Republican House lawmakers on Tuesday took a jackhammer to Gov. John Kasich’s “Job’s Budget 2.0,” gutting the governor’s plan for sweeping tax reform in favor of a permanent 7 percent income tax cut.
Kasich’s sales-tax expansion, small-business tax break, severance tax overhaul, and 20 percent, phased-in income tax cut have been scrapped in a substitute to House Bill 59 introduced by House Speaker William G. Batchelder and Rep. Ron Amstutz, chairman of the House Finance and Appropriations Committee.
House leaders also threw out Kasich’s proposal to expand Medicaid under the federal Patient Protection and Affordable Care Act.
Amstutz said revenue growth would help cover the 7 percent income-tax cut, which he said would amount to $1.5 billion over two years.
Still, Kasich’s $63 billion plan, which promised a $1.4 billion tax cut over three years, is down but not out. The governor’s proposals could be brought back to life as lawmakers continue work on the budget.
“We are going to continue a lot more work than what you are going to see in the substitute bill,” said Amstutz, a Wooster Republican. “We feel the scope and size of what the administration is recommending in terms of tax reforms is a doable target… but we need to do a lot more work to develop some alternatives to getting the goal set.”
Kasich’s tax reforms also could re-emerge once the Senate, also controlled by Republicans, gets a hold of the bill later this month.
“We appreciate the House’s income tax cut and we’re hopeful that there’s more to come so that we can keep this job creation momentum going,” said Rob Nichols, Kasich’s spokesman. “The governor will continue to pursue tax reform and a larger tax cut, especially a small-business tax cut, to help make Ohio more competitive.”
The GOP governor sought to drop the state’s sales tax from 5.5 percent to 5 percent while broadening the sales-tax base to include previously untaxed services. Kasich also hoped to provide up to a 50 percent tax break to small-business owners who claim business earnings on their personal tax filings, and bolster state coffers by revamping the severance tax and asking big gas and oil drillers to pay more.
Ohio economics experts who rejoiced in Kasich’s plan decried its replacement.
A joint statement by Richard Vedder, professor of economics emeritus at Ohio University, and Tony Caporale, professor of economics at the University of Dayton, said “the tax proposals in the House Republican alternative budget are disappointing in that they substantially dilute the growth-enhancing aspects of the Kasich tax reform plan.”
Both experts called the substitute bill a “timid” revision.
House leaders also used their overhauled bill to resurrect a proposal that would effectively strip federal dollars from Planned Parenthood and other stand-alone family-planning clinics. The proposal was shelved late last year by the Ohio Senate.
Click here to read more of this story.
About Marion Online News
