Wednesday, May 30, 2001

Spending plan ups fees, ends rate cuts

By Spencer Hunt
Enquirer Columbus Bureau

        COLUMBUS — Most Ohioans will pay more in state income taxes next year, ante up more for college tuition and shell out more for driver's licenses and new tires.

        Those changes and others help form the foundation of a $44.9 billion budget the Ohio General Assembly is poised to pass this week. The state's two-year spending plan would provide $1.4 billion more to schools, while offering little to no new money for everything else.

   Here are some significant recent developments involving the $44.9 billion two-year budget bill Ohio lawmakers are expected to approve this week.
Court immunity
   House lawmakers agreed to support a Senate plan that would shield lawmakers and their staffs from lawsuits and keep their internal documents immune from a court order.
At-risk youth
   Lawmakers restored $15.8 million for the Civilian Conservation Corps, a state-run program that offers jobs to troubled teens.
   The budget bill creates a task force to consider ways to exempt cars up to 5 years old from the state's emission-testing program.
Teen licenses
   This proposal lets state officials consider new licenses that would clearly identify drivers who are between 18 and 21 years old.
Industry grants
   Lawmakers set aside $25 million to be used for economic development projects that would benefit Ohio's steel and automotive industries.
   House lawmakers hope to restore up to $15 million in job training and economic development funds intended for Ohio's 29 Appalachian counties. The state has 88 counties.
   Source: Ohio Legislative Service Commission, House and Senate Republicans.
        Members of a House-Senate conference committee were moving the two-year budget bill toward its final passage stage late Tuesday night. They were expected to approve a 1.5 percent across-the-board cut to many state agencies, adding to millions lawmakers already have diverted to help pay for schools and rising Medicaid costs.

        Past state budgets were once so flush with cash that lawmakers refunded taxpayers and still spent millions on new programs. A stale state economy turned those surplus tax revenues into a fond memory. As the funds dried up, lawmakers still had to find a way to meet an Ohio Supreme Court order to narrow the gap between poor and rich schools.

        State Rep. Gary Cates, R-West Chester, said majority Republicans did the best they could, holding the line on taxes while making tough spending choices during a fiscal crisis.

        “There were a lot of people asking us to spend more money than we had,” said Mr. Cates, who is second-in-command in the House. “Folks can take some satisfaction in the fact the legislature said "No.'”

        While the budget forces agencies and officials to tighten up on spending, it's squeezing taxpayers, too. Gov. Bob Taft and legislative leaders didn't raise taxes, but they erased tax breaks, raised fees and made other changes that will cost nearly every Ohio resident more.

        Families with students at public universities could get the biggest sticker shock. The budget plan eliminates a 6 percent cap on tuition increases next school year.

        University of Cincinnati students already expected to see a maximum 6 percent increase in tuition from $5,337 to $5,657 next school year. With the tuition cap gone, the bill could go up another $50 to $100 per student to cover higher health costs and faculty salary demands.

        “It's hard to say what will happen. The latest budget planning documents still show a 6 percent increase,” UC spokesman Greg Hand said.

        Cincinnati State Technical and Community College officials are planning an 11 percent increase — from $59 per credit hour to $65.50. Spokesman Bruce Stoecklin said officials fear some students will find the higher rates too expensive.

        “It certainly would be discouraging,” Mr. Stoecklin said.

        Ohioans at all income levels will spend more in income taxes next year. The budget bill puts a one-year freeze on a program that uses surplus budget funds to lower income tax rates.

        The state spent more than $610 million in surplus to lower this year's tax rates by 7 percent. For a person or family that earned $40,000 last year, the rate reduction cut $93 off their tax bill.

        Anyone who buys a car or renews a driver's license will feel the budget pinch. The basic $2.25 fee paid to register vehicles, transfer titles and renew drivers licenses will go up to $3 starting July 1.

        Ohioans who buy new tires for their cars will see a 50-cent state fee double to $1. The increase will raise $3.5 million to help clean up tire dumps.

        A more select group of people who donate to political candidates also lose a special income tax credit. Their loss will help the state raise an extra $4.8 million.

        The path to a balanced budget and a school funding solution also came at the expense of many state agencies.

        Higher education was the biggest loser. More than $154 million intended to help public universities hold down tuition and teach at-risk students instead went to elementary and secondary schools.

        Lawmakers agreed to tap up to $150 million from the state's rainy day funds to help cover spiraling Medicaid costs. Another $145 million in cuts that were to be approved Tuesday night is intended to further fund Medicaid — the state's medical safety net for uninsured, elderly and poor residents.


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