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The state budget is in.

Governor Mike DeWine hands the Brown Stadium package back with unclaimed funds, is still receiving criticism and could draw a lawsuit.

And the departing House minority leader considers her future.

That's this week in the state of Ohio.

welcome to the state of Ohio.

I'm Karen Kasler.

Republicans in both chambers of the Ohio General Assembly greenlit the final version of the GOP majority biennial state budget on Wednesday, mostly along party lines.

All Democrats and Republicans Tim Barr, Horst Levi Dean, Ron Ferguson, Scott Slager and Michelle Tasca voted against it in the House, and all Democrats and Republican Bill blessing were opposed in the Senate.

The vote came less than 24 hours after the conference committee released its final draft of the budget.

House Bill 96 cleared committee by 4 to 2 in the early hours of Wednesday around 1:00 am.

And after hours of delay.

Among the highlights of this budget, a combination of the two existing tax brackets for Ohioans making over $26,000 a year into a 2.75% flat income tax, which ends up being a tax cut for people making more than six figures.

A $1.7 billion sports and cultural facilities fund created with about a third of the unclaimed funds the state is holding.

600 million of that is earmarked for a grant for the Cleveland Browns Dome stadium development in Brook Park, a 40% cap on collected property tax that school districts can hold as a percentage of their operating budgets.

The Fair School funding plan restored, but at 2021 levels, a transformation of the State Board of Education into five gubernatorial appointees, with all 11 elected seats eliminated, a requirement that local school board candidates run under Partizan labels, and a $25 million cut for libraries, plus the requirement the material related to sexual orientation or gender identity be hidden so minors cannot access it.

The budget also includes a change to the Model Law, which was passed to stop teams that play in publicly funded stadiums from moving, as the Cleveland Browns did under owner Art model.

In 1995.

Yes.

We want to make sure that we, the taxpayers, are protected from teams moving in when there's appropriate space to support, whether it's, an arrangement like the Browns have, which is transformational mixed use development, including the stadium or just stadium improvements and some other teams might be looking to do.

We want to make sure that it when we're supporting those teams, that we have provisions protecting us from the team taking the money from us, and then two years later, simply moving.

What this is doing is protecting the taxpayers, basically saying, you have to fill out your lease, you have to satisfy your obligation.

And if you receive state funding, you have to remain in the state of Ohio.

So Even when we talk about this funding scheme that they have set up.

We don't really know what the accountability is.

They say my colleagues say they're going to pay it back, but I have no idea how strong, the accountability measures are.

I don't trust the entire this entire scheme.

And I think I've also mentioned we don't even know if the project can go forward.

A lot of these things are, are things that we can take care of quickly rather than run a big, long bill over several months and things like that.

And I suppose we could do it in, three hearings and pass a bill.

But, this is really a way for the House and Senate when they agree on something to get something done.

I, too.

Democratic former state lawmakers are threatening to file a class action lawsuit against the state if the budget gives that $600 million grant to the Cleveland Browns Dome stadium project from unclaimed funds, former Representative Jeffrey Crossman and former Senator and Attorney General Mark Dann say the proposal unconstitutionally confiscate the money.

It's being held in trust for Ohioans for use by a private entity, for a private project.

They're saying, we don't care that you own this money.

We don't care that we've appointed ourselves the state as the fiduciary for that money.

We're going to just dump that responsibility right now and give it out to somebody who has helped us in our campaigns.

That doesn't that is not a constitutional process.

If this plan collapses in court and delays stadium funding, it's not going to be our fault.

It's going to be the legislature's fault who forced this through knowing full well that it was unconstitutional.

This is more than about a stadium.

It's about whether our government respects the rule of law and the people it serves.

You can't balance a budget on broken promises, and you can't build a stadium on stolen property.

The Browns Stadium funding proposal is also not supported by group.

On the opposite side of the political spectrum from Crossman and Dann.

But the conservative group Americans for prosperity is cheering most of the budget.

I spoke with Donovan O'Neill, state director for RFP Ohio.

