Columbus, OH – In a new policy memo, A Path to Greater Prosperity (see full text below or download a PDF), The Buckeye Institute offers recommendations on Ohio’s budget as it enters the final stages of deliberation in the Ohio Senate.

In the policy memo, Greg R. Lawson, a research fellow at The Buckeye Institute, notes that the Senate version of Ohio’s budget “includes the boldest school choice plan in state history, pro-growth tax reform, additional guardrails to help prevent government overspending, and occupational licensing reform,” all policies supported by The Buckeye Institute.

Lawson praises the Senate for putting students first by making EdChoice scholarships available to every student in the state and increasing funding to public charter schools. Lawson also applauds the Senate for protecting Ohio’s successful and vital third-grade reading guarantee and creating a more responsive education bureaucracy. Lawson points out that keeping these policy improvements in the final budget “will benefit every child in every family in every community of Ohio.”

On taxes, Lawson notes that the “Senate’s pro-growth tax policies move Ohio closer to a flat tax” and improves upon the House budget by reducing the number of tax brackets to two. And reducing the commercial activity tax, Lawson observes, “will improve Ohio’s economy.” Lawson goes on to urge the Senate to restore “inflation indexing to the income tax brackets,” close tax loopholes, and add revenue triggers to “ensure that further rate reductions only happen after Ohio meets specified revenue goals.”

Lawson also highlights the Senate’s work to restrain future spending, make Medicaid and SNAP more accountable, and reduce needless and burdensome occupational licensing requirements. Lawson urges the Senate to restore provisions passed in the House to prohibit electric utilities from raising their rates on customers to subsidize electric vehicle charging stations and “tighten the criteria for spending the $1 billion set asides going to the All-Ohio Future Fun and the One-Time Strategic Community Investments Fund.”

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A Path to Greater Prosperity
By Greg R. Lawson
June 12, 2023

Introduction

The Senate version of Ohio’s biennial budget includes the boldest school choice plan in state history, pro-growth tax reform, additional guardrails to help prevent government overspending, and occupational licensing reform—all sound policy choices supported by The Buckeye Institute.
  
Putting Students First

The Senate budget puts students first in several important ways. First, it rightly makes the EdChoice scholarship available to every student in the state, increases funding to public charter schools, and creates opportunities for other innovative charter schools to access high-quality charter school funds. More money for charter schools will be needed to close the funding gap with district schools, but the Senate’s budget makes good progress. Second, the Senate bill wisely restores the third-grade reading guarantee, which, recent research shows, improves academic performance over time. And finally, as The Buckeye Institute has testified, Senate Bill 1 and House Bill 33 will create a more responsive education bureaucracy. Keeping these policy improvements in the final budget will benefit every child in every family in every community of Ohio.

Improving Ohio’s Tax Climate

The Senate’s pro-growth tax policies move Ohio closer to a flat tax. Reducing the number of income tax brackets to two improves upon the House plan, and reducing the commercial activity tax by 25 percent will improve Ohio’s economy. But more work remains to be done. The Buckeye Institute recommends restoring inflation indexing to the income tax brackets, closing additional tax loopholes, and adding revenue triggers to ensure that further rate reductions only happen after Ohio meets specified revenue goals. 

Restraining Future Spending

The Senate’s budget improves Ohio’s porous statutory appropriation limitation by tightening the spending covered by the limit and lowering the cap on spending in future fiscal years—protective measures against rampant public spending that The Buckeye Institute has long supported. 

Health and Human Services

The Senate’s budget will make Medicaid and SNAP recipients more accountable and ultimately more self-sufficient. The Senate proposal protects work requirements for SNAP recipients and seeks a federal waiver to allow work requirements for able-bodied Medicaid recipients, which tend to increase lifetime earnings even for those who remain on Medicaid for their entire working life.

Occupational Licensing Reform

The Senate’s budget includes overdue reforms that will make it easier to get a barber or cosmetology license without risking public health or safety. Ohio requires an onerous, unnecessary number of training hours (1,800 for barbers and 1,500 for cosmetologists), which the Senate budget will reduce to 1,000 hours for each—a smart, competitive move long supported by The Buckeye Institute.

Miscellaneous Items

Unfortunately, the Senate removed a House provision that would prohibit electric utilities from subsidizing electric vehicle (EV) charging stations by raising rates on all their customers. As The Buckeye Institute has explained, such subsidies increase costs for all electric ratepayers and redistribute wealth from the lower- and middle-classes to affluent EV buyers. The House provision should be restored.

Additionally, the Senate should tighten the criteria for spending the $1 billion set asides going to the All-Ohio Future Fun and the One-Time Strategic Community Investments Fund. This is significant spending that should go through the Public Works Commission, which has specific criteria and evaluation guidelines to protect taxpayers.

Conclusion

Although not perfect, the Senate’s budget deserves praise for putting students first, protecting taxpayers, improving accountability, and making Ohio more prosperous.

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