New Legislative Proposals Target School Funding, Pension Pickup and Parental Rights

New Legislative Proposals Target School Funding, Pension Pickup and Parental Rights

by | Nov 11, 2025 | General, School Finance

The legislature was active during this year’s end-of-session, which would affect school district finances, retirement system contributions, and parental rights in education.  Property tax reform occupied the floor with several bills passing this November. This follows previous property tax reform action from July 2025, with the legislative override of a line item veto from HB 96, the budget bill.  That override goes into effect January 1, 2026, and ends the ability to place replacement, emergency, substitute, and combined income tax and fixed-sum levies on the ballot.

Current expense or current operating expense levies are prohibited where there is a carryover balance of over 100% of general fund expenditures in the preceding fiscal year with the exception of renewal levies, in addition to changes to ballot language and election notices.

House Bill 473, which would have prohibited employers from picking up the employee share of contributions to the State Teachers Retirement System (STRS) and the School Employees Retirement System (SERS), never made it out of the House Public Insurance and Pensions Committee.

HB 496 passed and became effective in April 2025.  It made changes to how county auditors certify levies, to tax levy ballot language, and election notices.  County auditors now certify the annual estimated collection to a school district based on rounding to the nearest dollar, not $1,000 as in prior law.  The estimate of tax rates for bond and fixed-sum levies will now be based on the most recent tax list (prior law based the rates on the current year tax list or county auditor estimate.  Residential/agricultural rates for renewed or extended levies will now be based on the last known rate, not the estimated effective rate assuming approval of the levy, according to a July publication of the Ohio Secretary of State.

Property Tax Reform Bills Passed

HB 124 passed and is awaiting the Governor’s signature. It gives county auditors (as opposed to the state tax commissioner in existing law), the authority to select local properties for purposes of calculating the sales assessment ratio data. The county auditor will provide the representative sampling of sales to the tax commissioner, and the tax commissioner is to use that data only to determine the common level of assessment and for equalization.  The data provided to the tax commissioner by the county auditors are to consist only of open market arms’ length sales during the three years prior to the tax year. It changes the date by which the auditor’s assessment must be submitted to the county board of revision from the second Monday in June to the second Monday in May.

If the tax commissioner disagrees with the representative sample provided by the county auditor, it may appeal the county auditor’s determination of the sales included in the representative sample.  The county auditor will be required to submit the evidence it used to develop the representative sample.  The appeal must be determined by the last day of the tax year in which the appeal was filed.  If the appeal is successful, the determination or sample may be modified by the Board of Tax Appeals.

The new process applies to tax year 2026 and each year thereafter.

HB 129 passed and is awaiting Governor’s signature at this writing. It will revise the calculation of the 20-mill floor by including fixed-sum levies (such as existing emergency and substitute levies) in the calculation. It would also restrict when districts may seek new fixed-sum levies. Under the bill, a district may seek a new fixed-sum levy only if:

    1. The district has an emergency levy approved before 2026, which may be renewed once as a fixed-sum levy; or
    2. The district is in fiscal emergency, fiscal watch, or fiscal caution, or is subject to a presidential or gubernatorial emergency declaration.

The 20-mill floor calculation now will include incremental growth levies, conversion levies, and the property tax portion of combined income tax and property tax levies. Emergency (fixed sum) or substitute levies continue to be excluded from the 20-mill floor calculation until the applicable territory undergoes its first reappraisal or triennial update starting in tax year 2026. The LSC fiscal analysis projects that due to the operation of the bill slowing property tax growth, school districts will lose “…$162 million in TY 2026, $223 million in TY 2027, and $224 million in TY 2028. The magnitude of these losses will increase more slowly over time as fewer districts are able to collect additional revenues from rising taxable property values.”

It is estimated that when the bill becomes effective, 237 school districts will be above the 20-mill floor.

HB 186 passed. After it is signed by the Governor, it will provide a property tax credit to owners of property located in districts at the 20-mill floor. This credit would limit those districts’ total property tax revenue growth to the rate of inflation.

Uncodified language in the bill provides a temporary “make whole” provision for districts who will be affected by a reduction from reappraisals conducted in 2023 or 2024.  The difference between the amount that would have been collected and the reduced amount will be certified to the DEW,  which will pay the school district that amount on or before Aug. 15, 2026 and Aug. 15, 2027.  The funds will be transferred from the Expanded Sales Tax Holiday Fund  to the newly-created School Revenue Temporary Offset Fund. There will be no expanded sales tax holiday in 2026.

