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Now it's up to lawmakers to figure out what stays and what goes will go through key points of the Senate Republicans budget.

This week in the state of Ohio.

Welcome to the state of ohio.

I'm karen kasler.

The ohio senate approved a republican crafted budget that features $3.1 billion in tax cuts and includes two controversial bills on K-through-12 and higher education that sends the budget back to the House and almost certainly to a conference committee before the deadline on June 30th.

The budget passed with all Republicans voting for it and the chamber's seven Democrats voting against it.

Those Democrats had offered over 100 amendments in the process, but put up no amendments on the floor.

Minority Leader Nikki Antonio said the budget is so fundamentally and foundationally flawed that no floor amendment would change that.

This version of the budget keeps the Senate's initial plan to reduce the three state income tax brackets to two, two and three quarter percent and three and a half percent, but speeds it up.

It also makes a big cut to the state's main business tax, and it extends the back to school sales tax holiday from 1 to 2 weeks in August.

Republican Senator Matt Dolan, a candidate for US Senate next year, chairs the Senate Finance Committee.

The Senate focus is going to be on returning money to taxpayers.

And that's that means small businesses.

That means all levels of income will benefit.

We're having an extra sales tax relief so that people, when they want to go out and buy school supplies, which we've done for the last few years, But now any material goods that they they will get tax relief when they go out and buy those provisions.

These tax changes are good news to conservative groups that have pushed for lower taxes, a flat tax and the eventual elimination of the state income tax at the end of this budget cycle.

90% of Ohio businesses will not pay the commercial activity tax, which the Department of Taxation calls the annual tax imposed on the privilege of doing business in Ohio.

It was created in 2005 as the tangible personal property tax and corporate franchise taxes were ended.

It was designed to even the playing field among manufacturing and other businesses because it's levied on grocery receipts, not inventory or profits.

The National Federation of Independent Business, Ohio, is especially pleased about the changes in the ACT.

I would say I would point to the first pastor entities are also businesses.

They're not C corporations.

So when the corporate franchise tax was eliminated, C Corporation saw a significant benefit over past their entities and so they paid through their personal income tax, through their it flows through.

So I would argue that they do have two taxes, both the personal income tax and the commercial activity tax.

So they do get a break on the first 25,200 50,000.

And that was meant to normalize and help offset the elimination of corporate franchise tax, the tax on the privilege of doing business.

If you talk to some business owners, is a little bit frustrating.

And we've seen that frustration grow over the 18 years that it's been there.

And you're absolutely right, you could be bleeding in the red, have zero profits, in fact be well in the red and still have liability.

The state simply based upon gross receipts.

So it's not a tax on profitability, it's a tax on receipts.

And so sometimes you have those inequities where businesses are not profitable yet, but are still paying a substantial sum of money to their to the government there.

In your statement on in your statement on supporting the Senate budget, you write that Main Street businesses have had a hard time keeping up the rising costs and ongoing labor and supply chain issues.

But governments have those same issues.

And so how are they supposed to deal with rising costs and all this if their main business tax is no longer coming in?

Well, they will still have some business tax.

I think what this proposal did from the Senate, we're very grateful for that is help those smallest of enterprises.

So those larger entities, not that they're not important to the economy, will still have a liability on the cat end.

But we're seeing small businesses who are really struggling to keep up with inflation.

They don't have the leverage and the negotiating powers of their larger brethren.

Again, no disrespect to them, this helps put more money back into their business so they can compete with paying more competitive wages, adding additional benefits and staying afloat.

Candidly.

And so it's your contention that with this lower tax, there will be more economic activity, that there will be growth, even though in previous years there have been tax cuts but not more growth.

Yeah, Karen, I would and I would argue and you heard some of that on the Senate floor today, that there has been revenue increases and we've seen increased spending in the state budget.

We've always held the position our members hold the position that they are the entrepreneurs are better off spending that money than their government.

