Ohio Senate drops Medicaid expansion

$62B budget set for vote today cuts small business tax, raises school funding

6/6/2013

COLUMBUS — The Ohio Senate’s take on a $62 billion, two-year budget is headed for a vote today, complete with $1.4 billion in tax relief for small business owners and more money for K-12 schools than either the House or Gov. John Kasich had proposed.

The plan, however, lacks Mr. Kasich’s controversial proposal to expand Medicaid eligibility under the federal health-care law. The expansion is not expected to make a comeback when a House-Senate conference committee meets to hammer out a compromise between the two chambers’ versions.

At most, Medicaid talks will continue along a parallel track.

“There’s no question that the investment in education is significant in this budget,” said Sen. Randy Gardner (R., Bowling Green), a member of the Senate Finance Committee. “The last four years have been difficult. I have said for a long time that education shouldered perhaps a larger share of the burden in balancing the budget in the last four years, so I’m glad we could reverse that trend in this budget.”

The committee voted along party lines — with Republicans in support and Democrats in opposition — to send the budget to the full Senate for approval today. A final plan must reach Mr. Kasich’s desk by June 30.

The plan concentrates on tax relief on small businesses. It drops the House-passed proposal of providing a 7 percent across-the-board income tax cut for all Ohioans in favor of providing that $1.4 billion in tax relief instead to owners of small businesses. The bill allows them to write off half of the taxes owed on profits up to a break of $375,000 per couple filing jointly.

“For very small businesses, every penny counts…,” said Sen. Scott Oelslager (R., Canton), the committee chairman. “Those have historically been our engines of job creation.”

Mr. Kasich’s broader tax plan — expansion of the sales tax base to services and higher taxes on shale oil and natural gas drilling to underwrite an income tax cut for individuals and small businesses — will not be resurrected.

The Senate adds $717 million to basic K-12 education subsidies over two years, 11 percent above the current budget in which schools suffered severe funding cuts. In all, the plan offers $6.6 billion for 614 school districts next year and $7 billion in 2015 compared to $6.3 billion this year.

Toledo Public Schools, however, would fare better under the version passed by the House in April.

The plan would increase access to taxpayer-financed vouchers for students to attend private or religious schools.

A student who already receives a voucher could continue to be eligible at a reduced level, even if the family’s income rises up to 400 percent of the federal poverty level.