Gov. Mike DeWine signed the two-year spending plan just ahead of the midnight deadline on Monday, July 3rd after line item vetoing 44 provisions from the $190 billion package.
From state income taxes to agent appointment fees, the state’s new two-year budget made sweeping changes to the amounts Ohioans pay for housing, education and to run their businesses.
The colossal over 6000-page document also made some major public policy changes such as restructuring the Ohio Department of Education and expanding broadband development funding. It can be overwhelming, so we’ve searched through it to determine what these changes mean for you and your business.
Taxes:
The centerpiece of the budget is an estimated $3 billion tax cut. The final version reduces the number of income tax brackets to just two, bringing Ohio closer to a flat tax, which has been a goal of republican legislative leaders. The lower bracket, $26,000 to $100,000, will pay 2.75%. Those making more than six figures will pay 3.5%. Some businesses also will see a reduction with the elimination of the Commercial Activities Tax or CAT for 90% of businesses that pay it.
If you are looking into home ownership, you could get an income tax deduction for up to $10,000 per year for couples or $5,000 for individuals added to a homeownership-linked deposit account.
Additionally, Ohio will have a sales tax holiday in August 2024, but the length remains undetermined. However, it will not apply to alcohol and tobacco. Of note if you are planning to have a baby, you won’t pay sales tax on most baby items after Oct. 1.
Education
The budget includes the House’s version of the Cupp-Patterson formula, which contained multiple funding guarantee provisions. It also features universal vouchers, with prorated awards for families making above 450% of the federal poverty level. Significantly, there will be an overhaul of the Department of Education, Which will shift oversight from the State Board of Education to an official appointed by the governor.
Of note if you have younger children learning to read, the state is making a historic investment in phonics. Teachers will be retrained. Other programs that don’t focus on phonics will be eliminated and new materials for classrooms will be subsidized.
Development:
Across Ohio you will see more orange barrels as $500 million was set aside for Connect4Ohio to use for state road projects. If you live in rural Ohio, the state has allocated an additional $500 million over the next two fiscal years to improve roads in rural Ohio.
Broadband language revises definitions for Tier One and Two broadband service by removing wireless technology and enabling its use only in Tier Two areas deemed to be beyond an “extremely high cost per location” threshold to be established by the Broadband Expansion Authority. Allowing more hard cables to be laid instead of more wireless towers.
If you have any questions about the state budget, how it could affect your agency or how it affects your clients please contact John Wells at john@ohioinsuranceagents.com with questions.
