Taxes, school choice focus of Ohio Senate budget
COLUMBUS, Ohio (WCMH) – After weeks of work, the Ohio Senate revealed its version of the state’s budget Tuesday.
The 7713-page budget spends around $85 billion total, about $10 billion less than the version the Ohio House passed.
In the Senate’s budget, a large focus is on tax relief to the tune of $2.5 billion. Part of that comes in a collapse of income tax brackets.
Currently, there are four income tax brackets, with the highest rate currently at 3.99%.
But, in the Senate’s budget, they phase in two tax brackets over two years. Anyone who makes over $26,050 would have a 2.75% income tax, and anyone who makes over $92,150 would have a 3.5% income tax.
“When we arrived in the legislature a number of years ago, our highest tax bracket was just under 7.2%; we’ve now gotten it down to 3.5 percent, yet we’re still dealing with revenue,” Senate Finance Committee Chair Matt Dolan (R-Chagrin Falls) said. “So, we are confident the tax relief to citizens produces more economic activity.”
“The regressive taxes, we’re not supportive of; we think progressive income taxes based on your ability to pay is the better way to receive revenue,” Senate Finance Committee Ranking Member Vernon Sykes (D-Akron) said. “But we need to look at the total package and burden and how it may be shifting one way or another.”
The budget also expands the state’s back-to-school sales tax holiday, allocating two weeks for the sales tax break.
Also in the Senate’s budget, school choice does become universal. It will allow any parent to send their student to a private or charter school on the taxpayer's dime. But, while choice would become universal, not every student would be eligible for a full scholarship.
Students living 450% below the poverty line would be eligible for a full scholarship, which Dolan said accounted for about 75% of all school children in the state.
The full scholarship is up to $8,400 for high school students and $6,300 for K-8th grade. Anyone living above 450% of the poverty line would be assessed based on need, but all students would get a minimum of 10% of the scholarship.
Overall, Republican Senators said this is a strong budget, while Democratic lawmakers remain uncertain.
“Our dollars that we saved went to targeted investments in mental health and education,” Dolan said. “And we are returning a great deal of money back to the taxpayers so they can reinvest in themselves and their families.”
“Being the ranking member here on finance, I’m nervous,” Sykes said. “Because there’s a lot of details, a lot of line items and we really need to go through it so we can have a better assessment.”
The Senate budget also increases mental health funding from the House version but does not fully restore it to what Gov. Mike DeWine proposed.
The budget also allocates $15 million for the Aug. 8 special election that lawmakers approved a few weeks ago.
Senators will continue to work on the budget for the next week, before sending it back to the House.