$74 billion state budget heads to DeWine for signature, vetoes

The Ohio Statehouse
The Ohio Statehouse

Credit: Laura A. Bischoff

Credit: Laura A. Bischoff

House, Senate approve compromise bill a few hours after more than 100 amendments are added

The Ohio House and Senate on Monday night both passed the conference committee’s $74 billion state budget report, setting up the state’s spending plan for the next two years.

The compromise resolved differences between the two chambers on school funding, taxes, broadband access, abortion and several other issues. The budget now goes to Gov. Mike DeWine for his signature, although governors often use their line-item veto power to cancel some provisions.

The general revenue fund is set at $34.84 billion for the first year of the budget and $39.24 billion in the second year, with nearly all of the Year 2 increase coming in the Medicaid line item. Those numbers compare to $34.13 billion in the fiscal year that ends this week. The state’s all-funds budget will be about $81 billion each of the next two years.

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This roll call shows how state representatives voted Monday, June 28, 2021, on the two-year state budget bill. "Yes" votes are in green, "no" votes in red, and failure to vote in yellow.
This roll call shows how state representatives voted Monday, June 28, 2021, on the two-year state budget bill. "Yes" votes are in green, "no" votes in red, and failure to vote in yellow.

Credit: Jeremy P. Kelley

Credit: Jeremy P. Kelley

“Context is important. In October, in the midst of COVID, Moody’s had said the bottom was going to fall out of state revenues, and there were disaster scenarios being painted,” said state Sen. Niraj Antani, R-Miamisburg. “So the fact that we stand here today not just able to deliver a balanced budget, but one with really no substantial cuts to core funding lines of the state ... and to deliver a historic tax cut, is a testament to every member of this General Assembly.”

The Senate passed the bill in a 32-1 vote, and the House approved it by a margin of 82-13. Here are some of the most prominent measures in the compromise budget:

School funding

The legislature primarily chose the House of Representatives’ Fair School Funding Plan as the school finance model, but state Rep. Scott Oelslager said they removed “intent language” beyond the next two years.

The “Fair Plan” is a wholesale change in how schools’ state funding is calculated, based on three years of research into how much different pieces of K-12 education cost in different circumstances. But the House’s plan was based on a six-year phase-in of funding increases, so removing that intent beyond the next two years raises questions.

The Ohio School Boards Association praised the move, calling the funding model itself a historic investment “that will reverberate for decades.”

“The work does not end today, though,” OSBA CEO Rick Lewis said. “The bill only funds two years of the six-year plan, which means future lawmakers must commit themselves to push this adequate and equitable funding formula across the finish line.”

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Direct funding of private school vouchers and charter schools remains, as called for in both budget bills, but the final version includes Senate provisions calling for significant increases in the dollar amount and availability of the vouchers.

Sen. Teresa Fedor, ranking member of the Senate Education Committee, was the lone “no” vote in the Senate. Fedor said she couldn’t support the fact that the bill doesn’t fully commit to the Fair School Funding Plan, while expanding charter and voucher funding.

“We had the opportunity to invest long term in the future of 1.7 million children, and we did not take it,” Fedor said. “This only kicks the can down the road to the next General Assembly and gives no stability to our schools.”

Income tax cut

According to the Legislative Service Commission, Ohioans with income between $25,000 and $110,650 will see a 3% reduction in the state income tax rate for 2021 and beyond.

But the final budget bill includes two other provisions that were not in the House or Senate version. The bill would make it so no one with income below $25,000 would pay Ohio income tax. The previous floor was $22,150.

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It would also totally eliminate the highest-income bracket (those over $221,300), and would set the rate for the new top bracket (all those over $110,650) at 3.99%, thus lowering the effective tax rate noticeably for the highest-income Ohioans.

Several of the House Democrats who voted against the budget plan referred to it as a $1.6 million tax-cut giveaway.

“Most of the dollars are going to flow to those who need them least,” said Rep. Daniel Troy, D-Willowick.

Other provisions

  • The final budget bill includes and expands a House provision helping to grow broadband internet access in low-service areas. The House had called for $190 million in such funding, but the final budget bill allocates $250 million.
  • The budget bill includes abortion restrictions from the Senate version that could affect the ability of the Dayton area’s lone abortion facility to stay open. For ambulatory surgical facilities that perform abortions, the hospital with which they have admitting agreements would have to be within 25 miles of the abortion facility. And the physician with those admitting privileges must practice medicine within those 25 miles.
  • The compromise budget eliminates a Senate provision that would have required the Ohio Department of Job and Family Services to conduct an “asset test” for each person receiving SNAP benefits (food stamps). The Senate’s plan would have stopped SNAP benefits for households with at least $2,250 in savings and would have increased recipients’ reporting requirements any time they had changes in income, based on things like seasonal changes in work hours.
  • The state’s system of child care standards, called Step Up to Quality, had been eliminated in the Senate version of the budget. But the conference committee reinstated it, and they increased eligibility slightly for publicly funded child care, up to 142% of the federal poverty level.
  • The budget bill allocates $350 million to help Ohio communities clean up brownfield industrial sites for potential redevelopment. The budget contains another $100 million on top of that for demolition of blighted buildings.
  • Odds and ends: The bill would follow new federal law by making Juneteenth a state holiday. It would allow continuation of the “alcoholic drinks to go” system for restaurants, as long as those drinks are offered to in-person diners. It puts limits on how Ohio’s Redistricting Commission can spend money, and allows House and Senate leadership to intervene in congressional redistricting lawsuits.

Politics, compromise

The conference committee of three senators and three state representatives finalized its report, which lists 191 amendments, around 4:30 p.m. Monday. By 9:50 p.m., both houses had passed it.

State Rep. Phil Plummer, R-Dayton, was a member of the conference committee and said the quick turnaround was “all good” because, “we have been working on this and communicating for some time now.”

As the dozens of amendments were read off in conference committee, Democrats objected to several of them. But Oelslager didn’t entertain formal votes on any of them, saying to save time the conference committee would “assume each objection fails, with two yes votes and four no votes” on party lines, no matter what the issue was.

“I was trying to debate how I was going to vote on this report — it is substantially better than what came out of the Senate, but it does fall short in a number of areas,” said Democratic state Rep. Erica Crawley. “I’m happy that there was an ability to come to a compromise on some major things that made a difference for our caucus and will make a difference in the lives of Ohioans.”