House GOP’s Budget Revisions Include Rewrite Of Tax Cut Plan

House GOP’s Budget Revisions Include Rewrite Of Tax Cut Plan, K-12 Funding; Medicaid Expansion Nixed

Majority Republicans in the House moved Tuesday to put their own stamp on Gov. John Kasich’s $63.3 billion biennial budget package by imposing major revisions to the executive plans in a number of key areas while maintaining a significant tax cut.

The ‘immediate and permanent’ 7% income tax reduction ‘“ Mr. Kasich proposed a 20% across-the-board cut phased in over three years ‘“ would be achieved without the broadening of sales taxes to services as the governor had proposed.

Instead, Rep. Ron Amstutz (R-Wooster), chairman of the House Finance & Appropriations Committee, said the House will use anticipated revenue growth and the sizeable anticipated year-end carryover balance from FY 2012 to cover the reduction, which will equate to a $1.5 billion over two years.

The governor’s 50% business tax cut proposal was jettisoned in favor of funding the broader income tax reduction, Mr. Amstutz said.

The House is not done in the tax area, he added, and will likely include further tax policy changes to the bill (HB 59) before it leaves the House.

As expected, the majority caucus will scrap Gov. Kasich’s plan for expanding Medicaid, which would have brought in $2.4 billion in federal funds under the Affordable Care Act to cover the cost of insuring another 275,000 Ohioans for the next two years.

The removal of the plan to extend Medicaid coverage to 138% of the federal poverty level culminates weeks of political pressure applied to lawmakers on one side by tea party groups and conservatives who decried the increased government spending and on the other by the health care industry and government program supporters who touted the health and economic benefits.

Speaker Batchelder had noted early in the process that his members held a deep disdain for ‘Obamacare,’ as most had campaigned against the sweeping federal health care law that allowed for the expansion as one of its many facets.

He said Tuesday that members were leery of moving forward given the ‘lack of clarity’ on Medicaid issues emanating from Washington, D.C. The caucus ‘had a considerable concern about exactly what it is we’re facing,’ the speaker said.

As anticipated, the House also swapped out Gov. Kasich’s Achievement Everywhere school funding formula for something more akin to the former Building Blocks approach. (See Gongwer Ohio Report, April 2, 2013)

As anticipated, the House also swapped out Gov. Kasich’s ‘Achievement Everywhere’ school funding formula, which was widely criticized during budget testimony, for something more akin to the former ‘Building Blocks’ approach.

The administration declined to establish a per-pupil amount in its formula, which witnesses said was a failure to address the question of what it costs to provide an adequate and equitable education. The House reinstated a per-pupil figure for its formula.

One of the complaints from superintendents about Mr. Kasich’s Achievement Everywhere formula was that a majority of districts would receive guarantee funds’ dollars added to their formula amount to hold them harmless at fiscal year 2013 levels. The House formula shifts money around to allow fewer districts to be on that guarantee.

The House Finance panel will hold hearings through Friday on the substitute version of the measure, with plans for committee and floor votes next week.

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