Although Ohio’s final budget must be approved by June 30, 2015, there are now three competing versions: Gov. John Kasich’s version, the House version, and the Senate Finance Committee’s proposal, the details of which were released this week.
According to the Senate’s Majority Caucus blog, the Senate plan includes “more than $1.7 billion in tax relief for hardworking Ohioans and small business owners.” The plan also includes $1 billion in new school funding, and one of the largest-ever state investments in higher education.
The Senate Finance Committee is conducting its hearings on the new budget bill, but the blog highlighted several elements of the proposal:
- Reduces Ohio’s income tax rate by 6.3 percent, saving taxpayers $1.26 billion over the next two years. The Plain Dealer reported that this is $1.7 billion less than what the House proposed and about $1 billion less than what Gov. Kasich proposed;
- Eliminates the entire state tax burden on small businesses with income up to $250,000 and creates an innovative, new flat tax for small businesses above that income level;
- Protects senior citizens by removing a proposed $264 million tax on Social Security benefits;
- Boosts Ohio’s rainy day fund, which will set aside nearly $2 billion for emergencies;
- Reduces proposed overall Medicaid spending by more than $1 billion;
- Spends less than any previous state budget plan introduced this year ($1.7 billion below the House plan and $1.1 billion below the governor’s plan);
- Invests more than $935 million new dollars into students and schools over the next two years ($351.5 million in fiscal year 2016 and maintains that additional funding in fiscal year 2017 and adds $233 million more);
- Keeps college affordable by freezing tuition over the biennium for two- and four-year institutions, while making the largest state investment in state share of instruction for higher education in eight years; and
- Restores funding for essential services, such as pregnancy care and breast and cervical cancer screenings for women.
The Plain Dealer detailed other provisions, including the following:
- Effectively placing a moratorium on the Ohio Historic Tax Credits for projects beginning July 1, 2015, and replacing the credits with grants beginning July 1, 2017;
- Giving judges, prosecutors, and sheriffs a five percent pay raise each year for four years, starting in 2017;
- Eliminating a state law requiring people who purchase fireworks in Ohio to sign a form pledging to take the fireworks to another state within 48 hours (this would not affect Ohio's ban on setting off fireworks in the state);
- Appropriating $100,000 per year for the Ohio Department of Health to grant wishes of children with life threatening medical conditions;
- Allowing active-duty military members 18 years or older to carry a concealed handgun as long as they have a military ID and a small arms qualification certificate;
- Allowing temporary license tags to be good for 45 days instead of 30 days;
- Eliminating the requirement that state university students living within 40 miles of their school live on campus;
- Creating a $1 million ''Lakes in Economic Distress Revolving Loan Fund'' to assist businesses that are hurt when a lake is found to be in economic distress because of environmental or safety issues; and
- Eliminating February special elections.
Before any of these particulars become part of an actual budget, the full Senate must pass the proposal, and it must be reconciled with the House version, which then will require Gov. Kasich’s signature.