COLUMBUS, Ohio – A Senate Republican is pitching a compromise to a proposed constitutional amendment that could make the November ballot and raise the state’s minimum wage to $15 per hour for all workers.
Legislation from Sen. Lou Blessing, a Colerain Township Republican, would slow the rollout to $15 an hour compared with the ballot proposal. The requirement would take full effect in 2028 after a multi-year phase-in under his bill, rather than 2026 under the ballot referendum. Unlike the ballot proposal, the legislation would exclude tipped workers from the full $15 per hour. The tipped minimum wage would be half the value of the nontipped minimum wage. And the bill would be much easier to change or repeal down the line than a constitutional amendment, which would require another statewide vote.
However, Senate Bill 256 also would offer a refundable tax credit to working-class earners, a long-sought policy goal for progressive economists that can provide hundreds of dollars in tax refunds. And that credit grows in size for families with young children, to sweeten the proposal.
Blessing’s bill marks a major paradigm shift. Democrats have long pushed to increase Ohio’s minimum wage, currently $10.45 per hour for nontipped workers and $5.25 for tipped workers. But Republicans, who hold supermajorities in both chambers of the Legislature, have resisted.
Liberals, however, were lukewarm on the bill. They credited Blessing for recognizing the need for a higher minimum wage and tax policy to favor lower-income workers. However, they chafed at some of its concessions and said the ballot referendum remains the better option. The Ohio Restaurant Association, on the other hand, is behind Blessing’s idea.
In an interview, Blessing said the likelihood is that the minimum wage organizers will gather requisite signatures to make the ballot. And if that happens, it will probably pass. The restaurant association, he said, persuaded him against a $15 minimum wage for tipped workers on the theory it might actually depress net pay that well-tipped servers earn after gratuities. Employers must, by law, ensure workers’ wages after tips meet the minimum wage standard. However, raising the minimum wage and pairing it with a refundable earned income tax credit, Blessing said, creates a whole that’s greater than the sum of its parts.
“To me, you need more than that,” he said of a standalone wage hike for nontipped workers. “You need to win the economic argument.”
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Ohio already offers a “nonrefundable” earned income tax credit (EITC) of up to 30% of the value of the federal credit. Because it’s nonrefundable, it can reduce recipients’ tax liability, but it can’t produce them a cash refund.
Blessing’s bill would also allow Ohioans to claim a “refundable” tax credit of up to 9% of the federal EITC, which can produce a cash credit. If recipients have a dependent under 3 years old, that figure increases to 12%. The size of the federal credit varies by household size and income.
Ohio’s current credit, to Blessing, is more “marketing than good policy” given it offers a large but nonrefundable credit to people who are already low earners and therefore don’t pay as much in taxes. He said this currently costs the state about $80 million per year. But a refundable credit alone would cost somewhere in the market of $209 million per year.
Zach Schiller, an economist with Policy Matters Ohio, commended Blessing for the bill. However, he said given the slower phase-in of $15 per hour, continuing to allow tipped worker to be “exploited,” and the lack of constitutional protections via legislation, Policy Matters can’t support the bill as written. And that’s despite the organization’s lobbying for more than a decade for an EITC.
“But by the same token, the acknowledgement that we need a higher minimum wage and a refundable EITC … we’re glad to see that’s out there and getting some attention,” he said.
According to Policy Matters Ohio research, a universal $15 an hour minimum wage will directly boost salaries for 470,000 Ohio workers earning less. It will also indirectly benefit those earning up to $17.25, whose payscales will likely increase as well. Three in five people whose pay will go up are women. Given Black and Latino workers are overrepresented in such jobs, they will disproportionately benefit from the policy.
Euclid Democratic Sen. Kent Smith has introduced legislation in the past to raise Ohio’s minimum wage for all workers. He said he welcomes Blessing’s bill, saying he’d rather make incremental progress than no progress. But he remained adamant that Ohio must eradicate the “tipped worker penalty” – his term for a different wage standard for tipped workers.
“Poverty numbers indicate if you’re in a tipped worker profession, you’re more likely to be in poverty than if you’re not,” he said. “The way the modern economy has evolved, these are positions where you’re working harder and earning less.”
The Ohio Restaurant Association declined to make an official available for an interview, but backed Blessing’s bill in a statement. The slower rollout, the association said, would leave small businesses more time to adjust.
“The proposed legislation maintains the tipped wage that is so valued by servers and bartenders, increasing the tipped wage to $7.50 an hour over time, which avoids putting Ohio’s restaurants and bars at risk for closure,” the association said. “Eliminating the tipped wage, as proposed in the ballot initiative, would threaten the survival of many small and independent restaurants, especially those in small towns across Ohio.”
Cleveland.com and The Plain Dealer reached out to the Chamber of Commerce, as well as the organizers behind the Raise the Wage Ohio amendment. Campaign manager Mariah Ross, speaking to The Columbus Dispatch, called the legislation “an underhanded attempt to trick the public” by excluding tipped workers and slowing the phase-in.
To make the ballot, organizers must gather at least 413,000 valid signatures of registered voters and submit them by late July.
Ohio voters last adjusted the minimum wage in 2006, backing a constitutional amendment that set a minimum wage that adjusts annually for inflation. It’s currently $10.45 per hour for non-tipped workers and $5.25 for tipped workers. The federal minimum wage is $7.25 and $2.13 per hour, respectively, but does not adjust for inflation.
Blessing noted the Legislature has taken some lumps from the voters lately. Last summer, lawmakers failed dramatically in proposing a constitutional amendment to make future constitutional amendments much harder for citizens to propose and pass. Then in the fall, voters overwhelmingly passed a law creating a recreational marijuana program in the state and a constitutionally guaranteed right to abortion – both opposed by Republicans who control all three branches of government. He said it’s time to win one.
“Frankly, I don’t think it’s a great look to just keep having things done at the ballot because we failed to act,” Blessing said.
Jake Zuckerman covers state politics and policy for Cleveland.com and The Plain Dealer.