports stadiums and fund youth sports programs.

Highlights of the Executive Budget Proposal include the following:

• Ohio Housing Investment Opportunity Program: The executive budget proposes to invest $100 million over the biennium to promote access to affordable housing in communities with a focus on investment in housing infrastructure and other costs associated with housing development in rural and border counties, including single and multi-family housing. The program would be administered by the Ohio Department of Development.

• Historic Preservation Tax Credit: The executive budget proposes to increase the number of Ohio Historic Preservation Tax Credits from $60 million to $120 million per year. Additionally, the budget proposal would support more historic preservation projects and target the rehabilitation of historic owner-occupied homes.

• Welcome Home Ohio Program: The executive budget proposal anticipates a phase-out of the Welcome Home Ohio Program that was created in the 2023 budget, with a proposed $40.6M budget appropriation in FY2026 (a 30.6% reduction vs. FY2025) and a $625,000 appropriation in FY2027 (a 98.5% reduction vs. FY2026).

• Brownfield Remediation & Demolition and Site Revitalization Programs: The executive budget cuts funding to the state brownfield and demo programs by 99.4% and 99.1% respectively. The brownfield program would receive only $2.25M per year (likely for administrative costs) in both FY2026 and FY2027, while the demo program would receive $1.5M per year (again most likely for administrative purposes) over the biennium.

• Transportation Funding: Overall, transportation budget revenues are expected to fall over the biennium. Expected revenue in FY2025 is $2.24 billion; in FY2026, it is forecast to be $2.12 billion, while in FY2027, it is forecast to be $1.95 billion. The budget recommendation includes $6.1 billion during the biennium for reconstruction and new construction (this includes carry-over from previous fiscal years for ongoing projects).

• Public Transportation: The executive budget proposal would maintain flat funding for the biennium, with an annual appropriation of $37.01M (equal to the estimated spending level in FY2025).

Now that the budget has been introduced, hearings are underway in the Ohio House of Representatives. The House is expected to pass the transportation budget (with hearings being conducted in the House Transportation Committee) by the end of February. Lawmakers have also set timeline for the Main Operating Budget, with a goal of passage of that document by mid to late April.

In addition to testimony from state agencies, boards, and commissions, advocates and members of the public will have an opportunity to testify in the near future. Be sure to follow GOPC through our social media channels and our online bill tracker for regular updates on both budget documents as they make their way through the state legislature.