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Senate Transportation Budget Zeroes out Public Transit,
Slightly Improves EITC
Special to The Truth
Last week, the Ohio Senate
took a leap backwards by removing $100 million for public
transit from the Transportation Budget allocated by the Ohio
House of Representatives. They also took small steps to
otherwise improve equity by expanding Ohio’s Earned Income
Tax Credit.
Governor Mike DeWine
proposed increasing the gas tax to 18 cents per gallon in
order to fill a $1 billion hole in Ohio’s Transportation
Budget. The House reduced the increase to 10.7 cents and
increased federal flexible funds for public transit from $40
million to $100 million. The Senate further reduced the gas
tax to 6 cents per gallon and removed transit funding from
the Transportation Budget altogether.
Instead of funding transit
through the Transportation Budget, the Senate proposed
adding $48.5 million to the $6.5 million Governor DeWine
included in his GRF proposal, for a total of $55 million a
year. That is still far short of the $150 million a
year needed to meet demand and there is no guarantee these
funds will remain intact during the horse-trading that will
inevitably take place during the General Revenue Fund
process from now through June.
“Public transit is a
transportation alternative and should be part of the
transportation budget,” said Amanda Woodrum, Senior
Researcher for Policy Matters Ohio. “The House rightfully
recognized that transit offers affordable, accessible and
environmentally-friendly transportation choices while the
Senate reverted to a roads-only transportation mentality.
The conference committee should restore the good work done
by the House.”
At the same time, the Senate
included reforms to Ohio’s earned income tax credit (EITC).
It is great that Ohio has an EITC, but only five percent of
the state’s poorest residents benefit from it because it is
worth only 10 percent of the federal EITC, it has a steep
benefits cliff for people who earn more than $20,000 a year,
and it is not refundable. The Senate removed the income cap
and raised the credit to 30 percent of the federal EITC.
However, it left out the most important reform — making the
credit refundable. Unless the credit is made refundable, the
other reforms benefit only an additional 1 percent of Ohio’s
lowest income families, according to an analysis from the
Institute for Tax and Economic Policy.
Ohio is an outlier among
the 29 states with EITCs: 25 have credits that are
refundable. Each year, the refundable federal EITC lifts
millions of people out of poverty, including 3 million
children in 2016. A refundable EITC would help Ohio fix its
upside down tax code that has lower income residents paying
higher portions of their income in sales and use taxes than
wealthier Ohioans.
“The Senate made
improvements to Ohio’s EITC, and it’s a good start, but it’s
not enough” said Policy Matters Project Director Kalitha
Williams. “Refundability is the most powerful aspect of the
EITC. Working families use their refunds to pay for child
care, buy food and make home and car repairs. That boosts
the economy and is good for everyone.”
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