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The League of Women Voters of Metropolitan Columbus

News

Legislature fixes budget shortfall with tax freeze

Monday, Dec. 21, 2009

Governor Ted Strickland and lawmakers were able to find a compromise solution to close the $851 million budget deficit, and on Thursday approved HB 318 (Sykes), Tax Freeze.

HB 318 delays the final 4.2 percent reduction in personal income taxes approved in HB 66 in 2005, and makes other adjustments to close the state's projected budget deficit. The League of Women Voters has been urging such a resolution to the budget dilemma since May.

A provision that was included in the House version of HB 318 to reduce the salaries of lawmakers by 5 percent was removed in the Senate version of the bill, but is included in separate bills before the Ohio House and Senate, SB 209 (Schaffer) and HB 210 (Morgan).

Once HB 318 is signed into law, the Ohio Department of Taxation can begin distribution of tax booklets, charts, and forms with the tax law changes. Governor Strickland is expected to sign the bill into law early this week.

The Senate Finance and Financial Institutions Committee, chaired by Senator John Carey, approved several amendments to HB 318, and reported out the bill favorably on Thursday.

The bill was then immediately sent to the Ohio Senate, which had delayed its session in order to take action on HB 318. Senators approved HB 318 by a 17 to 15 vote. All Democrats and five Republicans, including Senators Harris, Niehaus, Carey, Goodman, and Wagoner, voted for the bill.

The House, which also had delayed its session to consider HB 318, then concurred with the Senate's version by a vote of 54 to 42. All Democrats and two Republicans, Representatives Dolan and McGregor, voted for the bill.

In addition to postponement of the income tax reduction, the final bill includes the following amendments:

Although HB 318 closes the current budget deficit, a future state budget deficit of $6-$8 billion was the focus of lawmakers as they debated HB 318 on the Senate and House floors. The following are some excerpts from the debate regarding HB 318 on the floor of the Senate:

The above summary was taken from today's edition of League education specialist Joan Platz's weekly Education Update.

Read more: House Bill 318