If Gov. John Kasich’s latest two-year state budget proposal proves one thing, it is this: Most Ohioans don’t have a friend in Columbus.
If you’re a high income earner, the governor is on your side. If you’re a bigwig at a Big Oil & Gas firm, the governor is your humble servant. If you are a charter school cheat, looting public education – John Kasich is your wheelman.
If you’re looking for relief or a leveling of the playing field – you’re out of luck.
There are still bills to be dropped, hearings to be held and a months-long political process to watch and to participate in on Capitol Square. Innovation Ohio will be unpacking the issues below in greater detail in the coming days and weeks. The state budget is about taxing and spending, but it’s also a huge collection of public policy changes. It’s a document that can be forward looking and which offers a plan to put public money into to the public’s interest. What we’re seeing so far is ideological dogma, little that speaks to the future and lots of your money flowing in the wrong directions.
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It’s bu-bu-bu-bu-budget time!
On Monday, Gov. John Kasich is set to unveil his two-year state budget plan. The plan will outline how the state will spend over $55 billion in state tax collections and federal grants.
In his first budget, released in 2011, Kasich notably opted to shift the burden of paying for government to local taxpayers by preserving spending at most state agencies while drastically cutting revenue shared with local governments and schools. With a modest economic recovery underway, the 2014-2015 state budget will not be about allocating cuts, but instead is expected to see revenue gains. The big question for Monday will be whether Kasich restores those earlier cuts to provide property tax relief at the local level or instead uses increasing tax revenue to fund the gradual elimination of Ohio’s income tax – which, being based on an individual’s ability to pay, is our most progressive tax. [Read more…]
In Washington, President Obama and Congressional Democrats secured a historic fiscal victory in early January. By finally passing legislation that asked the wealthiest Americans to pay a little more in taxes, lawmakers moved one step closer to securing our nation’s fiscal health.
At the state level though, Republican Governors from around the country are pushing for tax reforms that would do the exact opposite. These governors want to see income taxes reduced or eliminated while raising other more regressive taxes that harm low- and middle-income taxpayers. These pieces of legislation are taken straight from the radical conservative playbook in an effort to transfer the burden of paying for public services from the wealthiest to the less well off. The Republican argument is that if a state lowers their income tax rate it will become more competitive in the eye of businesses who may want to relocate there or to help attract high-skilled workers.
For example, according to a recent New York Times article, Kansas Republican Gov. Sam Brownback introduced legislation to phase out the state’s income tax by cutting services and keeping in place what was meant to be a temporary increase in the state’s sales tax. Republican lawmakers in Kansas said that individuals were leaving the state to move to states that do not have income taxes and that this legislation would make them more competitive.
In reality, recent evidence points to the fact that there is no correlation between a state income tax rate and economic growth. What is worse is that these policies are simply another gift to the rich at the expense of low- and middle-income workers.
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Oil and gas development in Ohio is once again going to be a major policy issue in 2013 and Gov. John Kasich intends to push for an increased severance tax on horizontal drilling in Ohio to help pay for a $500 million income tax cut.
While it’s true that the oil and gas industry is growing in Ohio at this time, is it possible that the administration is being overly optimistic in its projection of how many producing wells there will be in the near future? Proper forecasting of wells and production estimates are essential because the production from these new oil and gas wells will pay for Kasich’s income tax cut. That’s why Innovation Ohio was interested in seeing how close the Kasich administration well estimates were to reality in 2012.
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