House GOP yanks John Kasich's budget proposals

by MARC KOVAC | RPC Capital Bureau Published:

COLUMBUS -- House Republicans stripped many of Gov. John Kasich's major policy proposals from the biennial budget bill Tuesday, citing the need for more time and discussion on tax reforms and a lack of clear direction from federal officials on Medicaid programming.

The substitute bill accepted on a split vote by the chamber's finance committee removed Kasich's plans to expand Medicaid eligibility, a reduction and broadening of the state sales tax and a hike on oil and gas produced via horizontal hydraulic fracturing.

House Republicans instead are proposing a 7 percent income tax cut for all brackets, amounting to about $1.5 billion in savings for individuals and businesses during the next two years.

Lawmakers also increased school funding for more districts compared to the governor's plan, with more money for college and career preparation programs. All districts would receive at least the same amount of state funding as the current fiscal year, with increases capped at 6 percent.

Republicans added a number of other amendments likely to draw debate, including language that could cut funding for Planned Parenthood, a provision to require sales tax collections by Internet retailers and the removal of some of the governor's proposals related to Ohio's burgeoning fracking-related industry.

The changes drew immediate criticism from House Democrats and others, particularly those who support expanding health care coverage for needy Ohioans. The chamber's minority leader said his members would work to introduce standalone legislation on the Medicaid issue.

"Despite the widespread, bipartisan support for this proposal, House Republicans have decided to stand with a group of right-wing extremists who care more about ideological purity than common sense solutions," Armond Budish, a Democrat from the Cleveland area, said in a released statement.

Rep. Vernon Sykes, a Democrat from Akron and ranking minority member of the finance committee, added during Tuesday's hearing, "We're hopeful that this is not the end of this proposal, that there still would be some further considerations of the Medicaid expansion."

Rep. Ron Amstutz, a Republican from Wooster who serves as chairman of the powerful House finance committee, said the panel would hold hearings through coming days, with additional amendments likely before an expected floor vote on Thursday. The bill then will head to the Ohio Senate for its consideration and conference committee negotiations before final passage in late June.

The Medicaid issue is likely to draw increased public attention in coming weeks, with a protest planned at the Statehouse on Thursday among groups that support the governor's proposed expansion of eligibility to Ohioans earning up to 138 percent of federal poverty level (about $15,400 per person or $23,050 for a family of four).

The administration estimated move would leverage billions in federal Medicaid dollars, save the state more than $400 million in general revenue funds and ensure 275,000-plus additional low-income Ohioans will have coverage.

The plan won support of Statehouse Democrats and some Republicans in the Ohio House, including the chairwoman of the subcommittee that considered the issue.

But it drew criticism from Tea Party and other conservative groups and many other House Republicans, who view it as a support of federal health care mandates and out-of-control spending.

GOP House Speaker Bill Batchelder said there is too much uncertainty from federal officials about Medicaid expansion to move forward with an Ohio plan.

"This is so screwed up," he said. "We have all these regulations that have to come out. We have to have them in order to draw a bill. We have to have them in order to know how much money we have to have to comply. And we also have to know what it means if they don't have the money in Washington. Those are pretty big challenges."

House Republicans did add $100 million for mental health and addiction services for the needy, though the governor's office said that wasn't enough.

"It's clear that support isn't there right now among House Republicans to extend Medicaid coverage, but it's the right decision for Ohio," Rob Nichols, the governor's spokesman, said in a released statement. "Not doing so will hurt our economy, make Obamacare's impacts worse and hurt vulnerable Ohioans who need care."

On tax reform, the amended budget bill offered a slightly larger tax cut than the one proposed by the governor, paid through spending cuts and increased tax collections rather than Kasich's sales and severance tax plans.

House Republicans continue to balk at the latter, saying it could stifle fracking activities and oil and gas production.

"We have a lot of people who are looking at coming to Ohio, and I don't think we want to put up a 'Get Out of Here' sign," Batchelder said.

Amstutz indicated the tax package likely will change in coming weeks, as lawmakers in the House and Senate hammer out a final version.

"We are going to continue a lot more work...," he said. "The scope and size of what the administration is recommending in terms of tax reforms is a doable target. It's in that zone, but we need to do a lot more work to develop some alternatives to getting to some of the goals that have been set."

He added, "What we're proposing in this bill is not the finished product...."

Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.

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