Our Inside Ohio Politics series seeks to demystify the inner-workings of the Statehouse and help Ohioans know how laws are made. This story follows a previous explainer on the $92 billion state budget and delves into the next steps in the budget process, starting with conference committee.
“This is tradition with budgets with limited exceptions,” Senate President Rob McColley, R-Napoleon, told this outlet. “It’s usually just the standard process of getting together, working out the differences and figuring out where we’re going to end up for the final version.”
Whatever compromise the GOP-dominated House and Senate chambers agree on then has to be sent to Ohio’s Republican governor, who wields line-item veto power and can cross out provisions he doesn’t like.
Lawmakers have until the end of June to finalize the budget.
Most of the negotiation happens behind closed doors and out of public view, but the major points of contention heading into this conference committee are fairly obvious.
Highlights from the Senate’s now-confirmed plan compared to the House’s plan include:
- Creating a flat, 2.75% income tax rate for all Ohioans who earn more than $26,050 annually. The proposal eliminates Ohio’s highest tax bracket for earners pulling over $100,000 per year, eliminating over a billion dollars in state tax revenue over a two-year period.
- Expanding access to Ohio’s “homestead exemption” property tax relief program by increasing the income threshold from $40,000 to $42,000 and allowing slightly more of a qualifying participants’ home value to be tax exempt.
- Granting county budget commissions the authority to reduce property tax millage “if the commission finds it reasonably necessary or prudent to avoid unnecessary, excessive, or unneeded property tax collections.”
- Eliminating replacement and substitute property tax levies.
- Capping a school district’s financial reserves at 50% of the prior year’s operating expenses, as opposed to the House-proposed 30% carryover cap. General funds in excess of that 50% cap would then be portioned back out to the property taxpayers of that district.
- Directing $600 million of the state’s $3.7 billion in unclaimed funds to the Cleveland Browns’ new stadium project instead of issuing public bonds as the House proposed.
- Requiring school boards to obtain a 2/3 vote from members before putting a property tax levy on the ballot.
- Adding $633.9 million more to the state’s K-12 public schools than the current biennium, phased in largely through new “performance-based” incentives that will reward high-performing and improving districts with more cash.
- Establishing a $100 million set-aside to potentially withhold from state universities that do not come under compliance of the newly-passed Senate Bill 1, which eliminates university-sanctioned diversity, equity and inclusion programs on public campuses.
Republicans are in the driver’s seat in both chambers because of GOP supermajorities. The budget bill passed the Senate on party lines with all but one Republican voting in support and unanimous Democratic opposition.
“This budget does not benefit hardworking, everyday Ohioans,” said state Sen. Willis Blackshear Jr. D-Dayton. “By underfunding necessary programs and failing to adequately invest in education, workforce, and housing, this bill ignores the will of the people.”
Ohio House Speaker Matt Huffman, R-Lima, told reporters Wednesday that the Senate’s school funding plan and flat tax rate will likely be central points of internal discussion as his caucus prepares for negotiations.
“We’ll have the next two-plus weeks to deal with it,” Huffman said. “Our staff and some of the leadership and other folks are set to spend the weekend reviewing these items, so I think there’s already discussions going on among a variety of people in different areas about what we may do.”
But, Huffman said he overall believes that the House and the Senate aren’t too far apart on the big stuff — he likes the idea of a flat tax, he’s framed the Senate’s idea on using unclaimed funds to help the Browns as clever — but pointed to “a lot of very basic policy differences” within the disparate proposals.
When asked about his non-negotiables, McColley said he didn’t want to reveal too much.
“But we’re firm believers in some of the big items. The flat tax is something that we feel pretty strongly about,” McColley said. “That would be something we’re pretty committed to, hopefully we don’t get a lot of push back. But other than that, we’ll let the process play out.”
Asked about his non-negotiables, Huffman told reporters, “I’d like to tell you that there is nothing that’s non-negotiable, even if somebody says it’s non-negotiable.”
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