A House-Senate conference committee voted 5-1 Tuesday evening to send a compromise budget bill to floor votes only hours before the expiration of a 17-day interim budget necessitated by majority Republicans' disagreements.
In resolving perhaps the No. 1 item that prevented an on-time budget, Ohio's $1.2 billion annual tax break for many smaller businesses will remain largely intact despite a House attempt to cut it almost in half.
The final budget will remove lawyers and lobbyists from those receiving the tax break, a move proposed by House Speaker Larry Householder, R-Glenford. The break involves income taxes paid by businesses such as limited liability corporations that pass through their income to personal rather than corporate tax filings.
While the Senate voted last month to end an extra tax break for those earning over $250,000 a year, Republicans retreated from large reductions at the insistence of first-year Republican Gov. Mike DeWine and business interests. Householder and Democrats say the break has not created jobs and is unfair to working Ohioans who receive no such breaks.
The new budget also contains a 4% across-the-board state income tax cut. And the bottom two brackets would be eliminated to allow the working poor earning less than $21,750 a year to pay no state income taxes. The final reduction is smaller than both the 6.6% originally proposed by the House and 8% sought by the Senate.
The compromise measure funds both a Senate plan to give money to fast-growing, generally well-to-do public schools and private schools through vouchers, as well as a House plan to pay for $125 million in additional services in poorer school districts. The budget fully funds DeWine's request for $550 million over two years to provide "wraparound" social services to low-income school children to spur their classroom performance.
Senate President Larry Obhof, R-Medina, said "We're all proud of the results ... this is perhaps the most kid-friendly budget in state history." Asked about failing to pass an on-time budget by the June 30 deadline, he said, "Getting the result right is more important than getting it done 10 days, 18 days ago."
The only House Democrat on the conference committee, Rep. Jack Cera of Bellaire, voted against the budget deal. House Democrats are displeased the budget did not dramatically throttle back the business tax break and did not resolve the state takeover of academically failing school districts, on which a one-year moratorium was declared. A deal was struck, though, on revised high school graduation standards.
The new budget also enacts a new health-care transparency effort. It requires a hospital to provide a cost estimate for scheduled services. And, out-of-network medical providers could not generally submit large, add-on "surprise bills" to patients for providing non-emergency services at an in-network facility covered by a person's health insurance.
The budget also will raise the age for purchasing tobacco and vaping products from 18 to 21 and impose a tax on vaping liquid containing nicotine.
It also retains a heavily debated motion picture tax credit, but with a focus on Ohio businesses, and allowing credits for post-production and promotional costs.
Ohio voters would see the presidential primary next year moved one work later, to St. Patrick's Day on March 17, to ensure the Republican winner is awarded all of Ohio's convention delegates.
The budget is packed with policy and cash, including up to nearly $200 million over two years to address the toxic algae blooms that afflict Lake Erie. It also would provide an unprecedented amounts to county children services agencies and the foster care system flooded with the children of addicts and upgrade opioid prevention and treatment programs.
Obhof said a separate workers' compensation budget deal has been reached that would eliminate several policy areas added by the House, including coverage for first responders claiming harm from post-traumatic stress disorder even though they have no visible signs of injuries. Obhof said the Senate favors the move but wants to consider it in separate legislation.
The state has been operating under a 30-day workers' comp budget and it, too, is expected to win passage on Wednesday.
The Senate also is expected to approve a much-amended version of a nuclear bailout bill Wednesday, returning House Bill 6 to the House for consideration, Obhof said.
The bill would charge electricity ratepayers statewide to bail out Akron-based FirstEnergy Solutions' pair of nuclear power plants along Lake Erie. The utility says rapid passage of the bill is urgent to avoid closure of the plants.
While a priority for Householder, the bill had languished in the Senate, which introduced its rewrite of the bill Monday and plans to vote Wednesday to send it to the House. If representatives agree with Senate changes, it would speed the money to the utility. A "no" vote would drag proceedings out even longer to settle differences between and the Senate- and House-passed versions in a new conference committee.
With Ohio's economy in decent shape and the state tax take accelerating, the inability of ruling Republicans to pass a budget has been portrayed by Democrats and others as an example of dysfunction.
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