DeWine reverses course on income tax cuts after four rounds of reductions, warns against further cuts as Ohio rate hits 2.75%

Ohio's top income-tax rate is now a flat 2.75%, effective Jan. 1, 2026, after Gov. Mike DeWine backed cuts in four consecutive state budgets. Now, as candidates seeking to succeed him propose going further, DeWine is warning Ohio to stop.

"This is just not an issue anymore. We've cut income tax for four straight budgets," DeWine said. "No one ever comes to us when we're sitting down and talking to a CEO and says, 'You know, we can't come to your state because your income tax is too high,'" DeWine said.

The warning marks a sharp break with Republican candidates campaigning on deeper cuts or elimination of the tax in the 2026 governor's race. It also represents a significant change in fiscal direction for a governor who repeatedly signed reductions into law.

For Dublin, where the median household income is approximately $155,282 — more than double Ohio's state median of approximately $67,769 — the reversal reaches beyond a political disagreement in Columbus. Households with incomes above approximately $138,000 to $140,000 receive about 96% of the benefit from Ohio's recent income-tax cuts, while the bottom 80% of earners get only a tiny share. The top 1% of Ohio households receives approximately 40% of the total benefit. Analysis by the Institute on Taxation and Economic Policy shows that Ohio's state and local tax structure is regressive: the lowest 20% of earners pay 12.7% of their income in state and local taxes, while the top 1% pay 6.3%.

The four rounds of reductions were neither accidental nor small. The 2019 budget reduced the top marginal income-tax rate from 4.997% to 4.797% and eliminated the lowest two brackets, leaving no income tax due on taxable income of $21,750 or less.

The 2021 budget eliminated income tax for people making under $25,000, restructured the system from six brackets to four, and cut the lowest three brackets by 3%. The top bracket was cut by 16.8% through elimination of the former bracket for income above $221,300.

The 2023 budget reduced Ohio to two income-tax brackets, at 2.75% and 3.5%, functioning as a 14.8% cut for the lower bracket and a 12.3% cut for the upper bracket. The 2025 budget then cut the tax on income over $100,000 from 3.5% to 3.125% for tax year 2025 before reducing the rate to a flat 2.75% for all income over $26,050 in the 2026 tax year.

The cost has been substantial. The Ohio Legislative Service Commission estimated that the 2021 budget's income-tax provisions would reduce General Revenue Fund tax revenue by about $1.643 billion over the FY 2022–FY 2023 biennium. The 2023 budget's income-tax changes carried fiscal impacts measured in multibillion-dollar reductions to state General Revenue Fund receipts. The 2025 budget cut is expected to reduce revenue by about $529 million in FY 2026 and $1.146 billion in FY 2027, according to the Office of Budget and Management.

Revenue strain has already appeared on the state ledger. Ohio's fiscal year 2024 tax revenue came in $485 million below estimate, including personal income-tax revenue that fell $457.8 million short of the forecast. Ohio officials attributed the shortfall in part to tax cuts, particularly lower income-tax withholding and larger refunds.

Among the largest obligations at stake is K-12 education. State funding for primary and secondary education through the General Revenue Fund is appropriated at $11.26 billion in fiscal year 2026 and $11.65 billion in fiscal year 2027. Ohio school districts also rely on state reimbursements for property-tax rollbacks and homestead exemptions, totaling $1.30 billion in fiscal year 2026 and $1.33 billion in fiscal year 2027. Local governments face their own funding pressures: Ohio's Local Government Fund was reduced under the Kasich administration through successive cuts that left it a smaller share of state General Revenue Fund receipts.

The tax-cutting path that created those pressures received repeated legislative support. The 2019 budget bill, HB 166, passed the Ohio House 75-17 and the Ohio Senate 29-1 on July 17, 2019. The 2021 budget bill, HB 110, passed the House 84-13 and the Senate 32-1 on June 28, 2021, in what was described as bipartisan passage. The 2023 budget bill passed the Ohio House and Senate in June 2023. The 2025 budget bill, HB 96, passed the House 59-38 and the Senate 23-10 on June 25, 2025.

DeWine's warning has not settled the debate. Republican gubernatorial candidate Vivek Ramaswamy is campaigning on a plan to eliminate Ohio's state income tax entirely, with a goal of phasing it out over approximately eight to 10 years. Ramaswamy has said the first step would be eliminating capital-gains taxes in his first budget.

"We are going to make Ohio a zero-income-tax state where you can keep what you earn. It is your money, not the government's," Ramaswamy said.

Dublin residents who benefited disproportionately from the cuts now face a consequential choice in the state's fiscal direction: whether the next governor and legislature will prioritize still-lower income taxes or preserve state funding for the education, infrastructure, and services that underpin the community's appeal.