Key Lawmaker Plans Changes To State Budget Plan

Mar 22, 2013

Republican Ohio House finance committee chair Ron Amstutz says major changes are planned to GOP Governor John Kasich's tax reform proposals, but he says the plan to cut income-taxes will remain.

Amstutz says he anticipates the House version of the two-year state budget will replace the governor's proposed sales-tax expansion on 80 goods and services that would fund the income-tax cuts. It's the latest twist in the budget battle between the Governor and majority legislative Republicans. More from Ohio Public Radio's Karen Kasler.

Gov. John Kasich doesn’t often do one-on-one interviews on any subject. But he sat down to talk about the budget, which he admits is not going over well with lawmakers, including his Republican colleagues, many of whom don’t like the proposal to pay for a state income tax cut in part with revenue from an expansion of the state sales tax onto some 80 services that are not taxed now.
Kasich: “Tax reform is always something - don’t tax me, tax the guy who’s hiding behind the tree. And so, this is just the usual, this is just the usual kind of hubbub around the issue of tax reform.”
Kasler: “But specifically the broadening of the state sales tax. That’s gotten some concerns there.”
Kasich: “Sure.”
Kasler: “You know, you just said it yourself – that Ohio’s taxes are too high, we need to lower them to be competitive. But when you broaden a tax and impose it on services that didn’t have a tax before – isn’t that a tax increase?”
Kasich: “No, because it’s a net $1.4 billion tax cut. And here’s the thing. About 75% of our economy now are services. Do you know you pay taxes on dry cleaning? Did you know that? And that’s a service, okay.  What the legislature has seen fit to do is whenever they’re short money they go and tax a service that doesn’t have any lobbyists, and that’s how they plug their holes. I want to make sure that we have a modern tax system and use it to reduce taxes to help small business and help us to be more competitive.”

But what are the budget’s chances? Fellow Republican House Speaker Bill Batchelder, who leads a supermajority caucus 60 that includes members who were very supportive of Kasich’s first budget, is clear.
“As it is, as it is submitted? That would not be possible.”

Batchelder says Republicans’ concerns about the budget are no surprise to the governor.
“He’s aware of this, of course. We speak to each other often. There are a number of things there that have to change. Some of them are not very significant in terms of the quantity but they’re important to the members of the caucus. Others are very expansive and sweeping in their nature and those would include obviously the tax, obviously Obamacare, and we still have confusion over the language involved in school support.”

The tax Batchelder refers to here is the expansion of the state sales tax, but he’s also said he and many other Republicans don’t like the tax on big oil and natural gas drillers. And when the Speaker references Obamacare, he’s talking about the expansion of Medicaid to people who make up to 138 percent of the federal poverty level – a plan that Kasich has put forward even though he opposes the Affordable Care Act. But even as Kasich continues to promote the controversial elements of his budget, he remains confident.
“What do I think at the end of the day? I’m hopeful we’re going to get there. But it’s always a bumpy ride. Change is very difficult.”

But he won’t talk about the behind-the-scenes conversations he’s having with the Democrats he needs to pass the Medicaid expansion, or the Republicans he hopes to persuade to support that and the other elements of his budget.
“I would love to talk to you about all the negotiations, but I’m not going to.”

The budget needs to be in place by the end of June. It’s still in a House committee, but the Speaker says he’s urging his colleagues in the Senate to start hearings of their own to make sure that deadline isn’t missed.