COLUMBUS, Ohio – A final version of the governor’s midterm budget bill that includes a package of tax cuts has cleared the Statehouse before lawmakers adjourned for the summer.
The mid-biennium review package includes tax cuts backed by Gov. John Kasich. It would double Ohio’s earned income tax credit from 5 percent to 10 percent for low-income taxpayers and increase personal income-tax exemptions for residents making under $80,000 a year.
It also included a statement that college athletes do not have the right to join a union.
Lawmakers also approved new high school graduation requirements and free college admissions testing.
Passage came Wednesday night after an amendment was added to a separate bill to ensure legislative control over a $300 million Medicaid reserve fund in the budget measure. The fund covers unexpected expenses for the taxpayer-funded health program.
The legislation speeds up implementation of a 10 percent an income tax cut so the full reduction will take effect during the 2014 tax year.
“I am proud that we have been able to continue to reduce income tax rates for all Ohioans…The unemployment rate in Ohio is down almost two full percentage points since last July when these tax cuts first started rolling out,” Sen. Tim Schaffer (R–Lancaster) said.
Ohio’s 5.7 percent unemployment rate in April was the lowest in over six years and is 0.5 percent lower than the national average.
The measure doubles Ohio’s non-refundable Earned Income Tax Credit for low income Ohioans from 5 percent of the federal credit to 10 percent, though some critics said lawmakers should have made the credit refundable. It also increases personal income tax exemptions for Ohioans earning less than $80,000.
“Unfortunately this bill reflects the sad reality that everyday Ohioans continue to be left behind while the wealthy and politically-connected remain the focus of this administration and legislature,” said Rep. John Patrick Carney (D-Columbus), who believed that sales and property tax increases should have been rolled back.
The bill, which passed the House on a 58-32 vote after being approved 24-7 in the Senate, also increases the business income tax deduction by 50 percent, which Schaffer says will save Ohio employers an estimated $228 million this year.
A Kasich spokesman said the governor is expected to sign the bill. Kasich can use his line-item veto authority on the measure.