House Bill 318

House Bill 318 is the bill that the House Democrats have come up with to “fill” the nearly $900 million hole in Ohio’s operating budget caused when Governor Strickland decided to withdraw his plan to supplant revenues in the education budget with estimated revenues from VLT’s after the Ohio Supreme Court ruled that the VLT decision is subject to referendum. This bill, which recently passed the House by a party line vote of 55-44 with two republicans joining with the democrats, is an income tax hike of 4.2% for all Ohioans.

This bill will retroactively raise the income tax rates on all Ohioans and leave Ohio families with a bill of nearly $900 million in unexpected taxes. The legislation attacks small businesses that pay the state income tax and created 70% of the new jobs last year. Since many small businesses are sub-chapter S (or similar tax reporting entities) corporations that report their business income on their personal income taxes this bill will hurt small businesses.

Calling the bill anything other than a tax increase is simply dishonest. Here are the facts:

Current 2009 State Income Tax Rates
$5000 or less
.587%

More than $5000 but not more than $10,000
$29.35 plus 1.174% of the amount in excess of $5000

More than $10,000 but not more than $15,000
$88.05 plus 2.348% of the amount in excess of $10,000

More than $15,000 but not more than $20,000
$205.45 plus 2.935% of the amount in excess of $15,000

More than $20,000 but not more than $40,000
$352.20 plus 3.521% of the amount in excess of $20,000

More than $40,000 but not more than $80,000
$1,056.40 plus 4.109% of the amount in excess of $40,000

More than $80,000 but not more than $100,000
$2,700.00 plus 4.695% of the amount in excess of $80,000

More than $100,000 but not more than $200,000
$3,639.00 plus 5.451% of the amount in excess of $100,000

More than $200,000
$9,090.00 plus 5.925% of the amount in excess of $200,000

HB 318 Proposed 2009 State Income Tax Rates
$5000 or less
.618%

More than $5000 but not more than $10,000
$30.90 plus 1.236% of the amount in excess of $5000

More than $10,000 but not more than $15,000
$92.70 plus 2.473% of the amount in excess of $10,000


More than $15,000 but not more than $20,000
$216.35 plus 3.091% of the amount in excess of $15,000

More than $20,000 but not more than $40,000
$370.90 plus 3.708% of the amount in excess of $20,000


More than $40,000 but not more than $80,000
$1,112.50 plus 4.327% of the amount in excess of $40,000

More than $80,000 but not more than $100,000
$2,843.30 plus 4.945% of the amount in excess of $80,000


More than $100,000 but not more than $200,000
$3,832.30 plus 5.741% of the amount in excess of $100,000

More than $200,000
$9,573.30 plus 6.24% of the amount in excess of $200,000


With the information in hand, you can decide for yourself whether or not this is a tax increase!

The bill has been deceptively labeled the “Education Funding Protection Plan” because it purports to protect the revenue stream aimed at education from the VLT’s. When Governor Strickland gambled with the VLT’s he simply moved money from the schools back to the general revenue fund. We can just as easily protect our schools and move the money back to the schools from the general revenue fund. This is the responsible thing to do. The fear-mongering that has taken place is shameful. By moving the money back to the schools from the general revenue fund we can have a responsible debate about the entire state budget which actually grew this year by nearly 7%.

Since July of this year alone, this administration has increased state spending by $220 million through the controlling board. House democrats claim that republicans have no solutions yet they continue to table our amendments and refuse to even hold a single hearing on issues such as HB 25. HB25, introduced by republicans in January would restructure the executive branch of Ohio’s government and has an estimated savings of $2 billion. Republicans have also introduced HB 240 which puts in place recommendations made by the State Auditor to enhance Medicaid and would have an estimated savings of more than $300 million. HB 65 and HB 120, also republican sponsored legislation would include additional savings, yet as of today, none have had a single hearing.

Democrats have no interest in doing any real work on behalf of Ohioans. While they have repeatedly stated that they believe increasing taxes in this economy would only worsen the recession, their actions indicate their true feelings…that government is the solution to all of your problems and we can only solve the difficulties we face by increasing taxes and expanding government.