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Ohio Senate budget plan: tax cuts, universal school vouchers and stripping state school board powers

Senate President Matt Huffman (R-Lima) and Finance Chair Matt Dolan (R-Chagrin Falls) speak to reporters about the draft two year operating budget.
Daniel Konik
Statehouse News Bureau
Senate President Matt Huffman (R-Lima) and Finance Chair Matt Dolan (R-Chagrin Falls) speak to reporters about the draft two year operating budget.

Ohio Senate Republicans are giving the public the first look at their proposed $85.7 billion two-year operating budget . It includes income tax cuts, universal vouchers for students to attend private K-12 schools and a controversial plan that strips the Ohio Board of Education of most of i ts powers.

Senate President Matt Huffman (R-Lima) said this budget makes some innovative changes.

“It is not a normal budget. And by that I mean that there are real innovation, changes to the way that we do things, changes in the way that we fund public expenditures," Huffman said.

The Se nate 's draft budget plan include s personal income tax cuts for many Ohioans by creating two tax brackets. The tax rate for the lower bracket would be 2.75%. The higher bracket would be 3.5%.

The Senate plan also builds on the state's current back -to -schoo l sales tax holiday. It ex pands the holiday from one we ek end to two weeks at the beginning of August starting next year and includes more goods and services eligible for exemption — worth about $1 billi on in tax brea ks .

The senate proposal would also cut the state's commercial activity tax by 25% on companies with gross receipts of over $150,000 .

Education funding

Senate Republicans want to expand the state's school voucher program to allow any Ohio K-12 student to receive a voucher to attend private schools. Currently, only students in low-performing school districts and whose families are at or below 250% of the federal poverty line are eligible .

However, under the Senate plan, the amount of the voucher would be reduced depending on family income. So, a family earning more than $13 5,000 would be eligible for at least 10% of the voucher amount.

Donovan O'Neil, state director for Americans for Prosperity-Ohio, said he'd like to see universal vouchers without means testing , but he's cautiously optimistic at this point.

"So the devil's in the details with the means testing. But what the Senate has done that the House and the governor had not done that we think is good is it at least lets folks know , wherever they live in Ohio, regardless of their income, some assistance is available to access a school choice program if they feel like it's time to take their child into that program," O'Neil said.

There have been questions about the cost of school vouchers since the Ohio Legislative Service Commission earlier this spring analy zed the cos t of a full universal voucher plan and det ermine d expenditures would increase $1.13 billion in the first year if it were adopted.

Funding of public schools has been a major concern for Democrats w ho are closely scrutinizing the Senate proposal to ensure the funding meets the Fair School Funding Plan, a provision passed by an earlier G eneral Assembly designed to fund K-12 public schools in a way that lowers reliance on property taxes.

Sen. Vernon Sykes (D-Akron) said he likes what he's seeing so far.

"I think the fair school funding plan, yes, we looked at that, at least what's been presented to us so far. We want to look at the details of that to make sure. That's extremely important as one of the main functions and responsibilities here that the state of Ohio provide adequate, equitable schools," Sykes said.

The Senate's draft plan restores funding for literacy improvement that was in the budget Gov. Mike DeWine (R-Ohio) proposed earlier this year.

Other changes in Senate plan

  • The Senate plan includes a provision, supported by DeWine, that takes powers away from members of the Ohio State Board of Education. The Senate passed a bill in March stripping the board's powers, but it has not passed the House.

  1. Third Grade Reading Guarantee - During the pandemic, Ohio lawmakers suspended the reading requirement. The House version of the budget would eliminate it entirely, but the Senate wants to return to holding back children in the third grade if they don't pass a reading proficiency test.

  1. The Senate provides $200 million for career technical education, $100 million for facility upgrades and $100 million for equipment.

  1. The Senate's plan increases funding for the state's psychiatric hospitals by $15 million each fiscal year. And it earmarks millions of federal TANF (Temporary Assistance for Needy Families) dollars for mental and behavioral health services.

  1. It adds $15 million to fund the upcoming Aug. 8 special election so Ohioans can weigh in on a controversial proposal to change the state’s constitution.

Senators will spend the next week or so working with this draft budget. A vote from the full Senate is expected near the middle of June .
Copyright 2023 The Statehouse News Bureau.