Ohio's Promised Property Tax Relief Is Real — but Mentor and Lake County Homeowners Won't Know the Full Picture Until 2027

The Ohio House passed a state budget promising historic property tax relief and a lower income tax rate, and Gov. Mike DeWine signed House Bill 96 into law on June 30, 2025. The income tax cut is already showing up in paychecks. But for Mentor and eastern Lake County homeowners, the property tax impact won't be fully visible until 2027 bills arrive — and five school funding measures on the Nov. 3, 2026 ballot could offset some or all of the savings.

The state tax cuts

Under HB 96, Ohio's top personal income tax rate dropped from 3.5% to 3.125% for tax year 2025, then to a flat 2.75% on nonbusiness income above $26,050 for tax year 2026 and beyond — described by the legislature as the nation's second-lowest rate. New withholding tables took effect for payroll periods ending on or after Aug. 1, 2026, and most workers have already seen lower state withholding in recent paychecks.

On the property tax side, the budget raised the standard homestead exemption from $28,000 to $32,000 and increased the enhanced exemption for disabled veterans and surviving spouses of certain public officers from $56,000 to $59,000. It also lifted the income threshold for the standard homestead exemption from $40,000 to $42,500 for property taxes generally payable in 2026, expanding eligibility for some seniors and disabled homeowners.

HB 96 also gave county commissioners new authority to add a local exemption tied to the state homestead exemption and to authorize an owner-occupied credit of up to 2.5% of the tax on qualifying property.

A separate law, House Bill 186, created an Inflation Cap Credit that limits school district property tax increases to the rate of inflation. Enacted Dec. 19, 2025, it took general effect March 20, 2026, and applies to eligible real property beginning with tax year 2025. Because HB 186 took effect after first-half 2025 tax bills had already been mailed, the full credit for that year was applied to second-half bills. The credit continues for tax year 2026.

DeWine signed a budget correction measure, House Bill 479, on June 26, 2026, setting aside $350 million for a one-time property tax reduction in tax year 2026. About 710,000 Ohio homeowners who receive the state Homestead Exemption are expected to see a one-time credit of roughly $450 to $500 on bills mailed in January 2027.

The budget also added $555.2 million in K-12 education funding over the biennium — $207.6 million more in fiscal year 2026 and $347.6 million more in fiscal year 2027, compared with fiscal year 2025. DeWine line-item vetoed a provision that would have capped public school districts' carryover balances at 40% of prior-year expenditures and required property tax rate reductions in some cases.

What Lake County did with its new authority

The Lake County Board of Commissioners unanimously adopted a Local Optional Homestead Tax Exemption that effectively doubles the state-funded homestead benefit for eligible seniors and permanently and totally disabled homeowners, increasing average savings from about $500 to $1,000. The county estimates the doubled exemption and related local adjustments will save taxpayers more than $8 million annually; including other local levy and fee adjustments, the county's total relief package tops $9 million.

The doubled exemption takes effect with tax year 2026 and will be applied automatically for homeowners already enrolled in the homestead program — no new application needed. The Lake County Treasurer's office notes that the homestead credit will be doubled for 2026 taxes payable in 2027, while the owner-occupancy credit will not be doubled.

Those figures describe the savings side. School advocates estimate a different total on the revenue side: the combined effect of the state exemption increase and Lake County's local doubling will reduce local property tax revenue by about $14 million annually, including roughly $9.3 million in public school funding.

The levy question

That lost revenue lands squarely on districts that depend heavily on property taxes for daily operations. Five school funding issues will appear on Lake County's Nov. 3 ballot: levies or continuing earned-income school taxes for the Mentor, Kirtland, Painesville, Riverside, and Willoughby-Eastlake school districts.

Mentor Public Schools has placed a five-year, 3.5-mill operating levy on the ballot after voters rejected two larger operating proposals in November 2025 and May 2026. The levy would raise about $9.6 million annually beginning in 2027 for the general operating budget — $3.9 million less per year than the May request. It would cost approximately $123 a year per $100,000 in property valuation.

The district has $6.6 million in cuts already scheduled for this year and is developing a consolidation and cost-saving plan projected to save $3.3 million to $3.5 million annually starting in the 2027–28 school year; those reductions will occur whether the levy passes or fails. If the levy fails, the district may need another $9.6 million to $14.4 million in cuts affecting staffing, class sizes, student services, and programs. Mentor Public Schools last passed a new-money operating levy in 2016 — its only new operating levy in approximately 20 years.

Willoughby-Eastlake City Schools has placed a 0.75% earned income tax on the ballot, projected to raise about $14 million annually — roughly $9.6 million for day-to-day operations and $4.4 million legally dedicated to permanent improvements. The tax applies only to earned wages and salaries, not pensions, Social Security, capital gains, or investment income. School officials warn that if the measure fails, the district may consolidate its two high schools. If approved, the tax would begin Jan. 1, 2027. It is the district's first request for new operating revenue in six years.

Kirtland Local School District has placed a five-year renewal of its existing 4.36-mill operating levy on the ballot for current operating expenses, projected to generate $2,278,636 — equal to $134 per $100,000 of market value.

What lands on the bill

Lake County homeowners will see the combined effect of state homestead-exemption increases, the locally doubled exemption, the inflation cap credit, and the one-time $450-to-$500 state credit on 2026 property tax bills mailed in January 2027 for first-half taxes and in July 2027 for second-half taxes.

But any relief on one line of the bill could be offset by a new levy on another. The final number on a household's 2027 tax statement will reflect its property value, every state and local relief measure, and whether voters add new school levies to the local mix on Nov. 3.