State Senate must intervene to increase economic security
As Ohioans face growing economic uncertainty driven by chaotic federal policy, the Ohio House has put forward a budget that harms children and parents, underfunds schools, upends programs that stabilize household budgets, and botches an attempt to address rising property taxes. The state Senate now has an opportunity to ensure some measure of economic security and set Ohio on a better path.
The House budget underfunds Ohio public schools by $2.75 billion over the biennium, scrapping a quarter century of progress toward a constitutional funding system. The Fair School Funding Plan is a bipartisan approach to funding school districts based on what it actually costs to educate Ohio kids, and the reality that economically disadvantaged students, students with special needs, gifted students, and English language learners require more support to meet their educational needs.
The House has instead concocted a formula that that will barely move the needle on school funding in more than half of Ohio districts. “In 323 districts, this plan will provide just $50 more per student in the next two years,” said Policy Matters Executive Director Hannah Halbert. “Representatives are heading home on recess having put their names on a bill that gives Browns owners Jimmy and Dee Haslam $600 million and Ohio kids 50 bucks.”
The House budget backtracks on programs that reduce maternal mortality, limiting Medicaid doula services to only 6 counties and halting a waiver process that would have helped babies under age 3 avoid disruptions in their health insurance under Medicaid. Lawmakers also retained Medicaid trigger language, which would eliminate health coverage for more than 700,000 Ohioans if Congress reduces federal Medicaid funding.
The House budget fails to address the growing childcare crisis, reducing the governor’s proposed funding for Child Care Choice Vouchers by $25 million, to $200 million over the biennium. If the CCCV program is to have any chance of stabilizing the childcare crisis, the state needs to adequately fund the Department of Children and Youth’s plan to increase provider payments and implement parent copay caps.
After public outcry, the House restored the Public Library Fund (PLF), but retained a technical change that could have long-term consequences.“Libraries still take a small hit in this proposal,” said tax researcher Bailey Williams. “The appropriation of $500 million in FY 2027 is less than the $510 million the PLF distributed to counties in calendar year 2023.” But the real harm will come in subsequent budgets. “The PLF has been a rare example of the legislature adequately funding a public good, by setting aside a fixed share of state income-tax revenue,” Williams said. “The House budget changes that, funding it instead with a direct transfer from the GRF, akin to a line-item appropriation. That makes our libraries subject to the same legislative whims that threaten Ohio’s schools, childcare, and healthcare every two years.”
The House proposal fails to do what a budget should — adequately fund programs and services that benefit Ohioans — while wading into issues well outside its scope. The House uses the state budget bill to institutionalize a gender ideology based on falsehoods, which it uses to rationalize policy choices that will harm trans and intersex people. Equality Ohio elaborates on the impacts on people and families across the state.
A bright spot in this budget is the legislature’s decisive move away from destructive income tax cuts, like the flat tax or elimination of the income tax, which cut taxes for the wealthy at the expense of state programs that benefit the majority of Ohioans. Protecting this revenue stream is one of two key wins for local communities, who receive a direct share of income tax revenue. The Local Government Fund saw its share of income tax revenue increased from 1.7% to 1.75% in the House bill.These are meaningful improvements for local communities across the state.
The House budget also proposes counterproductive property tax reforms. Instead of targeted relief for property owners facing rapidly rising taxes, this budget proposes untargeted relief at the expense of schoolchildren. The bill requires school districts that have cash reserves of greater than 30% of their operating costs to lower property tax rates in their districts. This would force school districts to fund property tax relief through their rainy-day funds, even as the state reneges on its commitment to fair school funding. This will shift more of the cost of education onto communities and increase the number of property tax levies placed on the ballot.
The Senate has an opportunity to lead where the Ohio House has faltered. Economic uncertainty and the threat of a recession is increasing with the continued chaos at the federal level. Ohioans need a state budget that guarantees the basics – health, education, and respect for the rights and liberties of individuals.
Lame duck is an opportunity for legislators to act on data centers (and more)