Senate kills tax increase plan

By Dan Trevas Record-Courier Capital Bureau Published:

After a last ditch effort late Sunday failed to result in a statewide ballot issue that would create a new way of financing education, Ohio Senate leaders said they will likely have to trim state spending on other efforts to comply with an Ohio Supreme Court school ruling.

"As of now, every part of the state budget is on the table for examination," said Sen. Roy Ray, chairman of the Senate finance committee.

Ray, R-Akron, said a plan passed by House Republicans in a Sunday session would not raise the essential money needed to comply with the March supreme court ruling. The court gave lawmakers until March 1998 to overhaul the education system to ensure schools are adequately funded and not reliant on locally generated property taxes.

The Senate and Gov. George Voinovich had proposed spending another $1.1 billion per year on education, which they intended to raise through statewide, voter-approved 1 percent increase in the sales tax and an increase in businessproperty taxes.

In order to get another $1 billion for schools, Ray said lawmakers need to look at state spending reductions across the board including higher education, prisons and corrections, mental retardation and developmental disabilities and benefits provided to those on Medicaid.

"Finding a billion dollars for schools will decimate certain other areas of the budget," he said.

Senate Democrats reminded the lawmakers that the legislature has the power to raise taxes and meet the court's decision without a statewide referendum. After the Senate refused to go along with the House plans, legislative efforts to meet the Aug.6 deadline to place a plan on the November ballot ended.

Democrats in the House and Senate resisted all efforts to goto the ballot with a plan saying lawmakers need more time to devise a remedy to the funding system that will meet the court'sorder.

"As we deal with this we have to have a thorough and efficient solution," said Rep. Sean Logan, D-Lisbon.

However, Senate President Richard Finan, R-Cincinnati, said the Senate will not vote to increase taxes. Although he would not specify what the Senate will offer as an alternative, he said the only option to not raising taxes is cutting the budgets of other agencies.

"I think its too early to talk about it," he said. "

On a party-line 60-36 vote with three Democrats not voting,the House passed its substitute to Voinovich's and the Senate's tax hike plans.

The House resolution required the legislature devote at least 28.1 percent of the state budget to education; require that state devise a system for determining the cost of an adequate education; and devote $300 million to school building construction and $100 million for access to technology annually over the next 10 years.

Architects of the plan admitted it moves the state closer to complying with the supreme court order, but does not resolve all the problems.

"We are inevitably going forward. This would mean we have a plan in place. It is not the entire solution, but we have a plan," said Rep. Ron Amstutz, R-Wooster.

Finan said the plan had many faults including putting too much pressure on the state to borrow money for school construction. He said the House plan would require levels ofconstruction funding that may be too high to be spent properly while the rest of state government might not have enough money to keep up with its maintenance and facilities needs.

Senate Democrats have proposed a plan that expands the typesof services subject to the sales tax in order to raise more moneyfor education. They are hoping Finan and the Republican majority adopt the plan to meet the court order.

Sen. Leigh Herington, D-Kent, said as a Senate finance committee member he could not look at massive cuts in the higher education budget to pay for primary and secondary education improvements.

"Any solution that would include a cut to good, public higher education is not a solution," he said.

Fellow finance committee member Sen. Anthony Latell,D-Girard, said the Republicans should take a close look at the expansion of the sales tax to certain activities, and should examine all the streams of funds coming into the state and wherethe money is spent.

"I think this gives us the time to get an in-depth look at the total picture and all the parts of the problem," he said.

Work on the plan will continue later this month. Lawmakers will spend Monday paying their respects to former House SpeakerVern Riffe, who died Thursday, and is being honored with special Statehouse ceremonies.

Tuesday, many lawmakers depart to Philadelphia for the National Conference of State Legislatures, which is inducting Finan as their national president.

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