Senate proposes tax cuts for all

Ohio Senate Republicans are offering an 8% acrossthe-board income-tax cut over two years while restoring many of the reductions the House made in a $1.2 billion annual tax cut for business owners.

Senate President Larry Obhof, R-medina, was joined by his caucus members Tuesday in unveiling the chamber’s rewrite of the two-year, $68.8 billion state operating budget passed by the House.

Obhof said the Senate’s proposed budget affords $300 million in annual tax cuts for Ohioans while making needed investments to benefit the environment, education and struggling families.

Foremost among the changes in the budget, now known as Substitute House Bill 166, is a coming showdown with the House over taxation — particularly business taxes.

The House proposal would erase the state’s bottom two tax brackets on income below

$22,500 a year, award a 6.6% income tax cut to all other brackets and reduce the top incometax rate from 5% to 4.67% on income above $222,200.

The Republicanled chamber also would significant scale back the current business income-tax deduction that allows partnerships, LLCS and sole proprietors to pay no income tax on up to $250,000 in income, plus get a 40% tax cut on income over $250,000. The House budget would eliminate the extra tax break for Ohio’s wealthiest business filers above $250,000 and lower the new no-tax level to $100,000.

With business groups and Republican Gov. Mike Dewine calling for restoration of the full tax break, the Senate kept much of it.

Senate Finance Committee Chairman Matt Dolan, R-chagrin Falls, said the business tax break, with the House changes scheduled to be retroactive to the beginning of the year, would remain unchanged this year.

In 2020, the Senate plan would eliminate the extra tax break on annual business owner incomes above $250,000, with filers paying the full 4.6% rate on income in excess of that amount. The change would cut the break by a total of $300 million. Dolan said the tax break creates jobs and dismissed suggestions that it is a “loophole.”

House Speaker Larry Householder, R-glenford, and others have expressed doubts about the tax break generating more jobs and investment and suggested that it largely went to the bottom lines of business owners.

Obhof said he hoped the 8% income-tax cut — 4% annually for two years — would offset the 10.5-cents a gallon increase in the state gas tax Ohioans will pay beginning July 1 to raise money to fix deteriorated state and local Senate President Larry Obhof, R-medina, is joined by his caucus to unveil its rewrite of the House-passed state operating budget Tuesday. roads. The Senate cut would save a single taxpayer with $45,000 in annual taxable income roughly $67, while the larger Senate cut would increase the savings to about $81.

In reversing the House, the Senate also would keep state tax breaks for movie and TV productions and purchases of rare coins and bullion.

The proposed budget retains moves made by the House and Dewine to route more state assistance to children and adults afflicted by the state’s opioid crisis and, at $170 million, fully funds the first two years of Dewine’s H2ohio initiative to help clean algae-fouled Lake Erie and other state waterways.

Under the House plan, beyond the first two years funded at half of the governor’s request, borrowing would be used to create a long-term funding source for H2ohio, which the Senate rejected. Dewine wanted nearly $900 milllion set aside up front to avoid borrowing.

The Senate also agreed with Dewine’s request, which was approved by the House, to raise the legal age for purchasing all tobacco and vaping products to 21 from 18.

Amid legal challenges over the “heartbeat” law to forbid abortions once a fetal heartbeat is detected around six weeks of pregnancy, the substitute bill also proposes $5 million for the Ohio Parenting and Pregnancy Program, which provides funding for pregnancy resource centers around the state. Such centers provide pregnant women with alternatives to abortion.

Stephanie Krider, vice president and executive director of Ohio Right to Life, championed the funding as a victory for abortion opponents. “This funding will impact countless mothers and babies by increasing the effectiveness and reach of Ohio’s 140-plus pregnancy resource centers,” she said.

NARAL Pro-choice Ohio Executive Director Kellie Copeland decried the outlay and called for funds to be allocated to reduce infant mortality. “For years, this legislature has been prioritizing bills based on fake science, and now they are continuing this trend by greatly increasing the funds distributed to fake women’s health centers,” she said.

In other moves, the Senate proposed restoring a $15 million federal set-aside to help provide assistance to family members who take children into their care, often because a parent is addicted to opioids or other drugs.

In a statement, Senate Democrats saw some encouragement in the Senate budget proposal, but cast a wary eye on continuing tax cuts. “After the last administration’s decade of cuts, I remain encouraged by the potential reinvestment we could see in this bill. The devil is in the details, but we are hopeful for progress aimed at improving the quality of life of all Ohioans,” said Minority Leader Kenn Yuko, D-richmond Heights.