State budget starting to take shape

COLUMBUS

Take a deep breath.

We’re midway through the biennial budgeting process in the Legislature, following the passage of the $71.5 billion legislation by the Ohio House.

Midway probably is not the best descriptor, since we’re actually about three months into a five-month process that started on Feb. 2, when Gov. John Kasich presented his proposal for how the state should spend its money over the next two fiscal years.

That initial plan, you’ll recall, included a tax reform package with rate hikes on cigarettes, commercial activity taxes for bigger businesses, oil and gas production via horizontal hydraulic fracturing and general sales taxes, balanced by a plan to eliminate taxes on small businesses and a 23 percent income tax cut for all taxpayers.

The governor also included law changes to tackle Lake Erie water quality issues, charter school reform and numerous other suggestions for improving the state.

The House spent almost three months (not including lawmakers’ two-week spring break) hearing testimony before the main Finance Committee and its numerous subcommittees considering the governor’s plan and formulating its own.

There was ample outcry, in particular, from families and other advocates for residents with developmental disabilities. Business groups also spoke out against the tax increases suggested by the governor.

In the end, the House killed off much of Kasich’s tax plan, replacing it with a 6.3 percent across-the-board income tax reduction and the permanent enactment of a 75 percent tax break for small businesses. The House version amounts to more than $1 billion in cuts over the biennium.

The House also removed the water quality language (portions were included in separate legislation that already passed the General Assembly) and charter school accountability provisions (portions are included in a new Senate bill that was recently introduced).

Disabled residents

The chamber also tweaked portions of the legislation dealing with programs for disabled residents, including calling for the creation of a commission to review facility closings proposed by the governor. Lawmakers say the commission’s work would include the earlier-announced closings of developmental centers in Youngstown and Dayton.

There was a little craziness — an amendment to block the state auditor from checking state officials and agencies for compliance with open records laws and a couple of other provisions critics said were aimed at punishing labor unions. But those items were ultimately removed before the budget passed the House.

A few Democrats joined Republicans in voting for the House budget. A few Republicans joined Democrats in voting against it. And a spokesman for the governor voiced ample concern about the changes made.

But all of that may not mean anything at this point. Even as the House was finishing up its work on the budget, the Senate was beginning its own hearings on the legislation. It will play host to hearings and behind-closed-doors deliberations over coming weeks and likely make big changes.

Afterward, the House and Senate will have to negotiate a final version, via conference committee. The governor can line-item veto anything he doesn’t like before adding his signature.

There’s a lot of process left before the start of the new fiscal year on July 1.

Marc Kovac is The Vindicator’s Statehouse correspondent. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.