Ohio Senate GOP seeks universal school voucher eligibility, big tax cuts in state budget plan

Jul 30, 2023

Ohio Senate Republicans on Tuesday unveiled a two-year state budget plan significantly more conservative than what the Ohio House passed. (2015 file photo)The Plain Dealer

COLUMBUS, Ohio—Ohio Senate Republicans’ two-year budget plan, unveiled Tuesday, would establish universal eligibility for some portion of publicly funded school vouchers for K-12 private schools and make major cuts to state income tax and commercial activity tax rates.

The Senate GOP's $85.7 billion budget proposal also includes a controversial proposal to strip the State Board of Education of most of its powers and give them instead to the governor's administration.

The Senate's state budget bill, which will be further changed before it passes the legislature, removes a number of House-added provisions, including increasing minimum salaries for Ohio teachers. The two chambers must reconcile differences in their budgets in time to send a bill to Gov. Mike DeWine before the fiscal year ends June 30.

Other proposals the Senate stripped from the bill include items to provide $62 million for a "land bridge" connecting Cleveland's downtown and lakefront, and to offer more sports gambling facilities in the state.

It also would provide $15 million to pay for an Aug. 8 special election on State Issue 1, which – if passed by voters – would require future constitutional amendments to be passed with at least 60% support, rather than the simple majority of "yes" votes that's needed now.

Read more: Coverage of State Issue 1

Overall, the Senate's budget reflects the sunny financial position the state's in right now, as tax revenues so far this fiscal year are more than $840 million higher than anticipated, and state officials have a large chunk of one-time federal coronavirus relief money left to spend.

Here's more on what the Senate's budget plan would do:

School voucher expansion

The revised budget plan, adopted by the Senate Finance Committee, would allow any Ohio K-12 student in a family making less than 450% of the federal poverty line – equal to $135,000 in annual income for a family of four – to be eligible for vouchers. Students from families making more than that would also be eligible for vouchers of at least 10% of the scholarship amount (equal to about $650), with the exact amount they receive being based on their families’ income.

Right now, income limits for Ohio's voucher program are 250% of the federal poverty line, or $75,000 per year for a family of four.

Most Ohio Republican lawmakers back expanding school vouchers, though there is some disagreement among them about whether to push to make every Ohio student eligible for vouchers, or to pass a more modest expansion.

Gov. Mike DeWine has indicated skepticism about universal school vouchers, telling The Plain Dealer/cleveland.com editorial board earlier this year that "the cost of that would be very, very significant."

The Senate's budget plan would increase state spending on school vouchers to about $1 billion per year during the next two fiscal years, according to estimates from the nonpartisan Legislative Budget Office. That would be $373 million more than what the House is seeking during that time.

Income, CAT tax cuts

State income tax rates – particularly for wealthier Ohioans – would be slashed by a total of $1.5 billion, and the number of state income-tax brackets would be reduced from four to two in the Senate's spending plan.

Right now, Ohio charges income-tax rates of 2.765% on income from $25,000 to $44,250; 3.226% on income from $44,250 to $88,450; 3.668% on income from $92,150 to $115,300; and 3.99% on income over $115,300. The Senate plan would create two brackets, one for lower earners with a tax rate of 2.75%, the other for higher earners with a 3.5% tax rate.

The proposal also would cut the state's commercial activity tax, which is assessed on almost all companies with gross receipts of over $150,000 in the state, by 25%, according to Senate Finance Committee Chair Matt Dolan, a Chagrin Falls Republican.

Higher education overhaul

Senate Republicans inserted into the budget a proposal to strip the State Board of Education of most of its powers and give them to the governor's administration instead.

Republicans claim the change is needed because the state board, which has been beset by infighting over hot-button proposals like protections for LGBT students, has been slow to act in naming a new state superintendent of public instruction and to raise student test scores.

Critics, including Democrats, note that Republicans only advanced the proposal last November, shortly after three Democrats were elected to board seats previously held by Republicans. The 19-member board includes 11 members elected by district and eight who are appointed by the governor.

At the start of the current session, Senate Republicans introduced an overhaul bill as Senate Bill 1 – indicating the proposal's importance – and passed it during a party-line vote in March. That bill then went to the House, where committee hearings have since been held on it, but no floor vote has yet been scheduled.

Teacher salaries

The Senate's budget plan would scrap increases to teacher salaries that were part of the House-passed budget.

The House's budget plan would raise minimum salaries for all Ohio teachers, which are set based on teachers’ education level and years of experience. Under the House budget, teachers with no experience or college degree would have to be paid at least $34,600 per year, up from an annual minimum of $25,950 right now. Teachers with a master's degree and 11 years of experience would see a larger minimum increase, from $48,690 per year right now to $64,920 annually.

Third grade reading guarantee

Since 2012, Ohio has required third graders to repeat the grade if they don't pass a reading proficiency test. Lawmakers suspended that requirement during the coronavirus pandemic; now, the House-passed budget would eliminate that requirement permanently. However, the Senate's version of the budget would keep the third grade reading guarantee.

Cleveland ‘land bridge’

The House-passed budget plan would put $62 million in state money toward building a land bridge to connect Cleveland's downtown Mall with Cleveland Browns stadium and other lakefront attractions. The Senate's plan would take away that proposed funding.

The proposed land bridge, first unveiled in 2021 by the owners of the Browns, would be built over the Ohio 2 Shoreway and nearby railroad lines, providing a wide span over barriers that, for decades, have separated downtown from the stadium and its lakefront predecessor, the Rock and Roll Hall of Fame, the Great Lakes Science Center, and Lake Erie itself.

However, the Senate budget plan would take $1 billion the House added to improve rural highways and offer it instead as grants around the state. Some of that money could potentially go toward the proposed land bridge, if lawmakers approve it.

Expanded back-to-school tax holiday

For years, Ohio lawmakers have designated the first weekend in August as a "back-to-school tax holiday." That means during that time, shoppers in the state are not charged state or local sales taxes for items such as clothing and school supplies.

In Cuyahoga County, where customers pay a total of 8% state and local sales tax, that means anyone buying $100 worth of eligible school supplies would save $8. Local governments would be reimbursed by the state for revenue losses from the holiday.

Under the Senate Republicans’ plan, the 2024 back-to-school tax holiday would last not two days, but for two full weeks starting on Aug. 1. During that time, all items priced at $500 or less would be exempt from sales tax, except motor vehicles, watercraft, alcohol, marijuana, and tobacco and vapor products.

Beyond 2024, back-to-school tax holidays would automatically expand beyond a single weekend in years when there is more than $50 million in excess money in the state's general revenue fund.

Other changes in the Senate Republicans’ budget include:

The Senate GOP's budget plan, after another round of revisions, will likely clear a final Senate vote later this month, as Republicans hold a commanding 26-7 supermajority in the chamber. That would set up a conference committee fight between them and Ohio House Republicans, who passed a more bipartisan budget plan in April. When the House and Senate disagree on legislation, delegates from each chamber form a conference committee to hammer out a final compromise bill to send to DeWine's desk.

A new budget must be signed into law by June 30, when the state's fiscal year ends.

Jeremy Pelzer covers state politics and policy for cleveland.com and The Plain Dealer

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