Ohio senators sent their version of the GOP-majority biennial state budget back to the House on Wednesday afternoon by a vote of 23-10, ushering in the final stretch of negotiating.
All nine Democrats, who collectively tried and failed to amend the budget on the floor almost a dozen times, voted against HB 96. One member of the GOP caucus broke with his colleagues and voted against the budget, too: Sen. Bill Blessing (R-Colerain Twp.).
One of the biggest changes from the House version of House Bill 96 is the addition of a flat state income tax, transitioning down from the current two-bracket system to a flat rate for everybody making over $26,050 annually at 2.75% by tax year 2026. That would most immediately affect Ohioans who make more than six figures, if it goes into effect, saving them and costing Ohio more than $1 billion across the biennium, according to legislative analysis.
To account for the cut, members were told to be “deliberate” in their budget revisions, Senate Finance Chair Jerry Cirino (R-Kirtland) said in an interview last week. Some amendments significantly reduced funding to government programs and community projects to balance the budget. But Republicans are largely on board with the idea, which they see as a way to boost the economy.
“By continuing to lower the rate and simplifying our code, businesses and individuals alike will have to spend much less time and energy on complying and avoidance," said Sen. George Lang (R-West Chester). "I do feel sorry for the accountants in Ohio because as we simplify the tax code, their work level is going down and their billable hours will go down as a result.”
But the flat tax proposal was one of the many reasons Democrats opposed the budget. Sen. Kent Smith (D-Euclid) said the budget offers a tax cut of more than $10,000 to the wealthiest Ohioans who earn over $1.7 million a year, while shifting money away from working class families. He said it's the first budget since 2001 to not receive even a single Democratic vote.
“The founders of this nation wanted to form a government of the people, by the people and for the people," Smith said. "But in Ohio, we have a government of the special interests by the working class for the millionaires. This is Robin Hood in reverse.”
The Senate budget includes money for the final two years of implementation of the Fair School Funding plan—but at 2021 levels, so it's not fully funded. The House budget used a different school funding formula. And the Senate plan would limit school districts to cash balances of 50% of their budgets with the rest returned to property taxpayers, while the House budget has a 30% carryover cap. The budget also has less money for Medicaid and the H2Ohio water quality program than in the initial budget, and eliminates a funding formula for libraries going forward.
Sen. Bill DeMora (D-Columbus) listed what he called the "losers" in the budget – public school and university students, libraries, working families who need affordable child care, those in Medicaid expansion, food banks, local governments and democracy with the elimination of the Ohio Elections Commission.
“Who are the winners? Well, it's simple—wealthy tax dodgers and corporate welfare recipients," DeMora said. "The budget cuts their taxes, funds their stadiums and all they would did by all the cost of it was paid for by gutting every single safety net in the state. This budget reveals the true Republican agenda.”
Money for Browns' stadium a big point of interest, contention
The $600 million from unclaimed funds for the Cleveland Browns’ domed stadium development in Brook Park was the focus of much frustration. The Senate got rid of the House’s $600 million debt and bond structure, instead earmarking it through a performance grant program they want funded by a percentage of money managed by the Ohio Department of Commerce’s Division of Unclaimed Funds. Assets turned over to the division come from Ohioans’ dormant bank accounts and uncashed checks, among other sources.
Senate President Rob McColley (R-Napoelon) said the state will make money from partnering on this investment with the billionaire owners of the team, Jimmy and Dee Haslam, who have donated millions to Republican candidates and causes.
"We haven't been influenced by the Haslams. We do this for economic development projects of this size all the time. The only difference is that it got attention because of the type of investment that it is," McColley said. "When you look at the long term viability and the the ability really to turn this into a moneymaker for the state of Ohio, this is a really good proposal and a really good project.”
Memos from the state budget office and researchers for state lawmakers have cast doubts on the estimates from the Haslam Sports Group on how much money the project will bring in. The team has said it will move forward with the development in spite of opposition from leaders in Cleveland and Cuyahoga County.
Minority Leader Nickie Antonio (D-Lakewood) pointed out that no northeast Ohio senator voted for the budget, in part because of concerns about the money for the Browns stadium in it. And she also defended what her members said about those who stand to benefit from the budget.
“My caucus did not speak disparagingly about any of the wealthy or billionaires in our state. We're happy they're there. We're happy that they're investing," Antonio said. "What we talked about was giving billionaires money from Ohioans that they don't need, frankly.”
But Cirino was clearly irritated at what he also termed disparagement of wealthy, successful business people by Democrats.
"I feel really compelled to talk about the disparagement of wealthy, successful business people by the other side of the aisle. This is ridiculous. These are the people who are creating jobs, creating value, buying property, hiring people, and giving to charities in a big way," Cirino said to reporters after session. "So let's just be careful about disparaging billionaires or highly successful people. They are an important part of our economy. They pay most of the taxes."
Senate budget makes other big change to House version
Among other last-minute tweaks made Tuesday, the latest HB 96 returns county coroners to an election structure. It also:
- Gets rid of automatic cost of living adjustments for local elected officials
- Removes an earlier Senate measure that requiring driver’s licenses and state identification cards to include a resident’s sex at birth, but maintains the language that the state will recognize “only two sexes, male and female, which are not changeable and are grounded in fundamental and incontrovertible reality"
- Requires school board candidates run with partisan labels
- Provides libraries with $990 million, but eliminates the Public LIbrary Fund formula
After three hours of floor debate and the vote in the Senate, the budget went back to the House, which voted nearly unanimously to reject the Senate’s changes and send it to conference committee. The lone dissenting vote was Rep. Jason Stephens (R-Kitts Hill), whose term as speaker in the previous General Assembly was marked by repeated battles with supporters of current Speaker Matt Huffman (R-Lima), elected to that position earlier this year.
The budget is expected to be signed by Gov. Mike DeWine—who does have line item veto power—by June 30.
