Conference committee will sort out Ohio budget differences

June 19, 2015 at 12:00a.m.

COLUMBUS

The Ohio Senate approved a $71.3 billion biennial budget Thursday that proponents say will mean lower taxes and economic growth and opponents say will further help wealthy residents at the expense of the needy.

Sen. Scott Oelslager, a North Canton Republican and chairman of the Finance Committee, called final bill a “comprehensive and thoughtful budget that benefits the citizens of our great state. This plan demonstrates the Senate’s commitment to funding essential programs while ... protecting taxpayer dollars.”

Sen. Mike Skindell, a Lakewood Democrat and ranking minority member of the finance committee, countered, “In this budget, Gov. Kasich and the Republicans seek further across-the-board income-tax cuts, but what does that mean? The wealthiest Ohioans get an average income tax [cut] of $10,227 while the middle class, those with income ranges between $37,000-$58,000, are only getting a $13 cut. The cuts are generous to the wealthiest Ohioans but [do] little for middle-class Ohioans.”

The final vote on HB 64 was a split 23-10, with most Democrats opposing, though Republicans accepted a few last-minute changes to gain support from one minority-party member. One Republican member, meanwhile, voted against the bill.

The budget isn’t a done deal, however. After a House vote later in the evening rejecting Senate amendments, a conference committee of the two chambers – the panel includes four Republicans and two Democrats – meets today to begin negotiations on a final two-year spending plan.

The morning session of the committee was scheduled to include comments from the state budget director and updated financial projections, which could sway conferees’ decisions.

Much of the ensuing work of the conference committee will be completed behind closed doors. Members have a little more than a week to complete the legislation to ensure a final vote by the House and Senate by June 30, in time for the governor to veto lines he opposes and add his signature in advance of the new state fiscal year July 1.

The Senate version of the budget outlines more than $1.7 billion in tax cuts, including a 6.3 percent income-tax rate cut, plus the elimination of taxes on small-business income up to $250,000 and a new flat tax of 3 percent for small-business income above that total.

The Senate also added a cigarette tax hike of 40 cents per pack, plus an increase on taxes for other tobacco products to 22.5 percent from 17 percent. The proposal would not include e-cigarettes, and taxes on premium cigars would be capped at 50 cents.

The Senate retained language added by the House creating an “Ohio 2020 Tax Policy Study Commission” to review future tax-reform proposals. But senators added language requiring that panel to study how to transition Ohio to a flat income-tax rate of 3.5 percent or 3.75 percent in the next three years.

The study commission also would have to negotiate an increase in taxes on oil and gas produced via horizontal hydraulic fracturing by Oct. 1, reporting its recommendations to the general assembly for subsequent legislative action.

Additionally, Senate Republicans added $935 million in primary- and secondary-school funding – “No district will lose funding over the next biennium,” Oelslager said.

The Senate budget also includes measures to better control Medicaid spending, direct more funding to townships and small villages, earmark local government funds for law-enforcement training and boost the dollar total that can be deposited into the state’s rainy day fund.