Americans for Tax Reform tells legislature “Pass Kasich’s Budget!”
by Nick • February 5, 2013 • Uncategorized • 14 Comments
You’ve probably read a lot about Governor Kasich’s new budget proposal in the last 24 hours. It contains a lot of reforms, the key points of which are below.
- 50% tax cut for every small business
- 20% income tax cut for all Ohioans
- Reducing sales tax from 5.5% to 5% (while applying it to a broader base of services)
- Increasing the gas and oil severance tax, but still keeping it below most other energy producing states
While Democrats are scrambling and scouring to find something in this budget they can demonize, Grover Norquist has already come out and urged the legislature to pass Governor Kasich’s plan.
Dear Legislator,
I write in strong support of the tax and education reforms in Gov. John Kasich’s proposed budget. The governor’s plan recognizes the urgency of reducing income tax rates across the board for Ohio’s families and small businesses, and broadens the sales tax base while reducing the rate. The proposal is a net tax cut of over $1 billion, reducing the overall burden on taxpayers rather than using reform as a Trojan Horse for tax increases. And it expands access to school vouchers for an unprecedented number of low-income students currently locked into underperforming schools.States compete for population, jobs, and investment. That is especially true today in the Midwest, where states like Wisconsin, Indiana, and Michigan have streamlined labor regulations and are proposing significant tax cuts. Ohio started this process in 2011 with the elimination of the estate tax. The governor’s proposal will continue the effort to transform the state, cutting taxes and giving new educational opportunities to an unprecedented number of Ohio’s children.
This budget reduces income taxes across the board, giving much needed tax relief to Ohio families and small businesses of all sizes. It also broadens the sales tax rate and lowers the rate from 5.5 percent to 5 percent. The overall impact of the tax changes is a $1.3 billion tax cut.
With respect to education, Ohio will join Indiana and Louisiana as a true leader on education reform. Nearly one-half of Ohio’s children will be provided a voucher to attend a private school of their choice, freeing many of them from failing or underperforming schools. School choice is a civil rights issue, and Gov. Kasich’s budget places Ohio at the forefront of the national reform effort.
For those of you who have signed the Taxpayer Protection Pledge, a vote for this budget is compliant with the Pledge.
Again, I urge your support for Gov. Kasich’s proposed budget. If you have any questions about ATR’s position on this issue, please contact Ohio state affairs manager Josh Culling at 202-785-0266.
Onward,
Grover Norquist
President, Americans for Tax Reform
And yes, the severance tax increase is recognized by ATR as part of Governor Kasich’s plan to reduce Ohio’s overall tax burden.
Kasich’s plan calls for lower income-tax and sales-tax rates, but also an expansion of the sales-tax base and an increase to the severance tax that applies to horizontal drilling by oil and gas companies mining the state’s rich shale deposits.
The first-term governor has signed Norquist’s Taxpayer Protection Pledge — a promise to oppose any and all tax increases. But Americans for Tax Reform backs his plan because “the increases you get from some of the base-broadening and the severance tax is more than offset” by the sales-tax cut and across-the-board income-tax reductions, Culling said.
Once again, Kasich has proposed a budget with bold changes aimed at moving Ohio forward. The first two years have gone well, resulting in a $1 billion+ surplus and 120,000 new jobs. Let’s hope that our Republican friends in the legislature take Mr. Norquist’s advice. Here’s a short video of the governor himself explaining his proposal to all Ohioans.
I think we need to put away the rose-colored glasses folks. There are good things about the Kasich budget and he is a marked improvement over Strickland. However, for the biennium the 2012 – 2014 budget represents a n 11.4% (~$3 billion) INCREASE over the 2010-2011 General Revenue budget.
Did your income at home go up by 11% over the past two years? The new Kasich budget is the second largest budget increase in the past 13 years and comes during a time when Ohio’ s economy is still weak. Clearly despite all the talk Governor Kasich has done little to reduce spending. There are other clouds on the horizon. Despite some early success in job creation that situation has stalled out and Ohio is shedding jobs again. I don’t see this huge budget as a way to fix that problem.
The new budget includes large cuts to local governments – this might have been justified if SB5 reforms had survived the referendum but we know that did not happen. There won’t be any savings on public pensions and salaries, Governor Kasich, so if these local entities are cut they will have to go to the taxpayers with new tax levies. The total tax burden will soon be on the rise again in Ohio. Ohio is already in the top 20 in terms of the total tax burden on its citizens.
The Kasich budget makes no mention of estate tax reform – where is it Governor? You were for such reforms during your campaign. And this is not budget related, but where are your proposals for voter photo-ID’s and where is your plan to make Ohio a right-to-work state? The entire state government is in republican hands what are you waiting for? Michigan just did it!
