Budget OK’d

A state budget that cuts personal income taxes, revamps Ohio’s school-funding system and imposes new abortion restrictions cleared the state Legislature on Thursday over the objections of both Democrats and some Republicans.

Next stop for the $62 billion, two-year spending blueprint is the desk of Republican Gov. John Kasich, who is expected to sign it – with likely line-item vetoes – by a Sunday deadline.

The Ohio Senate passed the bill 21-11, with Sen. Kris Jordan the only GOP defection. In the Republican-dominated Ohio House, the bill eked out a 53-44 majority with seven Republicans opposed.

Republicans were particularly proud of the $2.7 billion in overall tax cuts delivered over three years under the bill, including a phased in income-tax cut for individuals and small businesses.

The provision represents a political victory for Kasich, who made a campaign pledge to cut income taxes and faces re-election next year. It phases in a 10 percent cut over three years ending in 2015.

The cut is partly paid for by increasing the state sales tax rate from 5.5 percent to 5.75 percent. The bill also calls for applying the tax to digital goods, such as e-books and music downloads. Kasich’s earlier proposal to hike taxes on oil and gas drilling was excluded.

Democrats attacked the thrust of the tax changes, saying the income tax cut would disproportionately benefit wealthier Ohioans while sales tax changes would hurt those struggling to make ends meet.

Broadly, state Sen. Joe Schiavoni says he’s disappointed over the budget, arguing that Republicans inflated the impact of the tax cuts, which, he said, aren’t spread out evenly among wage earners.

The Democrat said Ohioans earning $33,000 to $51,000 will pay $9 less in state taxes, which is not ”the great shot in the arm according to what these guys are touting.” In comparison, Schiavoni said, someone who earns more than $330,000 will get back $6,000.

”It’s not going to affect normal, working people’s lives,” said Schiavoni, D-Canfield.

He said the budget ”missed the boat” on adequately funding local governments and the sales tax increase from 5.5 percent to 5.75 percent, although it seems negligible, is ”just another way that people are getting nickled and dimed.”

Schiavoni voted no.

Sen. Bill Seitz, a Cincinnati Republican, said wealthier residents pay more taxes – and so naturally receive a bigger share of cuts.

“Them that pays the most will benefit the most when we cut rates. That’s just the math. That’s not an argument, that’s math,” he said.

Democrats registered their harshest criticism of the day at Republicans’ failure to include an expansion of the Medicaid health insurance program in the bill.

Sen. Capri Cafaro, a Hubbard Democrat, called the decision cowardly, heartless and short-sighted.

“I have to admit, you can probably tell, that I have never been so angry, so appalled and so heartbroken by the actions of the General Assembly,” she said.

Cafaro, the ranking Democrat member of the Medicaid Finance Subcomittee, also called the rejection irresponsible, and a big reason she voted no on the budget bill.

”Our hands are tied and we are not going to be able to move forward trying to cover 275,000 Ohioans that fall into the cracks, many of whom are working and childless adults,” said Cafaro, D-Hubbard.

Regardless, Cafaro said, she’s pressing forward and the expansion could be accomplished legislatively in another bill.

State Rep. Tom Letson was critical, too, of the rejected Medicaid expansion and tax plan, what he called a ”continuing shift of the tax burden in Ohio to lower income people.”

Across the board tax reduction, Letson said, ”disproportionately affects lower income people” more than than high wage earners. Coupled with the sales tax increase, the lowest wage earners are spending more in taxes than they are getting in tax cuts.

”They are going to be taxed higher than what the break is,” said Letson, D-Warren.

The budget also fails to adequately address school funding, which, Letson said, is at percentage levels currently lower than they were before the DeRolf decision in 1997, which declared Ohio’s way of funding public schools unconstitutional.

Letson voted no.

The budget also adjusts how Ohio calculates the state’s share of funding to public school districts and community schools, increasing the amount schools receive per pupil to $5,745 in 2014 and $5,800, but eliminates a 12.5 percent property-tax subsidy that the state had been paying on new levies imposed by school districts, libraries and other public entities.

Among hundreds of provisions in the bill was a last-minute amendment requiring Ohio doctors to inform women seeking abortions in writing whether a fetal heartbeat is present. Abortion-rights supporters were on the scene to protest the measure, with several escorted out for shouting “Shame on you, shame on you!” after the budget passed.