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OHIO LEGISLATURE Panel works on budget plan



Published: Mon, April 11, 2005 @ 12:00 a.m.



The proposal would allow schools to levy property taxes that could grow.

By JEFF ORTEGA

VINDICATOR CORRESPONDENT

COLUMBUS -- The House Finance Committee worked late into the night Sunday on a proposed, two-year $51.3 billion state budget that cuts individual personal-income taxes and gives schools additional ways to fund themselves.

House Speaker Jon A. Husted said the proposed spending plan would revitalize Ohio's economy and help change the way state government operates.

But minority Democrats said they believed the proposal benefits wealthier Ohioans at the expense of the working class and poor.

It "favors the wealthiest 5 percent [of Ohioans]," said Dale Miller of Cleveland, the top-ranking finance committee Democrat.

Tackling taxes

Under the latest version of the spending plan, largely based on a proposal put forth by Republican Gov. Bob Taft, personal income tax rates would be slashed by 21 percent across the board over five years.

It also phases out the corporate franchise tax, replacing it with a so-called "commercial activity tax" on business receipts, and raises the kilowatt-hour tax by 30 percent.

The proposed budget also phases out the tangible personal property taxes on business machinery and equipment. The House added a provision phasing out tangible personal property taxes on furniture and equipment.

The proposed two-year outlay also would permit school districts to levy additional voter-approved property taxes that could grow with inflation.

According to an analysis of the budget bill, the annual growth rate would be capped at 4 percent.

The proposal also would reauthorize municipal corporations to levy income taxes to shared with school districts, according to the legislative analysis.

Party lines

As lawmakers worked through the afternoon and into the evening, majority Republicans beat back dozens of Democratic amendments including those that would have restored eligibility for Medicaid services for some families and restored some funding for after-school, youth programs and other services.

Republicans also tabled another Democratic amendment that would have replaced the proposed commercial-activity tax with a reformed corporate-franchise tax.

State Rep. Jim Hoops, a northwest Ohio Republican and finance committee member, said he was pleased with the proposed spending plan.

"Overall, I like the concept," Hoops said of tax provisions including the income-tax cuts and the phasing out of the tangible personal property taxes.

But state Rep. Brian Williams, an Akron Democrat and finance committee member, criticized what he said was the lack of inflationary growth in schools funding.

"This is not a good bill for public education," said Williams, a former Akron schools superintendent.

Reductions

The budget bill would leave in place some of the reductions in state aid to local governments proposed by Taft. This latest proposal would slash in half the proposed 20 percent cuts in state aid to counties that file plans to consolidate services with the state.

Under the latest budget version, some villages and townships could also see a portion of the 10 percent state funding cut proposed by Taft lowered, based on need.

Husted said he believed he had enough votes to pass the budget when it comes before the full House Tuesday. It would then have to be approved by the Senate and signed into law by the governor.

The current, two-year $48 billion spending plan runs through June 30. State lawmakers must enact the next two-year outlay by July 1.




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