Americans for prosperity has praised the budget for several reasons, including the 2.75% flat income tax.

And that is basically collapsing or combining Ohio's to existing tax brackets into one.

It really turns out to be a tax cut for people making over $100,000 a year.

It will cost the state more than $1 billion.

There's an analysis from the Legislative Service Commission that says income tax cut since 2005 have added up to $72 billion in lost revenue for the state.

Do you feel like that has all paid off in Ohio when it comes to metrics like economic development and growth, how our schools and infrastructure are doing that sort of thing?

Yeah, I think it pays off.

And I think what's notable here, right, is a lot of what we've had to do in terms of economic development and economic growth is, go out and try to lure businesses to come to the state.

But when you have a state now, like Ohio will be after the budget's passage as a flat 2.75% income tax state, that in of itself is a competitive signal to the rest of the country at, while the second lowest rate in the nation only matched by Arizona, and the 0% income tax states.

And so what that does is rather than having to go out and spend money on economic development incentives to bring businesses and investment to the state of Ohio.

What we're saying is, when you bring your employees to the state of Ohio, they're going to get to keep more of their hard earned money than they would if they were in a state like California, New York, new Jersey.

That's a good thing.

And I think it's the way that you you'll see this economic growth happen because of this, very clear signal that a flat tax sends to the rest of the states.

Governor Mike DeWine had said that Ohio was already competitive in income taxes, and that all the businesses he's talked to, that's not a factor in bringing them here.

Was it necessary to do this?

I think so, again, you look at what the national trends are, right.

We have it's a flat tax revolution across the country.

You've got states like Mississippi and others that have moved on the march to a 0% income tax, 2.75% will put us just a few ticks below.

And Indiana to our west.

Right, which I think is at 2.9 flat now and working its way over years to get to a 0%.

So the governor is right.

We've got we've had a low competitive tax rate for a long time, but we don't operate in a vacuum.

Other states are moving in big, bold ways.

And this budget does that by moving Ohio to a flat income tax.

Another big part of the budget, of course, the education spending, critics have pointed out that this budget puts more continues to put money into vouchers when around 90% of students go to public schools that it doesn't fully fund the fair school funding plan, since it's based on 2021 salary and financial data, the state has been dropping for several years in terms of some metrics on how IT schools compare to schools and other states.

And there's it's hard to compare Ohio's report cards because the report card has changed so many times over the last couple of decades.

But it's, I think, universally acknowledged that reading and math scores are not where people want them to be.

So how can schools how can we expect schools to do better when they're not getting fully funded?

Well, the ultimate best indicator, we believe, for education is parent satisfaction.

The parents happy with the education and opportunity that their child is getting in the school, their choice.

And it's why education opportunity programs like Ed Choice, the essays that have been expanded to non charter nonpublic families now and this budget is so critical because it provides families with flexibility for public, private, charter, non charter school to be able to go to the school that best, best meets that child's needs.

And that's what I think the most critical element.

We spend a lot of money in public education, and we spend even more money with this budget in public education, and that's not a bad thing.

But we do need to begin to figure out how are we getting the most bang for our buck with those dollars, especially when you can look at something like an Ed Choice voucher at about the $8,000 or so.

That's a lot less expensive for the taxpayers, for the state of Ohio, to get a quality education versus 2020 $5,000 that some of the least well-performing school districts in the state of Ohio, cost to educate a child.

At the end of the day, if the money follows the child, we think it's going to go where it's getting the best return on investment.

And that ROI, isn't just a number.

It's actually opportunity for students and success and, upward mobility for families.

Are you concerned at all that Ed Choice vouchers and the expansion of them are really going to kids who have never gone to public school?

These are kids who are already in private school.

Well, I think that's helpful, right.

Because those folks are also paying exorbitant property taxes right now.

And part of that property tax crisis that's sweeping the state.

So it's important that they get treated the same way that any other family would.

But what we're also finding, right, is as mom and dad begin to look at report cards, and we're now in the summer months, and they're beginning to evaluate their child's education in the fall and where they want their child to go, they have the Ed Choice voucher available.

