Ohio House passes $380M income tax cut

The recently passed House spending plan includes a 2% across the board personal income tax cut for Ohioans. It will now go before lawmakers in the Senate for consideration.

Lawmakers in the Ohio House passed a two-year, $75 billion operating budget proposal that includes a 2% across-the-board personal income tax cut. The tax cut adds up to $380 million over two years.

House Bill 110, sponsored by Rep. Scott Oelslager, R-North Canton, was passed April 21 by a bipartisan majority 70-27 – sending the proposed budget and tax cut to the Senate.

Ohio expects to record a year-end surplus, despite revenue worries on account of the COVID-19 pandemic. Given the good news, lawmakers are seeking to return some hard-earned taxpayers dollars back to Ohioans.

“As a fiscal conservative, I’m all for cutting taxes and being fiscally responsible,” said Rep. Haraz Ghanbari, R-Perrysburg.

While the federal COVID-19 relief package, which distributes funds to states, prohibits the states from using the money toward tax cuts, Ohio lawmakers say this measure is not impacted by the strings attached by the federal funds. “We funded our tax cut with state dollars so we think we’re on pretty solid ground,” said House Speaker Bob Cupp, R-Lima.

“We believe philosophically that individuals work hard to earn those dollars, and they deserve to stay in their pockets,” Oeslager said.

Meanwhile, Ohio Attorney General Dave Yost recently filed a lawsuit over the federal relief package provisions, arguing that they are unconstitutional. “Congress just didn’t have the authority to coerce the states with regard to their tax policy,” Yost argued.

The proposed budget also attempts to address the state’s school funding formula, which was formerly foundunconstitutional. The nearly $2 billion funding plan eliminates funding caps and guarantees; factors in local income levels, instead of only property values in determining local funding ability; and funds public charter school funding directly from state coffers, rather than through local districts. The overhauled funding formula would phase-in over the course of six years.

Another measure in the proposed budget erases any citations issued since March 14, 2020 to liquor establishments that were found to have violated COVID-19 orders. The provision would refund any penalties and reinstate revoked liquor licenses.

Ohio lawmakers are right to look to ease the tax burden when the state is operating on a surplus, returning to workers some of their hard-earned dollars.