Joint vocational school districts also will be affected by the tax credit, with a projected $174.5 million loss over three years.

HB 309 passed and is awaiting the Governor’s signature. This bill permits the county budget commission to reduce voted millage so “…as to bring the tax levies required therefor within levels the commission finds reasonable and prudent to avoid unnecessary or excessive collections. Before reducing the amount or rate of any tax pursuant to this division, the commission shall provide the taxing authority of the levying taxing unit and the levying taxing unit an opportunity to present, at a public hearing, information that either considers relevant to the questions of if and to what extent the levy should be reduced.” (R.C. 5705.32)

Reductions may not cause a district to fall below the 20 mil floor or to cause the amount collected from that levy to be less than the previous year unless the district has funds available from reserve balance accounts, nonexpendable trust funds, or carryover amounts.

The legislation further provides new language that the tax commissioner will make a determination each year of the rate a fixed sum levy must be changed, if any, to generate the amount specified in the levy by the first of September.

HB 335 passed and awaits being sent to the Governor. It will cap inside millage growth to the rate of inflation for tax year 2026 and going forward.  County budget commissions are empowered by the new legislation to adjust the rate of inside millage to ensure that it does not exceed the sum of the past three years of inflation.

The law contains a process for school district to appeal a rate reduction to the county budget commission demonstrating that the taxing authority (school district) requires the rate approved.

Parental Rights, Report Cards, and Governance Changes: House Bill 455

HB 455 is a broad bill that would make several substantial changes, including modifications to state report card measures, revisions to district-of-residence rules, board of education vacancy procedures, and an expansion of parental rights.  This bill passed the House, but was not assigned to a Senate committee before the holiday break, therefore it remains in stasis as the current session of General Assembly continues.

What Does This Mean for Your District?

The financial impact of the property tax bills should be closely monitored for the impact on your district’s forecast and preparing for collective bargaining in 2026.  Your attorneys at Ennis Britton are closely monitoring these bills, their impact, and all education-focused legislation introduced in Ohio. Please contact us with any specific questions about how these proposals may affect your district.

 

 

 

 

Elimination of Property Tax Proposal Moves Forward

Elimination of Property Tax Proposal Moves Forward

by | Jun 18, 2025 | Board Policy & Representation, Labor and Employment, School Finance

On May 14, 2025, the Ohio Ballot Board voted to certify a proposed constitutional amendment from Citizens for Property Tax Reform to ban property taxes in the state of Ohio. Many individuals joined the group after receiving letters related to the state-mandated reappraisal in 2024. The state-mandated reappraisal happens every six years in Ohio. No state has yet abolished property tax, although a few have limited it significantly.

In order to make it onto the November 2025 ballot, at least 413,487 voters must give their signatures prior to July 2, 2025. These signatures must come from voters in at least 44 of Ohio’s 88 counties. Supporters of the proposed amendment say they are worried about seniors on fixed income who cannot afford the increase in property taxes. Critics say that abolishing the property tax will make it difficult to fund essential services.

 What would this mean for your school district?

The proposed amendment does not include any indication of how major public programs like public education would be funded without property taxes. Nor is there any legislative solution proposed at this time. Ohio Governor Mike DeWine told reporters that, in what he has seen so far, the effect would be devastating to our schools. Banning property taxes outright could put children, families, and communities at risk because the government would not be able to provide services. This includes not only public education, but libraries, police, firefighters, or other services that are funded with property taxes.

 

 

Career Tech Corner: U.S. House of Representatives Pondering Funding Increase for Career Technical Education

Career Tech Corner: U.S. House of Representatives Pondering Funding Increase for Career Technical Education

by | May 14, 2025 | General, School Finance

Two U.S. Representatives, Rep. Glenn Thompson (R-PA) and Rep. Suzanne Bonamici (D-OR), began to circulate a Dear Colleague Letter (the “Letter”) throughout the House of Representatives that urged lawmakers to consider an increase in funding for Career Technical Education (CTE) in the 2026 budget.

According to the Letter, State grants under the Carl D. Perkins Career and Technical Education Act were funded at $1.44 billion in Fiscal Year (FY) 24 and 25. However, the Letter states that, when adjusted for inflation, these numbers are roughly half of the funding made in 1980. This concern comes as there is a growing recognition of CTEs and a high need for more skilled laborers. In fact, the Association for Career & Technical Education (ACTE) projects a deficit of 6.5 million skilled workers by 2030, highlighting the need for growth of CTE programs.

