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Wednesday, May 29, 2002

Lawmakers close in on budget deal




By Spencer Hunt, shunt@enquirer.com
Enquirer Columbus Bureau

        COLUMBUS — A $1.9 billion plan that would raise taxes on cigarettes and trust funds to balance the state budget faces what could be its final test in the Ohio General Assembly today.

        A consensus among the Republicans who control the Legislature has been hard to find. On Tuesday, House Speaker Larry Householder, R-Glenford, predicted enough of his members will pass a bill that features a 31-cent-per-pack increase in the cigarette tax this afternoon.

        Senate President Richard Finan, R-Evendale said he also would urge support in his chamber, although he dislikes a decision to raid the state's tobacco lawsuit settlement.

        Mr. Finan acknowledged it may be difficult to find enough GOP senators to send the plan to Gov. Bob Taft.

        “We're between a rock and a hard spot here,” Mr. Finan said. “We're down to crunch time.”

        Ohio's current budget dilemma, which has its roots in the national recession, has put conservative anti-tax lawmakers at odds with their own party leaders.

        A group of 15 GOP lawmakers wrecked budget negotiations in the House last week when they refused to support a bill that would raise cigarette taxes 50 cents per pack.

        Mr. Householder was able to break the logjam with an offer to lower the tax increase to 31 cents a pack.

        He also endorsed another proposal intended to keep Ohioans in lower income tax brackets if their pay increased with the rate of inflation. The income tax proposal would take effect in 2005.

        Another key tax increase, on the annual interest generated in unspent trust funds, also would be eliminated by Dec. 31, 2004. The trust fund tax would bring in $108 million next fiscal year.

        The 31-cent cigarette tax hike would add $283 million a year, $90 million less than the proposed 50-cent increase.

        The House Republican proposal, which Gov. Taft also supports, would replace missing cigarette tax funds with more money from the state's tobacco lawsuit settlement.

        The plan would take $345 million in tobacco funds meant for school construction projects, up from $180 million in a plan the Senate GOP passed May 22. That money would be replaced in the fall with general obligation bonds sold to finance the state's capital budget bill.

        Other key elements remain mostly unchanged from the Senate-backed proposal. Lawmakers would drain the $607 million left in Ohio's rainy day fund, tap another $105 million in reserves, and rely on Gov. Bob Taft to make $230 million in cuts at state agencies over the next 13 months.

        The changes Mr. Householder made were important to Rep. Bill Seitz, R-Green Township. One of the 15 lawmakers who held up budget talks last week, Mr. Seitz said he'll vote for the bill now.

        “It's a much better package than it was,” Mr. Seitz said.

        In the Senate, Mr. Finan said he was upset that fewer dollars will be available to fund community construction projects. Lawmakers are expected to debate the capital budget this fall.

        “I think that seriously jeopardizes any chance of community projects in a capital bill,” said Mr. Finan, who added, “We don't have a lot of choice but to go along with that.”

        Though Mr. Householder said the revised plan will pass with 52 Republican votes, two more than needed to pass the 99-member chamber, Mr. Finan was reluctant to say what would happen in the Senate.

        The Senate could vote to agree with the House's changes as early as today, sending the entire plan to the governor. If the Senate doesn't concur, lawmakers could spend more days talking over a new compromise plan.

        Only 17 of the Senate's 21 Republican senators voted for the budget balancing proposal last week, the bare minimum to pass. Sen. Scott Nein, R-Middletown, voted no then and said he sees no reason to change his mind now.

        “We need some more significant cuts in government spending,” Mr. Nein said.

        One key vote may be Sen. Jeffry Armbruster, R-N. Ridgeville.

        House and Senate Democrats, a minority in both houses, are not expected to be involved at all in today's budget debate. Sen. Mark Mallory, D-Cincinnati, criticized his Republican colleagues for ignoring Democratic suggestions including one that would increase funds for college scholarships.

        “Democrats have said from day one that we are willing to be part of a solution,” Mr. Mallory said. “But that means they would have to be willing to accept Democratic input.”

       



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