Bipartisan bill to unrig Ohio’s tax code should be top priority for next General Assembly

At the close of the 135th Ohio General Assembly, Senators Louis Blessing and Kent Smith introduced legislation that should be taken up immediately at the start of the 136th. The bill from the top Republican and Democrat on the Senate Ways and Means Committee would put public resources directly into Ohio communities by fixing and modernizing our tax code.

“Policy Matters Ohio applauds the work of Sens. Blessing and Smith,” said tax researcher Bailey Williams. “SB 342 is an excellent starting point for upcoming budget discussions.”

The wide-reaching bill would provide direct aid to local communities in multiple ways. It would create a property tax circuit breaker — a proposal championed by Policy Matters — to provide targeted property tax relief to those who need it most. The circuit breaker would help renters and homeowners of all ages while simultaneously holding schools, libraries, and local human services harmless.

The bill would also provide free breakfast and lunch in schools, making Ohio the ninth state to ensure all kids in our schools can focus on learning free from hunger. It would also increase the share of state income tax revenue received by the Local Government Fund and Public Library Fund, from 1.7% to 2%, and support low- and moderate-income housing.

The revenue used to finance these desperately needed spending provisions is generated by eliminating tax expenditures for wealthy corporations and modernizing Ohio’s tax code. By cutting corporate handouts to the tech and pharmaceutical industries, the state can raise hundreds of millions of dollars better suited to funding policies that, for example, make healthy school meals available to every child.

Even more revenue can be generated by modernizing our tax code to recognize the expansion of new industries. SB 342 would take steps to strengthen Ohio’s weak severance tax on oil and gas and close loopholes that, for example, allow short-term rental platforms to escape hotel taxation. It would also tighten a big tax break for LLC owners who pay lower income-tax rates.

“This bill is likely to be reintroduced at the start of the next General Assembly, as it should be,” Williams said. “It shows that Ohio has the resources to make a tangible difference in Ohioans’ lives on issues from housing to hunger. The question is, will our lawmakers answer the needs of their constituents? Or will they continue to cater to the tech industry and Big Pharma?”

Policy Matters will continue to analyze the revenue and spending provisions for further improvement. We encourage other lawmakers to join Senators Blessing and Smith in their bipartisan work to meet the needs of Ohioans in the next General Assembly.