Legislative Update – Budget Bill Enters Final Stages
By Charlie Howard
As you will recall earlier this year the Governor’s proposed budget contained changes to Ohio’s sales taxthat if adopted, would have cost dealers an estimated $100 million. The changes would have applied to a long list of services in your dealership including (but hardly limited to) advertising, commercial property rent, dealer reserve, warranties, professional services and many, many others.
During the legislative recess, GCADA held a meeting so that members of Greater Cincinnati’s legislative delegation could hear our concerns firsthand. Nearly 30 dealers, general managers, and key dealership personnel attended this meeting.
Legislators who attended the meeting were:
• Rep. Ron Maag (R-62)
• Rep. Bill Blessing (R-29)
• Rep. John Becker (R-65)
• Rep. Peter Beck (R-34)
• Rep. Peter Stautberg (R-34)
• Sen. Bill Coley (R-4)
In this process the House of Representatives received the proposed budget first. The House passed a revised state budget that eliminated most of Governor Kasich’s tax proposals, including his proposed sales tax expansion on services, sales tax rate reduction, and pass through entity tax changes. The House version retained the Governor’s priority of reducing Ohio’s income tax rates as it provides a 7 percent across the board personal income tax rate reduction beginning in tax year 2013, to be paid for by anticipated revenue growth and budget surplus funds.
The budget bill was then forwarded to the Senate. While the Senate’s version of the budget also eliminated the sales tax proposals, their version removed the 7 percent statewide income tax reduction passed by the House in favor of small-business exemptions. Senators also sent an additional $141.6 million in direct state aid to schools, compared with the funding formula the House passed.
These and other differences are now being reconciled in conference committee. This committee is made up of six members, four Republicans and two Democrats. They are Reps. Ron Amstutz, Jeff McClain, Vernon Sykes,Tom Sawyer, and Sens. Scott Oelslager, and our own Bill Coley. This group of lawmakers will settle on a version of thenearly $62 billion budget that must be signed by Governor Kasich by June 30.
In politics, as in most things, it is never over until it is over. We will continue to monitor the progress of the conference committee. I want to thank all of you who were able to attend our meeting back in March or were able to reach out to your Representative or Senator. Your grass roots efforts have had a major effect on the process.