And I think we're going to continue to see those numbers uptick and increase.

The folks availing themselves of that.

And if they're not, that's also good, right?

It's good if they're in a public school, a government funded school that they like and is getting the results for their child, that's phenomenal.

We want to continue to fund and see that, be successful as well.

He also praised lawmakers for demonstrating real spending restraint.

This budget also does create, though, a sports and cultural facilities Fund by taking a third of the $4.8 billion in unclaimed funds and creating this, earmarking $600 million of that for a grant for the Cleveland Browns, for a dome stadium in Brook Park, which the Browns are obligated to pay that back.

There are two reports from state agencies that say that the economic forecasts that the Browns are putting out there are overly optimistic, and there are questions about whether the state should be giving cash money to a private entity for a private project.

What are your thoughts on this?

Well, Americans prospering were well documented in our position on these sort of public private partnerships, these economic development incentive projects that, this isn't the first time it's happened.

We're doing this for a long time as a state of Ohio.

We've been on record largely in opposition to these ideas.

But I think what the this General Assembly has done with this sports deal in particular, is, is structure in a way that isn't just taking money out of the General Revenue Fund and handing it over to a private entity.

It's not increasing taxes like the governor had requested and making taxpayers pay more to fund these.

They're using, as I believe the finance chair described it, lazy money.

Right.

That's sitting in the unclaimed funds that's been in that unclaimed funds for a very long time and utilizing it to achieve that outcome.

In an ideal world, we wouldn't be doing these kinds of things.

Right.

And it's why going back to a flat tax, getting a flat tax accomplished, or being a 0% income tax gate and spending education opportunity and reforming our property tax system, that's the ways we I think we actually could attract new business and economic development in the state.

But, we've got a long way to go to get there.

And, these programs are going to continue to exist, I think, until the taxpayers start to ask for more accountability.

Should the people who are benefiting from prosperity be the people who are paying for this?

I mean, a billionaire who has the money to build a stadium?

Should that billionaire be building that stadium?

That billionaire is benefiting from this budget a lot.

Why should this be part of it?

Well, that's what our argument has been about.

These economic development programs going back to the inception of jobs, Ohio and others.

Right, is that we we spend that money to attract businesses, and we sort of compete against other states with the taxpayer dollars.

It's where these economic development type incentives and programs, while they sound good and they look good, they oftentimes don't pan out the way you would, you know, as rosy as they're presented.

And it's why we need to get the structural reforms done that we advocate for here to Americans for prosperity, because that at the end of the day, we think is going to be the best way to to, have the millionaires and billionaires invest in the state without coming to the taxpayers asking for for assistance.

There are no tax increases in this budget, but it also doesn't have some of the support that advocates have been pushing for.

For instance, affordable childcare.

You have a businesses who have said that that's something that they need.

There was $1,000 tax credit for parents, of kids under seven years old that would be funded by a, a increase in the cigaret tax is no tax increase is always the right answer.

Well, part of our budget, right.

We've gone in the last 15 years from, I think, $100 billion of fund budget to what we just approved.

Yes, the legislature approved yesterday of a $200 billion all fund, spent 15 years, $100 billion more in spending.

That may or may not be right, Karen.

But the challenge here is it's a lot of money we're spending.

And part of the message we were sending to legislators through the last six months was demonstrate fiscal restraint.

The last two biennium, we've been flush with cash.

Covid money flew and flowed into the state.

And what we're budgeting on here, if this makes sense for for the next biennium, where budgeting like we're still in Covid year, right?

We're budgeting off of those numbers.

We're not retracting that spending.

So the fiscal restraint that the House and Senate presented to bring in, I think, a little over $6 billion in less spending than what the executive requested, we think is prudent, because you don't know what the economic future is going to look like in the country.

And again, we're budgeting based off of already inflated budgets due to federal spending and money coming into the state in the Covid years.

You got people who are saying $200 billion in all funds.

That's not fiscal restraint.

No, we think we should go a lot further than that.

