by Tyler Arnold
Formal discussions between the House and the Senate regarding a budget agreement are expected to begin Wednesday.
House Majority Leader Bill Seitz, R-Cincinnati, told The Center Square via email that some informal discussion are already underway.
Although both chambers have a Republican majority and successfully passed bipartisan bills, the plans differed from each other on some specifics regarding healthcare transparency, tax cuts, a film industry tax credit and education spending.
“I think we’re going to work well together and I fully expect a quality bill that is satisfying to both chambers and the governor,” Senate President Larry Obhof, R-Medina, told reporters.
On healthcare, the House version includes a plan called “Healthy Ohio,” which calls for a controversial provision on price transparency. The transparency provision would require hospitals to give patients cost estimates on non-emergency procedures and products. Although supporters argued that this would reduce costs, the Senate pulled it out of its budget proposal after backlash from the medical industry.
Although both chambers pushed tax cuts, the Senate version has larger cuts to the personal income tax than the House. The Senate plan would also maintain the current threshold for the small business tax credit, which exempts small businesses from paying 75 percent of their taxes on their first $250,000 of income; the House plan lowered that threshold to the first $100,000 of income.
Both plans eliminate all income tax for residents who earn $22,500 or less. The House plan includes a 6.6 percent income tax cut across the board, which would be implemented over two years. The Senate plan calls for an 8 percent tax cut across the board.
“Fundamentally, we believe it’s your money first, not the government’s money,” Senate Republican spokesperson John Fortney told The Center Square via email.
Both plans would increase wraparound education programs, but the House plan would increase education spending by $75 million more than the Senate plan. The Senate plan would provide an additional $550 million in funds over the course of the next two years while the House would provide $625 million.
The House plan would also eliminate two tax credits that function as subsidies for two industries: the Motion Picture tax credit, which provides tax breaks to the film industry for shooting in Ohio, and the NetJets credit, which funds luxury business jets.
“My hope would be that the tax changes will be more easily bridged than some of the health care issues,” Seitz said. “We aren’t that far apart on education issues or spending issues either.”
Greg Lawson, a research fellow for The Buckeye Institute, an Ohio-based, free market think tank, told The Center Square in an email that the Senate bill upholds free market principles better than the House bill, but that they are both flawed, especially in terms of government spending.
“While the Senate did resort to bringing back a couple of tax expenditures the House had wisely eliminated, such as the motion picture tax credit and the notorious ‘NetJets’ sales tax cap, their deeper cut to the personal income tax rates was an improvement on what the House did,” Lawson said. “The Senate’s tax cuts will make sure that every Ohioan that pays income tax gets to keep more of their money.”
With a revenue surplus, both chambers have pushed for total spending increases, which Lawson suggested is unstable. When the economy begins to face hardships again, he said the budget will get knocked out of balance.
Lawson encouraged lawmakers to approve a plan that maintains the Senate’s tax cuts and changes to education, but keeps the House’s healthcare transparency provision and the elimination of the NetJets and film tax credits.
– – –
Tyler Arnold reports on Virginia, Ohio and Michigan for The Center Square. He previously worked for the Cause of Action Institute and has been published in Business Insider, USA TODAY College, National Review Online and the Washington Free Beacon.
Background Photo “Ohio Senate Floor” by John Beagle. CC BY 2.0.