Perspective: Governor Kasich's re-election budget

9:07 AM, Jun 29, 2013   |    comments
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Governor John Kasich and Republican legislative leaders stepped into the spotlight Friday to explain the about-to-be-signed, two-year budget plan.

It's a far cry from Kasich's original proposal to remake Ohio's tax code and structure.

Kasich sought to make dramatic tax system changes.

He wanted to put a higher tax on gas and oil drillers. Their lobbyists succesfully blocked that.

He wanted to expand the sales tax to include service providers, like lawyers and accountants.

Their lobbyists squawked and made a case that would be bad for Ohio's economy. That did not happen.

So the money had to come from somewhere else. Hence, the overall sales tax hike and a smaller income tax cut than the Governor proposed.

The Republican spin is that it's the biggest overall tax cut package in Ohio history -- $2.6 billion over two years.

Collectively, that's true.

The budget boosts the sales tax on goods we all buy by a quarter percent to 5 3/4 percent.

It cuts income taxes over three years by 10 percent, not the 20 percent Kasich sought.

Analysts say it means big savings for the very wealthy, very small savings for the middle class and a slight tax increase for lower income groups.

One study done for the group Policy Matters found those in the top one percent tax bracket will save about $6100, the middle class earning between $33,000 and $51,000 would save $9 and the lowest earners would pay an average $12 more.

The Democrats will simplify that to "the rich get richer and the poor get poorer."

Kasich's opponent, Cuyahoga County Executive Ed FitzGerald called the new budget " a train wreck."

The package also makes big changes in property taxes.

It eliminates the property tax exemption in the future for many seniors in the future.

Only low income seniors will be able to get it. Those getting it now will keep it.

And it takes away a state subsidy that gives property tax payers a break. The state had been paying 12.5 cents of every dollar.

Property owners will lose that break on future levies. Schools or governments seeking future property taxes will have a harder job selling the issues.

If the change had been in effect, the just-passed Cleveland school levy would cost the owner of a $100,000 home  $76 more a year.

Many of these provisions were added in non-public committee hearings.

That means schools and local governments did not have time to put together an effort to oppose them.

There will likely be lots of complaining after the changes are in place. Schools and cities will claim the state keeps shifting money problems to them.

Most of Ohio's job creation numbers   reflect an improving economy.

Kasich's camp can brag about Ohio's budget picture shifting from an $8 billion  hole to a big surplus on his watch.

And it will boast of getting a plan to fund road and bridge projects through Turnpike-backed funding.

But he will also take heat for property tax changes and anti-abortion measures added to the budget by his fellow Republicans in rushed conference committee hearings.

At the moment, Kasich remains the favorite in next year's election.

But Ohio's new budget's a mixed bag that may not be as helpful to Kasich as  his team hoped.


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