Republican leaders in the Ohio Senate want savings from a Medicaid program expansion to finance a 4 percent state income tax cut.
Senate President Pro Tem Chris Widener, a Springfield Republican, introduced the legislation.
According to the measure, an Ohio resident making $40,000 per year would see a cut of about $38 under 2014 individual income tax rates.
Ohio Senate GOP spokesman John McClelland says the proposal reflects projected savings from reduced hospital payments and many state prisoners now qualify for Medicaid.
McClelland tells The Northeast Ohio Media Group (bit.ly/1gPHdSU) the state will collect in additional sales-tax revenue and additional federal reimbursements for some previously ineligible enrollees.
The left-leaning Policy Matters Ohio says such a tax cut would mostly go to affluent Ohioans while other important needs are left unmet.
Senate President Keith Faber, a Celina Republican, as well as the rest of the Senate GOP leadership have signed on as co-sponsors of the legislation.
“It seems appropriate and consistent with the priorities of the legislature and the administration to return that money back to the taxpayers of Ohio,” McClelland said.
A Policy Matters report listed things that could be done with $404 million, including the hiring of police, firefighters and teachers.
“This approach would do much more to help working families, strengthen communities, and position Ohio for the future than another round of tax cuts like those proposed in Senate Bill 210,” said Wendy Patton, fiscal project director at Policy Matters.
The Medicaid expansion backed by Gov. John Kasich was approved last Monday by the Ohio Controlling Board.
The board’s vote cleared the way for Ohio to accept $2.5 billion in federal funding during the next two years to expand Medicaid.
The expansion of health-care benefits will cover an estimated 275,000 low-income Ohioans starting in January.