But at the end of the day, this is the first budget in a long time where you had the executive come in with a big number, the House bring that number down by a few billion, the Senate find additional savings.

And then even in the conference committee, where usually the taxpayers lose out and they find new way, new earmarks and other things that they put in there that they trimmed it a little bit more there.

We think that's important, especially with some of the uncertainties with Medicaid and the federal level, as the federal government begins to tighten its belt, as it should, with its own financial problems, states could see increased cost sharing.

Right.

And, the gap that I think the House and the Senate have provided in their version, the conference committee report of the budget ought to go to the governor.

Certainly, at best gives us some breathing room.

Should those, should those equations change?

And, we have to pay more for this already.

Ballooning, Medicaid spend.

Governor Mike DeWine is expected to sign the budget by the deadline on Monday.

He has expressed concerns about some items in the budget, including that flat income tax, but he is not directly threatened.

Any details?

Just before the big budget vote.

Another big change.

New leadership for minority Democrats in the House.

Representative Donny Isaacson takes over as minority leader with Phillip Robinson, Burl Brown, Pickle Antonio and Desiree Timms rounding out the team.

Allison Russo announced earlier this month that she was stepping down from that role, but would stay in the house.

The move comes as the Ohio Democratic Party has a new chair, and former Representative Kathleen Clyde.

With the departure of Liz Walters.

I spoke with Russo this week after the budget vote.

Listen, I started the General Assembly.

I said to, our members that I wanted to get them through the budget process.

That time came.

And I know the importance of a good transition, especially as we prepare for the 2026 election cycle and what is needed.

I am termed out.

You know, it's no secret that I, And looking at maybe what is next.

And so the timing I thought was best, it gets, with a new minority leader going into the summer break, and allows that transition to happen.

And for me to help in whatever way is necessary.

And then, to come back in late September and hit the ground running.

And that's a lot of what the Ohio Democratic Party has also said about their change in leadership to give time before 2026 hits.

I want to ask you, you've been in the House now for four budgets and has led the Democratic caucus for two of those, those budgets haven't been great for Democrats, but they are very visible documents.

And, this time around, no Democrats supported the budget.

What do you think those budgets have said about where the state is going and what, Democrats have wanted to do?

I mean, you really didn't get a whole lot of what you wanted in those.

Well, so as Democrats, you know, we had, a few key priorities.

One is, to protect the fair school funding formula and make sure that our public schools were fully and fairly funded.

That did not happen in this budget.

We, have not funded schools to where they need to be.

We've shifted $2.4 billion, into the voucher program.

You know, we've done things that make the the property tax burden even higher, for residents.

You know, we wanted to make sure that we are addressing those cost of living issues, one of which is reducing property tax in a real substantial way and providing direct relief.

That also did not have happened in this budget.

And we also have big concerns, about other key needs, things like making sure that people have access to affordable health care, making sure that they have access to affordable child care.

All of those things suffered in this budget in substantial ways, and it's why you saw vote in both chambers.

No single Democrat and some Republicans not supporting this budget for the first time since 2011 or 2001, I believe, was the first time that Democrats have not supported the budget in in either chamber.

Budgets are, again, not the only thing that the lawmakers do very visible, not the only thing.

So I want to ask you, as you look back as minority leader, what's your legacy that you're leaving here?

Well, I think a couple of things.

Number one, you know, obviously I took over in a very interesting time.

We were launched into multiple rounds of redistricting.

You know, I certainly fought as hard as I could, in those cases.

We held back this, 60% threshold.

While we didn't stop it from coming out of the legislature, I think that I was and my members, we were pretty successful in at least delaying that.

So that there was time to organize.

That, of course, led, to our ability to enshrine, the access to abortion and reproductive freedoms in our state constitute.

And then we have fought and really have been able to create coalitions across the aisle on this issue of public education.

You know, last budget, last General Assembly, we were a key part in making sure that we protected, and fully implemented the fair school funding formula and making sure that we did things like increase salaries, in reimbursement, for direct care providers, for the Medicaid program, getting money into child care.

