Ohio Republicans quickly moved through a two-year, nearly $163 billion state budget that makes sweeping changes to how the state funds public schools and includes an income tax break for every Ohioan.
After introducing the budget a little more than a week ago, the House Finance Committee gave its approval Tuesday, with all of the committee’s Republicans and two Democrats voting for it. The proposal passed on the House floor Wednesday, 70-27. Hearings continue in the Senate. The General Assembly must pass and Gov. Mike DeWine must sign a balanced budget by July 1.
“We have crafted a budget that is balanced, responsible and truly meaningful,” Finance Committee chair Scott Oelslager, R-North Canton, said Wednesday on the House floor. “We have an historic school funding plan. We have tax relief today for Ohioans. A 2% tax cut. That is a priority here today and for many across the state. At its core, this budget, like all budgets, represents people.”
The tax cut, according to Republicans, should cost the state around $380 million over the next two years.
The Fair School Funding Plan, which Republicans call predictable, sustainable and fair, would be phased in over the next six years, beginning with next school year. Republicans said it’s designed to make sure no district loses funding transitioning from one formula to the next.
Initially introduced this session in early February, the proposal changes the base cost formula to include a district’s income and takes into account everything involved in education, including professional development and extracurricular activities. It could mean $2 billion more for public primary and secondary schools.
A key change to local funding, according to the sponsors, is the new plan will base 60% of a district's local funding capacity on property values and 40% on resident income.
“Years of work has produced a stable, transparent, predictable funding model that will allow districts to plan ahead,” Rep. Bride Rose Sweeney, D-Cleveland, said. “I believe the time is right and the time is now. We will be judged by generations to come by getting this right.”
The budget also includes targeted investments for job retention and creation, $10 million for police body cameras and COVID-19 relief grants. It also creates the Joint Legislative Oversight and Review Committee of Federal COVID Relief Aid, and it vacates any violations of orders by businesses for COVID-19.
Democrats offered 17 amendments during the final committee hearing, including making the earned income tax credit partially refundable, increasing access to publicly funded child care, providing additional rental assistance and restoring cuts to local governments and libraries. All 17 were rejected.
Lawmakers offered several more amendments on the floor Wednesday, including one to raise the state minimum wage to $13 an hour. Each amendment was defeated.
“Democrats wanted to see a bold blueprint for Ohio’s future. That’s not what this budget is,” said Rep. Erica Crawley, D-Columbus, ranking member on the Finance Committee. “It’s disappointing that Republicans didn’t want to work with us to invest in the working people and families who have faced unprecedented uncertainty over the past year amid the worst public health and economic crisis in our lifetime.”
The tax cut proposal comes in the midst of the state’s lawsuit against the federal government, challenging what Attorney General Dave Yost said is provisions in the recently- assed American Rescue Plan that blocks states from cutting taxes if they accept the federal money.
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