The Ohio House of Representatives passed an $88 billion state budget plan this week that includes tax cuts, infrastructure improvements, additional K-12 public education funding and increased coverage for Medicaid. The 4,300-page, two-year funding plan now moves on to the Senate for further consideration.
Tax Relief for Ohioans
A key component of the House’s plan (HB33) is tax relief for Ohioans. The proposal includes the addition of nearly $1 billion in income tax savings, according to House GOP spokesman Aaron Mulvey, made possible in part by merging the two lowest tax brackets and implementing a new lowest bracket rate of 2.75% for those making less than $92,150. The plan also includes $510 million worth of accelerated business tax deductions.
In addition, HB33 includes Gov. Mike DeWine’s request to terminate the sales tax on baby products and provide a $2,500 per child tax deduction for parents.
Infrastructure Improvements
The House budget plan also includes $1 billion in funding for various infrastructure projects throughout the state. This includes $200 million for bridge repairs, as well as funding for water and sewer projects and broadband internet expansion. These investments in Ohio’s infrastructure are aimed at improving the state’s economic competitiveness and quality of life for its residents.
Education Provisions
In addition to tax cuts, HB33 includes pay raises for Ohio’s teachers. The plan proposes an increase in starting salaries to $40,000 and an increase from $48,690 to at least $64,920 for teachers with a master’s degree and 11 years of experience. The plan also raises eligibility for K-12 private school vouchers to $135,000 in annual income for a family of four, up from $75,000 for a family of four.
The House removed a provision introduced in Gov. Mike DeWine’s version of the budget that would have given $5,000 annual scholarships to all Ohio students who graduate in the top 5% of their class if they attend an in-state school.
Medicaid Increases
Under the House’s proposed bill, in-home healthcare workers providing services via Medicaid would see an hourly wage increase to $18. Additionally, covered treatments would be expanded to include things like doula services and obesity treatment.
Miscellaneous
In line with Gov. DeWine’s previous executive order on the matter, HB33 would ban TikTok and other Chinese-owned apps from all state computers and electronic devices. Additionally, lawmakers in the House cut the All Ohio Future Fund from $2.5 billion to $500 million to invest in large economic development sites across Ohio.
The budget plan is not without its critics, with some lawmakers arguing that the proposed tax cuts will disproportionately benefit the wealthy, while others believe that the proposed pay raises for teachers are not enough to address the larger issues facing Ohio’s education system.
The proposal will now move on to the Senate, where it will be debated and potentially amended before it is sent to the Governor’s desk for final approval. As the legislative process continues, KJK will keep a close eye on how the plan evolves and what impact it may have on the state as a whole. In the meantime, please reach out to Tax Partner Demetrius Robinson at DJR@kjk.com or 614.427.5749 with any questions or to discuss further.