BID undecided as Legislature extends budget negotiations

OSCPA staff report

The Ohio Legislature voted June 30 to continue funding state operations at current levels for 17 more days as it became clear that resolution could not be reached in time to meet Sunday's constitutionally mandated deadline for Am. Sub. H.B. 166, the state’s biennial budget bill. Negotiations are ongoing.

The Ohio Senate voted 32-0 for the extension, the House later voted 90-2 in favor, and then Gov. DeWine signed it.

Negotiations between the House and Senate are ongoing on the major areas yet to be agreed upon, including school funding, healthcare issues and tax changes, including Ohio’s Business Income Deduction (BID) and the amount of the across-the-board income tax rate reduction.

Legislative leaders reported that while agreement was reached on most provisions in the bill, several are still unresolved – including likely changes to the BID. Compounding that reality is that logistical challenges remained, as the Legislative Service Commission could not draft changes to the bill in time for legislators to carefully review them before voting, and Gov. DeWine would not have time to evaluate the 3,000+ page bill for possible line-item vetoes.

OSCPA continues to actively advocate to keep the BID level at $250,000 and to ensure that any changes don’t take effect until 2020. To reinforce that message, OSCPA has been collaboratively working with numerous major business organizations and jointly sent a letter to all legislators. The House version of the bill reduced the BID to $100,000 and made the change retroactive to Jan. 1, 2019. Both the House and Senate voted to eliminate the 3% flat rate on income more than $250,000, so it is unlikely to return in the final bill. Other tax changes include across-the-board income tax reductions (6.6% by the House, 8% by the Senate) and elimination of the bottom two tax brackets, reducing the total to five brackets.

Other key differences in the budget bill negotiations involve education funding and health care changes, including Senate language requiring health care providers to give patients better information of up-front costs and to protect patients from out-of-network charges from professionals working at in-network facilities. Altogether, there are more than 500 differences between the House and Senate versions, though legislative leaders have indicated most have been resolved.

Both the House and Senate also voted for -- and Gov. DeWine signed -- a measure to extend by 30 days the deadline for passage of the Ohio Bureau of Workers’ Compensation budget and related continued funding to allow time to negotiate differences on that bill, as well.

In addition to the budget bill, legislators are also working to wrap up votes before the summer recess on other hot issues, including HB 6, the energy funding bill focused on nuclear power plants.

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  1. John | Jun 28, 2019
    Looks like the PTE investor credit for the financial institutions tax is slated to be killed notwithstanding the element of double taxation that creates. 

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