- Despite a record-sized budget of $72 billion, the net increase in education spending is just $464 million, which is below inflationary levels.
- More than half of Ohio school districts will see less direct state aid in 2016 than they received last year.
- 55% of Ohio school districts will receive less money now than they did six years ago.
Ohio Tax Code Becoming More Regressive
Yesterday, Ohio Gov. John Kasich unveiled his latest two-year budget proposal, featuring a large cut in the state income tax, paid for with increased taxes on everyday purchases, on business activity and on oil and gas extraction. This is not the first time Kasich has proposed cutting the state income tax — the state’s most progressive tax. The tax is designed so those at the top income level pay the highest rate. The state’s estate tax on inherited wealth was eliminated completely in the Governor’s first budget. To pay for these tax cuts that primarily benefit the wealthy, the Governor’s budget proposes raising the state’s regressive sales tax and expanding it to more services — including parking and cable TV subscriptions. People with low-incomes spend much of their income on things that are taxed. As a result, they pay a much larger share of their income on taxes in states with regressive tax systems that rely heavily on sales taxes to fund state spending. According to the Institute on Taxation & Economic Policy, the poorest 20% of Ohioans pay nearly 12 percent of their income on state and local taxes, compared to just 5.5% paid by the top 1%. We crunched the numbers, and here’s how dramatic the shift has been in just six years. Combined, the state’s income and estate taxes have declined from 45% of state general revenue to just 28%. At the same time, sales taxes have increased from 43% to 53% and now picks up the largest share of the cost of state government.
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
Sales Tax | 42.6% | 40.2% | 45.5% | 47.2% | 52.0% | 53.3% |
Income & Estate Taxes | 44.7% | 45.7% | 40.3% | 39.2% | 29.2% | 27.6% |
Other Taxes | 12.7% | 14.1% | 14.2% | 13.6% | 19.0% | 18.9% |
Innovation Ohio Budget Briefing
Budget Proposal Favors Those At The Top, But Leaves More And More Ohioans Behind
- Tax shift hasn’t worked. Since 2005, Ohio has repeatedly tried shifting taxes from the wealthy to everyone else in hopes of creating jobs. We have over 80,000 fewer jobs than we did a decade ago, meanwhile poverty is up and median income has fallen.
- From one pocket to another. The proposed budget raises taxes on working Ohioans and businesses by $5.2 billion, to pay for a $5.7 billion income-tax cut that largely benefits those at the top.
- Those who can afford it the least pay more. Decreasing Ohio’s progressive income tax and increasing the regressive sales tax means that those who can afford it the least now have to pay more.
More tax shifting that favors those at the very top?
Kasich’s Contradiction
- Lower-income Ohioans now pay more as a share of their income in taxes than those at the top;
- State funding for education is now at its lowest share of the state budget since 1997 – the same year that the Ohio Supreme Court ruled that our school funding system was unconstitutional; and
- State funding to communities has been cut in half, which means that those who can afford them the least have to pick up a greater share of the tab for basic quality-of-life issues such as police and fire protection, trash collection and road repair.
State of the State’s Education Funding on Display in Medina
IO Op-Ed: Tired of tax reform that doesn’t help?
Dropout Recovery charter schools exempt from state report card
Ohio’s mostly failing charter schools continue to grow
[i] And in two cases, Pennsylvania — curiously, Ohio’s application doesn’t require enrollment estimates. Applications: Provost, Mosaica-Ohio and Mosaica-PA, and Insight-Ohio and Insight-PA.
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