GOP changes in budget aid young, elderly

By Ann Sanner
and Julie Carr Smyth
Associated Press

COLUMBUS: Republicans who lead the Ohio House on Thursday unveiled a host of changes to Gov. John Kasich's budget proposal that they hope will attract residents young and old, and reduce the impact of painful cuts on local communities and schools.

Graduates of Ohio high schools who left the state up to a decade ago could get in-state tuition rates at universities here. The plan also expands state College Opportunity grants to for-profit institutions and keeps in place the Republican governor's proposed 3.5 percent cap on tuition increases at public colleges and universities.

For the elderly, $15 million more is invested over the two-year budget cycle in the PASSPORT program, which provides in-home care for the elderly. The House also proposes elimination of Ohio's estate tax by 2013.

House Finance Chairman Ron Amstutz, R-Wooster, said lawmakers looked through every area of state government to tackle the estimated $8 billion budget shortfall the state faces.

''Tax increases would have been a quick answer without a real solution, hurting middle-class and lower-income families the most,'' he said.

In their proposal, House Republicans added $80 million to the school foundation formula, providing particular help to suburban districts that took hits under Kasich's plan. The new calculations mean no district will see a cut of more than 20 percent, the House estimated.

Kasich praised the budget revisions. He indicated in a written statement that he began working with House Speaker William Batchelder, R-Medina, and

Republicans in the Senate before he was elected.

''There will, of course, be different ideas on which route to take, but we share the same destination: fiscal stability without a tax increase,'' Kasich said.

House Democratic Leader Armond Budish, of Beachwood, criticized the changes as delivering more tax breaks to the wealthy and doing little for average Ohio residents. He said the funding increases to schools are minor.

''Instead of improving Ohio's schools and giving our children a better opportunity to succeed, the best the House Republicans could do is to limit Gov. Kasich's massive funding cuts to schools by 20 percent,'' he said.

For local governments, among the hardest hit in Kasich's plan, the House proposes creating a mechanism to reduce costs and encourage shared services. It diverts $50 million a year from the commercial activity tax paid by businesses to a special fund for local governments that collaborate. Some money could go to fiscal emergencies.

Amstutz acknowledged that that money doesn't make up for the cuts local governments will see in the budget already. Local governments are in line for a 33 percent cut in general revenue — from $1.3 billion to $865 million — under Kasich's plan. That remains unchanged in the Republicans' proposal.

''We aren't representing or suggesting that the funding that we're offering in this innovation fund is commensurate with the losses being experienced,'' Amstutz said. ''We are dealing with reality here.''

Despite the new money, however, elimination of the estate tax remains a concern.

Opponents of the estate tax say it drives wealthy people out of the state because they want to avoid sticking their heirs with the bill.

Local governments strongly object to getting rid of it because the bulk of the tax money — 80 percent — goes to them. They got $230.8 million from the tax last year, which helped them pay off debt and fund road repairs and other services.

Ohio taxes estates worth more than $338,333 before distribution to heirs or other beneficiaries. If the estate is transferred to a spouse, no tax is due. But other relatives could expect to pay it.

The House budget largely retains policy initiatives that Kasich proposed, including the overhaul of Medicaid programs. It removed two big-ticket items from the budget for consideration as separate bills: criminal sentencing changes aimed at reducing the number of nonviolent offenders on short prison stays and a proposal to shift 2 percent of pension contributions from employers to employees.

''There's lots of different ways to get policy done and one of them is separate bills,'' Amstutz said.

The House also stripped Kasich's idea for requiring university faculty to teach an extra class every other year.

On the question of privatization, the House took a blended approach.

It added a sixth institution to Kasich's list of state prisons to be sold or leased: Scioto County Juvenile Detention Center, which was slated for closing this fall. At the same time, House members imposed some legislative oversight on the governor's ability to sell off state assets, requiring authorization from the legislature for how sale proceeds are spent.