Rep's Corner

The House Republicans created a list of priorities that we wanted to accomplish at the beginning of the 123rd General Assembly. Some of the issues facing Ohio on which we wanted to make an impact included education, health care reform and deregulation of the electric utility industry. Another issue that we continue to keep high on our priority list is tax relief. I am pleased that we have approved a number of key tax provisions for Ohioans through several pieces of legislation. The issues range from adoption and medical expenses to income tax and college tuition.

For the fourth straight year, Ohio taxpayers will receive a tax reduction as a result of the Income Tax Reduction Fund, established by the General Assembly in 1996. Governor Bob Taft recommended that all surplus funds go toward school building maintenance and construction. While this issue is definitely one in which we need to address, House members, including myself, felt it was important to send excess dollars back to the taxpayers of Ohio. A compromise was reached which earmarked $415 million for schools. Surplus funds above this amount will be given back to taxpayers. The tax refund for 1999 will be 3.63 percent for a total of $293.2 million being sent back to taxpayers. This will increase to $1.66 billion the total amount of tax money returned to Ohioans since the Income Tax Reduction Fund was created.

Rising property taxes are a concern for all Ohio homeowners. However, for many elderly Ohioans, keeping pace with increased property taxes while living on a fixed income may be difficult. To counter the effects of these rising costs, Ohio continues to offer the Homestead Exemption tax credit. This credit allows more people to stay in their homes by providing property tax relief for limited-income homeowners who are 65 years or older or who are permanently disabled. Senate Bill 6, signed into law by Governor Taft in May, raises the income eligibility for qualified recipients from $20,800 to $23,000. This measure allows approximately 41,000 additional Ohio homeowners to be eligible for the homestead exemption. In addition, the tax credit will be indexed with the rate of inflation. I was also pleased to receive favorable passage of an amendment to this bill. The amendment modified the computation of income for purposes of determining eligibility for the homestead exemption in order to prevent a person from losing eligibility when their benefits convert from disability to retirement.

The amendment addresses situations in which a person who previously qualified for the homestead exemption on the basis of being disabled has reached the age when they qualify on the basis of age. The amendment eliminates immediate disqualification if the change in the way their benefits are characterized affects their eligibility for the exemption.
Included in the Patient Protection Reform, House Bill 4, were several tax relief measures affecting health insurance for self-employed Ohioans, expenses for medical care and insurance for long-term care.

HB 4 allows any person, whether self-employed or uninsured, to deduct from state income taxes health insurance costs as long as they are not covered under an employer-sponsored health plan. For self-employed individuals, the deduction cannot exceed income from self-employment. Another provision included in this legislation would allow taxpayers to receive a state income tax deduction if their medical expenses exceed 7.5 percent of their Federal Adjusted Gross Income. The bill also provides a 100 percent state tax deduction for the costs of premiums for long term care insurance.

In an effort to assist Ohio students attend college, we also created an income tax deduction for qualified tuition and fees for post secondary education beginning in 2001. The provision, included in the education budget bill, provides for a $2,500 income tax deduction per student per year, capped at $5,000 over the student’s lifetime. A part-time student may claim the deduction up to five years, but the $5,000 cap will still apply.

Qualified tuition and fees include charges imposed as a condition of enrollment. They do not include charges for room and board, insurance, sports or books. Expenses paid or reimbursed through scholarships or other benefit programs are also not included. Eligible institutions include Ohio state colleges and universities, private non-profit schools and proprietary schools. Eligibility is limited to those families with family incomes below $100,000 if a joint filer, or $50,000 if a single filer.

While there is still work to do to provide tax relief for Ohioans, I am pleased with the progress we have made during the first portion of this session. I look forward to continuing these efforts. Please feel free to contact me if you have any questions or concerns regarding this, or any other, issue. You can contact me at my Columbus office by calling (614) 466-1731.


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© Copyright 2008 State Representative Lynn Olman. All rights reserved.