Ohio House to finalize its changes to gov's budget

COLUMBUS, Ohio (AP) -- State representatives are closing in on their answer to Ohio Gov. John Kasich's proposed budget.

An Ohio House committee is expected to unveil its version of Kasich's $63.2 billion, two-year spending blueprint on Tuesday. Lawmakers have been eyeing major changes to some of Kasich's proposals, including his tax policy overhaul, plan for expanding the Medicaid program and the administration's pitch for a new school-funding framework.

The governor's fellow Republicans control the House, where the GOP supports Kasich's goal of reducing the statewide income tax rate. But many Republican lawmakers, including the House speaker and chairman of the House budget-writing committee, don't like how the governor raises the money for the cut.

Kasich's plan would lower the state's income tax 20 percent over three years and reduce the tax rates on consumer sales and small businesses. He's proposed doing so by raising the severance tax on large-scale oil and gas drilling and by applying sales taxes to a new list of services including those offered by lawyers, accountants, amusement parks and rock concerts.

Business leaders have argued that the new sales taxes on their services will be burdensome to impose, unfairly double-tax them in places and ultimately harm the bottom line.

House Finance Chairman Ron Amstutz has said he anticipates the House's version will replace the governor's proposed sales-tax expansion as a way of paying for the income tax cuts. And House Speaker William Batchelder also has signaled that the House will remove Kasich's proposed tax increase on drilling.

Changes are anticipated to Kasich's plan to extend Medicaid benefits to more low-income Ohioans under the federal health care law.

Roughly 366,000 residents would be eligible for coverage under the expansion beginning in 2014. The federal government offers a major incentive to extend coverage: It has agreed to pay the entire cost of the Medicaid expansion for three years and gradually phase down to paying 90 percent of the cost, still well above the Ohio's current level of 64 percent.

Many GOP lawmakers are averse to Democratic President Barack Obama's law and resistant to expanding government programs. And some question whether the federal government will keep up with its share of the costs or pass along a bigger chunk of the bill to the states.

State Rep. Jim Buchy, a Greenville Republican, said the GOP majority is still looking at all options regarding Medicaid, the federal-state program for the poor and disabled.

"There's no strong support for anything at this point," Buchy said Friday in an interview.

Buchy said he and others are exploring whether the state could provide job training incentives to Medicaid beneficiaries, so that some covered by the program might have a pathway to better paying jobs. He said he believed the federal government may have to sign off on such an idea before it could be implemented.

Kasich's school funding plan is also in trouble in the House, where superintendents from around the state lined up to testify against aspects of the plan. The administration's plan spends $15.1 billion on K-12 education over the next two years, boosting funds to districts that are lagging behind in property values and household incomes.

The governor touted the plan as delivering more resources to poor districts and less to wealthy districts. The plan sends $1.2 billion more to districts over the biennium than in the last budget, including a nearly 6 percent increase in fiscal year 2014, and 3.2 percent more the next year. Yet when district-by-district calculations came out, they revealed some wealthy districts getting more while some poor districts' budgets stayed flat.

Kasich's plan, dubbed "Achievement Everywhere," proposed a $300 million "Straight A" fund that will deliver grants to districts for innovation and efficiency measures, and brings all schools up to the tax base level of a district with $250,000 in property value per student — the 96th percentile of districts statewide — to ease wide disparities in millage revenues from local levies.