Ohio lawmakers are returning to the Ohio Statehouse as the General Assembly begins its 2026 legislative work, setting the stage for a session that will again feature major fiscal and policy questions for cities and villages across the state.

Legislative Schedule Takes Shape

The Ohio Senate will return first, convening on Jan. 28 and running session days through June 10. The Ohio House will begin session slightly later, on Feb. 18, although committee hearings will take place before then. The House will also conclude its first-half work on June 10. 

Each chamber has built in time away from session for the spring primary election on May 5. The House will take a longer break, with April and the first week of May largely reserved for a pre-primary spring recess. The Senate’s spring break will be shorter but still centered around the primary election period.

Capital Budget Looms Amid Uncertainty

One of the most significant unresolved items on the Legislature’s agenda is the state capital budget, which lawmakers typically complete in the second year of the biennium. Action on the capital budget has been delayed, largely due to broader fiscal uncertainty.

Several factors have contributed to that delay, including:

• Ongoing uncertainty surrounding a proposed constitutional amendment to abolish property taxes
• Ohio Supreme Court decisions related to nursing homes
• Potential federal-level changes that could affect Medicaid funding and food assistance programs

However, there are signs of movement toward beginning the capital budget process. The House, Senate, and Gov. DeWine's administration will need to work through key details, including how delayed the process will be and whether the final package will be more financially conservative than in past cycles.

Property Tax Debate Continues

Property taxes dominated much of the legislative conversation in 2025, and that issue remains unresolved heading into 2026. In addition to the veto override that got ride of replacement property tax levies, several property tax bills advanced late last year.

Those bills included:

• House Bill 309, sponsored by Rep. David Thomas (R-Jefferson), which expands county budget commission authority to reduce levy rates. Amendments shortened the waiting period after levy passage from five years to one year.
• House Bill 335, also sponsored by Rep. Thomas, which was modified to limit inside millage growth using the GDP deflator.

The property tax conversation will continue, but smaller changes can be expected, including legislative language dealing with property tax appeals, delinquent taxes and foreclosures, and other aspects of the system that legislators say can be improved. Consolidating services to attack the spending side of the tax equation could also get attention.

At the same time, backers of a statewide ballot initiative to repeal all property taxes in Ohio continue to collect signatures in an effort to place the issue on the November 2026 ballot.

In response, the Ohio Municipal League has been working with a coalition of like-minded organizations to collectively strategize and prepare for an educational campaign highlighting the importance of services funded by property taxes. This coalition work represents early groundwork ahead of any formal campaign launch.

Cannabis Law Changes and Host Community Funding

Another significant development for municipalities occurred late last year with the passage of Senate Bill 56, sponsored by Sen. Steve Huffman (R-Tipp City). The legislation includes the long-sought mechanism to distribute 36% of the state’s 10% cannabis excise tax to communities that host dispensaries.

The bill also made broader changes to Ohio’s cannabis and hemp laws, including requiring most hemp products to be sold through licensed dispensaries. Gov. Mike DeWine signed the legislation but vetoed language that would have allowed a grace period for the sale of THC-infused beverages, making those products illegal more immediately than under federal law.

Now, the Ohio Cannabis Coalition has submitted a petition summary seeking a referendum on portions of Senate Bill 56. The coalition is not seeking to repeal the dispensary host community fund provisions. If the effort moves forward, supporters would need to collect nearly 250,000 additional signatures to qualify for the ballot.

Looking Ahead

As the Legislature resumes work, OML will continue monitoring developments closely and advocating on behalf of Ohio’s cities and villages. From the capital budget and property taxes to cannabis revenue and broader fiscal policy, 2026 is shaping up to be another consequential year for municipal governments across the state.