Ohio budget proposal includes boost to school funding

No planned tax cuts, but budget includes reduction in number of tax brackets

COLUMBUS —Ohio House Republicans have abandoned any plan for a tax cut in the next two-year budget, but do plan to reduce the number of income tax brackets from nine to seven.

Rep. Ryan Smith (R., Gallipolis), chairman of the House Finance Committee.

The House version of the budget, expected to be sent to the Senate next week, would increase funding for school districts by $40 million a year. But some will still see cuts in their state aid depending how much enrollment they've lost. 

“I think for the most part you’ll see most schools make a small improvement compared to what we have in the governor’s plan, but frankly $40 million over 612 schools doesn’t spread very far,” said Rep. Ryan Smith (R., Gallopolis), chairman of the House Finance Committee, today.

“It’s nothing that’s going to blow people away,” he said.

The plan protects school districts from cuts as long as their enrollment doesn't drop more than 5.5 percent. Gov. John Kasich's plan would have allowed reductions after a 5 percent drop.

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Republicans say the changes, which includes a 1.5 percent cut for many state agencies, do not add up to the $800 million reduction that Gov. John Kasich, House Speaker Cliff Rosenberger (R., Clarksville), and Senate President Larry Obhof (R., Medina) have agreed to because of weak tax collections.

“These budget adjustments, I believe, put Ohio in a very strong position in the case of recession, in the case of anything that should happen in the future,” Mr. Rosenberger said.

The plan invests more over the biennium in the fight against opiate painkiller and heroin addiction, providing for more local treatment efforts, residential and transitional housing beds, and child protective services.

“It’s a $170 million investment over the biennium, I think a step in the right direction,” Mr. Smith said. “I realize that this epidemic is so large. I don’t know what the right number is, but in a challenging budget we certainly made a huge commitment to this area.”

It gives public colleges and universities a choice between freezing tuition rates or implementing a tuition hike and fee schedule that would be locked in for the next four years for incoming freshmen. The next freshman class could see a different tuition rate.

“I don’t think you’re going to find that universities are going to price themselves out to the point that they’re not going to be able to attract folks to attend,” Mr. Rosenberger said.

House Republicans have dropped Mr. Kasich’s proposal to have colleges and universities pick up the tab for student textbooks.

The plan abandons Mr. Kasich’s tax reform plan, in which he proposed increases in sales, tobacco, alcohol, and shale oil and natural gas to help pay for a 17 percent cut in the income tax.

Mr. Kasich had proposed collapsing Ohio’s income tax brackets from nine to five. The House plan would reduce the number to seven. Mr. Smith the changes target the lower end of the brackets.

“It does not raise anybody’s taxes,” he said.

The Senate will have its say on whatever the House passes next week. A final budget must reach Mr. Kasich’s desk by the end of June.

There will be more opportunities to look at revenue estimates between now and then. While the changes do not cut the full $800 million from the general fund over two years, Mr. Rosenberger said the House bill moves in that direction.

The plan also proposes changes in property tax evaluations for agricultural land, something that could represent another loss of revenue for local governments.The changes would be phased in over six years in hopes of easing the pain.

It combines a variety of regulatory and licensing panels but not to the degree proposed by Mr. Kasich.

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