So those things I think, you know, I certainly played a key role in, leading the strategy for the Democratic caucus.

And, you know, the fight is tougher now.

But that fight continues, and I have full faith in, leader Isaacson, to now carry that forward.

Democrats have done some things that have been very visible.

For instance, they've played a role in the elections of speakers on the Republican side.

It was Democrats who helped Jason Stevens become speaker.

And there was some reporting that suggested that Democrats should work with Stevens because there were bills that you didn't want to see come forward like that, 60% voter approval for constitutional amendments.

And even though Stevens was elected speaker with the help of Democrats, some of these things did come forward.

What was your relationship like with the speaker, even as he was going through his own battles on the Republican side?

Do you regret, partner with him, even though some of these bills did go forward?

Well, first of all, the relationship with Speaker Stevens, I'd said, you know, since that he was elected speaker, he and I disagreed on many things.

Listen, the key reason that we formed that coalition was to protect public education and public education funding.

And it was as simple as that, and we accomplished that.

We're there, Bill, certainly that got across the line that we did not like, we did not support.

Absolutely.

Again, there were many issues that, the former speaker and I, and certainly my members disagreed with him on.

But, you know, we accomplished the goal at that point, which was to protect public school funding, in the best possible, best possible way that we could.

Do I regret that partnership?

No.

Absolutely not.

It was the right thing to do at the moment.

Do I think that things would have been substantially worse, with the alternative?

Yes, absolutely.

It has been a difficult process for Democrats.

The proposal to try to shift that redistricting commission to an independent commission, of course, did fail.

And so there is still that process that is led by politicians.

But, when you talk about the supermajority of Democrats in the in both chambers of the legislature, super majority, on the Supreme Court, you've got, the statewide executive offices all occupied by Republicans, the U.S. Senate.

Now, both of our U.S. senators are Republicans.

It's tough for Democrats right now.

What can be done?

What can you and other Democrats do to shift this?

I mean, Republicans have won all statewide 83% of statewide races in Ohio since 1994.

Well, I think, when we look at what have been the outcomes for Ohio as a result of those choices and the policies, it's not great.

We are falling in every single measure from economic outcomes to health outcomes to educational outcomes.

And on top of that, we have not getting to population.

And to me, that is the biggest predictor of success in the state.

Are you able to convince people to move into the state in a way that grows your population?

None of those things have happened, because these Republicans and their failed policies have failed to Ohioans.

And we will see a continuation of that with this budget that was just passed, this week.

It is broken promises.

It makes the rich richer.

It makes those who are working class Ohioans, working families, it does nothing to solve their problems.

And so, you know, I think, given what is likely to play out at the national level between now and November of 2026, it could be a really interesting year and opportunity for Democrats.

But we as, Democrats have to take advantage of that.

We have to talk to what the people's needs actually are.

You know, people ask me all the time, how can Democrats win here?

And I say, look at some of our state legislative races in this last cycle, we had individuals who were able to win, even in Trump districts overperforming the top of the ticket.

And the reason that they did is because they spoke to those economic issues, for their constituents.

They talked about delivering actual results.

And that at the end of the day, people want, representatives, elected officials who are there to solve problems and to get things done.

Russo says she'll announce her future plans by the end of the summer.

And speculation is that she'll try a rematch against Mike Carey, who beat her in his first election to Congress in 2021.

She says she's not hinging her decision on a redraw of the congressional district maps, which Ohio lawmakers need to do because of a court order.

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

Thanks for watching.

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

Support for the Statehouse News Bureau comes from Medical Mutual, dedicated to the health and well-being of Ohioans, offering health insurance plans, as well as dental, vision and wellness programs to help people achieve their goals and remain healthy.

More at Med mutual.com.

The law offices of Porter, right, Morris and Arthur LLP.

Porter Wright is dedicated to bringing inspired legal outcomes to the Ohio business community.

More at porterwright.com.

Porter Wright inspired Every day in Ohio Education Association, representing 120,000 educators who are united in their mission to create the excellent public schools.

Every child deserves more at OHEA.org.