Senate Finance Chair Wants To Keep 2% Tax Cut - Or Increase It
The Ohio Senate is now considering the $74.7 billion two-year state budget, which includes a 2% income tax cut. And the Republican who’s leading the committee looking at the spending plan says he hopes that will change.
Senate Finance Committee chair Matt Dolan (R-Chagrin Falls) said while he’s concerned about the $410 million in spending the House added to the budget, and also has questions about the $1.8 billion school funding formula overhaul, he likes the tax cut Republican representatives put in.
“I hope it stays and I actually would like to increase it. I think I think lower taxes are a good incentive for economic growth," Dolan said.
The 2% tax cut will cost the state $380 million dollars over two years, and Dolan said it’s part of a continuing plan to make the state’s tax system more competitive.
Democrats have said that money could be used to build broadband access, help with lead poisoning prevention, expanding Medicaid to post-partum mothers or a create a refundable tax credit for low-income people.
According to an analysis by the Institute for Tax and Economic Policy, a 10% refundable credit would help 37% of families earning less than $22,000 a year with an average benefit of $230. An average benefit of $324 would go to 19% of families earning $22,000 -$40,000. pic.twitter.com/3dYjZBQXEb— Ohio Poverty Law Center (@OhioPovertyLaw) April 23, 2021
But Dolan said that’s also a tax cut, so their criticism of the Republicans’ tax cut is unfair.
Dolan also said because the House didn't use any federal funding from the American Rescue Plan in developing their budget, the tax cut wouldn't be banned under that proposal. Ohio Attorney General Dave Yost has filed a lawsuit challenging a provision in that COVID relief plan that says states can't use the money to fund tax cuts without penalty.