Ohio’s two-year state budget is headed to a conference committee this week to work out significant differences between the House and Senate versions. There isn’t much time to deal, because the budget must be signed by Sunday night.
Both budgets have income tax cuts – 6.6% in the House version, 8% in the Senate. And the House budget requires no taxes for people making under $22,250; the Senate budget changes that floor to $21,750.
This isn’t exactly what Gov. Mike DeWine wanted during his proposal in March.
“You can look to our budget that we presented is where we think we should be, and that is really no tax changes,” DeWine said.
DeWine said that includes a deduction that allows many small businesses to take the first $250,000 of their income tax-free. The House dropped that to $100,000, but the Senate restored it, saying the change was a tax increase.
All told, the House budget’s tax cut is $216 million, far less than the Senate’s $700 million.
But the Senate also expanded the tobacco products tax on e-cigarettes and vaping products, and would allow those who are 18 by October to continue to buy tobacco products. However, all versions of the budget raise the tobacco buying age to 21.
Both budgets include DeWine’s $550 million for wraparound services targeted to low-income districts for counseling, food and after school programs. The House added $125 million to that, directing it specifically to poorer districts.
But the Senate moved that extra money into vouchers and aid to fast-growing, better-off districts that have had their state funding capped. House Speaker Larry Householder wasn’t pleased.
“I know there was money that went to some of the wealthier schools, the ‘capped’ schools, and I kind of thought that’s where it went – sort of a ‘rob from the poor, give to the rich’ kind of a thing,” Householder said earlier this month.
But Senate Finance Chair Matt Dolan said there are concerns about putting too much into that new wraparound services fund right now.
“Ultimately if it’s rolled out correctly, it’s going to be a great program,” Dolan said. “But it’s a half a billion dollars, it’s brand new and school starts in two months. So the idea of throwing another $125 million at it when there are some realistic questions and hurdles about how to administer it did not make sense to us.”
In an attempt to settle the long-standing issue of graduation requirements, the Senate’s budget includes a set of standards with non-testing options. The House budget doesn’t.
But while the House dissolves academic distress commissions, which have managed the state takeovers of the Youngstown, Lorain and East Cleveland districts, the Senate version keeps them.
Senate Education Chair Peggy Lehner (R-Kettering) said abandoning those commissions is dangerous.
“These are schools that have not done well for some time. If they had the ability to do this on their own, they would have done it,” Lehner said.
DeWine’s budget doubled funding for children services to $60 million over the two years. The House doubled that and the Senate agreed. The Senate also added $10 million to help parents avoid relinquishing custody to get their kids specialized treatment.
Both budgets put money into the H2Ohio water quality fund – the House put in $86 million, the Senate $172 million.
But drugs and movies are two other points of contention. The House wanted a single pharmacy benefits manager for Medicaid – the Senate cut that. And the Senate restored the $40 million film tax credit that the House eliminated.
For the last decade, budget votes have been along party lines. But this time, both versions have widespread Democratic support. And as House Minority Leader Emilia Sykes (D-Akron) tells it, it almost seems like it’s a battle between chambers rather than parties.
“The Senate version wasn’t terrible,” Sykes says. “But it wasn’t as good as what we saw in the House. So we will certainly be working in conference committee to ensure more of those priorities that we saw in the House version of the budget end up being in the final version that the governor signs.”
But Sykes said Democrats are concerned about the tax cuts in both budgets, and will fight for funding for wraparound services and against academic distress commissions and vouchers. She said they’ll watch for changes that could make Medicaid less accessible.
Other things to watch out for include the House budget allowing only school districts facing fiscal emergency to put money questions on August special election ballots. The Senate budget also pushes next year’s presidential primary to a week later in March, and extends a moratorium on new fireworks wholesaler/dealer licenses until the end of 2020.