CHICAGO — Ohio's House of Representatives unveiled a $72 billion, two-year budget this week that strips Gov. John Kasich's spending plan of a series of controversial tax increases that the governor wants to impose to offset a major income tax cut.
Kasich proposed the tax changes as part of his ongoing push to overhaul the Buckeye State's tax structure. He wants to raise several so-called consumption taxes, among others, and implement a double-digit income tax cut. Kasich has already enacted the largest income-tax cut in the state's history, which took effect in the current budget.
The Republican-led House on April 14 introduced a new budget bill that abandons all of Kasich's proposed tax increases. House Bill 64 retains the income-tax cut, but trims it significantly. Despite the smaller size, the tax cut would still cost the state $1.2 billion. Lawmakers reportedly said revenue from an improving economy will offset the losses.
The House bill would also create an Ohio 2020 Tax Policy Study Commission to review long-term reforms, officials said.
Despite the differences, House Speaker Cliff Rosenberger told local reporters that the party is not at odds with Kasich's tax policies.
"I believe in what the governor is trying to do and where he's trying to go long term with our state," Rosenberger was quoted as saying in Cleveland.com. "We are not a difference with the governor. We are in a position to say we want to work on this and craft this."
The House also took out Kasich's controversial proposal to increase taxes on oil and gas producers taking part in the state's fracking industry. Lawmakers said the oil market was too weak now for the tax increase.
"We don't want to pile on," Rep. Ryan Smith, R-Bidwell, chair of the finance committee chair, told reporters.
The House two-year spending plan totals $71.5 billion, roughly $770 million less than the executive budget.
The bill offers a 6.3% across-the-board income tax cut that would bring down the top rate to 5% from 5.33%. It also proposes a permanent 75% reduction for small businesses, echoing the governor's plan.
Kasich proposed a 23% reduction in the personal rate.
His budget would also increase the sales tax to 6.25% from 5.75% and expand it to cover some services.
Republicans also proposed boosting K-12 spending by $179 million over Kasich's original proposal.
Kasich, who is eyeing a presidential run, has enacted more than $3 billion in income tax cuts since taking office in January 2010.
The House will hold hearings on the budget bill throughout the week with a vote expected on April 22. The measure will then head to the Senate. Kasich must sign a final budget by June 30.
Ohio is rated double-A by the three major ratings agencies.