State to start 2027-28 capital budget process after record high spending in 2025-26

The process for Ohio’s state budget begins this month as the House of Representatives considers funding for public projects.

State Rep. Jean Schmidt, R-Loveland, announced that the General Assembly would soon begin the capital budget process for fiscal years 2027-28. Lawmakers will review applications for projects by local governments and non-profit organizations as part of the budget process.

The capital budget is one of the five main budgets that make up the state budget and is intended for the construction of physical state assets and community projects. The state’s five spending plans also include separate transportation and main operating budgets.

The biennial capital budget for fiscal years 2025-26, codified as part of House Bill 2, which Republican Gov. Mike DeWine signed in June 2024, totaled a record amount of $4.1 billion. It included $717 million for one-time community projects.

Project spending included $46 million for renovations to the Duke Energy Convention Center, $20 million for the Pro Football Hall of Fame, and $24 million for TRC Inc., a mobility testing partnership between Honda and Ohio State University.

Separately, in June 2025, lawmakers passed House Bill 96, the state’s biennial operating budget, a roughly $200 billion spending plan that included $99.5 billion in for fiscal 2026 and $101 billion for fiscal 2027. However, less than half — $45.6 billion in fiscal 2026 and $46 billion in fiscal 2027 — were from Ohio’s General Revenue Fund.

One budget item set aside $600 million in unclaimed taxpayer funds for the construction of a new stadium for the Cleveland Browns. The proposed funding led to a lawsuit against the team’s owners for seeking public funds for a private venture.

A Franklin County judge blocked the transfer of the funds in a December 2025 decision that contradicted a separate ruling earlier that month by a federal judge that would have allowed the funding to go through.

The 2025-26 budget also included $1 billion in tax cuts, including property tax reforms and the creation of a flat-rate income tax of 2.75% that will take effect in tax year 2026.

Anyone making $26,050 or less will pay zero state income tax. Tax rates for the highest income bracket will be reduced from 3.5% to 3.125% in tax year 2025.

“The first thing moms and dads see on payday is the often disappointing amount of taxes taken out of their hard work,” Senate President Rob McColley, R-Defiance, said in a June 2025 press release. “I’m proud of the progress we have been able to make over the last decade by reducing the overall number of income tax brackets from nine down to one.”

Ohio’s state budget has increased significantly over the past ten years. The state budget was projected to increase by 78.5% from 2016 to 2027, while the state population grew by 2.1% between 2016 and 2024, according to a 2025 Ohio.news review.