GOP beats back budget amendments

4/11/2005

COLUMBUS - A House Finance Committee last night deliberated a $51.3 billion, two-year budget that would cut personal income taxes 21 percent across the board and replace a pair of business taxes with a tax on gross sales over five years.

But consumers would immediately pay higher taxes on cigarettes, alcohol, electricity, and college tuition.

Under the budget proposal, local libraries and governments would see their state aid slashed, and 25,000 working poor parents will lose their Medicaid health coverage.

A full House vote could take place as early as tomorrow. A final budget must be in place by July 1.

House Speaker Jon Husted (R., Kettering) disputed claims made by schools and local governments that the budget, largely drafted by Republicans, shifts the funding burden to taxpayers by allowing school districts to seek property tax mills that would increase the amount of money schools received as property values increased.

"Those are optional choices," he said.

"With [school employee] health-care pooling and major policy shifts along those lines, we're trying to save school money at the local level, so that they can put more of their resources toward academic purposes rather than administrative purposes."

Democrats offered some 40 amendments to the budget, seeking without success to undo the cuts in Medicaid coverage for the working poor, fully restore dental coverage partially funded in the GOP budget, and restore a program that helps extremely poor, medication-dependent Ohioans who have yet to qualify for another government program.

The budget also taps $33 million earmarked for smoking prevention and cessation efforts, including a high-profile marketing campaign targeting young smokers and indoor air quality.

The money would be used to subsidize federally mandated tailpipe testing for drivers in the Akron and Cleveland areas, fund a program encouraging Ohioans to adopt healthier habits, and generally fill a hole in the budget.

The budget also calls for an additional unspecified amount to be transferred from the tobacco fund in 2007 to pay for a managed care system in the aged, blind, and disabled Medicaid population.

"We sued the tobacco companies to recover general revenue funds that we had expended in prior years for health issues," said Rep. Chuck Calvert (R., Medina), committee chairman.

Democrats tried to amend the budget to increase the fees on large industrial smokestack polluters to at least partially restore funding for the anti-tobacco fund.

"The state spends hundreds of millions of dollars in Medicaid dealing with illnesses resulting from smoking," said Rep. Dale Miller (D., Cleveland), ranking Democrat on the committee.

"The state of Ohio can save a lot of money if we continue to fund these programs," Mr. Miller said.

The budget would:

Repeal the corporate franchise tax and unpopular tangible personal property tax on business and replace with a tax on gross sales that is applauded by manufacturers but derided by heavy volume, low-profit businesses like auto dealers and grocery stores.

Cap college tuition at 6 percent while not increasing funding for higher education over the next two years.

Provide a minor increase in K-12 education while guaranteeing that school districts will not receive less basic aid than they did the prior year.

Increase the cap on the number of charter schools in the state from 225 to 250.

Creates a statewide voucher program providing tuition grants of $4,500 or $5,000 for as many as 18,000 students seeking to flee failing public schools for private or religious schools.

Expands the Cleveland voucher program to include the 11th and 12th grades.

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