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Budget battles wage on in the capital



Published: Wed, June 8, 2005 @ 12:00 a.m.



The current budget expires June 30.

By JEFF ORTEGA.

VINDICATOR CORRESPONDENT

COLUMBUS -- Members of a joint House and Senate panel will meet Thursday to begin hammering out differing versions of the new state budget passed by each chamber.

Both versions would slash personal income taxes, phase out the corporate franchise tax and replace it with a new "commercial activity tax" on business receipts.

But there are differences between the versions particularly in education-related and other matters.

Majority Republicans in both legislative chambers pledged Tuesday to work together to iron out the differences.

"We'll somehow try to merge things as best we can," said Senate President Bill M. Harris, R-Ashland.

The two-year budgets adopted by each chamber adopt key tax provisions proposed by Republican Gov. Bob Taft.

Tax provisions

They include the following:

U A 21 percent cut in state personal income tax rates phased in over five years.

U A phase out of the corporate franchise tax to be replaced with a new broad-based, low rate "commercial activity tax" on business receipts.

U A phase-out of the tangible personal property taxes levied on business inventory, machinery and equipment. The two-year, $51.4 billion state budget the House adopted in April added furniture and fixtures to a five-year phase-out while the two-year, $51.2 billion state spending plan the Senate passed last week phases the tangible personal property taxes out over four years.

U Making permanent half of a temporary 1 percent increase in the state sales tax that was due to expire June 30.

U An increase in electricity consumption-related tax rates.

Two differences between the versions of the budget are in provisions dealing with beer, wine and cigarette excise taxes.

In the Senate version, majority Senate Republicans eliminated a House proposal to double the excise taxes on beer, wine, cigars and smokeless tobacco.

The Senate version of the budget also increases by 25 cents per pack the 45-cent cigarette tax approved by the House.

Currently, the state's cigarette excise tax is 55 cents a pack.

Version contrasts

Other differences between the two versions of the state budget include the following:

U The House version of the state budget included a provision that would force school districts to join a statewide health care plan that estimates said could save more than $185 million over two years. The Senate's version of the budget calls for an independent study of the matter.

U The House's version of the budget would allow public schools to levy additional voter-approved property taxes that could growth with inflation. The Senate's version of the state spending plan eliminated the provision.

U The House-passed version of the budget included a provision for a voucher program to allow up to 18,000 school children to have scholarships to attend nonpublic schools. The Senate's version of the budget reduces the number of vouchers to 10,000.

Partisan response

Democrats, deep in the minority in both legislative chambers, renewed their protests Tuesday that the new state budget will shortchange Ohio's working and middle classes.

State Rep. Dale Miller, D-Cleveland, said both versions of the new state budget also harm local communities through cuts in state aid to local governments.

"It's bad either way," Miller said Tuesday before the House overwhelmingly rejected Senate changes to the state budget, one of the procedural preludes to the appointment of a conference committee.

House leaders appointed state Reps. Charles Calvert, R-Medina, Tom Raga, R-Mason, and Miller to the conference committee while the Senate appointed state Sens. John Carey, R-Wellston, Ron Amstutz, R-Wooster, and Tom Roberts, D-Dayton, to the panel.

The current two-year, $48 billion state budget runs through June 30. The governor has to sign a new balanced state spending plan into law by July 1.




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