State lawmakers will have a little more to spend while making final deliberations on the state’s two-year budget, according to state revenue projections unveiled Tuesday afternoon.
Both the Legislative Service Commission and state Office of the Budget and Management project greater revenues than previously estimated for the fiscal year ending this month and the next two years. The projections were presented to a panel of lawmakers who will decide which projections to use in finalizing the state budget bill, which has been reviewed, debated and revised several times since Gov. John Kasich introduced the plan in February.
The Office of Budget and Management projections show an estimated state surplus of $2 billion this year, up from $1.6 billion projected in February. After accounting for transfers to the rainy day fund and other commitments, lawmakers would have about $400 million to allocate in this final stage of budgeting, where two Republicans and one Democrat from each chamber hammer out their differences through what’s called a committee on conference.
The committee’s chairman Rep. Ron Amstutz, R-Wooster, said lawmakers could have that compromise together by Monday or Tuesday, ready for full House and Senate votes later in the week ahead of the June 30 deadline for Kasich’s signature.
Lawmakers first have to decide which revenue projections to use during the next few days of discussion. And the surplus is largely from one-time money, which lawmakers have said should not go toward ongoing budget commitments.
Legislators could use the projected surplus or find other revenue to implement an across-the-board personal income tax cut, which the Senate removed from the House-approved plan, in addition to a form of the personal income tax cut for small businesses and pass-through entities added by the Senate.
“We’re thinking about a more modest blending of the two rather than a simple math of adding,” Amstutz told reporters after hearing the projections. “The challenge with doing both… is that it costs money that we don’t have.”
Kasich wants that surplus to fund one-time personal income tax cuts, but told reporters earlier Tuesday that he’s confident the final budget bill will include both tax cuts, which he proposed in February.
“There are going to be tax cuts in this bill,” Office of Budget and Management Director Tim Keen said. “How large those tax cuts are going to be will depend on what sort of tax reform elements that we’re able to agree upon in the days ahead.”
Keen said the projected 2013 surplus was driven mostly by one-time events: $500 million from JobsOhio for the lease of the state liquor enterprise, greater personal income tax revenue from taxpayers shifting income to their 2012 returns and excess commercial activity tax revenue.
Sen. Tom Sawyer, D-Akron, questioned Keen whether income tax cuts were the greatest need for funding in the state. Keen said Kasich believes the greatest unmet need is increasing competitiveness and job growth and decreasing taxes would be the best way to meet that need.
The OMB estimates not expanding Medicaid costs the state $504 million in the next two years. Kasich pushed to expand Medicaid, the state- and federally-funded health insurance program for poor and disabled Ohioans, in his budget plan. The House removed it and doesn’t plan to pass related legislation until after the budget.