All told, Jack Cera has served in the Ohio House for two decades, first in the 1980s and 1990s and most recently since 2011. On Wednesday, the Bellaire Democrat recorded a first in his legislative career. As a member of the minority caucus, he never had supported a two-year state budget plan. Now he has. He joined in the unanimous backing from the House Finance Committee, the full House giving its approval on Thursday.
The support of Cera and other Democrats reflects well on the work of Gov. Mike DeWine and Larry Householder, the House speaker. As a candidate, the governor pledged to make significant investments in the lives of children, especially those who are poor and vulnerable. He kept his word, and then the speaker strengthened the commitment, adding resources for disadvantaged students and abused and neglected children.
The House budget plan also aids counties in covering the cost of legal counsel for indigent defendants. It increases funding for need-based college assistance. It seeks transparency in health care costs and improved oversight of pharmacy benefit managers. It sustains the Medicaid expansion and moves closer to an adequate continuum of care for mental illness.
More, the budget plan narrows a most wasteful tax break, the relief for “pass through” business income, costing $1 billion a year. The threshold for income going tax-free would drop from the first $250,000 to the first $100,000. The budget plan also ends the lower tax rate on remaining “pass through” income. These are positive steps given that the tax break mostly benefits wealthy households without delivering the promised spark to the state economy.
So there is much to please Democrats, even as they point to portions of the plan that depart from their priorities. This is what effective governing looks like, finding the center where both sides can claim wins, that half-loaf better than none at all. The hope is the state Senate sticks to such an approach.
That said, it is worth examining where the House plan falls short, especially after the past decade of disinvestment by the state. As initially proposed, the budget eliminates taxation of income below $22,500. Now the plan also calls for an income tax cut across the board, taking the top rate from 5 percent to 4.67 percent. This is wholly unnecessary, rates already slashed one-third since 2005, along with erasing the estate tax.
What otherwise might be done with the projected $108 million in lost revenue? Higher education has experienced a 20 percent decline in funding the past decade (in real dollars). The budget plan proposes for the biennium a 1 percent increase in the state share of instruction, the primary funding vehicle for colleges and universities. The schools argue persuasively for 2 percent, or enough to keep up with inflation.
The budget plan proposes essentially no increase for early education, though such an investment yields a high return in productive lives. The governor has talked about broadening eligibility for public child care, another smart investment. Yet the funding isn’t there in this budget plan. Even with the proposed increase, the sum for need-based college aid is $150 million, or far below the target of $250 million set during the Bob Taft years as governor. Local governments remain under fiscal strain.
This isn’t to diminish the bipartisan achievement in the House. As Emilia Sykes, an Akron Democrat and the House minority leader, noted, the budget plan “lets us finish some of the unfinished business.” That “some” is telling. Ohio still has much work to do on the investment side. In that regard, it hardly helps to reduce income tax rates one more time.