The spending plan now advances to a conference committee where legislators will seek settle differences and produce a compromise budget for final votes by the House and Senate next week.
Republican Gov. Mike DeWine must sign the budget bill, after exercising any line-item vetoes, by June 30.
“While being fiscally responsible, this budget protects Ohio's commitments to our most vulnerable, makes education a priority and invests in Ohio’s natural resources,” said Sen. Nathan Manning (R-North Ridgeville), whose 13th district includes Huron County. “I'm proud of the work we were able to accomplish to keep our state healthy and our future hopeful."
The Republican-ruled Senate Finance Committee unveiled its final revisions to the budget Wednesday evening, attracting the votes of all Democrats to advance the budget bill to the floor vote. While their substantive amendments were swatted aside by Republicans, the Democrats followed up with "yes" votes on the floor.
The last-minute additions to the budget included overhauling high school graduation requirements and enacting tougher controls on pharmacy benefit managers in Ohio's Medicaid program.
Changes to end the state's controversial system for taking over failing school districts remain in limbo. Currently, a state-controlled panel appoints a CEO to control nearly all aspects of a district's operations. A House plan was stripped from the bill and legislators will seek to reach agreement on language in conference committee.
The GOP-dominated Ohio House passed its version of the budget by a bipartisan 85-9 vote that would appropriate dramatically more money to help counties deal with the at-risk children of drug-addicted parents, increase early childhood education and give high school students more career paths outside college.
Sen. Matt Dolan, R-Chagrin Falls, the Senate Finance Committee chairman, said the budget fulfilled DeWine's call to increase investment in children and education, particularly with "wellness" money to help impoverished children address out-of-classroom problems so they are ready to learn. "Governor, we met you there and we agree," Dolan said.
Sen. Vernon Sykes, D-Akron, ranking Senate Finance Democrat, criticized GOP insistence on more tax cuts when money is needed for investments in education and children and routing $50 million more to private-school vouchers. But, "the good things outweigh the bad things," he said in complimenting DeWine's children-friendly budget request.
Perhaps the biggest items to be resolved in House-Senate talks involve taxation and school funding in a budget that senators said would increase state spending by 4.4 percent in the year beginning July 1 and 3.5 percent the following year.
One large difference centers on the so-called small-business tax cut. Saying the reduction was simply pocketed instead of invested in new jobs and equipment as intended, the House made substantial cuts in the $1.2 billion annual tax break for partnerships, limited liability corporations and sole proprietors. It now permits them to pay no tax on the first $250,000 in annual income while also receiving a 40 percent tax cut on amounts above that figure.
The House budget lowered the no-tax level to $100,000 and eliminated the extra tax break above $250,000 for Ohio's wealthiest business filers, with both retroactive to Jan. 1. Amid lobbying by DeWine and business owners, the Senate kept the full tax break for this year and would retain the tax-free level at $250,000 next year while eliminating the 40 percent tax cut above that amount.
“We applaud the Ohio Senate for recognizing the importance of small business to Ohio’s continued growth,” said Roger Geiger, vice president and executive director for the National Federation of Independent Business (NFIB) in Ohio — the state’s leading small business association. “Small businesses represent a significant portion of private sector employment and economic activity. NFIB members’ optimism is at near-record levels. The actions taken (Thursday) will work to preserve the dedication our members have to Ohio’s success.
“The Ohio Senate not only retained the BID, but they also reduced personal income taxes as well, returning more money to hard-working Ohioans,” Geiger added. “We look forward to continuing to work with our partners in the legislature and the administration to ensure these positive economic policies are enacted.”
Both chambers also are offering across-the-board income tax cuts, but the Senate went bigger, offering an 8 percent cut over two years. The House went with a 6.6 percent cut in the income-tax tables. Both chambers agreed to raise the level at which the tax must be paid to $22,500 a year and reduced the top income tax rate from 5 percent to 4.67 percent. The income tax cuts would save most Ohioans less than $100 annually.
Senate revisions in school funding upset some House members. The Senate removed $125 million that the House had added over two years on top of DeWine's request for $550 million to provide social services for low-income schoolchildren to help them perform better in the classroom.
The Senate routed $37.6 million to typically well-to-do suburban districts experiencing rapid enrollment growth to help them deal with the crush of pupils amid frozen state aid. The Senate also proposes to allocate $50 million more for income-based scholarships for public school students to attend state-chartered private schools.
The House and Senate both agree with DeWine's request to raise the age for purchasing tobacco and vaping products from 18 to 21, but the Senate also tacked on a 17 percent tax on the invoice price of products before changing the tax to 1 cent per a tenth of a milliliter of vaping fluid to bring in slightly more money. It also would allow those who turn 18 before next Oct. 1 to continue to buy tobacco.
The chambers differ in funding for DeWine's H2Ohio program to help clean up algae-choked Lake Erie and other waterways. The House would provide $85.2 million in surplus funds for the year beginning July 1 only, while the Senate wants $172 million over two years.
Two other items of note: Ohio's presidential primary would be moved from the second Tuesday (after the first Monday) to the third Tuesday in March to allow it to remain a key winner-take-all-state. Also, a chartered private school would be permitted to deny admission to a student whose parents decline to have that student vaccinated.
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