COLUMBUS — Ohio would lower income taxes for individuals and direct more money toward water quality initiatives, local governments and libraries under a two-year state budget proposal introduced Tuesday in the Republican-controlled state Senate.
It eliminates the bottom two tax brackets and decreases personal income tax rates for the others by 8% over two years. The income tax cut in the $69 billion proposal approved by the GOP-led House was 6.6%.
That and other proposed tax changes affecting businesses would reduce taxes by more than $600 million, said Republican Sen. Matt Dolan, who leads the Senate committee considering the plan.
“One of the more important strategic investments for us is to make sure that our partners — our constituents, and the citizens of Ohio — enjoy in Ohio’s success,” Dolan said. “And so it’s really important to us that returning tax dollars to Ohioans is the signature statement by the Senate.”
The Senate plan includes $550 million that by Republican Gov. Mike DeWine sought to boost educational wraparound services , plus $125 million more toward education-related spending, such as private-school scholarships and more money for growing school districts whose funding has been capped.
And unlike the House version, the Senate proposal would maintain tax credits for the motion picture industry.
The top Democrat in the Senate, Sen. Kenny Yuko, of Richmond Heights, said he was “encouraged by the potential reinvestment” in the bill.
“The devil is in the details, but we are hopeful for progress aimed at improving the quality of life of all Ohioans,” Yuko said in a statement.
Ohio tax revenue has exceeded projections this fiscal year. Senate President Larry Obhof said lawmakers factored that cushion into their considerations.
They face a June 30 deadline to get a budget signed DeWine.
In addition to the tax changes, the Senate Republicans’ budget proposals would:
• Provide $172 million for DeWine’s proposed “H2Ohio” water quality initiative over two years, or double what the House supported.
• Maintain a business income tax deduction for the first $250,000 in income, rather than shrinking that to the first $100,000 as the House plan did.
• Slightly increase the percentages of state revenue that go to funds for public libraries and for local governments.
• Create a program to help fund the care of children being looked after by relatives.
• Appropriate an extra $100 million for rehabilitating and building schools.
• Expand payment rate increases for certain assisted living and senior care programs.