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Tuesday, December 23, 2014
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Published: Monday, 6/2/2014 - Updated: 6 months ago

OHIO GENERAL ASSEMBLY

Budget deal speeds up tax breaks

Compromise is $400 million

BY JIM PROVANCE
BLADE COLUMBUS BUREAU CHIEF

COLUMBUS — Some $400 million in additional tax breaks are headed Ohioans' way under a compromise budget bill hammered out on Monday with plans to get it to the governor’s desk this week.

The cuts, made possible by better-than-expected tax collections in the current budget, are the General Assembly’s attempt to give Mr. Kasich some of what he wanted when he proposed a tax-reform plan in March that also would have hiked taxes on horizontal-oil and natural-gas drillers, cigarettes and other tobacco products, and the income of large businesses.

Lawmakers have at least temporarily put off those tougher votes as they prepare to leave on break.

The House-Senate conference committee voted 4-2 to send the midbudget revisions to their respective chambers with the two Democrats objecting to pouring more money into tax cuts.

“Rather than ensuring that the youngest folks that really need early childhood education gets that education, we’ve been turning our backs on them and putting it into tax cuts that generally benefit the most wealthy in the state of Ohio,” Sen. Mike Skindell (D., Lakewood) said. “A tax cut for working families that amounts to $14 or $20 doesn't help a student go to college, but if you put the investment into a [college assistance grant], that makes an impact.”

But Rep. Lynn Wachtmann (R., Napoleon), a conference committee member, countered that the state’s

HIGHLIGHTS
■The bill speeds up by one year the 10-percent across-the-board income tax cuts that were set in motion last year and were set to be fully implemented by 2015. The cuts have been gradually phased in, starting at 8.5 percent in 2013. What would have been a 9-percent cumulative cut this year will now be 10 percent.

■That change is expected to reduce taxes by a total of $100 million.

■The state’s nonrefundable Earned Income Tax Credit for lower-income Ohioans would be doubled from 5 percent of the federal EITC to 10 percent, a move that would total about $17 million a year.

■$47.5 million in additional funding to help tackle Ohioans’ growing addiction problem with opiate painkillers and heroin.

priority should not be increased government spending.

“I’d rather have my constituents administer their monies and not have me sit in Columbus and control their expenditures and family funds ...,” he said. “Less taxes are more freedom, and that’s a good thing in America.”

The bill speeds up by one year the 10-percent across-the-board income tax cuts that were set in motion last year and were set to be fully implemented by 2015. The cuts have been gradually phased in, starting at 8.5 percent in 2013. What would have been a 9-percent cumulative cut this year will now be 10 percent.

The change is expected to reduce taxes by a total of $100 million, although the left-leaning Policy Matters Ohio estimated that half of the cuts will be enjoyed by the top 5 percent of earners making at least $151,000.

The state’s nonrefundable Earned Income Tax Credit for lower-income Ohioans would be doubled from 5 percent of the federal EITC to 10 percent, a move that would total about $17 million a year.

The current tax break for small businesses, those that pay the income tax instead of the commercial activity tax, would be temporarily expanded from 50 percent of the first $250,000 in business income to up to 75 percent, depending on how much the year-end surplus turns out to be. It will revert to the lower level next year.

Among the numerous provisions within its 1,160 pages is $47.5 million in additional funding to help tackle Ohioans’ growing addiction problem with opiate painkillers and heroin, using money it expects to save from the recent federally funded expansion of Medicaid eligibility.

The bill also declares that university athletes are not public employees, a move designed to head off any potential effects in Ohio from a National Labor Relations Board decision that football players at Northwestern University are employees with the ability to unionize.

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.



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