COLUMBUS — Smokers would pay 31 cents more for a pack of cigarettes to help balance the state budget under a plan that passed the Ohio House on Wednesday.

        The 51-43 vote for the bill, which would raise Ohio's 24-cent cigarette tax to 55 cents starting July 1, is intended to help patch a $1.9 billion hole in the state's $44 billion budget. The bill needed 50 votes to pass.

        The measure would also add a new state tax on trust funds, completely drain Ohio's rainy-day fund and raid the tobacco lawsuit settlement — all to repair a government spending plan torpedoed by declining tax revenues.

HOUSE ROLL CALL

How area House members voted Wednesday on a budget-balancing bill.The measure passed, 51-43. Five members did not vote.     Republicans voting yes — Cates, West Chester; Clancy, Colerain Township; Jolivette, Hamilton; Niehaus, New Richmond; Raga, Mason; Schmidt, Loveland; Schneider, Madeira; Seitz, Green Township; Webster, Hamilton.     Democrats voting yes — None.     Republicans voting no — Brinkman, Cincinnati.     Democrats voting no — Barrett, Cincinnati; Britton, Cincinnati; Coates, Forest Park; Driehaus, Cincinnati.

        Four Republican lawmakers, including Rep. Tom Brinkman, R-Mount Lookout, and all the House's Democrats voted against the plan. The bill now goes to the Senate for another vote today.

        Senate President Richard Finan, R-Evendale, said he will urge his members to agree with the House GOP plan.

        “There are three or four things our members have raised as issues and we're trying to work our way through them,” Mr. Finan said.

        House Speaker Larry Householder, R-Glenford, was optimistic Senate Republicans would pass the bill as is.

        “My expectation is the Senate will concur,” Mr. Householder said. “I talked with Senator Finan earlier (Wednesday) and I don't see any problems with anything that was done here.”

        Wednesday's vote marked the end of a brutal round of budget negotiations that split conservative and moderate GOP lawmakers over a set of tax increases Mr. Householder, Mr. Finan and Republican Gov. Bob Taft held out as the only workable solution to the state's fiscal crisis.

        A group of 15 Republican lawmakers refused last week to vote for a plan that would raise the state's cigarette tax by 50 cents.

        Several switched sides to vote for the measure after Mr. Householder and Mr. Taft agreed to lower the cigarette tax increase to 31 cents.

        Other changes that won conservative votes included a proposal to raise Ohio income tax brackets slightly each year, starting in 2005, to match the rate of inflation. The measure is intended to help Ohioans from landing in a higher tax bracket if they receive only cost-of-living pay raises.

        “To me this is the silver lining in the clouds of the difficult financial times we're dealing with,” said Rep. Tim Grendell, R-Chesterland, a conservative who relented and voted for the cigarette tax increase.

        A new tax on the annual earnings of undistributed trust funds would also be revoked on Dec. 31, 2004. The tax, which would mirror a federal tax that banks already pay each year, is expected to add about $108 million to state coffers starting July 1.

        Differing estimates show the 31-cent cigarette tax increase would bring in anywhere between $240 million to $280 million. The 50-cent tax increase was projected to have created $373 million.

        House lawmakers made up for the lost revenue by dipping deeper into the state's tobacco lawsuit settlement. The $180 million that Senate Republicans proposed ballooned to $345 million in the House plan.

        That money was supposed to be spent on school construction and renovations. The $345 million in construction money will be replaced by general obligation bond funds in the state's $1.8 billion capital budget, due out this fall.

        Other key provisions include spending all of the $607 million left in the state's rainy-day fund. Gov. Bob Taft would make $230 million in spending cuts in state agencies over the next 13 months. Another $175 million would be saved by separating Ohio's tax law from business depreciation tax reductions in the federal government's economic stimulus program.

        Unable to stop or alter the bill, House Democrats mostly booed their Republican colleagues from the sidelines.

        Several Democratic amendments to the House GOP plan were summarily dismissed Wednesday, including one Rep. Catherine Barrett, D-Cincinnati, offered to reduce state agency contracts with private businesses and corporations.

        With the House vote in hand, the budget debate shifts back to the Senate.

        Last week Senate Republicans supplied the bare minimum number of votes needed to pass a bill containing a 50-cent cigarette tax increase.

        Mr. Finan would not say if he could repeat the 17-15 vote, even with a reduced cigarette tax increase.

        “I hope we can turn the vote,” he said. “We'll see.”
       

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