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$69B state budget with tax cuts, health-care transparency on way to approval

By Randy Ludlow • Jul 17, 2019 at 4:59 PM

Ohio's $69 billion operating budget won approval 75-15 — 17 days after it was due — Wednesday afternoon from the House.

The two-year spending plan now goes to the Senate, whose anticipated OK would send the budget to Gov. Mike DeWine, who must sign the measure and issue line-item vetoes by the end of the day.

Some House Democrats opposed the bill because it did not include a revamp of legislation allowing state takeovers of troubled school districts. Instead, the budget calls a one-year moratorium on takeovers while a long-term solution is approved.

Rep. Jim Butler, R-Oakwood, noted the bill has been dubbed "the children's budget." He said it also could be labeled "the patients' budget," because of numerous health-care provisions, including a ban on "surprise billing," new requirements on hospital price transparency and a sweeping revamp on laws surrounding much-reviled pharmacy benefit managers. He said the latter should lead to lower drug costs for those on Medicaid, the federal-state health insurance program.

"We are finally doing something about health-care costs in this budget," Butler said.

Rep. Scott Lipps, R-Franklin, said those budget provisions will make Ohio a national leader "in both PBM reform and health-care transparency." Going to a single PBM - instead of the current setup of having each of five private managed-care companies hire their own - will ensure that the PBM will work for the state of Ohio to the benefit of taxpayers."

Noting a program that will direct extra money to pharmacies, mostly in southeastern Ohio, Lipps said, "We're working to prevent pharmacy deserts in Ohio."

Rep. Jeanine Boyd, D-Cleveland, said while she would cast a "bittersweet" vote for the budget, "it does not go far enough" to reverse a decade of tax cuts that stripped schools and local governments' ability to serve their citizens.

Rep. Kent Smith, D-Euclid, said he is opposing the budget because of changes in education policy by the Senate, including what he said are relaxed oversight standards on charter schools.

The key takeaway for most Ohioans is an across-the-board state income tax cut of 4 percent, along with elimination of the lowest two brackets. That means workers earning less than $21,750 a year would pay no state income taxes.

The income-tax reduction was even higher initially, but had to be trimmed after lawmakers restored $1.2 billion in annual tax breaks for many smaller businesses — beating back a House attempt to cut it almost in half. Only lawyers and lobbyists will be barred from those receiving the tax break, which applies to businesses such as limited liability corporations that pass through their income to personal rather than corporate tax filings.

The individual income tax cuts also were lowered in a compromise to pay for both a Senate giving money to fast-growing, generally well-off public schools and private schools through vouchers, along with a House plan to pay for $125 million in additional services in poorer school districts. And the budget fully funds DeWine's request for $550 million over two years to provide "wraparound" social services to low-income schoolchildren to spur their classroom performance.

"It is a billion dollar giveaway," said Rep. Emilia Sykes of Akron, the Democratic leader of the House who voted for the measure. "That funding is going into the pockets of millionaires and billionaires so they can go on vacation."

Rep. George Lang touted the restoration of the business tax cuts, which he said he led to new business start-ups and increased state revenue.

"I believe small business is the heart and soul of America," said the Republican who lives near Cincinnati.

Other provisions in the budget:

• Setting new graduation requirements that will take effect when this year's incoming freshmen are seniors.

• Raising the age for purchasing tobacco and vaping products from 18 to 21 and imposing a tax on vaping liquid containing nicotine.

• Retaining a controversial motion-picture tax credit, but with a focus on Ohio businesses and allowing credits for post-production and promotional costs.

• Making the first earmark for domestic violence programs across the state.

• Changing Ohio's presidential primary to one week later than normal, on St. Patrick's Day of 2020, to ensure the Republican winner is awarded all of Ohio's convention delegates under party rules.

• Nearly $200 million could be slated to address the toxic algae blooms that afflict Lake Erie.

• Giving unprecedented amounts for county children services agencies and the foster care system flooded with the children of addicts, while upgrading opioid-prevention and -treatment programs.

• Adding $7 million to crisis pregnancy centers, a provision opposed by backers of abortion rights.

Sykes asked DeWine to veto that allocation, along with the change in the Ohio primary, rolling back charter schools oversight, and increase in money for private schools.

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©2019 The Columbus Dispatch (Columbus, Ohio)

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