They know how to grow jobs.

They know how to stimulate the economy.

You know, small businesses create two out of every three new jobs.

So we've always had the position that who better to have that, the entrepreneur or the government?

There's another provision in the budget that would extend the sales tax holiday in August, the back to school sales tax holiday from one week to two weeks.

Is that really a big deal for businesses?

It is if you're in the retail industry and we have a significant number of retailers in our membership.

So yeah, this is going to get boots on the ground, people in their stores.

And I think it's a win really for consumers.

You know, sales tax, if you're purchasing large items for back to school, whether it's laptops or other electronics, clothing, things of that nature, that can be a substantial chunk of change for for families who may struggle.

If you have three or four or five kids, that's a that's a huge portion of your budget.

And so this is putting money, more money back in their pockets and really empowering them.

So I think it's a win for everyone.

Senate Finance Chair Madeleine said all levels of income will benefit from the Senate budget, especially with tax relief.

From your perspective, is that the case?

Because others will say it's not the case that the wealthiest people are benefiting the most.

And the more you pay, the more you're going to benefit from a cut.

But I think that at the end of the day, what the Senate proposal did, my understanding is nobody's going to see a tax increase from that.

And we can argue about how much it may be to one individual.

But at the end of the day, the rates are coming down and the brackets are collapsing.

And so I think it's a benefit for all Ohioans.

And does that flattening of the income tax help your members?

It does.

You know, the bid is in place in Ohio.

So that's a unique thing we have here in Ohio.

It's mean, it's extremely competitive.

It's really helped our small businesses, particularly weather through the past few rough economic years and continue to stay afloat.

The changes here have certainly helped, but I think getting to that that flat, that flat bracket certainly makes us less progressive and more competitive.

It helps to not disincentivize, if you will, earning more.

Money.

Democrats blasted the tax cuts as an extreme takeover of state funds for the wealthy and well-connected and noted the sales tax holiday is only helpful to those who have the money to buy things.

Senate Republicans say their budget also includes $1.3 billion more for K through 12 education, but it's less than the House version.

The Senate budget also expands the ed choice taxpayer paid private school voucher program to basically any Ohio family who wants vouchers, but includes means testing for those above 450% of the federal poverty line, which is $150,000 a year for a family of four.

We want to provide parents throughout the entire state the opportunity to decide for themselves where their child should be educated.

So like the governor, like the house, we've expanded school choice.

Unlike them, we've said that that choice belongs to everyone, but not at the same financial levels.

Senators also included Senate Bill one, the bill to add the word workforce to the name of the department of Education and strip power from elected state school board members and give it to the governor who would appoint a head of the state school board.

Senators also included the higher education overhaul bill, Senate Bill 83, which targets complaints that conservatives have had about what they call indoctrination on university campuses.

It would ban most diversity training and faculty strikes and requires expressions of intellectual diversity on a set of specific topics, including electoral politics, gay marriage or abortion.

When asked why it was included in the budget, Dolan said it demonstrates that senators feel it's important, quote, to make sure that we hold the universities accountable.

Students, faculty and activists opposed to Senate Bill 83 have been protesting for weeks.

This week, they held what they called a funeral for higher education as a demonstration at the state House on access to child care for lower income Ohioans.

Governor Mike DeWine's initial budget expanded eligibility.

A lot.

Senators increased it slightly from where it is now.

Availability for spots is an issue.

So we did provide ARPA dollars for building out daycares.

And we you know, we'll hope to expand probably that as we go forward.

But it is it is having enough spots.

It was a problem right now that we have to address.

Groundwork Ohio advocates for early childhood education programs and quality child care programs and was pushing for changes in the Senate budget.

With nearly 70% of parents identifying that they would work more or go back to work if they had access to child care.

We're concerned that not only the parental workforce is being impacted, but certainly employers.

