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The 2026-27 state budget process is in the books. The Ohio General Assembly quickly pushed HB 96 through the final stages of budget process, conference committee and subsequent final votes last week, and sent the bill to the Governor on June 25. Governor DeWine used his veto powers and signed the final bill into law on June 30.
While we’ll spend a lot more time writing on how this state budget will impact health and human services, this initial reflection on the budget provides a quick look at where The Center for Community Solutions’ budget priorities landed.
Improve coordination, efficiency and access across public benefits, including Medicaid, SNAP, TANF and WIC
Medicaid “trigger” language remains
While there are several provisions related directly to the administrative side of managing the Medicaid and SNAP programs that we will dig in to as we learn more about their impact, the most critical piece of the state budget that we’ve been concerned with throughout the process is the so-called Medicaid trigger language. This language would immediately end the Medicaid expansion in Ohio if the federal government were to reduce its financial contribution, known as the Federal Medical Assistance Percentage (FMAP). This language remains in the final state budget and in light of significant uncertainty as it relates to federal policymaking and funding levels, we remain concerned about this language that ties the hands of Ohio policymakers.
Conference committee changes move in the right direction on Medicaid spending authority
Overall, funding levels for Medicaid experienced a rollercoaster throughout the budget process. The main portion of the Medicaid budget, line item 651525, is reduced from the Governor’s as introduced budget but, across the board, not as substantial a reduction as was proposed in the Senate’s budget. Additionally, the conference committee made a change in line with Community Solutions’ assessment that the Department of Medicaid would need broader ability to request spending authority through the state’s Controlling Board to fill any gaps in funding existing Medicaid services and supports that run into a shortfall because of the reductions in the budget line item.
Support tax policies that center the realities of families as they juggle working, caretaking and making ends meet
Child tax credit remains absent from the final budget
The Governor proposed to institute a refundable tax credit of up to $1,000 for kids aged six or under for low and lower middle-income families. The funding identified in the Governor’s budget proposal for this tax credit was an increase in the state’s tobacco tax. The tax credit and the tax increase were both removed in the House-passed budget and never added back in by the Senate. We are disappointed that this policy was not part of the final budget bill. A child tax credit (CTC) would have been beneficial to support families by providing tax relief and reducing poverty. We know from the experience with the expanded child tax credit at the federal level, that these dollars go directly to helping families with the necessities of life. This tax credit would have been targeted to Ohioans most in need of additional support.
Budget moves Ohio to a flat income tax
What is included in the state budget is a move to a flat income tax, at a rate of 2.75%, in Ohio. This shift to a flat tax will cost the state almost $1.7 billion over the biennium in lost revenue collection compared to current rates. The flat tax was introduced in the Senate’s version of the budget and agreed to by the House.
Advocate for solutions to health and human services issues that address the needs of Ohioans of every age
Governor reinstates continuous coverage of Medicaid for children under four years of age
Continuous Medicaid enrollment for young children was removed from the budget bill that was sent to Governor DeWine. This policy was passed through the last state budget in the 135th General Assembly and is in the implementation process at the Department of Medicaid. Continuous coverage means that once a child, ages zero to their 4th birthday, is enrolled in Medicaid, they would stay enrolled without an annual redetermination, until the age the continuous coverage ends. The House removed this policy in its version of the budget and the Senate did not add it back in. While the final legislative language includes a repeal of this policy, Governor DeWine vetoed the repeal, maintaining continuous Medicaid enrollment for children.
Having a policy of continuous coverage for young kids is especially important in light of the work requirements that are set to be implemented for the Medicaid expansion population in Ohio starting in 2026. Inevitably with work requirements, individuals will lose coverage for either failure to meet the requirement, but more likely because of the administrative burden of managing a work requirement tracking process. We do not want kids of parents who are work-required to get caught up in the administrivia of managing work requirements. Continuous coverage will keep the youngest kids enrolled, even if their parents lose coverage.
Support the continuum of care for children and youth with behavioral health needs
Revisiting a study of multi-system youth
The legislature indicated a renewed interest in understanding the needs of multi-system youth in Ohio by requiring collaboration across youth-serving state agencies to address the needs of MSY. The final language also includes a requirement to report to the General Assembly on data and policy recommendations for serving MSY. In the past, the General Assembly conducted a multi-system youth study committee, which issued a report, and has also required a group of stakeholders to develop and implement a multi-system youth action plan. A key development of the implementation of this plan is OhioRISE, the Medicaid managed care program for MSY that launched in 2022 and is now serving over 40,000 Ohio kids.
Advocate for additional funding for harm reduction
Legislature reduces funding for harm reduction
While harm reduction-related initiatives are funded across different areas in the budget, the final budget overall included less dedicated funding for harm reduction than the Governor’s initial proposal. The Governor had earmarked up to $250,000 a year for local harm reduction efforts within the Department of Health’s budget, and this earmark was removed in the final budget.
Conclusion
As we continue to dig through the policy changes in the budget, Community Solutions will share much more analysis over the next several weeks. We plan to break down the major changes to health and human services across the budget bill, with the overarching dilemma of an influx federal reconciliation process that could result in significant impacts to the state’s bottom line.
