A panel of state lawmakers have agreed on a two-year state budget along party line. The 4-2 vote by the conference committee ends a week of work resolving the differences between the spending plans passed by the Ohio House and Senate. The budget outlines spending for around $60 billion in state funds, and nearly $200 billion when federal funds are added.
The latest version of House Bill 96 approved by Republicans on the conference committee combines Ohio's two existing income tax brackets for people who make more than $26,000 annually into a 2.75% flat income tax rate. That amounts to a tax cut for Ohioans making over $100,000 a year.
"We're going to have a flat tax in the state of Ohio," said conference committee chair Brian Stewart (R-Ashville), who also served as House Finance Chair. "The House has agreed with the Senate to rescind an awful lot of kind of small income and sales tax exemptions. Individually, it's not that much money at issue, but when you put it all together, it's a sizable amount of money and we're going to return it to the state."
The budget, which includes $60 billion in state funds, also strikes a compromise on the question of how much collected property tax a school district can hold as a carryover balance. The House had capped that carryover at 30% of a district's annual budget—a proposal that school groups said would cost districts $5 billion and send most into the red in the second year of the budget. The Senate raised the cap to 50%. The conference committee settled on a 40% limit.
The budget also picked up the Senate's plan to provide funding for the Cleveland Browns' domed stadium development in Brook Park. Lawmakers created a sports and cultural facilities fund with $1.7 billion in unclaimed funds, with $600 million earmarked for the Browns project.
Gov. Mike DeWine had proposed a similar fund, paid for by a doubling of the tax on sports gambling operators. The House budget had proposed a package of 30-year bonds.
The Haslam Sports Group has said the development would raise $1.3 billion more than the billion dollars the state would spend to pay back those bonds, though analyses from the Legislative Service Commission and the Office of Budget and Management said that forecast was overly optimistic.
Lawmakers also added in a provision dealing with a state law that bans sports teams that play in taxpayer-funded stadiums from moving without providing at least six months' notice or striking an agreement with their home city. That's known as the Modell Law, named for Art Modell, the former Browns owner who moved the team to Baltimore in 1995. Cleveland is suing the Browns under that law.
"I think they want clarification of the Modell Law, which is designed to say, that's about moving teams out of Ohio. It's not about moving teams within the same county within Ohio," Stewart said. "So we're clarifying that to say, if you're within the same county, you're not violating the Modell Law." When asked if he thinks that settles the lawsuit, Stewart replied, "We do."
The budget passed the conference committee around 1:30am Wednesday, after hours of delays. Senate Finance Chair Jerry Cirino (R-Kirtland) said it's a 5,500 page bill, but he said he thinks lawmakers who will vote on it in just a few hours are familiar with it by now.
"We've been working on this together for a long time. And obviously the House started first after they got the executive. They spent a long time developing two bills and then sending it over to the Senate," Cirino said. "We spent time on our two bills and now we spent the last couple of weeks in conference spending a lot of time on it. So I think when our members respectively vote tomorrow, they're voting on a very informed basis."
It's likely the budget will get no votes from Democrats, said conference committee member and House Finance ranking member Bride Rose Sweeney (D-Cleveland). She said she's disappointed that schools aren't fully funded and that there's no substantive property tax relief, and that DeWine's $1,000 tax credit for young children, funded by a cigarette tax hike, wasn't restored.
"We were elected to make choices for the people of Ohio. And we believe that this budget is making the wrong choices," Sweeney said. "We've made choices that are really good for billionaires, are really good for the top, most well-off people in the state of Ohio. And it is the average working Ohioan that we did very little for."
The budget will go to the House and Senate and then on to DeWine, who's expected to sign it by the deadline on June 30. DeWine vetoed 44 budget items two years ago, 14 in the budget before that, and 25 in the first budget he signed.
