COLUMBUS, Ohio - A sweeping state budget that would give residents an income tax cut while scrapping an expansion of Medicaid passed the Republican-controlled House on Thursday after lawmakers agreed to continue discussing health coverage for the poor.
The $61.5 billion, two-year budget rewrites Republican Gov. John Kasich's proposals for overhauling the state tax code and drops his plans to extend Medicaid health coverage to thousands more low-income residents.
The House voted 61-35 on the spending blueprint, which would begin July 1. The plan, with the support of three Democratic lawmakers, now goes to the GOP-dominated Senate, where more changes and hearings are expected.
Before the final vote, representatives dumped a contentious provision approved by a House committee that would have barred instructors from distributing contraceptives or promoting what the provision referred to as "sexual gateway activities" in health education classes.
Other debate was focused on whether the state should move forward with expanding the federal-state Medicaid program under President Barack Obama's health care law.
Roughly 366,000 low-income Ohio residents would be eligible for coverage beginning in 2014 by expanding Medicaid, the health program for the poor that already provides care for one of every five residents in the state. The Kasich administration expects the state to see $13 billion from the federal government over the next seven years to cover those newly eligible for Medicaid.
Instead, representatives Thursday evening unanimously approved an amendment to give lawmakers time to study the issue and allow the state to pursue other options.
The Kasich administration has been negotiating with federal officials for months over the details of possibly providing private health coverage to some people who would be eligible for Medicaid under the expansion.
The amendment directs administration officials to assist lawmakers in developing Medicaid reforms and to submit a Medicaid plan to the Legislature by this fall. It says state lawmakers would have to sign off on any Medicaid proposal that has federal approval before it gets implemented.
The change had the reluctant support of Democrats, who earlier Thursday had tried unsuccessfully to restore Kasich's proposal into the budget.
Democrats argued pursuing expansion was the best way to create new jobs, save state taxpayer dollars and keep Ohio residents healthy.
"We had the opportunity to do the right thing today, not to just kick the can down the road," House Democratic Leader Armond Budish, of Beachwood, told his colleagues.
Still, he said, the amendment was "better than doing nothing."
The amendment requires a future bill be introduced in the House that reforms the Medicaid program and reduces the number of people who enroll in the program over time.
House Finance Chairman Ron Amstutz, a Wooster Republican, said the measure allows lawmakers the chance to work with the Kasich administration to find common ground.
"If we want healthy Ohioans, we need to roll up our sleeves," Amstutz said. "And next week and the week after find ways to come together and do good policy."
The Medicaid expansion is one of the key components of the federal Affordable Care Act. Many Republican lawmakers, who dominate the House, are averse to the Democratic president's health overhaul and fear being stuck with the long-term costs of the program.
A Kasich spokesman said Thursday night the administration looks forward to continuing its work on Medicaid.
"We are pleased that the House backed away from its initial position and has listened to the governor and many, many others who have clearly demonstrated the advantages to businesses, Ohio's economic recovery and the health of our state of providing health care to low-income, working Ohioans," spokesman Rob Nichols said in an emailed statement.
Among other changes, the House plan spends slightly less on education overall than the governor had proposed. Lawmakers also added $16 million for a workforce training pilot program for the economically disadvantaged.
The budget bill contains a 7 percent permanent income tax cut. But the House's $1.5 billion income tax reduction over two years is less than the 20 percent Kasich's had originally proposed. The measure also excludes the governor's proposed tax hike on oil and gas drillers. And it eliminates increased sales taxes on professional services, such as those from lawyers and accountants.
Democrats were unsuccessful in their attempts to boost money for local governments and delete a provision that sends Planned Parenthood to the back of the line for public family planning money.