Ohio Statehouse Update: Governor Kasich proposes biennial budget bill

Today, Gov. Kasich proposed a two-year budget totaling over $72 billion in state general revenue fund spending, including a two percent increase in spending in Fiscal Year 2016 and a 2.5 percent increase in Fiscal Year 2017. The “Blueprint for a New Ohio” includes a net tax cut of $500 million, a $700 million increase in K-12 spending, a $375 million deposit into the state’s rainy day fund, and an across the board reduction in the state income tax. While details on the proposals are not expected to be released for another week or so, here is a summary of the budget highlights.

As the governor has hinted at for some time, the main theme of his budget proposal is tax reform. In addition to the income tax cut, the budget includes:

• A tax cut for small business;    

• An increase in cigarette taxes;

• An “equalization” of the tax rate on non-cigarette tobacco products with cigarette taxes;

• An increased “severance tax” on oil and gas producers; and

• An increase in the Commercial Activity Tax.

In addition to increased funding for K-12 schools, proposed education reforms include:

• Tougher requirements on charter school sponsors and management companies;

• The ability for charter schools to seek levies;

• Increased funding for early childhood education;

• Caps on state testing time;

• Caps and freezes on higher education tuition increases; and

• Allowing community colleges to offer bachelor’s degrees.

Human services and healthcare are also an area of broad reform in the governor’s budget:

• Allocating $310 million to case management services for Ohioans receiving public assistance;

• Increased access to subsidized child care;

• Requiring premiums for individuals on Medicaid that make over 100 percent of the federal poverty rate;

• Programs aimed at reducing infant mortality; and

• Programs aimed at eliminating tobacco use on K-12 and higher education campuses.

The legislature has a constitutional responsibility to pass a balanced budget no later than July 1. Between now and then these initiatives along with the numerous other policy and budgetary changes included in the budget bill will be vigorously debated in the legislature. Hearings begin tomorrow in the House of Representatives as the Office of Budget and Management and Legislative Service Commission brief members of the Finance Committee on the overall structure of the budget.

 McDonald Hopkins will continue to provide updates as this important legislation is discussed and debated.

For more information, please contact:

Michael Caputo
(non-attorney professional)
216.348.5770
mcaputo@mcdonaldhopkins.com

Rebecca M. Kuhns
(non-attorney professional)
614.458.0043
rkuhns@mcdonaldhopkins.com

Aaron M. Ockerman
(non-attorney professional)
614.458.0026
aockerman@mcdonaldhopkins.com

Todd Snitchler
614.458.0032
tsnitchler@mcdonaldhopkins.com

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