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Budget Update: The House Sub Bill

Ohio’s state budget bill, HB59, is making its way through the process – we’re now nearly 1/3rd complete as the budget is slated to be voted out of the House of Representatives on Thursday, April 18th.  Next, the budget will move to the Senate.  For a look at the whole process, click here.  Here are the toplines based on where we’re at now:

– Yesterday, an estimated 2,500 people were on the Statehouse lawn rallying for Medicaid expansion.  This component of the budget bill would provide health care for 275,000 Ohioans, bring 30,000 jobs to our state, raise over $1 billion in revenue over the next 10 years, and more.  It is supported by a wide range of advocacy groups – many of whom typically butt heads: Planned Parenthood and Ohio Right to Life, for example.  It is the breadth and depth of the coalition that supports Medicaid expansion that makes it so frustrating that the House pulled the expansion from the proposed bill that was introduced by the Governor.  This is the biggest change to the bill and the piece getting the most coverage.

– Income tax cuts, something that One Ohio Now has pushed back on from the beginning because of how they disproportionately benefit the wealthy, are another significant change in the sub (short for substitute) bill introduced in the House on Tuesday.  The original proposal called for 20% across the board income tax cuts (plus an additional one time 4% cut via the spillover effect from the Rainy Day Fund), but the new proposal calls for 7% cuts.  In addition to lowering the income tax cuts – a great move for Ohio (though we should go further and eliminate them altogether since they have not been proven to work) – the “big business income tax cut” of 50% was taken out.  This was another great decision, given its misguided nature and large benefit to the wealthiest 5% (who would get 80% of the benefit), while the average true small business wouldn’t get enough in return to hire a single employee.

– Continuing the trend, the most notable pieces of the new budget bill are those that don’t exist.  Governor Kasich’s proposals to expand the sales tax base and reduce the rate: out.  His reasonable move to increase the severance tax on oil and gas drilling: no longer in the budget.  These tax changes were the revenue generators that were being traded for income tax cuts, so with them gone the House could not find the money to give away to the wealthiest Ohioans.  In fact, the House is still planning to use one-time money, which will leave a structural imbalance over time, to pay for part of the income tax cuts – using Rainy Day Funds.  Even Senator Keith Faber has acknowledged that a 7% income tax cut is unlikely to produce any results given what has happened in the recent past.

– The K-12 education funding formula has been changed substantially and the net result is that the total amount of funding is down $313 million from the Kasich proposal to the House proposal.  There are numerous other changes, but what is important to remember is that K-12 education saw $1.8 billion in cuts in the current budget – the investment needed in our education system is not in this budget.  We have ongoing concern that poor districts will not get nearly what they need while the wealthy continue to get wealthier.  This is an unconscionable trend, and education advocates are working hard right now to get things moving in the right direction.

– Yet again, the legislature has put in language to defund Planned Parenthood.  This political attack would lead to reduced health care opportunities for low-income women across the state and is being vociferously debated in the House as I type.

There are certainly a number of other changes to the House version of the budget – an attempt to mollify health and human service leaders on Medicaid expansion by giving $100 million (a substantial sum in nearly any other context) to mental health and addiction services, taking out the “parent trigger” language from the K-12 component, removing the workload requirement changes to the higher ed budget, and more.  And at over 4,000 pages, there is new information still being found every hour.

Hopefully you’ve found this to be a good summary – let us know if you have specific questions or would like to learn more.  And don’t forget to weigh in yourself by contacting your legislators!

#statebudget

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