Ohio Governor Proposes Higher Taxes on Cigarettes and Sports Betting to Fund Key Programs

Ohio Governor Mike DeWine has unveiled his proposed two-year budget for 2026-27, placing a strong emphasis on child welfare, public safety, and education. As part of his plan, DeWine is advocating for increased taxes on cigarettes and sports betting to generate funding for key state initiatives, including professional sports venues and youth sports education.

New Revenue Streams to Budget Priorities

DeWine’s proposal outlines a significant tax increase on sports betting, raising the current 20% tax rate to 40%. The additional revenue, estimated to generate between $130 million and $180 million annually, would be directed toward a fund ing professional sports facilities and youth athletic programs. A group appointed by both the governor and the Legislature would be responsible for allocating these funds.

The governor’s budget announcement coincides with major developments in Ohio’s sports landscape. The Cleveland Browns are planning a move to a domed stadium in Brook Park, while the Cincinnati Bengals are preparing extensive renovations to Paycor Stadium. DeWine emphasized that sports betting companies profit significantly from Ohioans and believes it is fair for some of those earnings to contribute to stadium improvements and youth sports programs.

“It seems to be only just and fair that some stadiums be paid for by them, and it seems also fair that our young people, who you know they are targeting, will get some benefit by being able to play sports,” DeWine stated.

Child Tax Credit and Cigarette Tax Increase

A cornerstone of DeWine’s budget plan is a new child tax credit aimed at assisting families with young children. Under the proposal, Ohio parents with children under the age of seven would receive a $1,000 annual refundable tax credit. The initiative is designed to provide financial relief to working parents, particularly those earning minimum wage.

To finance this tax credit, DeWine has suggested increasing the state’s cigarette tax from $1.60 per pack to $3.10. The American Cancer Society, which s the hike, estimates that this increase would generate an additional $319 million in annual revenue. The higher price per pack is also expected to discourage smoking, particularly among young people. Ohio currently ranks 29th in the nation for cigarette taxes, and raising the rate would align it more closely with other states imposing higher tobacco levies.

“It really is time. I just see struggling families all over the state of Ohio, and, you know, they just need some help and this is a little help that we can give them,” DeWine said.

DeWine’s budget plan also includes initiatives aimed at higher education, with a focus on expanding opportunities for top-performing high school students. He proposed a direct ission program that would guarantee college ission for students ranking in the top 5% of their graduating class. Additionally, he suggested that state funding for universities be partially based on employment outcomes for graduates.

The proposal includes continued for the Governor’s Merit Scholarship Program, which grants $5,000 annually to students in the top 5% of their high school class who enroll in Ohio colleges. In 2024, 6,200 students were eligible, and since the program’s inception, Ohio has seen an increase of 1,000 students choosing in-state higher education.

Beyond education, the budget earmarks $50 million over the next two years for the OhioSEE initiative, a program that ensures children from kindergarten through third grade have access to eye exams and glasses. DeWine also aims to expand school-based health centers, double the state’s historic rehabilitation tax credit, and introduce a new credit for owner-occupied historic homes.

Environmental efforts remain a priority as well, with continued funding for the H2Ohio program to combat farm runoff and protect water quality. Additionally, the proposal includes increased financial for local governments and public libraries.

Legislative Process and Timeline

Ohio’s state budget will cover the period from July 1, 2026, to June 30, 2027. Over the next six months, lawmakers will negotiate funding allocations for state agencies, the Legislature, and the judiciary. The final budget bill must be signed by DeWine by the end of June 2026.

Source:

”Ohio governor proposes doubling the tax on sports betting revenue — again”, cdcgaming.com, February 04, 2025.