Ohio Senate Budget May Need to be Trimmed to be Balanced
Senators will unveil their version of the state budget today – they needed to trim hundreds of millions of dollars to make sure it’s balanced. But critics are pointing to a small business tax cut as the reason the state’s tax revenues are short by nearly a billion dollars.
The tax cut was passed in 2013, and now that it’s fully phased in, it allows businesses that file revenue as personal income to deduct all taxes on the first $250,000 of income. The total deficit for this fiscal year is $841 million. But budget director Tim Keen says that tax is not the reason for the shortfall.
“The tax gains of Ohioans has never exceeded, in the three years that we’ve done this, the estimates that we put in place. So I have seen no evidence to indicate to me that the small business tax cut is the cause of the revenue shortfall that we're seeing."
An Ohio Department of Taxation document shows that while that tax cut will have cost the state nearly $1.1 billion in 2016, it was estimated to cost the state $1.17 billion.