The Ohio House passed House Bill 166 Thursday, its version of the state’s biennial budget. While the bill includes substantial income tax reductions, some groups aren’t pleased with the impact it will have on small businesses.
Under the bill, Ohio’s Business Investment Income Deduction would be lowered to $100,000. As of now, small businesses don’t pay taxes on the first $250,000 of income, but that would be lowered to $100,000 under House Bill 166, which passed Thursday in a 85-9 vote. Eight Republicans and one Democrat voted against the budget proposal.
“We had some really good debates and good ideas, and I think this budget will make a difference for Ohioans,” House Speaker Larry Householder (R-Glenford) said in a press release. “Some of the ideas we talked about are going to become separate bills in order to build them out a bit more. We’re just getting started.”
The Ohio Chamber of Commerce was disappointed the bill passed, saying it “includes a $1.1 billion tax hike on small business owners, reducing their ability to reinvest in their businesses.”
The bill “means less money for worker training, increased wages, new technology or equipment, or expanded operations,” the Ohio Chamber said.
“Tax shifting makes Ohio less competitive, not more,” their statement concluded. “Ironically, the vote came during national small business week.”
Rea S. Hederman Jr., executive director of the Economic Research Center at The Buckeye Institute, was pleased that the bill “allows Ohioans to keep more of their money,” but said “more pro-growth polices could have been implemented if the House had further reduced needless spending.”
“Although this budget advances good tax policy by eliminating some tax credits and loopholes for private jets and movie studios, the budget increases taxes on Ohio’s entrepreneurs and small businesses, which will slow economic growth and job creation,” he said in a statement. “Given the budget comes at a time of economic expansion, policymakers have the perfect opportunity to pursue meaningful, sustainable pro-growth reforms that will make Ohio a national economic leader, and The Buckeye Institute stands ready to assist in identifying areas of spending that can be responsibly cut to allow for greater tax cuts and greater economic growth.”
House Bill 166 will now head to the Senate for consideration, and the two chambers have until June 30 to agree on a budget.
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Anthony Gockowski is managing editor of Battleground State News, The Ohio Star, and The Minnesota Sun. Follow Anthony on Twitter. Email tips to [email protected].
Background Photo “Ohio House Chambers” by Joshua Rothaas. CC BY 2.0.