CHICAGO — Ohio Gov. John Kasich said a $500 million payment the state received in exchange for a 25-year lease of its lucrative liquor distribution system will boost the rainy-day fund to $1.9 billion and trigger an automatic tax refund to Ohioans.

Kasich made the remarks during the unveiling of a 2014-2015 budget proposal. The spending plan includes an overhaul of the state's tax code, a decision to expand Medicaid under the new federal health care law, and a $1.3 billion increase in K-12 spending.

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