The Democratic-led Ohio House is likely to vote as early as today on legislation that would enact Gov. Ted Strickland’s proposal to freeze planned income-tax cuts to help balance the budget.
Strickland first proposed delaying the planned income tax cuts for two years to fill an $850 million hole that opened up in the budget at the end of September when the Ohio Supreme Court ruled that the state must seek voter approval for a gaming expansion plan.
House Speaker Armond Budish introduced the legislation, which would postpone a planned 4.2% decrease in the state income tax rate, the final installment of a five-year, 21% reduction in the tax rate proposed by former Republican Gov. Bob Taft in 2005. The bill also includes a proposal to cut legislative pay by 5%. Republicans in both the House and the Senate have said they are opposed to the tax-cut freeze.
Strickland said the plan would raise $844 million to replace revenue earmarked for schools that was originally to be raised by installing 17,500 lottery terminals at the state’s horse-racing tracks.
“Of the options available to us, I believe postponing the last part of the scheduled income tax reduction will protect our schools from destructive cuts while avoiding a sales or other tax increase on Ohio families and businesses during this recession,” Strickland said in a statement.
Ohio’s income tax rate ranges from 0.618% to 6.24%.