Add to this his decision the last few days to cave-in to the Obama Administration and accept the federal money for the Medicaid expansion and I find myself wondering why I worked so hard in 2010 to help elect John Kasich. If we have an economic downturn Ohio will be toast and Kasich will be looking for a job. The Governor might just find his “base” is not too excited about him come November, 2014.
Wow. Some folks are never satisfied. Where to start?
First, the new budget doesnt mention estate tax reform, because the estate tax was already eliminated in the last budget!
One thing to always remember with Ohio’s budget is that the largest chunk of it is Medicaid spending. This is a federal entitlement that states are required to fund a portion of. The amout spent on Medicaid is largely out of a state’s control. So including the entire budget including Medicaid spending year over year is not a fair comparison.
The new budget does not make large cuts to local governments, There were cuts to the local govt fund in the last budget, but not this one. And the argument is contradictory. First you complain that spending isnt cut enough and then you complain about cuts to local governments? It doesn’t make sense.
Did incomes rise that much? No. But employment has risen.
Where is your evidence that Ohio is shedding jobs again? Ohio is way ahead of the average state when it comes to job growth and the unemployment rate.
The RTW issue is a non-starter as far as Kasich pushing it through. The legislature delivered him a flawed and complicated bill. The Teap Party wanted him to sign it and he did. He pushed for it and made a case for it to Ohioans. But in the end, it was repealed because the public didnt understand it. That’s on the legislature and its water under the bridge now.
If they were to come back with a RTW bill, it would be played as them giving the finger to and not listening to the voters when they repealed SB5. And it would be repealed again. The answer to RTW is the citizens drive for the Workplace Freedom Amendment, which we have pushed for hard. We dont want the legislature or the governor’s hands on this topic, or it will fail.
This budget contains major tax reductions that will lower Ohio’s overall tax burden, we are outperforming the national average in recovery, and people are still complaining? Grover Norquist, who most voters view to be too extreme a conservative, says this is a good budget, and people are still complaining?
Give me a break!
Basically, the attitude I’m hearing is that “I demand 100% of my agenda and I want it NOW NOW NOW!!! Not 90% or 80%. 100% or I’m gonna let the Democrats win and get zero!”
It’s very short sighted and self-defeating.
“Increasing the gas and oil severance tax, but still keeping it below most other energy producing states”
Most other states don’t have a Commerical Activities Tax on gross revenues. Kasich’s decision to keep pushing the severance tax looks like the action of a stubborn egotist. He doesn’t need it, and he’s going to stop Ohio’s economy from growing as it could if he gets his way.
If the previous commenter is right about the degree of spending increase, I am doubly unimpressed.
Tom Blumer
BizzyBlog.com
Mr. Blumer,
I assume you missed this analysis done by Ernst & Young that DID include the CAT tax and all other taxes, including severance tax, to determine Ohio STILL maintained its competitive advantage after instituting its new severance tax rate.
http://jobs-ohio.com/images/Ernst-Young-Severance-Tax-Analysis-Prepared-for-the-Ohio-Business-Roundtable-5-15-12.pdf
At the end of the day, Ohio’s sev tax proposal is so incredibly minor a change that pushback against it looks silly from a conservative POV.
Any conservative economist, Laffer, Vedder, whoever, would say the most damaging tax by far is the income tax. Thanks in part to the sev tax change, Ohio is able to significantly cut the income tax and promote growth. All while maintaining its competitive advantage over other oil/gas states.
Those numbers are pretty darn ridiculous.
No one really looks into the details about how state budgets spend money vs. how the federal govt (or a family) does it. Before Kasich, Strickland, Voinovich, Taft, et. al moved money in and out of the GRF like it was monopoly money. Kasich is the first guy that has taken that smoke and mirrors out of budgeting and made everything transparent. That means that you’re going to get these bogus numbers that people like Fargo are pushing.
Let’s be clear – the only person who would try to hit Kasich on spending is someone who either doesn’t understand the process, has a personal grudge, or someone that is getting paid to do it. That’s it.
Oh, and another thing… there are NO local government cuts in the budget. Again, Fargo is spreading lies.
Steven: ” Again, Fargo is spreading lies.”
Really? I sure keep that in mind Steven, thanks.
As to the budget – made my assessment as it is based on information from analysis of my reading and the analysis of individuals at other sites including the Buckeye Institute — I know a lot of conservatives who see it my way those who carry water for Kasich will probably disagree – so be it.
