Ohio Senate Republicans on Tuesday unveiled plans for an 8-percent across the board income tax cut, elimination of the two lowest tax brackets and continuing a business tax cut that allows some firms to avoid paying state income taxes on the first $250,000 in revenue.
Senate President Larry Obhof, R-Medina, said at a press conference that the package represents an overall tax cut of $600 million for Ohioans. Users of vaping products, also known as e-cigarettes, would face a new 17-percent tax on the retail price.
The tax changes are included in the Senate version of the state operating budget bill which is scheduled to be finalized by June 30. The legislation describes how the state plans to spent $141.7 billion over two years. Medicaid, the state and federally funded health care program for 2.8 million disabled and low-income Ohioans, represents the largest chunk of the state budget: more than $50 billion over two years.
The Ohio House version of the bill calls for a smaller income tax cut and reducing the threshold for the business tax break to the first $100,000 in revenue. Another sticking point between the House and Senate is over Ohio’s motion picture tax credit, which the House wants to wipe out and the Senate wants to keep.
The budget also includes a one-time allocation of $50 million for disaster and emergency needs. None of it is specifically earmarked for Dayton tornado recovery but it replenishes two funds that had been dwindling and could be tapped later for clean up efforts, state legislative leaders said.
Education: The Senate sticks with Gov. Mike DeWine’s plan to earmark an additional $550 million for mental health, counseling and other health services for K-12 students. Instead of injecting an additional $125 million for those services as the House proposed, Senate leaders want to earmark that $125 million toward expanding the Education Choice Scholarship that gives money for kids in poor performing schools to attend private schools. Some of the earmark would also go to helping rapidly expanding school districts.
Later this week, the Senate will fold into the bill some major K-12 policies, including altering high school graduation standards, changing how failing schools and districts can face a state takeover and how district report card grades are calculated.
Human Services: The Senate chips in an additional $5 million a year for food banks, raising the total allocation to $24.55 million; allocates $5 million for pregnancy crisis centers, up from $1 million — a move praised by Ohio Right to Life and criticized by NARAL Pro-Choice Ohio; increase reimbursement rates for programs that help elderly Ohioans live independently; and increase money for kinship care programs used by families in crisis.
Local Government: Public libraries would be eligible for 1.7 percent of the state’s general revenue funds, up from 1.68 percent; funding would be restored to cities through the Local Government Fund; and increased money for lawyers appointed by the courts to represent indigent defendants.
Environment: DeWine proposed spending $900 million over a decade to protect waterways and Lake Erie. The House earmarked $68 million toward starting the project. The Senate boosted that to $172 million.
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