Ohio House revises Kasich Medicaid, tax proposals

COLUMBUS, Ohio (AP) -- Income tax cuts are in. Medicaid expansion is out.

More money for schools is in. A sales tax on services is out.

Those are among dozens of judgment calls contained in an Ohio House rewrite of the two-year state budget introduced Tuesday.

The Republican-led chamber's answer to GOP Gov. John Kasich's spending blueprint spends about $2 billion less while retaining a 7 percent permanent income-tax reduction statewide and removing tax increases on professional services and drilling. Kasich has proposed a two-year budget plan of about $63.2 billion, beginning July 1.

The House's $1.5 billion income-tax reduction over two years is less than the 20 percent Kasich had originally proposed, and excludes the governor's proposed small-business tax cut.

"We just couldn't get that done in this time frame and be comfortable with it," said House Finance Chairman Ron Amstutz, who described a host of Kasich proposals that have been removed from the bill for lack of time to explore them.

The House dropped the Kasich's plans to extend Medicaid coverage to thousands more low-income Ohioans under President Barack Obama's federal health care overhaul.

Roughly 366,000 Ohio residents would be eligible for health coverage under the Medicaid expansion beginning in 2014. The state would see $13 billion from the federal government over the next seven years to cover those newly eligible.

Instead, representatives added $100 million over the two-year period to mental health and addiction services.

Asked whether the amount was sufficient to provide care to those who needed it, Amstutz said, "We don't know the answer to that."

The House bill directs other government funds to the needy, Amstutz said, including $150 million more for job services and readiness and $6 million more for job co-ops and internships.

A provision added to Tuesday's bill also would effectively de-fund Planned Parenthood. Abortion rights groups fought the same move last session and vowed to work to defeat it again.

The House will hold hearings on the new version this week, and more changes could come before lawmakers vote on the bill. The Senate then would take up the measure.

On education, the House bill increases state aid school districts get for each student.

Kasich's education budget proposed spending $15.1 billion on K-12 education over the next two years, boosting funds to districts that are lagging behind in property values and household incomes. The proposal prompted an outcry by superintendents who said it delivered big increases to some wealthy districts and no new dollars to some poor ones.

The House plan caps district funding increases to 6 percent a year and adds new money to meet a state mandate that students must know how to read before leaving third grade. Tweaks to Kasich's formula — including an increase in per-pupil funding from roughly $5,000 to $5,700 — distribute the money more fairly across the state, Amstutz said.

Kasich spokesman Rob Nichols said the governor remains committed to advancing his proposals and is encouraged by the progress so far.

As for the removal of Medicaid expansion, Nichols said in an emailed statement, "It's clear that support isn't there right now among House Republicans to extend Medicaid coverage, but it's the right decision for Ohio. Not doing so will hurt our economy, make Obamacare's impacts worse and hurt vulnerable Ohioans who need care."

House Speaker William Batchelder said lawmakers weren't willing to go forward with expansion with so much uncertainty from Washington about the law's regulations. Plus, he said, his caucus was divided on how best to address the extension of Medicaid coverage.

Of the 60 House Republicans, Batchelder said 20 indicated their willingness to do something, 20 wanted to know more before their vote could be counted either way and 20 "might shoot themselves before they voted for it."

Batchelder said the House would continue to work with the Senate and the Kasich administration on the issue, with the hope that clearer instructions from Washington may arrive before Ohio's June 30 budget deadline.

Rep. Vernon Sykes, top Democrat on the House budget-writing panel, said Democrats were disappointed that extended Medicaid coverage wasn't included in the bill.

"We're hopeful that this is not the end of this proposal, that there still would be some further consideration of the Medicaid expansion," Sykes said.

The Medicaid expansion is one of the key components of the federal Affordable Care Act. Of the nearly 30 million people expected to gain insurance coverage under the law, about half would get it from the expansion.

Many Republican lawmakers are averse to Democrat Obama's health overhaul and resistant to expanding government programs.

A leader in a conservative movement to take over the state's Republican Party told state lawmakers a vote on extending Medicaid could hurt the party and their chances in 2014 elections.

Republican Rep. Barbara Sears said she didn't want Medicaid expansion removed from the bill, and thought it could have been structured in a way to meet the state's needs.

But, she told reporters, "It's tainted because it's under the Affordable Care Act."