Bipartisan tax & budget bill is a good deal for Ohioans

New, bipartisan legislation introduced by Senators Louis Blessing and Kent Smith should be immediately considered in the ongoing operating budget debate in the Ohio Senate. This bill, titled “A Good Deal for Ohio Act,” would modernize our tax code to put vital public resources into Ohio communities.

The legislation would take two important steps to ensure that corporations of all types pay their fair share in state taxes.

S.B. 190 would close tax loopholes for big tech and pharmaceutical companies. Ensuring these corporations pay their share of taxes on energy-intensive data centers or distributing expensive prescription drugs will raise hundreds of millions of dollars for the state.

The bill would also modernize the tax code to recognize new industries. S.B. 190 would update Ohio’s weak severance taxes on natural gas and oil. It would also expand the definition of hotels under state law to include short-term rentals, which currently avoid local hotel taxation in most communities. Finally, the bill would tighten a $1 billion tax break for owners of LLCs and other businesses that allow them to exempt income and pay lower income tax rates.

With the revenue raised from these reforms, S.B. 190 would allow our state government to provide much needed assistance directly to communities across Ohio. The bill’s spending provisions include direct tax relief for everyday Ohioans. The key element is the property tax circuit breaker — a proposal championed by Policy Matters — to provide targeted tax relief to Ohioans with the most need. The circuit breaker would help renters and homeowners of all ages while holding schools, libraries, and local human services harmless. This is the best option for property tax relief, especially compared to the arbitrary 30% cap on school district rollover balances in the House-passed version of the budget.

The tax relief efforts of S.B. 190 don’t stop there. The bill also includes a refundable Earned Income Tax Credit that increases in value for claimants with children under the age of three. This would put money directly into the pockets of working Ohioans to help offset regressive taxes like sales and property taxes. Additionally, the bill would increase the share of state income tax revenue that goes to both the Local Government Fund and the Public Library Fund, raising each fund’s share from 1.7% to 2%. Improving these funding streams will alleviate the pressure local governments and libraries face to raise local property or sales taxes to fund their vital services. On top of all this direct tax relief, there is still more revenue to help everyday Ohioans.

There are two main direct spending elements of S.B. 190: The first would provide free breakfast and lunch in public and private schools, making Ohio the ninth state in the country to ensure all kids in our schools can focus on learning free from hunger. The second provision would provide significant funding to support low- and moderate-income housing across the state. This proves Ohio has the resources to make a tangible difference in the lives of everyday Ohioans on issues from housing to hunger.

As the Senate debates the main operating budget, our state senators have an opportunity to deliver real results for their constituents. From property tax relief to eliminating hunger in schools, this bill has elements that should be incorporated into H.B. 96. The question is whether our lawmakers join Senators Blessing and Smith in a bipartisan manner to answer the needs of their constituents — or will they continue to cater to the tech industry and Big Pharma?