House OKs budget with tax credits, school vouchers

3/23/2006

COLUMBUS - The Ohio House overwhelmingly passed a bill yesterday that started out as a halfway-point adjustment to the state's $51.2 billion, two-year budget, but ended up packed with tax credits, an expansion of school vouchers, and new funding for school construction and college financial aid.

There was no mention on the floor of the county sales-tax break slipped into the bill that Wood County hopes to use to lure megaoutfitter Bass Pro Shops to Rossford, despite a letter from a competitor asking Gov. Bob Taft to kill it.

"We find it increasingly troubling when state and local governments provide our competitors a head start in the marketplace by subsidizing the construction of their stores," wrote Mark Baker, chief executive officer of Minnesota-based Gander Mountain. "We believe the success of a retail business is best decided in the marketplace, not the halls of the state capitol."

Gander Mountain employs more than 1,185 people and operates a total of 312,000 square feet at multiple stores in Ohio.

Although the governor has a problem with at least one other tax break in the bill, he has no problem with this one, Taft spokesman Mark Rickel said.

"It puts another tool in the local economic development toolbox," he said. "Any county that chooses to can use it. This is more than retail. It's a tourist attraction with education and interactive displays."

The language is narrowly drawn to allow any county to return 75 cents of every $1 collected in its local share of the sales tax to a qualifying retailer to recoup a minimum $50 million investment in buildings, land, and equipment. To qualify, a developer must commit by Dec. 1. It must promise to reserve at least 10 percent of the facility's square footage to education or exhibition activities, create and maintain at least 150 full-time "equivalent" jobs, and state that more than half of its visitors would be "reasonably anticipated" to come from at least 100 miles away.

The break would last 10 years or until the investment is recouped, whichever is shorter.

"This is not a state tax policy," House Speaker Jon Husted (R., Kettering) said. "This is a local tax policy. There are no state dollars involved in this. It's the local county commission asking to do this, forgoing their own revenue for this purpose."

The bill, which passed the chamber 91-1 and now goes to the Senate, would open the window wider for parents to apply for taxpayer-funded tuition help to send their children to private or religious schools this fall. The program currently limits eligibility to students attending schools that have been in "academic emergency," the lowest performance grade, for three consecutive years.

Now, students in approximately 50 schools in "academic watch," the second-lowest grade, could apply. The move adds Toledo Public Schools' Cherry, Hale, and Pickett elementary schools and Scott and Woodward high schools. Also added were Mills Elementary in Sandusky and Freedom Elementary, Lima, and Lima North Middle in Lima.

Majority Republicans refused to consider any amendments offered by Democrats, including one from Rep. Peter Ujvagi (D., Toledo) that would have provided military widows with state-funded college tuition.

The budget also:

●Eliminates a special business tax break for a cargo hub south of Columbus and replaces it with a broader exemption that would apply to any business anywhere in the state that exports 50 percent of its goods and does at least $100 million in annual business.

●Keeps $1.7 billion in ongoing bricks-and-mortar projects alive even though they have yet to spend their money.

●Adds $1 billion in new bricks-and-mortar projects, predominantly new school construction and local economic development projects.

●Shifts $2 million of $7.5 million earmarked for Toledo's Marina District ice arena project to a new marina amphitheater project. The change would allow the arena to be built elsewhere in the city.

●Allows COSI Toledo and other science and natural history centers to ask voters to approve a property tax levy to finance operations without having to surrender their admission fees.

●Adds $60 million over two years in college financial aid.

●Requires the secretary of state's office to remove personal Social Security numbers on certain financial filings posted on the Internet.

●Allows Cuyahoga County voters to approve a 30-cent hike in the cigarette tax to fund the arts.

Contact Jim Provance at:

jprovance@theblade.com

or 614-221-0625.