State Budget Process Enters Final Stretch; Negotiations Will Determine Fate of Tax Provisions

On a 25-8 vote, the Ohio Senate this week approved its version of the state operating budget (House Bill 110), setting up a likely showdown with the House. The measure totals $74.5 billion over two years in General Revenue Fund spending and $160.9 billion in total state spending.

Included in the Senate-approved budget are OMA-supported provisions to repeal Ohio’s sales tax on employment services and reduce personal income taxes by 5% across the board. The sales tax change has been a top priority of the OMA Tax Committee and, if enacted, would be transformational for Ohio’s manufacturing climate. The sales tax provision will be heavily debated in conference committee. OMA members should contact their state lawmakers to convey its importance.

The biggest hurdle for budget negotiators will be K-12 school funding. The House included what it called the Fair School Funding Plan, a complete overhaul of K-12 financing. The Senate replaced it with their own new formula a week ago, saying their proposal is more sustainable. The budget must be passed by the end of June. 6/10/2021