Ohio House, Senate budgets differ on school funding, tax cuts

(The Center Square) – The Ohio House and Senate have a little more than two weeks to decide how to and how much to pay for public education, how much money taxpayers get to keep and how to get rural areas better access to high-speed internet.

Those are a few of the differences between a two-year budget passed Wednesday by the Senate and a House plan passed earlier in the legislative session. A conference committee will be charged with working out compromises in order meet a June 30 deadline for passing a budget.

“The Senate’s budget plan represents a bold step forward for a state emerging from a pandemic,” Senate President Matt Huffman, R-Lima, said. “We recognize the need for a well-educated workforce by investing in a new school funding plan that is reliable, sustainable and accountable to taxpayers. Additionally, the Senate delivered on its commitment to provide tax cuts. We fundamentally believe it is your money first, not the government’s.”

The Senate’s plan gives Ohioans an across-the-board 5% income tax cut, while the House plan includes a 2% cut. That means an $864 million reduction in tax collections for the Senate plan, and a $148 million reduction in the House’s option, according to the Legislative Service Commission.

The Senate version would have Ohioans making $41,000-$64,000 a year pay $22 less a year in taxes, while those making more than $526,000 annually would save around $1,700 a year, according to Policy Matters Ohio, a Cleveland-based research group. In the House plan, the highest income earning group would save $612.

The help pay for the tax cut, the Senate removed nearly $200 million the House had set aside to fund broadband expansion throughout the state, a cause many House Republicans have backed throughout the session.

House Democrats criticized the tax cut on Twitter as something for only wealthy Ohioans.

“Advocates agree [with Ohio House Democrats] that the latest version of the state budget is full of misplaced priorities, including a tax giveaway for the wealthiest Ohioans and radically changing school funding [without] a real vetting process,” the tweet said.

School funding could be a significant sticking point. The House plan was developed over several years and passed with wide bipartisan support. It also has received wide support from education groups across the state.

That plan would be phased in over the next six years, beginning with the next school year. Republicans said it’s designed to make sure no district loses funding transitioning from one formula to the next.

Initially introduced this session in early February, the school proposal changes the base cost formula to include a district’s income and takes into account everything involved in education, including professional development and extracurricular activities. It could mean $2 billion more for primary and secondary public schools over the next six years.

The plan looks at two basic steps. First, what is the base cost to educate a student and how much can local communities pay.

A key change to local funding, according to sponsors, is the new plan will base 60% of a district’s local funding capacity on property values and 40% on resident income.

The plan also changes how community schools and voucher systems are paid. The money will go to the school educating the student, rather than the home district and then passed on.

Sen. Matt Dolan, R-Chagrin Falls, said the Senate’s formula is based on teachers and meets the Senate’s two key factors: preparing children to enter the classroom and putting teachers in front of students who are instrumental in development.

Dolan said it would mean an additional $75.9 million for schools in the upcoming school year.

“Teachers are the key to a successful education, and this plan starts by funding teachers,” Dolan said.

Dolan said 80% of the current state and local funding is spent on teachers, with the average teacher in Ohio making more than $72,000 annually in salary and benefits. With a student-teacher ratio of 20 students a teacher, the base cost per student in the state is $3,622 a year.

When teacher professional development, building administration and maintenance, student support and district administration is added, the base state cost per student rises to $6,110.

If passed, the state also directly will fund charter school enrollment, rather than sending money to the student’s home district and leaving the responsibility to those districts to pass along funding.

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