Republican Senate leaders say the budget they released yesterday is not the final product, but it does represent some of the changes they wanted to make to the House’s spending plan.
More changes are coming, with the deadline to sign the budget just over two weeks away.
The Senate budget increases the House’s income tax cut from 6.6% to 8% over two years. President Larry Obhof says Ohioans will benefit from the change, along with the Senate’s restoration of the small business tax deduction from $100,000 back to $250,000.
“It ends up at about $340-345 million per year,” Obhof said.
House Speaker Larry Householder says the Senate budget shows some differences in philosophies on tax policy. For one, he doesn't buy into the concept that the tax break encourages business owners to create jobs.
“But yet you’re paying zero taxes if you put it in your pocket," Householder says. "And they can write it off if they purchase equipment or have an employee so I think it just does the opposite of what the intention of it is."
The Senate budget includes a 17% tax on e-cigarettes as "other tobacco products," and preserves the increase in the age to buy tobacco products from 18 to 21-years-old.
It also requires big online retailers to collect sales tax, which was allowed under a U.S. Supreme Court decision last year.
“We do not consider that a tax increase, and the House did not either, because under current Ohio law, at least theoretically, those taxes are due anyway," Obhof said.
The Senate also restored a $40 million film tax credit that the House budget eliminated.
In addition to tax changes, the Senate budget proposals would:
- Provide $172 million for DeWine's proposed "H2Ohio" water quality initiative over two years, or double what the House supported.
- Slightly increase the percentages of state revenue that go to funds for public libraries and for local governments.
- Create a program to help fund the care of children being looked after by relatives.
- Appropriate an extra $100 million for rehabilitating and building schools.
- Expand payment rate increases for certain assisted living and senior care programs.
The Associated Press contributed to this report.
