By Andrew Welsh-Huggins
The Associated Press

COLUMBUS - House Republicans cannot balance the state's two-year budget without a proposed one-penny sales tax increase, House Speaker Larry Householder said Tuesday.

GOP lawmakers earlier eliminated $2.3 billion in taxes proposed by Gov. Bob Taft and promised to find deep cuts in his $49 billion spending plan.

Instead, they have been able to trim only about $1.2 billion and are increasingly relying on a temporary sales tax to balance the budget. Taft's proposals would have been permanent tax increases.

The House Finance Committee on Tuesday added the sales tax increase, along with dozens of other changes, into the budget bill.

The bill also includes a proposal to let Ohioans replace the tax increase in November by allowing video slot machines at Ohio racetracks. If the gambling is approved, the sales tax would end on June 30, 2004, Householder said. If it isn't, the tax would end a year later.

Senate President Doug White wouldn't say Tuesday if he supports swapping the sales tax for the machines. He said he's concerned that revenue from the machines wouldn't provide enough money.

The sales tax increase would generate about $1.2 billion more each year. Revenue from the slot machines is estimated at $400 million to $900 million a year.

The state's take of more than 50 percent of the proceeds from the machines would be the highest percentage nationally, said Charles Ruma, owner of Beulah Park, a thoroughbred racetrack southwest of Columbus.

"We believe it's the best revenue source for the state, especially in light of the fact so many people are going every single day to Indiana, West Virginia and Michigan," he said. "You don't have to understand too much to know a lot of money goes out of the state already."