Ohio House Finance Committee Unveils Biennial Budget Sub Bill

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COLUMBUS—The Ohio House Finance and Appropriations Committee today introduced Substitute House Bill 59, the two-year budget proposal that refines the recommendations in Governor Kasich’s executive budget proposal that was introduced in the House in February.

Building upon the Governor’s strategic vision, the bill continues to make sweeping policy reforms in all areas of government in an effort to make Ohio’s state government more efficient, effective and focused on providing tangible results for Ohioans.

“Governor Kasich laid out a powerful, forward-thinking budget, and we believe we have built upon those proposals in a way that will have a positive impact on all Ohioans,” said Speaker of the Ohio House William G. Batchelder (R-Medina). “Providing healthcare and employment services, as well as reforming state tax policies and funding schools, are continuing themes in both the House and executive versions of Sub. House Bill 59. The substitute bill that was introduced today is the product of countless hours of discussion and a thorough examination of the way our state government operates.”

Providing Permanent Income Tax Relief & Continuing Further Tax Reform

Reforming Ohio’s tax structure is one of the key issues included in Sub. H.B. 59. The bill initiates meaningful income tax reform to stimulate job growth and put more money back in Ohioans’ pockets. It permanently reduces income taxes by 7 percent in FY 2014, which will provide nearly $1.5 billion in income tax relief over the next two years.

Among other changes, the bill:

Exempts grain elevators from the commercial activity tax (CAT)

Lowers the motor fuel tax on liquefied natural gas to 28 cents per gallon

“We remain committed to continue working with the Governor on reforming Ohio’s tax code within the budget-making process,” Chairman of the House Finance and Appropriations Committee Ron Amstutz (R-Wooster) said. “We believe that the targets set by the administration for providing individuals and businesses with relief from the state income tax remain within a reasonable range. However, we decided that it is advisable to hold back a range of potential means of lowering the income tax until additional analysis is conducted.”

Helping the Unemployed Find Work

The House version of the budget includes a strong effort to help Ohioans find gainful employment, access important job resources, and improve their employability. A variety of funding initiatives, which total $250 million over two years, have been included in the state budget, including:

$75 million increase per year in additional funding for employment services and job readiness
$30 million increase per year in additional funding for local governments for mental health services
$20 million increase per year in additional funding for local governments for addiction services
$6 million funding increase for job co-ops and internships

“We heard compelling testimony from a variety of witnesses that low-budget, community-based programs often provide the most cost-effective results,” said Chairman Amstutz. “We are focusing our efforts on assisting potentially employable individuals with overcoming the personal challenges that prevent them from obtaining or keeping a job.”

Primary & Secondary Education: Ensuring Money Follows the Child

Education, a continuing priority for the Ohio House, has received particular care and consideration in Sub. H.B. 59. The budget builds upon sound principles in the executive proposal for primary and secondary education by making changes to target more state aid increases to rural and lower wealth school districts.

“We applied a number of refinements to the education items and funding mechanisms that the governor proposed, but the general construct of the administration’s recommendations remains throughout,” said Chairman Amstutz.

Among other proposals to boost Ohio’s schools and educational standards, Sub. H.B. 59:

· Ensures that none of Ohio’s 600+ school districts will receive less state aid than they did in FY’13

· Increases funding for career-technical education to prepare high school students for future career opportunities

· Increases funding for special education, disadvantaged aid, and transportation

· Provides core funding levels to allow all schools to be competitive

· Provides additional funding for school districts to implement the Third Grade Reading Guarantee through the K-3 Literacy Program

Higher Education: Making College More Affordable

Additionally, Sub. H.B. 59 takes significant strides to improve Ohio’s higher education through comprehensive policy improvements. Among these proposals are:

Moving funding for Ohio universities to an outcome-based system rather than a population-based system

