Gov. John Kasich unveiled a budget proposal Monday that would cut state taxes overall by $500 million over two years and target help at small businesses, but would also seek to shift tax burdens from income to consumption of goods, smoking and oil and gas profits.
The budget totals nearly $140 billion over two years. Tax reforms represent a significant portion of the policy changes. As with his last budget, this plan seeks to push down individual income tax rates and taxes charged on small businesses while increasing other taxes to pay for the changes.
The proposal also outlines a host of other policy initiatives, including an overhaul to Ohio’s welfare system, efforts to get tough on underperforming charter schools and provisions that would allow community colleges to offer bachelor degrees.
The proposal, which covers the 2016 and 2017 budget years, serves as a starting point for the Ohio House. It will begin its budget deliberations immediately.
By law, the budget for Ohio’s state government must be approved by the General Assembly and signed by June 30. The 2016 budget year begins July 1.
Kasich, meanwhile, plans to make stops around the state to tout his proposals. He’ll meet with student entrepreneurs Tuesday at the University of Dayton to talk about the proposals for small businesses.
Not surprisingly, Kasich’s fellow Republicans generally had praise for his proposal.
“I commend Governor Kasich and his team for the work they have already put into this budget proposal,” Rep. Ryan Smith of Gallia, the House Finance Committee chair, said in a statement. “I look forward to reviewing the measures outlined in the bill and working closely with my colleagues in the legislature to ultimately agree on a plan that is best for Ohio.”
But portions of the package drew mixed reviews and criticism as the wrong policy at the wrong time for Ohio.
The Ohio Grocers Association, for example, questioned proposals to boost the tax on cigarettes and the commercial activities tax, two moves it said that would be bad for its members economic survival.
Liberal-leaning Policy Matters Ohio said Kasich’s budget “includes some needed initiatives, such as bolstering preschool education and stepping up efforts to fight infant mortality.”
But his plan to further cut income taxes were a concern, it said.
“It would divert $500 million into tax cuts that would be better spent on vital public services,” a statement from the think tank said. “While some elements of the tax plan may be good policy … the overall package will further tilt the tax system in favor of those most able to pay.”
Senate Minority Leader Joe Schiavoni, a Boardman Democrat, was more to the point.
“The last thing Ohioans need is another increase in the state sales tax,” he said. “Instead of raising taxes on everyone to benefit a few, the governor should have proposed meaningful investments in education and local communities.”
Click here to learn more about some of the changes proposed.
You can also click here to read a piece from the Northeast Ohio Media Group about how much the proposed Sales Tax increase could cost you per year.
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