Columbus, OH – On Thursday, The Buckeye Institute testified (see full text below or download a PDF) before the Ohio House Finance Committee on the education and tax reform policies in Ohio House Bill 33, Ohio’s biennial budget.

In his testimony, Greg R. Lawson, a research fellow at The Buckeye Institute, noted the “House’s effort to build on Governor Mike DeWine’s proposal to expand EdChoice eligibility” but told lawmakers that expanding EdChoice eligibility to 450 percent of the federal poverty line was “insufficient” given the challenges families face and the learning loss students have suffered. Lawson urged policymakers to “make all K-12 students eligible for EdChoice vouchers and raise the tax credit for home schooling families.”

Lawson acknowledged the efforts at reforming Ohio’s income tax but said the policies currently in House Bill 33 miss the mark and don’t take “advantage of the golden opportunity afforded by major revenue surpluses.” Lawson encouraged lawmakers to “close more tax loopholes, reduce the top tax rates, move to a true flat rate income tax, and make clear in this bill that it intends to eventually eliminate the state income tax entirely.” Lawson also recommended that lawmakers eliminate earmarks as outlined in The Buckeye Institute’s Piglet Book and use the savings to help pay for the tax cuts.

Lawson closed by telling the committee that with a few changes, “Ohio’s budget can benefit every child, every family, and every community.”

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An Ohio Budget to Benefit Every Child, Every Family, Every Community

Interested Party Testimony
Ohio House Finance Committee
Ohio House Bill 33

Greg R. Lawson, Research Fellow
The Buckeye Institute
April 20, 2023

As Prepared for Delivery

Thank you, Chair Edwards, Vice Chair LaRe, Ranking Member Sweeney, and members of the Committee for the opportunity to testify regarding Ohio House Bill 33.

My name is Greg R. Lawson, I am a research fellow at The Buckeye Institute, an independent research and educational institution—a think tank—whose mission is to advance free-market public policy in the states.

First, The Buckeye Institute appreciates the House’s effort to build on Governor Mike DeWine’s proposal to expand EdChoice eligibility to 450 percent of the federal poverty line and send additional resources to high-performing charter schools. Unfortunately, in the wake of the historic decline in academic performance following the COVID-19 school closures, even this laudable expansion is insufficient under the circumstances. At a minimum, Ohio’s budget should make all K-12 students eligible for EdChoice vouchers and raise the tax credit for home schooling families. By increasing schooling options and educational resources, policymakers will help families tailor academic environments to fit their children’s learning needs. One student in a household may thrive in their local public school, while their sibling struggles and would do better in a charter or private school across town. Students and their families deserve options. 

A meta-analysis of rigorous studies by the University of Arkansas has shown voucher programs and their recipients have been successful across the country. Other studies have shown increased parental satisfaction and higher graduation rates and college attendance among voucher students. It is time to acknowledge and reward the success of school choice initiatives.

Second, while House Bill 33 rightly attempts major tax reform, it regrettably misses the mark by not fully taking advantage of the golden opportunity afforded by major revenue surpluses. It also fails to follow all four of The Buckeye Institute’s four principles of good tax policy. Those principles require tax policies to promote growth, improve transparency, promote equity, and be simple. 

House Bill 33 does reduce tax rates on investment and labor, and it consolidates the lower two tax brackets into one 2.75 percent flat rate, but without changes to the upper two tax brackets future tax reform will be extremely difficult, if not impossible. An across-the-board 2.75 flat tax rate would be more equitable and promote even more growth and prosperity. To fulfill the promise of tax reform, the General Assembly should close more tax loopholes, reduce the top tax rates, move to a true flat rate income tax, and make clear in this bill that it intends to eventually eliminate the state income tax entirely. 

Finally, House Bill 33 has too many earmarks. As I have explained in the Piglet Book (a copy is included in the testimony), earmarks should be avoided and their sums used to help offset tax rate reductions. It is also important for state budgets to include responsible revenue triggers such that further tax rate reductions may only occur after revenue goals are met. These triggers act as circuit breakers for tax cuts during fiscal stress and recessions, and would help prevent the nightmare scenarios that Kansas encountered when it failed to curb spending while cutting taxes.

There is still time to amend House Bill 33 to make school choice universally available and make tax reform bolder and better. With just a few changes, Ohio’s budget can benefit every child, every family, and every community. 

Thank you for your time and attention. I would be happy to answer any questions that the Committee might have.

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Piglet Book® is a registered trademark of Citizens Against Government Waste and is used with permission.