Ohio Budget: Lawmakers’ priorities not quite on target, advocates say

Ohio Senator Matt Dolan, R-Chagrin Falls, introduces the Senate's version of the budget. Photo courtesy of the Ohio Senate

The money invested in a state budget should be fully reflective of the state’s values, public advocates say in arguing the current proposals considered by Ohio lawmakers have a long way to go in reaching that goal.

The comprehensive, two-year budget is being negotiated inside the Ohio Statehouse and includes billions of dollars in proposed spending for education, infrastructure and a variety of other public needs.

Both chambers of the state legislature — the Ohio House of Representatives and the Ohio Senate — must agree on a budget before it’s sent to the governor’s desk for a signature.

Gov. Mike DeWine already offered his own budget suggestions, and the House approved its version in May.

Now all eyes are on the upper chamber. Senate leaders released their slate of proposals on June 1 and state senators will soon vote on a full bill.

Here are some of the key Senate budget proposals under scrutiny:

Income tax cut

The gist: Lawmakers want to enact new tax cuts for Ohioans, though critics point to research suggesting the cuts would mainly benefit wealthy earners.

The House version included a 2% income tax cut for Ohio workers. The Senate is proposing to bump this up to 5%.

Senate leaders noted this tax cut would cost the state about $874 million in revenue, but defended it as a form of economic stimulus.

“We believe that the best investment we can make in a citizen is to return the money to themselves,” said Senate Finance Chairman Matt Dolan, R-Chagrin Falls. “Hardworking Ohioans, we’re going to keep more money in their pocket … we are investing in them by increasing the tax cut, decreasing the amount that they have to return to the state of Ohio.”   

The actual financial impact to the bulk of Ohio workers would be minimal, according to research from think tank Policy Matters Ohio

This chart from Policy Matters Ohio shows the potential effects of a proposed 5% income tax cut.

The lowest 20% of earners (who make less than $23,000 per year) would not see any benefit whatsoever.

The next 20% of earners (those making between $23,000 and $41,000 per year) would take home an extra $4 — over the course of a whole year. That’s about a penny per day.

Even someone making $82,000 per year, which is well above the state median income, would see their weekly paycheck rise by just $1.13.

In terms of total dollars, the greatest benefit would be seen by those in the top 1% of earners, Policy Matters Ohio found. The top 1% (making $526,000 or more per year) would earn an extra $33 per week, or $1,712 over the course of the year.

Most Ohioans wouldn’t even notice the tax cut among their overall finances, argued Nick Bates, the outreach director for One Ohio Now and Hunger Network Ohio. 

But, he added, they would take notice of a lack of public services and investments. 

Bates and a number of other public advocates called for improvements to the budget in an Ohio Statehouse news conference on Monday.

What might communities look like, Bates asked, if the government reinvested that $874 million into communities rather than the 5% income tax cut?

Separately in the budget, the House is proposing new tax deductions on capital gains earnings, including those from venture capitalists. The Senate’s budget draft took out these deductions.

Internet expansion

The gist: To help pay for the income tax cuts, Senate leaders took out nearly $200 million in proposed funding for broadband internet expansion projects. There’s now a push to get that money restored.

An estimated 1 million Ohioans are without access to affordable, reliable internet at home. 

With the enactment of House Bill 2, the state will soon have a new grant program in place to spur private investment toward broadband expansion projects.

Broadband internet expansion is seen as a major priority toward improving access to education and other necessary services. (Photo by Leonardo Fernandez Viloria/Getty Images).

There is an initial $20 million going toward this program. A lot more money is needed in order to get broadband internet to all areas of Ohio.

The governor supports more spending in the budget for this purpose. So do lawmakers in the House — members approved $190 million in additional budget spending for the grant program.

The Senate is proposing to take this $190 million out. One reason is to help pay for the income tax cuts described above. But Senate President Matt Huffman, R-Lima, is skeptical of broadband internet expansion itself.

For years, experts have stressed to lawmakers the importance that the internet can have in providing educational, business and health opportunities to all Ohioans.

Huffman remains unconvinced. 

“(S)imply providing broadband services does not mean that people who may be able to access that will or can access that,” Huffman told reporters on June 1. “They still have to have a piece of equipment of some kind — a computer, iPad, whatever it may be — they have to know how to use it. They have to know what happens when it doesn’t work. And for people like me, I don’t know what happens when the thing doesn’t work, I have to ask somebody, and I assume a lot of other Ohioans are just like that.”

The Republican sponsors of HB 2, Reps. Rick Carfagna of Genoa Twp. and Brian Stewart of Ashville, are pushing for the Senate to reinstate this $190 million in funding. 

So too are organizations like the Ohio Poverty Law Center. Susan Jagers, the organization’s director, said Monday the pandemic has revealed just how critical the internet is for connecting to one’s jobs, doctors, schools and loved ones. 

Those who are disadvantaged will continue to be so until the state ensures all Ohioans can afford high-speed internet at home, Jagers said.

School funding

The gist: Ohio leaders are continuing the decades-long work of determining a fair school funding model. Advocates appear to prefer the House plan over the Senate plan.

Might this finally be the year lawmakers solve the issue of Ohio’s unconstitutional school funding model?

School buses for Sandusky City Schools. Photo from Sandusky City Schools website.

Those in the legislature hope so.

OCJ outlined the differences between the two chambers’ plans in an earlier article.

Leading education advocates so far support the House plan because it proposes a higher “base cost,” the annual amount it costs to educate one child. Dolan has defended the Senate’s lower amount as being more financially sustainable in the years to come. Senators also want to see a greater increase to private school voucher funds.

Proposed changes to a child care quality rating system known as Step Up to Quality are also receiving scrutiny. 

A quick look at some other Senate budget proposals:

  • Helping kids grow?: The governor and the House called for raising the age eligibility for the parental support program Help Me Grow program from 3 years old to 5. The Senate removed this age increase.
  • Other help for mothers: The Senate is proposing a new requirement that Medicaid provide coverage for the maximum postpartum period allowed by federal law instead of just  60 days after giving birth.
  • COVID-19 health orders: The Senate is keeping in the House’s proposal to vacate public health order violations from businesses during the pandemic. The budget would require the state to return any collected fines and reinstate any revoked liquor permits.
  • Put those balloons and streamers away: America will celebrate its semiquincentennial (250th birthday) in the year 2026. The House budget would create an Ohio Commission for the U.S. Semiquincentennial, with $400,000 in funding to prepare for this anniversary. The Senate, however, wants to take this funding out.
  • Adoption wording: As the OCJ previously reported, DeWine wants to update the language for state’s adoption laws to reflect the fact that LGBTQ+ couples can now adopt. DeWine proposed changing the phrase “husband and wife” to read “legally married couple.” The Republican-led House and Senate are in agreement that the law should remain as “husband and wife.” 
  • More money, more problems?: The Senate budget draft proposes the Ohio Department of Job and Family Services director submit a report to legislative leaders identifying the total amount of fraudulent unemployment benefits issued between March 1, 2020 and Dec. 31, 2021.
  • Medical marijuana use: Should a workplace be able to punish an employee for using medical marijuana, even if it’s legal and prescribed by a medical professional? The Senate budget draft says yes, and includes a provision that employers would not be in violation of Ohio Civil Rights Law for implementing such workplace policies.
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