COLUMBUS, Ohio (AP) — Ohio’s budget director and legislative analysts are planning to update state lawmakers on the latest revenue and Medicaid projections as compromise talks begin on the state’s spending blueprint.
READ MORE: In the Columbus Dispatch
The $71.3 billion, two-year operating budget cleared the state Senate on a 23-10 vote on Thursday evening after a last-minute decision to remove an abortion clinic restriction.
The sweeping proposal would increase Ohio’s tobacco taxes, boost higher-education funding and eliminate state taxes for certain small business income.
Majority Republicans stressed that the massive document funds essential programs while protecting taxpayer dollars. It includes a 6.3-percent income tax cut, plus a 100 percent tax exemption on business owners and sole proprietors on up to $250,000 of income, with a lower 3 percent rate on income above $250,000.
“This budget accomplishes what we hoped to achieve and that is to help those most in need. By leaving $1.75 billion more in the pockets of Ohio families and small businesses, it will spur job creation and boost our economy,” said Sen. Chris Widener (R-Springfield)
The Senate is focused on small businesses “where the vast majority of Ohioans are employed,” said Sen. Bob Peterson, R-Sabina. “This will increase our small business activity.”
“This budget invests taxpayer dollars where they count. It eases the tax burden on businesses and families while freezing tuition for undergraduate students and investing nearly $1 billion in Ohio’s K-12 schools,” Senator Kevin Bacon (R-Minerva Park)
The budget includes more than $935 million in additional education funding over the two years — $351.5 million in the 2016 fiscal year and adds $233 million more the following year — while protecting lower-income school districts, Bacon said
Democrats opposed the budget, arguing it doesn’t do enough for lower-income families, infrastructure, education, and child and adult protective services, particularly as the majority cuts taxes.
“There is not enough in this budget to give a supportive vote,” said Sen. Charleta Tavares (D-Columbus) who said the budget was “dead set on creating winners and losers.
“The money does belong to the people, but I believe the people have some needs they want addressed,” she said.
“The tax cuts are generous to the wealthiest Ohioans but do little for middle-class Ohioans,” said Sen. Michael Skindell, D-Lakewood, arguing the cuts should be focused on “families that have largely been left out over the last 10 and a half years.”
The budget now heads to a joint conference committee that will start meeting on Friday to work out differences between the House and Senate.
The panel will review the size of income tax cuts, state funding for public schools and a host of other areas on which the House, Senate and Gov. John Kasich disagree.
The goal is to finish work by June 30, the end of the fiscal year.
Highlights of the budget approved by the Ohio Senate:
Reduces Ohio’s income tax rate by 6.3 percent, a savings of $1.26 billion over the next two years.
Eliminates state taxes on small businesses with income up to $250,000 and creates a 3 percent flat tax for small businesses above that level.
Republicans say this budget spends less overall than any of the plans put forward this year. It reduces proposed overall Medicaid spending by more than $1 billion.
Invests more than $935 million new dollars into students and schools over the next two years and holds all districts harmless to 2015 funding amounts.
Provides an opportunity for predictability and sustainability for school districts, driving additional dollars to low-wealth, low-capacity districts while ensuring more districts are on the funding formula.
Implements recommendations of the Senate Advisory Committee on Testing, such as reducing hours of required testing.
Increases the state investment in state share of instruction for higher education in eight years.
Institutes a two-year freeze on tuition rate increases and
requiring public universities and colleges to find ways to reduce student costs by five percent.
Appropriates $33 million over the biennium to the Department of Developmental Disabilities’ Medicaid Services to correct unintentional funding reductions from caseload estimates.
Restores or provides additional funding for pregnancy care, breast and cervical cancer screenings, foodbank services, various healthcare, arts and youth programs.
Maintains the Ohio Historic Preservation Tax Credit while requiring the Ohio Development Services Agency to study ways to convert the credit to a grant program.
Restores funding for the Southern Ohio Agricultural and Community Development Foundation.