House Approves $1.7 Billion Budget Fix

By JOHN McCARTHY, Associated Press Writer

COLUMBUS, Ohio (AP) - The House on Wednesday narrowly approved a bill designed to fill a $1.7 billion hole in the state budget with tax increases, borrowing and a raid on the state's rainy day fund for its last $600 million.

The bill, approved 51-43, goes back to the Senate for consideration of House changes on Thursday.

Republicans Tom Brinkman of Cincinnati, Rex Damschroder of Fremont, Keith Faber of Celina and John Willamowski of Lima joined 39 Democrats in voting against the bill. Speaker Larry Householder, a Glenford Republican, needed 50 votes for passage.

Under the plan, the state tax on cigarettes would increase 31 cents a pack to 55 cents. It also borrows $345 million from school construction money provided by Ohio's share of the national tobacco settlement.

The bill also increases the tax on trusts -- the increase will lapse in 2005 -- and requires in 2005 that income tax brackets rise with inflation, meaning a small pay raise won't automatically put someone in a higher bracket.

An amendment added Wednesday removed a small increase in the amount retailers are allowed to deduct from the markup on cigarettes.

The amendment allowed Sen. Jeffry Armbruster, a North Ridgeville Republican, to vote on the bill. His vote was in doubt because he owns a company that operates two convenience stores.

The vote was difficult for Republicans, many of whom are freshmen who came to Columbus to cut government, Householder said.

"Obviously, there were some things in this bill that we had to do that is discouraging for people who are members of the Republican Party. But this is something that we temporarily need to get through and that's what we've done," Householder said.

Democrats complained that the bill relies too heavily on revenue that will be available only once. The cigarette tax increase is expected to provide about $224 million a year, but will decrease if people quit smoking because of the price of cigarettes.

"Using declining revenue sources is a ticket to disaster," said Chris Redfern, a Port Clinton Democrat.

Rep. Dale Miller, a Cleveland Democrat, offered a plan designed to save money on prescription drugs, one of several amendments that were all turned down.

Miller said the Republican plan "mortgages the future to pay for current obligations."

Householder used the tax-bracket provision to help sell the plan to conservative Republicans who didn't want to raise taxes.

However, Minority Leader Dean DePiero, a Parma Democrat, said some Democrats may use the increases in the November elections.

"It's the first time I've seen a $400-million tax increase be called a taxpayer protection act," DePiero said.

Rep. John Carey, a Wellston Republican who chairs the House Finance Committee, said the House had a larger responsibility and members should have put their personal philosophies aside.

"We have a responsibility to balance the budget. For this session, this has been a difficult task," Carey said. "I urge you not to turn your back on your responsibility."

(Copyright 2002 by The Associated Press. All Rights Reserved.)