Senate panel cuts tax relief from budget

Bill now provides help for small businesses

5/29/2013

COLUMBUS — A Senate committee Tuesday stripped a proposed 7 percent across-the-board income tax cut from the House-passed budget and replaced it with a cut targeting small businesses.

“It’s about creating jobs and growing the state’s economy,” Senate President Keith Faber (R., Celina) said. “While we are all for a 7 percent across-the-board income tax cut, we just did a 4.2 percent across-the-board income tax cut [in 2011]. And while it helped at the margins, the reality is we want do something that is targeted to those 95 percent of the creators of jobs.”

The Senate plan is closer to what Mr. Kasich proposed. The plan provides a 50 percent cut in taxes on the first $750,000 in business profit. The price tag is expected to be about $1.4 billion over the two-year budget.

Democrats weren’t happy with the move.

“Our schools and local communities have suffered drastic cuts since Governor Kasich took office, and today’s amendments by Senate Republicans to [House Bill] 59 did nothing to change that,” said Senate Minority Leader Eric Kearney (D., Cincinnati).

“That’s not good news for local taxpayers, who’ve been forced to pick up the slack from state funding cuts by voting for more local levies,” he said.

As expected, the committee also stripped a provision that critics argued would discourage public universities from helping students vote in Ohio. The provision would have required the schools to charge cheaper in-state tuition for any out-of-state student to whom it supplied documentation that could be used to establish residency for voting purposes.

“We had a significant number of members on both sides of the aisle that requested the removal of that,” Mr. Faber said.

The Senate revisions also include a new sales tax exemption for goods and services purchased by the Mud Hens. The move would put the minor league team on the same footing as the similarly situated Columbus Clippers.

Sen. Edna Brown (D., Toledo) and Sen. Randy Gardner (R., Bowling Green), a Senate Finance Committee member, requested the change.

“That is so important,” Ms. Brown said. “The stadium is owned by the county, and the Mud Hens organization is a nonprofit.”

A huge chunk still missing from the budget is how the chamber plans to deal with K-12 schools. Also still notably absent is the expansion of Medicaid that Gov. John Kasich has championed but House Republicans shelved.

Mr. Faber said again that Medicaid reform will not be part of the final budget, but discussions continue along a separate track.

The Senate Finance Committee also has not yet touched a provision added by the House that would put Planned Parenthood at the end of the line when it comes to distributing Ohio’s share of federal family planning dollars.

The massive amendment adopted by the committee Tuesday makes wholesale changes to the $61.5 million, two-year budget that the House sent it more than a month ago.

The budget will change again before the committee and full Senate vote next week.

A final budget must reach Mr. Kasich’s desk by the end of June.

The plan includes an amendment pushed by Mr. Gardner to increase funding for the Healthy Lake Erie Fund by $600,000 over the biennium on top of $550,000 already expected to roll over from the current budget.

The grants fund efforts to combat harmful algae bloom. Scientists and environmentalists had requested an additional $1.7 billion.

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