With that, President Trump signed an Order on February 3, 2025, that proclaimed February 2025 as Career and Technical Education Month. As part of that proclamation, President Trump stated, “[m]y Administration will invest in the next generation and expand access to high-quality career and technical education for all Americans. We will unleash the enormous potential of the American people and provide students and workers with the necessary skills training to ensure that our Nation dominates the 21st century.”

What does this mean for your CTC? There is clear recognition for the need for CTEs and the skilled laborer deficits that exist and will continue to grow without CTE growth. The commitment from the federal government to push this recognition further could lead to more students applying to your program. However, at this point, there is no guarantee that additional funding will follow. This also does not mean staffing applications will follow. The increased funding is worth keeping an eye on and potentially finding avenues to advocate for.

 

 

 

Federal Budget Proposal: Understanding the Potential Impacts on Education Funding

Federal Budget Proposal: Understanding the Potential Impacts on Education Funding

by | May 14, 2025 | School Finance

On May 2, the Trump Administration took its first formal step in the federal budget process by submitting its “skinny budget” proposal to Senator Susan Collins, Chair of the Senate Committee on Appropriations. This initial outline gives education leaders their first glimpse into potential funding changes that could affect school districts nationwide beginning this fall.

A skinny budget serves as a preliminary framework, communicating presidential priorities to Congress without offering comprehensive details. While significant as a statement of intent, it is important to remember that this document is non-binding. Constitutional authority for federal spending remains with Congress – a point Senator Collins herself emphasized when noting, “[u]ltimately, it is Congress that holds the power of the purse.”

The proposal arrives amid early signs of disagreement between Congressional Republicans and the White House. Senator Collins has already expressed “serious objections” after her initial review, suggesting a potentially complex negotiation process ahead.

The current proposal outlines a substantial $12 billion reduction in education funding – representing a 15% cut to discretionary education spending compared to the 2025 budget. For school districts already managing tight budgets, the specific reductions include:

• Title I: $4.5 billion reduction
• English Language Acquisition: $890 million reduction
• Adult Education: $729 million reduction
• Migrant Education: $428 million reduction
• Preschool Programs: $315 million reduction
• Department of Education Administration: $127 million reduction
• Office for Civil Rights: $49 million reduction

Not all programs would see cuts. IDEA funding would remain flat, while charter schools would receive a $60 million increase.

Beyond the raw numbers, the proposal introduces significant structural changes to how federal education dollars would be distributed. A new “K-12 Simplified Funding Program” would consolidate 18 separate competitive and formula grant programs into a single formula grant. Similarly, seven separate IDEA programs would be combined into one.

These consolidations would fundamentally alter how districts apply for and receive federal education funds, potentially creating both administrative challenges and opportunities during implementation.

School finance officers should be aware that the education budget represents only part of the potential fiscal impact on schools. The proposal exists within a broader context of competing priorities and fiscal constraints:

School nutrition programs administered by the USDA have already seen $1 billion in reductions, with further cuts possible if proposed SNAP eligibility restrictions are implemented. These changes could directly affect school meal programs and the students who depend on them.

Perhaps most concerning for districts serving students with disabilities, Medicaid – which currently provides $7.5 billion annually for school-based health services, including significant support for related services – faces potential cuts as the House Energy and Commerce Committee works to identify $880 billion in healthcare spending reductions.

Meanwhile, the administration has proposed increases to military and border security spending, while simultaneously working with Congressional Republicans to extend expiring tax cuts. The Congressional Budget Office estimates these tax extensions would reduce federal revenue by approximately $4 trillion over a decade, intensifying pressure for spending cuts elsewhere.

The administration has set an ambitious goal of July 4, 2025, for budget passage. If this timeline holds, districts could begin feeling funding impacts in fall 2025 with the federal fiscal year beginning October 1.

What does this mean for your district?

The budget proposal marks only the beginning of what will undoubtedly be a complex negotiation process. While the proposed education cuts are significant, history suggests the final budget passed by Congress may differ substantially from this initial outline.

For now, education leaders should focus on understanding these potential changes while continuing their normal operations and planning. As budget negotiations progress toward the July 4 target date, clearer information about impacts on specific programs and district-level funding should emerge.

