Ohio House adds tax, college tweaks to $55b budget

ANN SANNER

Asso­ci­ated Press

COLUMBUS — A key Ohio House com­mit­tee was prepar­ing Tues­day to put fin­ish­ing touches on its ver­sion of the state oper­at­ing bud­get, includ­ing the pos­si­ble removal of an ear­lier pro­vi­sion that would have cost casi­nos tens of mil­lions in addi­tional taxes.

The House Finance Com­mit­tee hear­ing was sched­uled to stretch from late after­noon into the wee hours. If the com­mit­tee approves the bud­get bill, it would go to the House floor for likely pas­sage Thursday.

A coali­tion of labor, envi­ron­men­tal, faith-based, stu­dent and com­mu­nity groups planned to protest the bud­get at the State­house on Thursday.

Among changes the Republican-led House has already sig­naled it will make to Gov. John Kasich’s $55.6 bil­lion, two-year spend­ing blue­print are elim­i­nat­ing the estate tax and mak­ing lower-costing in-state tuition rates avail­able to grad­u­ates of Ohio high schools who have left the state for up to a decade.

On Tues­day, the House had been plan­ning to clar­ify the rev­enues raised by casi­nos that would be sub­ject to the com­mer­cial activ­ity tax on busi­ness receipts. Their pro­posed lan­guage said the tax would apply to casi­nos’ gross receipts with­out deduct­ing win­nings and pay­outs first.

Casino devel­op­ers com­plained, threat­en­ing an almost cer­tain legal bat­tle if the lan­guage remained. They argued the House lan­guage con­flicted with the 2009 con­sti­tu­tional amend­ment that requires casi­nos to pay 33 per­cent of “gross casino rev­enue,” which would include total amount wagered minus win­nings. Some busi­ness groups backed their position.

Eric Schip­pers, a senior vice pres­i­dent with Penn National Gam­ing Inc., has called the House change “unique and dis­crim­i­na­tory” treat­ment under Ohio’s com­mer­cial activ­ity tax. He con­tended that if some­one spends $10 and wins $1,000, casi­nos would pay tax on the $1,000 under the change.

House Repub­li­can spokesman Mike Dit­toe said the revi­sion was aimed at clar­i­fy­ing what the House believed to already be on the books.

The House also wants to get rid of a Kasich pro­posal that would require uni­ver­sity fac­ulty to teach an extra class every other year and another of the governor’s bud­get pro­vi­sions that would shift 2 per­cent of pen­sion con­tri­bu­tions from employ­ers to employees.

The House bud­get removes Kasich’s pro­posed changes to the state’s crim­i­nal sen­tenc­ing laws in order to con­sider them in a sep­a­rate bill. Among the pol­icy goals was to reduce the num­ber of non­vi­o­lent offend­ers on short prison stays in order to cut costs and over­crowd­ing. Rep­re­sen­ta­tives also favor adding a sixth prison to Kasich’s list of state insti­tu­tions that will be sold or leased to pri­vate companies.

The House bud­get largely retains pol­icy ini­tia­tives Kasich pro­posed, includ­ing the over­haul of Med­ic­aid pro­grams, although it shifts more money to cer­tain areas.

For exam­ple, the House plan puts $15 mil­lion more over the two-year bud­get cycle in the PASSPORT pro­gram, an in-home care option for seniors. Leg­is­la­tors also added $80 mil­lion to the school foun­da­tion for­mula, pro­vid­ing par­tic­u­lar help to sub­ur­ban dis­tricts that took hits under Kasich’s plan. The new cal­cu­la­tions mean no dis­trict will see a cut of more than 20 per­cent, the House estimated.

For local gov­ern­ments, among the hard­est hit in Kasich’s plan, the House has pro­posed a spe­cial fund to encour­age shared ser­vice between town­ships and other munic­i­pal­i­ties. Their pro­vi­sion diverts $50 mil­lion a year from the com­mer­cial activ­ity tax paid by busi­nesses to a spe­cial fund for local gov­ern­ments that col­lab­o­rate. Some money could go to fis­cal emer­gency situations.

House bud­get changes impose some leg­isla­tive over­sight on the governor’s abil­ity to sell off state assets, requir­ing autho­riza­tion from the Leg­is­la­ture for how sale pro­ceeds are spent.

The Ohio Sen­ate, which takes up the bud­get once the House fin­ishes with it, opened tes­ti­mony on the bill Tues­day with a pre­sen­ta­tion by Kasich bud­get direc­tor Tim Keen. Keen esti­mated the cur­rent state bud­get gap at roughly $7.6 bil­lion. He told sen­a­tors the admin­is­tra­tion closed the struc­tural deficit before bud­get­ing for Kasich’s pol­icy pri­or­i­ties, so the two aren’t directly related.

The dead­line for pass­ing the bud­get is June 30.

Posted by AP News on May 4 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.