On Monday, Gov. John Kasich is set to unveil his two-year state budget plan. The plan will outline how the state will spend over $55 billion in state tax collections and federal grants.
In his first budget, released in 2011, Kasich notably opted to shift the burden of paying for government to local taxpayers by preserving spending at most state agencies while drastically cutting revenue shared with local governments and schools. With a modest economic recovery underway, the 2014-2015 state budget will not be about allocating cuts, but instead is expected to see revenue gains. The big question for Monday will be whether Kasich restores those earlier cuts to provide property tax relief at the local level or instead uses increasing tax revenue to fund the gradual elimination of Ohio’s income tax – which, being based on an individual’s ability to pay, is our most progressive tax.
The budget also represents the most significant policy proposal the General Assembly will tackle in its term. While the main requirement of the state budget is to determine how funds are allocated, nearly 2/3 of the bill – literally thousands of pages – will contain changes to Ohio law that have nothing to do with spending. In 2011, for example, the state budget included a new ban on abortion coverage by municipal health care plans and merit pay rules for school teachers.
Policy changes to watch for in the upcoming budget include questions about expansion of Medicaid, the healthcare program for Ohio’s poor – a change that imposes no additional cost on the state, as the federal government picks up 100% of the tab for the first four years, thanks to the Affordable Care Act. It’s the right policy move and is supported by hospitals, doctors and business groups, but it may meet with resistance from conservative Republicans hesitant to be seen as embracing ‘Obamacare.’ Expansion of charter schools and vouchers for private schools will be another area to watch, as will be the potential increase in the state’s tax on oil and gas companies drilling in Ohio’s vast shale resources.
Innovation Ohio will be actively reviewing budget documents as soon as they are available on Monday and will share our findings here and on social media (follow us on Twitter or Facebook). Check back often during the budget process – we will be actively monitoring tax policy changes, school funding and more.
In the meantime, read more about what to look for in Kasich’s education policy proposals – a sneak preview of which will be available tomorrow – from our education policy fellow, Steve Dyer.