 

 

 

 

FLSA Final Rule Changes Salary Threshold

FLSA Final Rule Changes Salary Threshold

by | May 23, 2024 | Labor and Employment, School Finance

In April 2024, The Department of Labor (DOL) announced a Final Rule increasing the threshold level salary minimum for the “salary test”.  (See the DOL document entitled Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees).

Generally, under the FLSA, employees are exempt from minimum wage and overtime protections if they are employed in an executive, administrative, or professional capacity (EAP) and meet three tests set out by the department which include payment of a specified weekly salary level and performing executive, administrative, or professional duties.

The new rule takes effect on July 1, 2024. On that date, the new salary amount threshold for a nonteaching, salaried supervisor or administrator increases to $844 week/$43,888 annual salary (up from $684 week/$35,568/annual salary.)

Then, in January 2025, the method used to calculate the salary will change again- and the amounts will increase a second time to $1,128week/ $58,656 annual salary.  After that, the salary threshold will be raised every three years after July 1, 2027. 

Whether an employee can be exempted from the payment of overtime by meeting the EAP exception depends upon meeting the “salary and duties tests” set out by the Department of Labor in the law. 

To be eligible for the exemption, the employee 1.) must earn a fixed salary, 2.) that salary is at least equal to the amount in the Final Rule, and 3.) that the employee performs functions that meet the executive, administrative, or professional duties as defined by the DOL. 

The salary amount will increase twice- on July 1, 2024, and then again in January 2025.  Due to that increase, some nonteaching administrative employees’ salaries may likely be lower than the new salary threshold amount. 

The “duties” part of the test must then be applied to the employee’s job duties to determine whether a nonteaching administrator/supervisor is exempt from overtime requirements.

Administrative employees will meet the duties test if they primarily perform office or non-manual work directly related to the operations of the school district.  Their duties must involve the exercise of discretion and independent judgment on matters of significance.

Executive employees are also eligible for the exemption. To meet the “duties test” for these employees means that their primary duty must be managing a particular department or division of school operations.  They must regularly direct the work of at least two full-time (or their equivalent) employees and must have the authority to hire and fire, or have their recommendations for promotion, termination, hiring, or other actions given particular weight.

Teachers are specifically exempt from the FLSA overtime rules as professionals, so this rule change will not affect certificated administrators. 

For highly compensated employees subject to the FLSA, the salary threshold is going up to $132,964 on July 1, 2024, and then up to $151.164.  It is likely some employees formerly covered by this exception may no longer meet the salary threshold.   Even if those employees still meet the requirements for exemption under the highly compensated employee test, the salary threshold to be eligible for the exemption must be met.  If this is no longer the case due to the increases planned to the salary threshold, it is well possible these employees could qualify using the EAP exception. 

Actions to take now:

Survey the salaries of nonteaching administrative employees to determine if any might fall below the new salary thresholds.  Employees that may be affected by this change include supervisors and directors such as technology directors, transportation and cafeteria supervisors, facilities managers, and other similar positions.

If the new salary threshold exceeds a nonteaching administrative employee’s current annual salary, school districts may need to adjust upwards or recognize these employees are eligible for overtime pay.  This means the employees would need to keep track of their time.  Consult with Ennis Britton to review specific situations. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 Update: Unemployment Coverage for Public Entities

by | Mar 26, 2020 | Labor and Employment, School Finance, School Management, Unemployment

Many public employers are considering staffing adjustments in light of the coronavirus and its impact on available work. For those employees not covered under contracts that must be paid in the case of an “epidemic or other public calamity” pursuant to RC 3319.08(B) and 3319.081(G), layoffs are being contemplated. In order to have all the information on the financial impact of such a decision, the public employer should consider whether it is a “contributory employer” or a “reimbursing employer.” 

Generally speaking, public employers are reimbursing employers. Essentially, reimbursing employers are self-insured and will be billed dollar-for-dollar by the Ohio Department of Jobs and Family Services for claims paid.   Public entity employers who have elected to become a contributory employer have paid unemployment tax. Contributory employers will have their claims mutualized with other employers in the state and will not have to reimburse on a dollar-for-dollar basis. Determining if the public entity is a contributory employer or a reimbursing employer will be necessary to determine how much will be saved via staffing reductions.

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) provides that reimbursing employers may be reimbursed for one-half of the amounts paid into a state unemployment trust fund between March 13, 2020, and December 31, 2020.

If you have any questions regarding unemployment compensation issues, please reach out to any of the Ennis Britton lawyers.