COLUMBUS, Ohio (AP) — Ohioans would receive a 5% personal income tax cut and schools would gain more state funding under Senate Republican’s version of the upcoming state budget released Tuesday.

The 5% cut over two years for a total of $874 million is deeper than the 2% proposed in the House-passed version of the budget. The cut is a reward for people who are working, said Senate President Matt Huffman, a Lima Republican, who called it a “stimulus” in the best sense of the word.

“If we want to talk about stimulus plans and what works and what doesn’t, an income tax cut will always be the best stimulus,” Huffman said. The Senate plan also eliminates sales taxes paid by Ohio job employment agencies. It makes no sense to tax companies trying to find work for people, said Senate Finance Chair Matt Dolan, a Republican representing suburban Cleveland.

The Senate budget plan also boosts funding for schools over the House plan by $223 million over two years, using a base annual figure of $6,110 to educate a child. In addition, for the first time the state would fund state charter schools directly rather than districts having to transfer money to those schools, under the proposal.

“It is a sustainable plan,” Dolan said. “Which means, we can pay for this plan and the school districts can rely on it.”

The budget also eliminates about $200 million meant to pay for grants expanding broadband service. Huffman said the use of the money needs to be more developed.

“People are anxious to spend money on something that everybody thinks is a good idea,” he said. “I think it’s bad idea to just start spending without a plan.”

The Senate and House must reconcile their competing versions of the budget this month ahead of the new fiscal year on July 1.

By Andrew Welsh-Huggins

Associated Press