Senate budget doubles down on trickle-down
Posted on 06/02/21 by Wendy Patton in Revenue & Budget
Misses the mark on important programs and policies
The Ohio Senate unveiled its 2022-23 state budget proposal yesterday; Policy Matters Ohio will analyze the details of the proposal in coming days. Here are our initial impressions as we dig into the details.
During the COVID-19 pandemic, we’ve seen how government can help people stay safe, make ends meet and expand opportunity, so we all have a better future, no matter what we look like or where we live.
Instead of building an Ohio that supports more opportunity for all, the budget proposal presented by Ohio Senate leadership yesterday doubles down on years of failed trickle-down policies that caused the super-wealthy to get even wealthier while most Ohioans saw meager if any gains. For more than 15 years, certain Ohio politicians have chosen to cut taxes for the wealthiest residents and corporations, slashing public resources for our communities, holding down funding for our schools and colleges and allowing workplace violations to go unchecked.
The Senate’s version of the budget bill, House Bill 110, continues this failed policy, expanding income-tax cuts for the state’s wealthiest residents, thereby reducing revenue available for shared public services. The bill would create a variety of new tax breaks, most notably a sales-tax break for users of temp firms, a business model that often pays workers inadequate wages and one that policymakers should not promote with a costly giveaway. At the same time, it would reduce the possibility of greater transparency and accountability for such tax breaks by eliminating the Tax Expenditure Review Committee, a group to review tax exemptions unanimously created by both houses of the General Assembly.
The Senate budget bill would harm the state’s cities and villages. It revokes a provision in last year’s emergency pandemic law that protected local tax revenues and maintained city services as people worked from home during the pandemic. It would make that change retroactive to 2020, potentially opening up gaping revenue shortfalls at the local level.
Governor DeWine announced earlier that he will end $300 a week in federally supported unemployment compensation (UC) on June 26, 10 weeks before it is due to end, costing about 300,000 Ohioans close to $1 billion. The Senate majority wants to end other federal UC programs in the state, a move that if effective now would wipe out all such support to more than 250,000 unemployed Ohioans. Beyond the pain it would inflict on jobless Ohioans and their families, this would further weaken Ohio’s economy. And in another short-sighted move, senators want to prohibit the state from entering into another agreement for such payments, depriving unemployed Ohioans of assistance in the future.
The Senate substitute bill dismantles Step Up to Quality, Ohio’s 5-star child care rating and improvement system. Eliminating Step Up to Quality will create a two-tiered child care system where some families will be able to afford high-quality care and other families will only have access to lower-quality child care, increasing disparities among children in our communities. The Senate bill does take a step forward to make child care more affordable for parents by raising Ohio’s unconscionably low rate for initial eligibility for public child care aid to 142% of the federal poverty level. Much more investment is needed to make child care affordable for all who need it. New rules in the Senate bill would restrict the state from using federal relief dollars to provide bonuses or stipends for child care workers, who are among the most important yet lowest-paid of Ohio workers. Given the crisis in child care, the state should be supporting good wages and benefits for child care workers and creating a strong child care sector, which parents need to get back to work.
Ohio has shamefully high rates of infant and maternal mortality in many communities, particularly among Black Ohioans. The Senate will expand Medicaid to provide a full year of coverage for 12 months after childbirth for both mother and child, which will help save lives. An increase in funding for rape crisis centers ($5.4 million) and for domestic violence services ($3.1 million) will also help women and children, offsetting deep federal cuts. There is more work to be done, like getting doulas certified for Medicaid reimbursements.
The Senate budget eliminates the Fair School Funding Plan. That plan – developed by educators and stakeholders over the past three years and passed (twice) on a bipartisan basis by the House – would establish a permanet funding formula, phased in over six years, that would correct the constitutional problems of the current system. The Senate’s new proposed plan, developed on a partisan basis over the past few months, does not fix the failures of the existing system. Despite slightly more funding in the current biennium, some districts get less, especially urban districts with high poverty. Senators who are penny pinching public schools have no qualms expanding funding for charters and private school vouchers greatly. We welcome their move to have the state pay those entities directly, protecting local levy dollars.
We need leaders who will unrig the rules so our tax and budget policy actually benefit Ohio’s working people, families, and students. The Senate budget bill doesn’t do that: The same old trickle-down priorities leave out too many Ohio families and communities. We look for changes; if they are not made in the Senate, the Conference Committee should do better.