So employers, we know that Ohioans have cut back 800 and 800000 hours, working parents have cut back, so lost productivity, revenues impacting employers and most importantly, that we are reminded of with new data updated kindergarten readiness assessment data is that our future workforce, our babies are more behind than ever.

So 65% of kindergartners are entering the classroom, not ready to learn.

And that goes up to 79% of low income kindergartners.

So if we're not investing them early, regardless, we are going to pay for that later.

When you talk specifically about low income Ohioans, the Senate budget cut the expanded eligibility levels for publicly funded child care.

How does that affect what's happening here?

Sure.

So Governor DeWine had proposed an increase from 142% to 160% of federal poverty level.

For around 40 $42,000 a year for a family of three.

I think.

That's right.

That's right.

It's a it's one.

42% is still under well, under $15 an hour, around 15 to $16 an hour for a family of three.

So cutting that back from 160% back to one 45% leaves the state budget proposal with just a meager 3% increase, which is just nominal in terms of the additional children served.

And it's the difference between a $15.75, I believe, and $15.99 an hour for a typical family.

The the governor's proposal was that to serve an additional 15,000 this walk significantly back on that commitment and still leaves Ohio in the in the lowest among other states in terms of eligibility.

Senate President Matt Huffman has maintained that the step up to quality program, which is the state's rating system for publicly funded child care programs, is too expensive and too bureaucratic.

It keeps some childcare providers out of the system and therefore contributes to the shortage of child care providers.

What happened would step up to quality in this budget in the Senate?

Sure.

Well, after a yearlong of thoughtful discussion among a legislative study committee, we were heading into this budget already very concerned about the quality system in House Bill 45.

Late last year, provisions were added alongside a massive ARPA bill, appropriation bill that impacted and and exempted 60% of all publicly funded programs needing to be in the rating system.

The Senate proposed increase now goes back on that agreement just in December, which hasn't really even taken effect yet and increase that to 80%.

So 80% of all publicly funded programs, the state their proposal, they want the state not to be investing in quality care.

Grandma Ohio is bringing the messages that kids who start behind stay behind.

That's why early childhood education is important, that mothers need childcare to work and provide for their families, and that investment in young children is important for the workforce now and in the future.

Are these messages getting through?

If you're seeing these kind of cuts now.

It is very clear.

You know, we felt very strongly that the governor had a very thoughtful response that was focused on young children and families.

And at this point in the state budget process, we see over a over a half a billion dollar cuts, not including some cuts to pregnant women and children and Medicaid.

And the disconnect between the Senate's choices and the needs of the children and families, their constituents is is just so very vast.

And so our message, regardless of we've had professionals, we've had families, we've had the state wide business community, nothing has gotten through that.

That should have resulted in such a kind of dire circumstance at this point in the negotiations.

There's been a shift in the temporary aid to needy families or Tanna funds, from cash assistance to other programs to help people in poverty because it's not indexed to inflation and is a fixed block.

Grant Dolan has said Republican Senate leadership is concerned that programs will cost more than ten F will cover.

We get ten money in a block grant and if you don't spend the entire block, grant goes into the surplus fund.

And we have built up a surplus fund which a few years ago we started then providing two additional programs out of the surplus.

Surplus is going to go away.

And so the Tanner BLOCK grants that we receive are to pay for child care and food assistance with child care program.

As we're discussing a back and forth, the price tag for that is is increasing every year.

And who knows where we're going to end up in this budget where it's going to be.

Majority of that is comes from the 10th block grants.

So if we're going to make an obligation to child care through the state, we better make it in the confines of money that we know we can spend.

And if the ten monies keep going out to other programs won't be enough for child care.

Tara Brinton with the Center for Community Solutions is concerned about Tanev spending long term as well.

We have increasingly used TANF in this state to fund health and human services, which, you know, it is focused on helping people living in poverty.

But we have at the expense of, I think, focusing in on those work training programs and really making the cash assistance program worthwhile that can train people for future careers.

