July 15, 2013
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.