COLUMBUS, Ohio — The Ohio Senate has announced its version of the state budget, one that provides a slight increase in public school funding, gives a $600 million grant to the Cleveland Browns for their new stadium and creates a flat income tax of 2.75%.
Senate President Rob McColley (R-Napoleon) and Finance Chair Jerry Cirino (R-Kirtland) announced their proposed amendments to the state's biennium operating budget on Tuesday afternoon. H.B. 96 passed the House in April.
Major items in the Senate budget
School funding
The senators increased the amount of money going to public schools from the House's proposal. The Senate budget gives public schools about $100 million more than the House. Although they follow most of the House's proposed budget, which only gives schools about $226 million for school funding, but $550 million total. The Senate changed the funding "guarantee" amount. Right now, some districts have guarantees that a portion of their funding will not be reduced, even if their enrollment goes down
Cirino explained this $100 million added back would only go to high-performing or "improving" districts.
"A new component has been added to recognize performance of the districts who have shown great progress or received a four or five-star rating in their last evaluation," he said.
However, to be fully funded based on statistics from the Fair School Funding Plan from 2021, schools would need an additional $666-800 million, compared to the $226 million given by the House.
"What would you say to the schools that say that you're not actually doing the fair school funding plan, and that this is going to devastate them," I asked McColley and Cirino.
"This is not going to devastate them... You'd be hard pressed to find a district that received over a 2% cut in all of their revenues," McColley responded.
Democrats, such as Sen. Paula Hicks-Hudson (D-Toledo), argue that this is misleading because the existing funding formula should have allocated much more.
"Even though the numbers may look higher, it's based on a lower formulation," Hicks-Hudson said.
They also raised the House proposal's cap on districts' rainy day funds to 50%, instead of 30%. This would mean that the schools would have to refund anything above that back to the taxpayer to provide property tax relief.
"There is going to be an ability for school districts to look over and above and beyond that 50% cap put money into a capital fund," McColley said.
This still isn’t high enough, said Senate Minority Leader Nickie Antonio (D-Lakewood).
"The legislature is micromanaging school districts, and honestly, some of these districts that haven't gone out for a levy because they have the reserves," Antonio continued.
Browns
The Senate's budget proposal still includes $600 million for a new Cleveland Browns stadium in Brook Park. However, the funding structure differs from what the Browns proposed and what the House approved earlier this year. The House proposed borrowing $600 million by issuing bonds and repaying the debt, with interest, over 25 years, at a cost of about $1 billion.
The Senate is proposing a $600 million grant for the stadium using unclaimed funds. That's other people's money that the state is holding, from things like forgotten bank accounts, rent or utility deposits or uncashed insurance policies. The Ohio Department of Commerce's website says the state is sitting on $4.8 billion in unclaimed funds.
The Senate believes the state will more than recoup that investment through sales tax, income tax and commercial activity tax revenues from the 176-acre Brook Park stadium district.
RELATED: WATCH: County Executive Chris Ronayne criticizes Senate funding plan for Browns
Income tax
The budget also includes a 2.75% flat income tax. This mirrors a bill currently in the House, which would eliminate the separate brackets of the non-business income tax. People making more than $102,400, the top, would have their taxes reduced from 3.5% to 3.125% in 2025 and then down to 2.75% in 2026. The lower bracket would stay at 2.75%.
"Getting to a flat tax is the right place to be for the people of Ohio," Cirino said.
Antonio responded that this will disproportionately harm low-income families.
"They pay off the folks at the top of the income brackets and the folks at the lower end are the losers," she said.
Next steps
Now, the Senate and House leaders will enter a conference committee, a closed-door negotiation period to create a final budget. Once a decision is made, both chambers must pass the combined bill. If it passes through both sides, it will be sent to Gov. Mike DeWine for review. In the past, he issued dozens of line-item vetoes on operating budgets.
Line-item vetoing is the ability for the governor to pick and choose which policies within a larger piece of legislation get to stay or must go.
DeWine is adamantly against giving the bond package to the Browns, and we have asked repeatedly if he plans to veto it. He says he hopes it doesn't get to that point.
The budget must be passed by the end of June.
We will continue breaking down what is in the 5,500-page proposal in the coming days.
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