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House finance committee retools state budget

Two-year spending plan contains more than $3B in proposed cuts.

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By Laura A. Bischoff, Columbus Bureau 12:12 AM Wednesday, May 4, 2011

COLUMBUS — The Republican-controlled House Finance Committee on Tuesday put the finishing touches on the two-year state budget bill that suggests more than $3 billion in cuts on school districts and local governments, eliminates the estate tax for wealthy Ohioans and largely protects Medicaid services to 2.1 million Ohioans.

The 20-12 vote along party lines came after more than three hours of debate.

Casino operators were not able to remove a provision requiring them to pay the Commercial Activities Tax on all wagers, not just on wagers minus payouts. The difference will cost Rock Ventures and Penn National Gaming — which are building casinos in Cleveland, Cincinnati, Toledo and Columbus — tens of millions of dollars in additional taxes and could lead to lawsuits.

“Leaving it in there is probably the better part of valor,” said House Finance Chairman Ron Amstutz, R-Wooster, who expects the debate over the tax, 26 cents on every $100, to continue. Gov. John Kasich has complained that the casinos landed a sweet deal and should be paying more in taxes and fees.

In last minute moves, lawmakers deleted a provision that would have allowed private vendors to operate county jails.

They also replaced a statewide plan to allow parents to vote to take over failing schools with a pilot project in Columbus city schools. California allows parents to take over academically troubled schools. Only one school in Compton has undergone a “parent trigger,” so its success or failure is undetermined.

The committee included an amendment that private owners of prisons won’t pay property taxes on the facilities if the state is contracting with them for services. The Ohio Department of Rehabilitation and Correction is moving ahead with plans to sell five prisons by Dec. 31 and contract with the new owner to house state inmates. The change is expected to net the state $75 million and eliminate 800 prison jobs.

To sell the idea, Kasich has said the privately owned buildings would be subject to local property taxes. The amendment strips that benefit to local communities.

Republican lawmakers also included a small expansion of the Ohio College Opportunity Grant program and added $12 million in funding over the two-year budget cycle.

Amstutz called it a difficult budget necessitated by the Strickland administration delaying tough decisions and building the last budget on substantial one-time money.

State Rep. Debbie Phillips, D-Athens, blamed the GOP-driven 2005 tax reform package that reduced money flowing into state coffers.

Democrats offered 22 amendments, including to regulate charter schools, block privatization of state assets and cap increases to colleges’ room and board rates at 5 percent.

Republicans tabled 20. Two that did survive: a task force for improving Central State University’s enrollment, retention and instruction quality; and adding $342,800 to the Ohio Civil Rights Commission budget.

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