Proposal to freeze historic preservation tax credits dropped from Ohio's budget amid concerns

State senators on Tuesday scrapped a plan to freeze tax credits for historic preservation work for two years amid concerns that the proposal could stop some significant restoration projects around the state.

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The change was included in the latest round of revisions that a Senate panel made to Ohio's operating budget. The two-year, $71.3 billion budget would increase taxes on tobacco, freeze tuition at state universities and eliminate state taxes for certain small business income.

The Senate Finance Committee plans to debate amendments Wednesday before voting on the bill. A vote by the full Senate could come as soon as Wednesday.

Democrats had pushed for the freeze to be removed, saying the tax credit is a vital tool for preserving landmark buildings and revitalizing neighborhoods.

A total of $482.3 million in tax credits have been approved for 238 projects since 2007, with 101 of those completed for a total of $218.9 million in tax credits, according to the Ohio Development Services Agency.

Opponents of the proposal were concerned that the freeze could jeopardize projects already underway, though Republican Senate leaders had said agreements in place would be honored.

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Under the Senate revision, a state agency would report to legislative leaders by the end of the year on how to convert the tax-credit program to a grant program.

Senate Finance Chairman Scott Oelslager said the proposal drew a lot of concern and confusion, so it was dropped.

"A lot of people felt like the moratorium was ending the program, but that was never the intent," Oelslager told reporters.

Another Senate change would cap the tobacco tax amount on premium cigars to 50 cents a cigar, which would be indexed to inflation annually. The tweak comes after the Senate revised the budget to impose a 40-cent increase on a pack of cigarettes and increase the tax rate on other tobacco products from 17 percent to 22.5 percent.

The budget will not include a proposed tax increase on Ohio oil-and-gas drillers, which has been a priority for Gov. John Kasich. Instead, legislative leaders announced Tuesday that a task force would review the issue and come up with a final report by Oct. 1.

Senate changes to budget on Tuesday also would:

— Require state elementary and secondary achievement assessments to be shortened, administered once each year and given in the second half of the school year.

— Eliminate a provision that would have banned the use of certain agreements with labor organizations on public improvement projects.

— Prohibit a state university from requiring students to live in on-campus student housing if they reside within 25 miles of the school, instead of 40 miles.

— Grant the state's corrections agency the discretion to send certain nonviolent felons to substance abuse treatment if the prisoner meets specified qualifications.

— Limit a plan to provide free public transportation to veterans to just those who are disabled as a result of their service.

— Ensure that by Dec. 1, 2018, any associate degree may be transferred from one state institution of higher education to another and applied to an equivalent bachelor's degree program without barriers.