Gov. John Kasich’s $67 billion budget got ripped apart and put back together by House Republicans, who stripped out his key tax reforms and put more money into other areas. Part of the reason was because nearly a half a billion dollars had to be trimmed from it - and more cuts are likely to come later.
Gov. John Kasich said $800 million had to be trimmed from his budget proposal, with tax revenues down $615 million for this fiscal year. So House Republicans made some big changes, including putting an additional $170 million into the fight against opioid abuse, which may be killing 11 people a day. House Finance Committee Chair Ryan Smith of Bidwell in extreme southern Ohio admitted that even that extra money is not enough to bring as much treatment as is needed. “I think there’s gaps in the system and that’s why we put $20 million in capital funding in there for new treatment beds,” Smith said.
The leading Democrat on the House Finance Committee is Jack Cera of Bellaire, near the border with Wheeling, West Virginia. Cera agreed that while the additional funding will help battle the opioid epidemic, it’s not enough – and he has a solution. “I think it’s something that we’d like to see perhaps, looking – and we’ve called for in the past declaring an emergency and using some of the rainy day fund,” Cera said.
But Smith says with that $170 million investment, his caucus feels dipping into the state’s savings account is not something to consider now.
The House also added nearly $90 million to primary education – no surprise given that more than half of Ohio’s public schools districts would have been cut in Kasich’s budget. But there are still schools that will get budget cuts. Cera said he’s still disappointed, because he says the focus on cutting state income taxes has driven schools to seek tax increases at the local level. And Cera has questions about the helpfulness of the House budget’s proposal to allow video poker at racinos with the proceeds going to education. “That’s always questionable whether that’s going to generate the kind of money. I don’t know at this point,” Cera said. “I think the problem is without going to the rainy day fund, I think it would be difficult to find a way to really do what you need to do for education.”
But Smith noted this was the second largest investment House leaders made after the opioid crisis. “While it’s not over 600+ districts, it’s hard to move the needle, as Rep. Cera said. I would simply say to the school districts, while a lot of people were moving backwards in this budget, they got $90 million more,” Smith said.
The House also scrapped Kasich’s 17% income tax cut, along with the tax increases that would have paid for it – hikes in taxes on cigarettes, e-cigarettes, alcohol and oil and gas drilling, and the increase and broadening of the state sales tax. Smith suggested erasing this part of Kasich’s plan was about dealing with the immediate tax revenue shortfall, and isn’t necessarily a sign that House Republicans no longer embrace the idea that tax cuts can spark the economy. “This year was a good time for stabilization and consistency and moving everything around, tax wise, and changing the structure at a time like this just didn’t seem like the right thing to do,” Smith said “We feel like we’ve made a lot of progress in the past, and stability and consistency going forward was more important.”
But Democrats have long claimed that Kasich’s attempt to move the state more toward sales taxes and away from income taxes benefits the wealthy and shortchanges everyone else. Cera likes this pause on income tax cuts now and hinted it should continue. “In the future, we need to be a lot more careful in making sure that the type of tax policy we come up with for both individuals and businesses are really ones that are going to effect the economy, because I think it’s debatable whether some of the ones we’ve done recently have really helped,” Cera said.
Even with all these changes in the House, there is still at least $200 million in additional cuts that the Senate will have to make to bring the budget into balance. But Smith says until final budget numbers are received in June, there’s no way to tell exactly what that number is – or whether the budget is actually not balanced yet, though by state law it has to be when it’s finally passed and signed into law by July 1.