Ohio GOP hacks away at Budget

Medicaid growth is out; 7% income tax cut is in

“This is so screwed up,” said House Speaker Bill Batchelder, center, R-Medina. “We have all these regulations that have to come out.”
“This is so screwed up,” said House Speaker Bill Batchelder, center, R-Medina. “We have all these regulations that have to come out.”

COLUMBUS — Ohio House Republicans on Tuesday took the scissors to their own governor’s proposed budget, stripping away his plan to expand Medicaid and much of his tax overhaul and revamping how he wanted to fund schools.

The revamped House plan spreads additional school funding in Gov. John Kasich’s plan over more districts, which would allow Toledo Public Schools to receive more than $430 million in aid over the two-year budget. The new plan also adds funding that is expected to financially boost universities and colleges, including the University of Toledo, Bowling Green and Owens Community College.

The revised two-year budget, nearly $2 billion smaller than the governor’s $63.3 billion plan, cuts personal income-tax rates across the board by 7 percent a year— a cut of $1.5 billion over two years. The cut would be financed by expected growth in existing tax revenue sources, as well as about $400 million in surplus funds that Mr. Kasich had planned to give back to taxpayers next year in the form of a tax rebate.

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Shelves proposed Medicaid expansion that would have covered 275,000 more uninsured Ohioans over the next two years.
■ Promises a 7 percent across-the-board annual income tax cut worth a total of $1.5 billion over two years.
 ■ Provides $30 million more a year for county mental health agency services and $20 million more a year for addiction treatment.
■ Renews effort to place Planned Parenthood at the bottom of priority list when it comes to distributing federal family planning dollars.
■ Kills plan to expand the sales tax base to professional services.
■ Keeps state sales tax rate at 5.5 cents on the dollar.
■ Kills plan to boost taxes on shale oil and natural gas drilling.

Rep. Ron Amstutz (R., Wooster) conceded this means the tax cut is at least partly funded by one-time money, but he also stressed that the income tax cut is permanent.

Mr. Kasich had originally proposed a total $1.4 billion cut over three years — 20 percent for individuals and 50 percent on the first $750,000 in small business profit. There is no targeted small business income tax cut in the House GOP plan.

“We like that proposal, too, but we couldn’t do it,” Mr. Amstutz said.

While guaranteeing that no school district would receive less money than it did last year, Mr. Kasich’s K-12 education proposal would have left about 60 percent of the state’s districts with no spending increases next year.

The GOP plan reworks the funding formula to spread the additional money provided under Mr. Kasich’s plan across more districts, reducing by about half the number that would have seen no increases. It targets more aid to poorer districts with higher special education and transportation costs and caps the amount of increases some rapidly growing suburban districts would have received under Mr. Kasich’s plan.

Toledo Public Schools, which would have seen no increase in aid during the first year of the biennium under Mr. Kasich’s plan, would now see funding increases of 6 percent in each year. The district would receive $210.7 million in 2014 and $223.3 million in 2015.

The House GOP largely left Mr. Kasich’s funding plan for public universities and colleges intact as he seeks to move away from funding based largely on enrollment toward funding based on such things as graduation rates.

The new plan, however, adds some funding to ensure schools like the University of Toledo, which could have been hurt during the first year of the new formula, would not be cut.

Rep. Tim Brown (R.,Bowling Green) said this will also help Bowling Green and Owens in his district. “I am pleased that my colleagues in the House recognized the importance of this request,” he said.

The House Finance and Appropriations Committee swapped out the governor’s budget proposal for its own as it begins a final round of hearings. A full House vote is targeted for April 18. Debate would then shift to the Senate.

“It’s clear that support isn’t there right now among House Republicans to extend Medicaid coverage, but it’s the right decision for Ohio,” Kasich spokesman Rob Nichols said. “Not doing so will hurt our economy, make Obamacare’s impacts worse, and hurt vulnerable Ohioans who need care.”

In the alternative, the House proposal would increase funding by $100 million over the two-year budget for county mental health agency services and drug and alcohol addiction treatment.

Rep. Barbara Sears (R., Monclova Township), a committee member, has been a vocal critic of President Obama’s signature health-care law. But like Mr. Kasich, she came to the conclusion that the state should do some form of Medicaid expansion. She voted against accepting the substitute budget bill lacking that language.

“There’s a philosophical concern about the expansion of entitlements,” she said. “... But there’s a difference between outright expanding an entitlement without an ending in mind and structuring a program that lifts somebody up and gives them an opportunity. The vast majority of people we’re talking about here are hard-working Ohioans that just need a little bit more.”

Mr. Kasich had decided that the state couldn’t afford to pass up $13 billion in promised federal subsidies to pay for it. The federal government has promised to pay 100 percent of the cost for the first three years of the expansion. The federal share would gradually decline to 90 percent after that.

House Speaker Bill Batchelder (R., Medina) portrayed the removal of the Medicaid language as potentially temporary.

“This is so screwed up,” he said. “We have all these regulations that have to come out.”

The expansion would have covered families earning up to 38 percent above the federal poverty level, about $31,800 a year for a family of four. That has the support of diverse allies like the Ohio Chamber of Commerce, labor unions, social service organizations, advocates for the mentally ill, Right to Life, Planned Parenthood, doctors, and county commissioners.

“Missing a once-in-a-generation opportunity to provide meaningful health-care coverage to Ohio’s most vulnerable citizens sets back our state,” said Mike Abrams, president of the Ohio Hospital Association. “... We are deeply disappointed that the Ohio House today has chosen not to roll up their sleeves to cut health-care costs and reduce the cost-shift burden on those with private health insurance.”

Mr. Kasich had proposed greatly expanding the state sales-tax base to previously untaxed professional services and hiking severance taxes on shale oil and natural gas drilling.

Contact Jim Provance at: or 614-221-0496.