The Ohio legislature came to an agreement on an $86.1 billion general fund budget Friday after Senate and House lawmakers spliced through more than 800 differences in their two proposals. Gov. Mike DeWine, wielding line-item veto power, will sign the bill Monday.
The final budget was approved by a vote of 25-6 in the Senate; 67-30 in the House. The rhetoric was mirrored in both chambers: Largely, Republicans championed income and business tax cuts and expanded school choice, while Democrats said the budget disproportionately benefits wealthy Ohioans.
The agreement comes after a week of conference committee deliberations, which were backlit by state forecasts of an additional $500 million in state revenue not previously expected.
“I think as people dive into this bill, they’re going to see that we not only met the needs of our citizens, but we also made sure that this place is a great place to start a business, that this place is a great place to educate your child, that Ohio is a great place for quality of life and to raise a family, and a lot of that is because of what we are accomplishing today in this conference report,” said Sen. Matt Dolan, R-Chagrin Falls, who led the Senate’s budget team.
“I find that the conference committee produced a report that works, again, for the wealthy and the well-connected, but doesn’t work for everyday Ohioans,” said Senate Minority Leader Nicki Antonio, D-Lakewood.
At the forefront of those negotiations were issues of education.
The legislature agreed to use the House’s K-12 funding formula along with the Senate’s universal school voucher plan. By doing so, lawmakers restored $541 million to public school funding and expanded full private school vouchers to any student within 450% of the federal poverty level.
Local districts gained millions of dollars through the K-12 funding decision. Across the state, this budget delivers $1.5 billion extra to public schools compared to the last budget.
House Finance Chair Jay Edwards, R-Nelsonville, said education was a top priority for his chamber heading into conference committee.
Through the budget, the state will also take over most of the duties prescribed to the state Board of Education, a Senate priority. The measure, derived from Senate Bill 1, was one of three Senate policies pertaining to education that raised concern from House Republicans and Democratic colleagues.
The other two bills, Senate Bill 117 and Senate Bill 83, were swapped in the name of compromise. The budget now includes a fully realized Senate Bill 117, a bill criticized by Democrats that will require Miami University and four other state colleges to create institutions specifically to promote intellectual diversity on college campuses. Meanwhile SB83, a bill that would have blocked university faculty from going on strike, was removed.
Elsewhere in education, the budget removes the third grade reading guarantee; largely prohibits universities from mandating vaccines; and raises the minimum teacher salary from $30,000 to $35,000.
Of local note, the final budget removed an initiative from Butler County lawmakers that sought to change the rules about property valuations ahead of the county’s regularly scheduled assessment from county auditors, which could see property valuations spike an average of 42%, according to the Journal-News.
“Across our district, state and nation, homeowners are faced with skyrocketing property values, which in turn can lead to drastic increases in their property taxes,” said Sen. George Lang, R-West Chester Twp., who along with Rep. Thomas Hall, R-Madison Twp., pushed for the policy. “Many are unprepared or unable to afford these sudden spikes and deserve protection. This was a provision I fought hard to include, and I am incredibly frustrated that local officials and state legislators have chosen to side with the government over the taxpayer.”
Lang did, however, applaud the legislature’s budget when it came to income tax and business tax deductions.
The final plan moves Ohio to two official tax brackets and will reduce revenue generated from income tax by $1.5 billion per year. Democrats argued that the tax cuts disproportionately benefit the wealthy.
The Senate also got a win through reducing commercial activity taxes, paid by about 90% of Ohio businesses. Phased in over the biennium, all businesses with less than $6 million in yearly revenue will no longer have to pay commercial activity taxes. The Senate fought hard to get it in the budget.
“We were deeply concerned with the CAT tax changes because you’re taking so many people out of the pool,” Edwards said. “The fear here from the business community is, if we ever have to raise the CAT tax, you’re going to have to have a smaller pool of people paying into that tax, so it’ll have to be raised exponentially.”
The Dayton Area Chamber of Commerce declined to comment on the CAT deductions.
Chambers of commerce and industry advocates, aligned on child care due to business and education interests, received a mixed bag when it came to increased funding in that arena. The Senate got its way on a mild eligibility boost for subsidized child care, while the House got its way with a $30 million grant fund that will allow existing child care centers to increase capacity.
And, while the legislature funded added $32 billion to DeWine’s $96 million proposal for preschools, the governor’s lofty $150 million child care scholarship fund was left out. In a press release, child care advocacy organization said lawmakers could have, and still need, to do more.
The governor did get his proposed Social Media Parental Notification act, a law that requires social media companies to give parents more regulatory control on their children’s social media consumption.
Elsewhere, billion dollar set-aside funds proposed by the Senate were slashed, including the $1 billion One Time Strategic Investment Fund and the $1 billion extended sales tax holiday, which were both notched down to $750 million a piece over the biennium.
The final budget includes about $65 million in earmarked local projects, outside of the $750 million local project fund. Included in those projects is $3 million for development around the Dayton Dragons stadium and $22.5 million toward the bid to keep the Western & Southern tennis tournament, one of the largest in the world, in Mason.
The tournament’s owners have asked for $50 million in public funds to renovate the Mason facility; $25 million already has been raised by the city and Warren County; now, $2.5 million is still needed to hit the goal.
“I am so grateful for the hard work from the state, county and city to show we are the best place for tennis and the Western and Southern tournament,” Rep. Adam Mathews, R-Lebanon, told the Dayton Daily News.
Ultimately, the bill, thousands of pages long, was characterized as a compromise by Republican leadership and as a missed opportunity by Democrats.
“We’re not doing what we should be doing in this budget,” said House Minority Leader Allison Russo, D-Upper Arlington, who, along with her colleagues, argued that the state ought to be doing more to address hunger, infant mortality and early childhood education.
“We had to give a little bit to get a little bit,” Edwards said. “That’s usually when good government is at its best, when you’re giving and taking. It’s not perfect … but I think we landed in a good spot for the people of Ohio.”
Current state funding expires Friday night. The two chambers approved a three-day stopgap funding, allowing the state to operate as normal over the weekend before DeWine signs the bill, expected Monday.