COLUMBUS — Gov. Bob Taft approved the General Assembly's $1.9 billion budget bill on Wednesday, but vetoed provisions designed to cap the budget in coming years.

        Those provisions would have limited how much the biennial budget could grow and dictated where extra revenues would be diverted. Some House Republicans saw the measures as ways to mandate responsible future spending.

        But Mr. Taft said the caps would stifle economic development and possibly cripple the state if a major expense, such as a settlement in the ongoing school funding lawsuit, should arise.

        “The realities of Ohio's state budget crisis simply dictate less government spending without the mandate of this otherwise well-intentioned item,” Taft said in his veto statement.

        Senate President Richard Finan, R-Cincinnati, praised the governor's veto decision, saying the cap would have “tied the hands of legislators” looking for creative ways to tackle budget shortfalls.

        The governor also vetoed an amendment added by Rep. Tom Brinkman, R-Cincinnati, that would have allowed the legislature to overturn Ohio's participation in a multistate compact to collect sales tax on Internet purchases.

        Mr. Brinkman said last week he expected Mr. Taft to remove the amendment.

        Mr. Taft vetoed a similar proposal in March and on Wednesday called the idea unnecessary, because the General Assembly would have to approve changes in the tax code before any collection could take place.

        Jennifer Detwiler, spokeswoman for House Speaker Larry Householder, R-Glenford, said the changes to the budget bill were not a surprise and did not change Mr. Householder's support.

        “We were looking for assurances that spending would be limited — but it's not for us to try and tie the governor's hands,” she said.

        The new budget includes a 31-cent tax increase on a pack of cigarettes, a new tax on trust fund income, draining all $607 million from the state's rainy day fund, and borrowing $345 million in tobacco money.

        No Democrats in the House or Senate voted for the plan. On Wednesday, House Minority Leader Dean DePiero again attacked Republicans for drafting a budget fix that relies on “unfair and irresponsible” tax increases.

        But Mr. Taft promoted the plan as a way to strengthen Ohio's economy, highlighting a prescription drug discount program for seniors and a $50 million investment in his Third Frontier project aimed at attracting new, high-tech jobs.

        The governor must still cut $230 million from state agencies to balance the budget, but has promised not to further trim local government funds. The bill also includes an income tax relief package in 2005, and eliminates the trust tax at the end of 2004.

        The new budget bill is the second fix passed this year. Joe Andrews, spokesman for Mr. Taft, said the governor is not concerned about dealing with this budget a fourth time.

        “Everybody is hopeful that by the end of the summer revenues will be up,” he said. “But we will be back in six months to start work with the new (2004-05) budget, and we'll have to start working on that process.”

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