By Liz Sidoti
The Associated Press

COLUMBUS - A $48.5 billion two-year state spending plan, up for a vote in the House, would give voters a choice: balance the budget with a temporary sales tax or electronic slot machines at racetracks.

Gov. Bob Taft has said he likely would veto a gambling provision.

CREEPING UP

A sales tax in Ohio was first levied in 1935 at 3 percent. It was increased to 4 percent in 1967 and to 5 percent in 1981. Counties have authority to increase the sales tax by as much as 1.5 percentage points. The total tax in Butler County is 5.5 percent; Clermont County, 6 percent; Hamilton County, 6 percent; and Warren County, 6 percent. The sales tax rate in Kentucky and Indiana is 6 percent.

Despite the threat, Republicans, who control the House 62-37, expected to include it in the budget bill before voting on the spending plan Wednesday, a self-imposed deadline to send the measure to the Senate. The budget must be enacted by July 1.

Several Republicans who object to tax increases in favor of more spending cuts planned to vote against the House budget. Speaker Larry Householder, a Republican from Glenford, acknowledged working to get Democratic votes likely needed to pass the measure.

Rep. Chris Redfern of Port Clinton, the No. 1 Democrat in the House, said a few members of his caucus planned to support the budget.

"I'm sure there's reasons that they could find under this bill that they would support. I couldn't find those reasons," Redfern said.

The House version includes about $600 million in reductions to the $49.2 billion budget Taft had proposed. More than half of those House cuts to Taft's budget - or $363 million - were in funding areas for primary and secondary schools.

The bill also includes a temporary penny sales tax increase, an expansion of the tax to more services, such as tattooing, tanning and towing, and a streamlining of the municipal income tax.

The budget, called the tightest in decades by Taft and Republican legislative leaders, also would maintain or cut spending for most state agencies over the next two years.

Among them, the Board of Regents, which oversees public colleges and universities, would get $137 million less than what it is receiving in the current two-year budget. Taft had asked for a $174 million boost from current funding.

Exceptions to the tight funding allocations include the Department of Education, which would get a $530 million increase in state spending for schools over current levels. And, the Department of Job and Family Services would receive $3 billion more than current spending, primarily because of uncontrollable rising Medicaid costs.

The House bill also is expected to include a provision later Wednesday that would require voters to be asked in November whether they want to allow video slot machines at Ohio's seven racetracks to raise new money in the second year of the budget.

If the gambling is approved, the 1-cent increase to the current 5-cents-per-dollar state sales tax, which would start this July 1, would end June 30, 2004. If gambling isn't approved, the sales tax increase would end a year later.

The tax boost 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 numbers don't work. Gambling is not a good revenue source to balance the state budget, and it's bad public policy," said the Rev. John Edgar, a United Methodist minister and a gambling opponent.

He criticized House leaders for making voters choose between two revenue-generating plans that in years past they have soundly defeated.

"There is a fundamental failure of the leadership at this point. They need to step up and take responsibility for finding a way to raise money instead of hiding behind the voters," Edgar said.