We've kind of like shifted how we're using those dollars and they're really focused on, you know, childcare is the largest source of Tanner funding now in the state.

Other very worthy causes, including child care.

We're using mostly, you know, Tanev for and TANF is a block grant, so we get the same amount every year from the federal government.

And that is eventually not going to be enough to fund these programs.

So, you know, I think the advocates in the health and Human Services space have been talking about and been in conversations with the state about let's really understand tanev, let's figure out sustainable, dedicated funding for child care and these other causes that we've increasingly just use Tanner for.

And ultimately, it's not going to be sustainable.

There was a change in the first Senate budget to the Supplemental Nutrition Assistance Program, or SNAP, commonly known as food stamps.

That would have required people 16 to 59 to either be in work or training programs.

That's a change from where it is now 18 to 49.

That was scrapped.

But there is a new addition in the final Senate budget that requires a photo ID.

What's the problem with that?

Yeah, so they changed the provision to include a snap photo ID requirement, which would mean that, you know, SNAP is food stamps are on an electronic benefit card that would require a photo ID and a phone number of one adult in the household.

And there's a couple of exceptions.

If there's an older adult, if ever, all the adults are 60 or 60 or older.

If there is a disabled member of the family.

But by and large, if there's an adult in the family, it would require a photo ID.

The problem with that is we've seen this attempted in other states.

It's really expensive and burdensome to implement and is really a challenge to the functioning of the program because the federal guidance or the federal laws around SNAP say that everyone in the household has to have access to use that card and so if one person's photo is on it and someone else in the family is trying to use it, that creates a challenge in the actual physical use of the card at the grocery store.

The cashiers are not allowed to check, you know, cross-check IDs.

So that's really a problem in the federal regs that say everyone in the household has to be able to use the card.

Federal guidance also says that you can request help or assistance in shopping for food.

And so that obviously also creates a problem.

If someone's pictures on the card and the person using it is different.

SNAP also has a lot of anti-fraud measures in place already.

And so we know that, you know, folks have to recertify their eligibility on a routine basis.

The counties in checking eligibility, check, lots of systems to see, you know, income identity.

They have lots of ways to check that.

And so we really have a lot of anti-fraud measures in place and SNAP and haven't seen this as an enormous problem.

So that's really the issue with the photo IDs.

When it comes to food, the budget does make some changes to food banks, which are reporting record demand right now.

Is there a concern there?

Yeah.

So we know that the food banks request in the budget was they they made some progress in the House version of the budget in terms of getting additional dollars into the food banks.

And that was not as not as high in the Senate version of the budget.

So we are concerned that they're seeing record demand, especially as some of the pandemic assistance has has phased out over the last few months that we're making these changes to snap at the same time that food banks are seeing record demand and not enough support.

So it is it is a concern.

There was a lot of talk among Republicans, Governor Mike DeWine and others about the budget being family friendly and focused on women, focused on children, focused on families.

This budget does make some changes, though, to Medicaid, specifically in those populations for pregnant women and for young children.

Yes.

So I believe the governor's quote was, we want to make Ohio the best place to raise a family.

And the governor and the House, I think, kind of held true to that, really, The introduced budget from the governor said that we're going to increase Medicaid eligibility for kids and pregnant women up to 300% of the federal poverty level.

The House added a provision that would provide continuous Medicaid coverage for kids to their fourth birthday, so that continuous coverage is sort of a wonky term, but but basically means that kids, once they're enrolled up to their fourth birthday, wouldn't have to do a recertification process.

So really, that's obviously a burden on the parents, too, to keep their kids engaged in Medicaid coverage.

So we think that those policies are a really good way to go.

The increasing coverage for pregnant women, especially after the state two years ago, expanded coverage for pregnant women from 60 days postpartum to one year.

We think this really builds on that, making sure that to address our ever increasing maternal mortality and morbidity rates, that this would go a long way in helping women and that that time period.

