Ohio Gov. John Kasich unveiled his final two-year budget on Monday, proposing to increase sales and other taxes to leverage a major reduction in personal income taxes.
By far the biggest shift would occur in the state sales tax, which would increase by a half a cent to 6.25%, be broadened to include more services and garner an additional $1.85 billion over the biennium. Income taxes would be reduced by $3.1 billion, and the overall net effect of the tax changes would equate to a $39 million cut over two years.
The plan also includes increases to cigarette, alcohol and, as expected, oil and gas severance taxes. In many ways, it reflects components of Mr. Kasich’s prior tax policy proposals, a good portion of which have already been rejected by his fellow Republicans in control of the General Assembly.
Also on the tax front, the governor is proposing centralized filing for municipal income taxes and related changes that have been opposed by cities.
The first overview provided to the public comes in the form of fact sheets that lay out the administration’s policy positions.
The all-funds budget, which includes federal reimbursements for Medicaid spending and other sources, along with tax revenue, is about $144.3 billion for two years. The current biennial blueprint totaled $128.3 billion.
The governor’s budget proposal also:
- Increases the income tax personal exemption for those with incomes up to $80,000 per year;
- Freezes tuition, general fees and special fees at Ohio’s public colleges and universities for two years and requires them to cover student textbook costs at a cost of $300;
- Increases base support for K-12 education by $200 million;
- Urges school districts to issue credit for work experience through College Credit Plus;
- Proposes moving all of the state’s computer systems to the cloud by the end of the Kasich Administration;
- Consolidates several state medical licensing boards by achieving a net reduction of eight boards, and;
- Directs the Ohio Department of Medicaid to seek federal approval to require certain adults to pay a monthly premium at about $20 per month for the service.
Additional documents and details on Mr. Kasich’s Fiscal Year 2018-2019 spending plan, called “Building for Ohio’s Next Generation,” are available on the administration’s budget website.
An administration news conference regarding the package of finance and policy proposals is being streamed live on the Ohio Channel.
Further documentation, including the legislation itself, will be available in the coming days.
The House Finance Committee has slated initial hearings on the plan for Wednesday and Thursday.
The first day will feature presentations by the administration and the Legislative Service Commission and is expected to include initial estimates for tax revenue and Medicaid caseloads over the next two fiscal years.
The second day of hearings this week will feature testimony on the transportation budget, which along with the spending plans for the Bureau of Workers’ Compensation and Industrial Commission, are traditionally the first components to get enacted.
Also this week, the House and Senate are set to finalize committee assignments and introduce the first spate of bills.