Giving families peace of mind in their child’s tuition costs by capping tuition increases at 2 percent for all state schools. Additionally, the bill allows schools to participate in a newly adopted “cohort plan,” which allows universities to institute a stable, four-year cost of education, capped at a one-time increase of up to 6 percent that cannot change from year to year

Providing $1.1 million in additional funding for the Ohio College Opportunity Grant

Increasing funding for the Adult Basic and Literacy Education (ABLE) Fund by $250,000 over the biennium, to help Ohioans who are preparing for their GED examination
Increasing funding for co-op internships by $6 million in FY 2015

“We took strides to make it more affordable to obtain a higher education degree and to give Ohio’s students the necessary tools to succeed in the future,” said Rep. Amstutz.

Healthcare & Medicaid: A long-term, fiscally responsible plan that assists Ohio’s families

Healthcare is a major component of this budget, and the House worked to institute policies that will positively affect all Ohioans. Major spending reductions in Sub. H.B. 59 are a result of the removal of the Medicaid eligibility expansion under the federal Affordable Care Act, an action the House has elected to take because there remain too many uncertainties with the federal program to warrant the expansion’s adoption.

“We have struggled the most with the questions around expanding Medicaid eligibility under the so-called Affordable Care Act,” said Speaker Batchelder. “Our members spent countless hours in hearings, analysis and discussion regarding ways to approach the needs of Ohioans in poverty as well as those without health insurance. However, there is not a consensus that extending Medicaid coverage is a sustainable or effective solution to the needs of adults living below the poverty line. We will further examine the federal program as implementation details continue to come forth, especially considering the ongoing gridlock involving the federal budget and growing uncertainty over sustainability of federal borrowing and spending.”

“There were many health-related variables we considered in this budget,” said Chairman Amstutz. “There is compassion for our citizens faced with barriers of addictions and mental illness, which they must overcome to achieve stable, meaningful employment. Given this common interest, we are calling for an all-hands-on-deck focus on comprehensive solutions that are based at the community level, as well as for the creation of a bipartisan legislative committee to keep a finger on the pulse of the Medicaid issue. We recognize that Medicaid is an area that will continue to require considerable discussion in the coming months and years, as it is an issue that is important to the well-being of all Ohioans.”

In addition to maintaining current Medicaid eligibility rates and establishing a joint study committee to monitor the issues surrounding Medicaid, Sub. H.B. 59 focuses on those who need help, ideally to the point where they no longer rely on public assistance. The budget accomplishes this by increasing funding to local governments for addiction services and mental health, as well as increasing temporary workforce funding for individuals in need.

Other initiatives included in Sub. H.B. 59 include:

Increasing funding for the Local Government Innovation Program by $4 million per year

Creating the Local Government Exchange, which is an effort to encourage more local governments to publish information on the internet to help reduce costs and increase transparency

Establishing the Ohio Oil and Gas Fund, using proceeds from drilling on state lands: 50 percent of royalties from drilling will be invested in Clean Ohio programs and the remaining 50 percent invested in our state parks

Increasing funding for RECLAIM Ohio, a funding initiative that encourages juvenile courts to develop or purchase a range of community-based options to meet the needs of juvenile offenders or at-risk youth

Increasing funding for the Mid-Ohio Food Bank by $2 million over the biennium

Making additional modifications to human trafficking law

Increasing funding for the Ohio Historical Society, Ohio Arts Council and the Hayes Presidential Center

“This budget upholds our commitment to Ohioans to assure their ability to be healthy, prosperous and self-sufficient,” said Speaker Batchelder. “With the help of many interested parties who came to the Statehouse and shared their views with the committee, we have addressed many issues that will have a profound impact on the daily lives of Ohio’s citizens. We will continue to strengthen Ohio’s economy and job climate in everything we do, whether that means keeping our taxes competitive or improving the quality of life in Ohio. I am proud of the work that Chairman Amstutz, Vice Chairman McClain, and all the subcommittee chairs have done on this budget proposal, and I look forward to working with the Senate to further strengthen the bill.”