Ohio House Budget Includes $300 Million Worth Of Income Tax Cuts
The two-year, $69 billion state budget proposed by the Ohio House makes some significant changes to the state’s tax cutouts.
The House budget features $300 million worth of income tax breaks for low- to moderate-income Ohioans, something that Republican leaders have pushed for since passing DeWine's gas tax. The bill would cut the tax by 4.7% for those earning between $22,500 and $88,800.
"One of our top priorities in this budget has been to empower all Ohioans, regardless of their ZIP code or circumstances," said House Speaker Larry Householder.
Householder says the budget reduces the current business income deduction. Right now, businesses don’t pay taxes on the first $250,000 of income, but Householder says that will go down to $100,000, making taxes fairer for all Ohioans.
“We shouldn’t try to pick winners and losers. What we should try to do is set a balanced field out there and let people compete in business," Householder says.
Democrats have called for a change in the business income deduction for years.
Householder says the House budget eliminates tax breaks for things like gold coins and private jets. It will get rid of the motion picture tax credit and one for contributing to a political campaign.
The budget also proposes changing the sales tax collection process for online retailers like Amazon and Wayfair and ride sharing services like Lyft and Uber. And it adds $125 million on top of DeWine's own education proposal in the two-year budget, although an overall school-funding plan is also being debated separately.
A full House vote could come next week following committee approval. The bill would go next to the Senate. The budget must be approved by the end of June.
Minority Democrats in the House expressed support for the tax changes, saying they incorporated ideas brought forward by members of their party.
"Walking back a tax system rigged against working people will help our state better live within our means and let working families have a better chance to get ahead," said Rep. Emilia Strong Sykes, the top House Democrat who represents Akron.
Other among House GOP proposals, the two-year budget would:
- Require public universities to guarantee students the same tuition rate from their freshman through senior years.
- Fund DeWine's proposed water quality initiative at requested levels of $85 million over two years. Householder said lawmakers are also looking at longer-term solutions for preserving water quality.
- Provide $60 million in additional dollars for children services in Ohio over two years. Agencies have struggled in recent years with record numbers of child custody cases driven in part by Ohio's opioid crisis.
- Boost spending for Ohio technical colleges, which provide postsecondary career and technical education at 54 sites across the state. The increase from $16 million to $23 million is the biggest since 2003.
- Raise the age to buy cigarettes and other tobacco products from 18 to 21 years.