House GOP spending plan includes 2 percent personal income tax cut

Published 1:32 am Saturday, April 17, 2021

COLUMBUS (AP) — Ohioans would receive a 2 percent personal income tax cut and the state would fund schools in a more equitable fashion under the latest version of the state budget introduced Tuesday by House Republicans.

The 2 percent cut would amount to $380 million in reduced taxes over two years beginning July 1, and is on top of $120 million in reduced taxes brought on by recently passed legislation that aligns Ohio tax code with federal law, according to majority GOP lawmakers.

The budget also provides previously announced $155 million in grants to help industries negatively affected by the coronavirus pandemic.

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“This is a thoughtful, structurally balanced and comprehensive budget plan that funds Ohio’s priorities and invests in Ohio’s future,” said House Finance Chair Scott Oelslager, a Canton Republican.

House and Senate lawmakers must approve the two-year $75 billion spending plan in time for GOP Gov. Mike DeWine to sign it into law July 1.

The school funding proposal incorporates current bipartisan legislation to change how Ohio funds education. The House approved a version of the plan last year but the Senate didn’t vote on it before the end of the session.

The nearly $2 billion proposal would eliminate funding caps and guarantees, and take into account a community’s ability to help fund its schools, factoring in not only property values but local income levels. It also would route public charter school funding directly from the state rather than through local districts. The changes would take place over the next six years and no school district will lose funding during the phase-in, under the proposal.

Supporters said the plan would address many problems with the complicated funding patchwork created since Ohio’s formula was found unconstitutional in 1997.

Lawmakers currently have more flexibility with the two-year budget proposal because state tax revenue continues to rise above initially conservative estimates crafted with an eye on economic damage from the pandemic.

Last month, tax receipts totaled $1.63 billion, $41.4 million or 2.6 percent above analysts’ estimates, according to preliminary figures from the Office of Budget and Management, Gongwer News Service reported.

To date this fiscal year, tax receipts are outpacing estimates by $763.4 million, or 4.3 percent.

Democrats applauded the school funding plan and other measures, but criticized the across-the-board tax cut, which they said would largely benefit the wealthy.

“Instead, we should be working together to invest in childcare, housing and other areas to benefit working people and families and get Ohio back on the right track,” said Rep. Erica Crawley of Columbus, the top-ranking Democrat on the House Finance Committee.