And then for kids, we know that when parents lose coverage, kids often lose coverage even if they shouldn't have, because we cover kids to in higher income range.

And so keeping kids engaged in coverage up to their fourth birthday really would go a long way in keeping kids enrolled in Medicaid.

And this budget changes that pulls that back.

Yes.

So the Senate has removed those policies, basically.

You know, I think some of the conversations that we've had is around looking at the Medicaid program in totality.

And the the the view of some folks in the Senate is that we don't want to add expansions of Medicaid into the program at this time.

The Senate budget also bans flavored tobacco and vaping products, except for menthol, Dolan said.

That's the approach he thinks will help stop smoking and keep kids from starting rather than smoking cessation programs.

Ohio has the fourth highest smoking rate in the nation, according to the CDC, and anti-smoking advocates are frustrated that the Senate cut the $14.7 million for those smoking cessation programs.

The state receives about $1.2 billion per year from tobacco settlement money and tobacco taxes.

And so we're only asking them to.

Well, the governor proposed a $20 million for this line item per year, and that's what we supported.

So that's what we're asking them initially.

Now, obviously, the Senate has cut that significantly.

Right.

And so we're trying to get that back up.

I can imagine there are people who say, hey, I don't smoke.

Why should I pay to help people stop smoking as a taxpayer?

Why is this my problem?

That's a that's a really good question.

And, you know, we have heard that quite a bit.

So, you know, the biggest concern that everyone should have, whether they smoke or not, is that smoking is estimated to cost Ohio about $6.56 billion in direct health care costs per year and $1.85 billion of that comes from Medicaid, which is obviously taxpayer money.

And so what we see in Ohio on an annual average is that residents pay over 1100 dollars per household and state and federal taxes whether they smoke or not.

The Senate budget also puts $1,000,000,000 to 21 time Strategic Community Investments Fund that local leaders and lawmakers can request money from.

Restores housing credits from Governor Mike DeWine's budget that were cut in the previous version of the Senate budget.

But $16 million toward the August special election on issue one, which is less than the $20 million estimate first circulated, lowers the minimum age to become a police officer from 21 to 18 and brings back $200 million in funding for career tech centers, which was dropped from the House budget.

The House is set to come back on Wednesday.

There were reports that Senate President Matt Huffman, who is term limited and is said to be interested in running for the House and vying for the speakership, was working behind the scenes to avoid a conference committee.

But Speaker Jason Stevens, who is not term limited, says the budget will go to conference to work out differences.

Also this week, the state ballot board rewrote some language on issue one, the constitutional amendment on the August ballot that would raise the voter approval threshold for future amendments from a simple majority to 60%.

Republicans, including Secretary of State Frank LaRose, who chairs the ballot board, have said it needs to be in place before a possible vote on an abortion access amendment in November.

The Ohio Supreme Court ordered the rewrite, saying some of the language written by La Rose, his office was not accurate and could be misleading.

Democrats on the ballot board say the revised language still is.

There's been no ruling on a lawsuit filed nearly two weeks before that one that claims the August election is illegal because most August elections were outlawed and a Republican backed law passed last year.

But this ruling suggests the court may say the August vote can go forward.

And that is it for this week for my colleagues at the Statehouse News Bureau of Ohio Public Radio and Television.

Thanks for watching.

Please check out our Web site at State News dot org and follow us and the show on Facebook and Twitter.

And please join us again next time for the state of Ohio.

Support for the statewide broadcast of the state of Ohio comes from medical mutual providing more than 1.4 million Ohioans peace of mind with a selection of health insurance plans online at med mutual dot com slash Ohio by the law offices of Porter Wright, Morris and Arthur LLP.

Now with eight locations across the country, Porter Wright is a legal partner with a new perspective to the business community more at Porter Wright dot com and from the Ohio Education Association representing 124,000 members who work to inspire their students to think creatively and experience the joy of learning online at OHEA.org