PREVIEW

STATE BUDGET

Medicaid, tax changes, charter school reform expected in governor’s budget

PREVIEW

Medicaid, tax changes, charter school reform expected in governor’s budget

Among potential proposals

HIGHER EDUCATION

Gov. John Kasich said he wants to reduce the cost of higher education. Another proposal would allow community colleges to award bachelor degrees.

child-care subsidies

Kasich said his budget would include an expansion of child-care subsidies for working Ohioans.

TOBACCO Taxes

Kasich has supported an increase of 60 cents per pack of cigarettes in the state tobacco tax.

Medicaid Expansion

Kasich couldn’t persuade the full state Legislature two years ago to approve expanded coverage. He’ll try again.

By Marc Kovac | news@vindy.com

COLUMBUS

A severe bout of depression left Cincinnati resident Ben Ertel out of a job with too few options.

Over in Greene County, Pam Harris was making too much money — $14 an hour in a 30-hour a week job — to qualify for assistance with the medication and services she needed to deal with arthritis, a stroke and some mental- health issues.

North Canton mom Cindy Koumoutzis watched her daughter struggle with the aftermath of a rape and an addiction to heroin without insurance coverage due to pre-existing conditions.

That was before Gov. John Kasich moved to expand Medicaid eligibility two years ago, providing health care coverage and related services to hundreds of thousands of additional Ohioans.

Today, Ertel has a full-time job as a nurse’s aide with insurance coverage through his employer, Harris is getting the medication and physical therapy she needs and Koumoutzis’ daughter is getting treatment and counseling for her addiction and health issues — all, they said, thanks to Ohio’s expanded Medicaid coverage.

Last week at the Statehouse, the trio joined mental health and addiction-services advocates in urging Republican lawmakers to continue the Medicaid expansion.

“I cannot say it strongly enough — the expansion of Medicaid eligibility limits has improved lives of many Ohioans and ultimately helps us to become a stronger and more robust state,” said Bobbi Douglas, executive director of Liberty Center Connections in Wooster.

Kasich unveils his biennial budget proposal today, and the Medicaid expansion likely will be part of it.

Though the expansion was finalized in 2013, he’ll need lawmakers’ approval to continue paying the costs of the program over the next two fiscal years.

Backers of the move aren’t the only ones pushing for inclusion in the budget. Many groups have been advocating for a variety of issues for inclusion in the budget.

Anti-smoking groups want an increase in taxes on cigarettes and other tobacco products, saying the change would bring a steady revenue stream into the state’s coffers while decreasing the number of smokers.

Education groups want more regulation of charter schools to make sure the public funds they receive are being used to effectively teach kids and not lining the pockets of big-money management groups.

Local governments want a restoration of the state funding that was cut a few years back, saying Ohio’s present economic climate and solid budget conditions merit a return of money needed for police, firefighters and other necessary services.

Democrats in the Ohio House and Senate say they won’t support policies that shift taxes from wealthy Ohioans to low- and middle- income residents. They also have wish lists of law changes they’d like to see — a refundable earned income tax credit, for example.

Republican lawmakers have their own ideas of how to move the state forward, some of which will line up with the governor’s budgetary vision, some of which will not.

The next five months will bring extended deliberations in committees and subcommittees, lengthy debates in the House and Senate before final passage and increasing calls from interest groups attempting to sway policy-makers on the wisdom of earmarking funds for various causes.

What’s To Come

The budget bill outlines spending over the next two fiscal years, with much of the funding devoted to schools and health care programs.

The last budget totaled about $62 billion in general revenue spending for fiscal years 2014 and 2015 and included a school-funding formula that backers said amounted to the biggest jump in state aid in at least a decade, a higher education funding model that increased consideration of student graduation rates and language requiring a doctor to conduct an external check for a fetal heartbeat before performing an abortion.

On the tax front, the last biennial budget codified a 10 percent personal income tax cut over three years, a 50 percent reduction in small business taxes, an increase in state sales tax to 5.75 percent from 5.5 percent, a broadening of the Commercial Activity Tax and the end of the state’s property tax rollback on future and replacement levies.

On Thursday, the governor told an audience of social service agencies in Columbus that his new budget proposal would eliminate income taxes on small businesses earning up to $2 million, plus a near doubling of personal income tax exemptions for Ohioans earning up to $80,000 annually. A total of more than $500 million in tax cuts is expected.

Expect additional tax reform in the executive budget, including hikes on cigarettes and other tobacco products and oil and gas produced via horizontal hydraulic fracturing and a revamped commercial activity tax.

“We’re going to have another major proposal on tax relief and tax reform,” Kasich said. “... This budget is kind of brimming with new thoughts and ideas....”

During last year’s mid-biennium review, Kasich proposed increasing the tax rate on cigarettes to $1.85 per pack from $1.25 and taxing e-cigarettes and other tobacco products at an equivalent rate. He also wanted to increase Ohio’s Commercial Activity tax (levied on gross business receipts of $150,000-plus) to 0.30 percent from 0.26 percent. Both proposals were cut from the final MBR, however.

Republican legislative leaders say they support income tax cuts. They’ve been more circumspect on other potential tax reform.

“I think reducing taxes in the state’s a good thing,” said House Speaker Cliff Rosenberger of Clarksville. “It’s something that continues to spur business, it continues to put more money back in the citizens’ pockets, and that’s what we want.”

The governor and others also say that they want to find ways to reduce the cost of higher education.

“We need to encourage [colleges and universities] to streamline and make themselves more efficient so that we can lower costs, not increase costs,” said Senate President Keith Faber of Celina, who’s called for a 5 percent reduction in students costs over the biennium.

Kasich and Statehouse Republicans continue to push for welfare reform, hoping to find a way to help needy Ohioans find jobs and opportunities so they don’t need public assistance.

Last week, Kasich said his budget would include an expansion of child-care subsidies for working Ohioans and requirements that counties better coordinate access to benefits, job training and other assistance for needy residents.

There’s been ample indication that lawmakers would like to provide more state funding for local governments, particularly townships.

“The local government fund dollars that went to Columbus and did not go back to the local communities is really crippling budgets and specifically safety forces...,” said Rep. Michael O’Brien of Warren, a freshman Democrat member of the Ohio House and member of the chamber’s Finance Committee. “... You may balance the budget on the state level, but then you’re crippling the communities where they have to raise taxes just to be where they were before.”

Medicaid Expansion

Kasich couldn’t persuade the full Legislature two years ago to pass expanded Medicaid coverage. He’ll try again in coming months as the budget moves through the House and Senate.

Opponents of Medicaid expansion view it as an endorsement of President Obama’s signature health care legislation.

Republican lawmakers have offered mixed signals as to whether the issue would remain a part of the budget, be addressed in separate legislation or be forwarded onto the Controlling Board. Kasich accomplished the expansion last session via the latter, bypassing a vote of the full Legislature.

Rosenberger recently said his caucus is considering ways to reform Medicaid to control costs and ensure needy Ohioans can find opportunities so that they don’t have to rely on Medicaid.