Ohio Gov. John Kasich has proposed a sweeping budget that reduces state income and small-business taxes through hikes in other areas, boosts school funding and expands Medicaid.

The Republican governor's plan was unveiled Monday.

The $63.1 billion, two-year budget incorporates a significant rewrite of Ohio's tax code that he says reflects the state's shift from a manufacturing to service economy.

It reduces the tax rate on most small businesses by 50 percent, cuts the income tax rate statewide by 20 percent over three years, and lowers the sales tax rate from 5.5 percent to 5 percent while imposing the tax on more services.

The plan also incorporates the governor's education funding overhaul outlined last week, which delivers $1.2 billion in additional funding to districts over the biennium.

Kasich also said on Monday he wants to expand Medicaid under the federal health care law to cover more poor people in the state.

He said the decision is likely to face opposition within his own party from conservatives against President Barack Obama's health care law. The GOP governor has also criticized the law as well as its potential long-term costs. Kasich now will need to persuade the Republican-controlled state Legislature to go along.

State officials said they believe 365,000 Ohioans will be eligible for coverage under the expansion right away and expects to get $2.4 billion in federal funds over the next two years for the expansion.

A group of Ohio's doctors and hospitals backs the idea.

The U.S. Supreme Court left it up to states last year to decide whether to expand Medicaid.

Facts and figures about Ohio's Medicaid program (Source: The Associated Press)

Facts about the proposed expansion of Medicaid in Ohio, the state-federal program that helps pay for health care for low-income residents:

   -- WHO'S COVERED: Currently, 2.3 million people in Ohio receive health care from Medicaid. Expanding the program would make 365,000 more Ohioans eligible for coverage in the beginning.

   -- COST: Gov. John Kasich's administration says the federal government would send $2.4 billion to Ohio to cover those newly eligible for Medicaid over the next two years beginning in July, and $13 billion over the next seven years.

   -- WHO PAYS: The federal government now pays about 60 cents for every dollar spent under Medicaid, and the state covers the rest. For states choosing to broaden Medicaid, Washington will pick up the full price of expansion the first three years and 90 percent over time.

   -- START DATE: Medicaid expansion would take effect in 2014. But state lawmakers must first approve the plan.

   -- WHO QUALIFIES: If Medicaid expansion goes forward, people who make up to 138 percent of the federal poverty line -- about $15,400 for an individual or just over $26,300 for a family of three -- would be covered.

   -- ADDED REVENUE: The state expects to net $235 million because of a boost in tax revenue, plus additional savings from proposed Medicaid eligibility changes and savings on medical care for prisoners.

   -- OPTING OUT: Kasich proposal includes an automatic "opt-out" trigger that would shut down Ohio's program for newly eligible residents if the federal government doesn't pick up its share of expanded coverage.

   -- MORE ELIGIBLE: In addition to those who could come on to Medicaid under expansion, Ohio is bracing for 230,000 eligible Ohioans to sign up for Medicaid once the federal law requires most people to have health insurance. Officials estimate there will be a roughly $521 million increase in the cost of the program for the state in 2014 and 2015.