On right to work, Nick says: “The RTW issue is a non-starter as far as Kasich pushing it through. The legislature delivered him a flawed and complicated bill. The Teap Party wanted him to sign it and he did….”
So this is all the fault of the Tea Party? Before the Senate vote Governor Kasich was on numerous public broadcasts defending every aspect of this bill. Several told him to his face this bill was headed for a referendum and that it would go down in a landslide.
Bill Cunningham told the Governor to his face that he would need a search warrant to find a republican if he persisted with the bill in its current format. Governor Kasich defended the bill point for point each time.
John Kasich was the Governor of the State and so he was capable of calling Sen. Shannon Jones into his office and suggesting they might be over reaching. Isn’t that a leader’s job?
And the Tea Party — weren’t those the folks that actually elected him Governor – so now they are the problem? Karl Rove should post here.
I’ll say this It’s for damn sure the incompetent Ohio Republican Party was not responsible for the statewide wins in 2010.
Your point about the prudence of a citizen based movement for RTW is taken — I’m on board with that. But this entire affair (SB5/Issue 2) was badly handled and the buck stops with John Kasich.
I stand corrected and retract my comment on estate taxes – I had forgotten that Governor Kasich actually did sign that repeal bill effective 01/01/2013 — and I’m not sure now what made me think that revenue was anticipated.
I cannot find the article on the recent private sector job losses in Ohio but I WILL find it and post a way to read it here. But one point should also be made Kasich always talks about total jobs (i.e., gross) then says Ohio ranks so and so among the states. Of course we create more jobs than South Dakota and Delaware but on a per capita basis the Ohio recovery is not as impressive. Again, John Kasich is a massive improvement over Ted Strickland and I hope I am wrong and the recovery continues unabated.
Your charge that I say it’s my way 100% or the highway (i.e., the democrats) is hyperbole at best of borderline demagoguery? I have worked for Ohio Republican candidates at all levels of government — for years — even when I did not fully agree with them because generally they were more conservative them the democrat they ran against. But I don’t have to toe the line.
If it comes down to Kasich v. Strickland again I know where I will be. I will be happy if my concerns turn out to be wrong on Governor Kasich.
That said, we did not lose Ohio in November 2012 because thousands of new democrats voted — they got fewer votes than 2008. We lost Ohio because a large number of republican voters (and/or conservatives) stayed home — so republicans need to buck up — we don’t have to backtrack and surrender just because Obama won an election that he shouldn’t of.
If we want to win in November 2014 we’d better get those conservatives back to the polls because not too many democrats are likely to see the light IMO.
Fargo, I didn’t say the SB5 debacle was the Tea Party’s fault or that the Tea Party is “the problem.” Where in the world did you get that?
The legislature produced a bill. The tea party backed the bill through both houses. They urged Kasich to sign the bill. But it was rejected overwhelmingly.
Now you want him to go back to the same topic and expect different results. And if he doesn’t, the tea party is going to shame him for it?
It makes no sense.
As far as it being badly handled, I don’t recall the tea party calling for the bill to be rewritten or for Kasich to veto it so that they could get it right. So laying all the blame at his feet, when the tea party was on board with it the whole time, is disingenuous.
“So laying all the blame at his [Governor Kasich's] feet, when the tea party was on board with it the whole time, is disingenuous.”
Seriously? I say we elect leaders to lead — effectively and with wisdom. Ohio’s government is a democratic republic not a pure democracy. Using your standard it is disingenuous to blame Obama for the Affordable Health Care Act then also I suppose.
There are no cuts to local government in the proposed budget.
So, saying “The new budget includes large cuts to local governments”, which you did, is a lie.
You may not like Stephen’s comment about spreading lies, but he’s right.
I re-examined the entire Kasich budget that is on-line and do not find the evidence for the cuts to local government that I claimed — the document that I got the information from was a valid study by a very knowledgeable individual but it is considerably older than I had realized — I should not have used it along with the more current data. So I’ll have to eat that one.
In re-examining the budget I’ll mention another aspect that could be potentially problematic for local governments and that is the plan to (apparently) restrict local government tax rates. Local governments are closer to the citizens and maybe this is not a good idea.
And one other thing — you and Steven can do as you wish but usually I prefer to call people “wrong” rather than “a liar” when I disagree with their point — especially in round one of a discussion. I have no reason to “lie” about John Kasich.
No one actually called you a ” liar”. But when you present an argument that is so full of inaccuracies (estate tax wasnt erased, budget has large local government tax cuts, etc.) you cant be so sensitive when someone calls you out for speading false information.
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Steven : “Again, Fargo is spreading lies.”
Nick: “No one actually called you a ” liar”.
That’s a relief.