Ohio panel to hold budget talks as plan nears vote
Ohio committee to discuss income tax cut, other changes as lawmakers near vote on budget
COLUMBUS, Ohio (AP) -- A legislative panel finalizing Ohio's budget is expected to discuss a new tax package that includes a statewide income tax cut of up to 10 percent and an increase in the state sales tax.
The six-member committee planned to meet on Monday to hash out the budget differences between the House and Senate, which passed separate tax proposals that must be reconciled. A committee vote on the budget proposal is likely to come Tuesday.
Lawmakers face a June 30 deadline to pass the almost $61.7 billion two-year spending plan before the new fiscal year begins July 1.
Republican leaders released details last week of the latest tax package, which is meant to be included in the budget.
The plan reduces the statewide income tax rate gradually over three years, beginning with an 8.5 percent tax cut on income earned in 2013 and moving to a 10 percent tax reduction by 2015.
The income tax cut would be paid for in part by an increase in the state sales tax, which would rise from 5.5 percent to 5.75 percent. That tax would be applied to digital goods such as electronic books and music downloaded online.
Among other changes, the proposal calls for a tax break targeted at small businesses. Individuals could write off 50 percent of their first $250,000 in business income annually. That's compared with the first $750,000 that the governor pitched in his budget proposal and the deduction the Senate passed in its version.
The new tax plan amounts to a $2.6 billion net tax reduction over three years, including more than $1 billion in the next budget year, according to GOP leadership.
Another change would get rid of property tax help that the state currently pays to homeowners who are subject to local levies, such as school issues. The elimination of the so-called property tax rollback wouldn't apply to existing levies, only deductions for future homeowners and new local levies. The move is expected to save the state nothing in the first fiscal year, about $34 million in 2015 and about $90 million annually in the years that follow.
Democrats have argued the effect of the changes amounts to a tax increase for most.
