Gov. John Kasich is set to sign the new two-year state budget tonight. As before, the Republican-controlled General Assembly has crammed the massive, 4,000-page budget bill full of all sorts of bad things that have nothing to do with taxing or spending, and that deserve — but probably won’t get — the Republican governor’s line-item vetoes.
But even if Mr. Kasich eliminates these noxious individual items, the remaining $71.2 billion spending plan that will guide state government for the next two years is plenty destructive enough. As in the previous two budgets the governor presided over, the new plan provides unnecessary tax cuts that will benefit the wealthiest Ohioans at the expense of the poorest, while providing inadequate support of essential state services as well as aid to local governments and schools.
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The new budget reduces Ohio’s personal income tax by 6.3 percent, at a cost of more than $1.2 billion over two years. Because the tax cut is across the board, it weakens the progressive structure of Ohio’s income tax, which properly imposes higher rates on wealthier taxpayers.
The budget greatly broadens a tax deduction for business income. It raises the state cigarette tax by 35 cents a pack, to $1.60; Mr. Kasich had sought a $1 hike.
The nonpartisan Institute on Taxation and Economic Policy estimates that the new budget gives the top 1 percent of Ohio taxpayers — those whose annual incomes exceed $1 million — a tax cut of more than $10,000 a year. They get half the total tax relief.
By contrast, the poorest 40 percent of Ohio households, with incomes of less than $37,000 a year, will pay slightly higher taxes, the analysis says. That is, the new budget shifts the tax burden from those Ohioans with the greatest ability to pay to those with the least. What a deal.
Once again, the new budget is balanced, despite the cost of the tax cuts, through restrictions on state spending. The budget provides a slight increase in aid to local governments, but not nearly enough to make up for reductions in recent years. The liberal advocacy group Policy Matters Ohio notes that local tax bases in cities such as Toledo remain sluggish as they continue to recover from the Great Recession.
Wendy Patton, Policy Matters’ senior policy director, says the budget is “not good for Toledo.” She adds that inadequate state funding will impair local services: public health and safety, road repair, help for abused and neglected children, care of mentally ill and old people, and recreation.
Similarly, lawmakers are providing more aid to local public schools, but not enough to restore prior cuts. And by spreading the overdue aid increase among all districts, rich and poor alike, they continue to ignore their constitutional mandate to achieve equity of school funding. The new budget does somewhat better by state colleges and universities and local public libraries.
The governor can make the new budget marginally less bad by vetoing nonfiscal items that amount to bad policy driven by legislative partisanship or extremist ideology. These include medically unnecessary restrictions on Ohio clinics that perform abortions, which are aimed at forcing them to close.
Among other worthy targets of the governor’s veto pen: A vindictive effort by lawmakers to punish communities such as Toledo that exercise their home-rule rights to operate traffic cameras, by cutting their state aid. A blanket denial of access to Ohio reporters about information related to county-issued permits to carry concealed weapons.
An effort to weaken the state Controlling Board, which enabled Mr. Kasich to expand Ohio’s Medicaid program of low-income health care when lawmakers initially refused to do so. A provision that would make it easier for local telephone companies to end land-line services. These are among the worst excesses, but there are many others.
Despite claims that the kind of trickle-down economics recurring in the new budget would promote business development, job creation in Ohio continues to lag the nation’s. Yet the Statehouse’s tax-cut strategy persists long after its failure has been amply shown.
Mr. Kasich is expected to announce next month, to no one’s surprise, that he is running for president in 2016. The budget he signs today will likely play well with the GOP base. But it provides much less of an indication that he is capable of leading all Americans equally.
First Published June 30, 2015, 4:00 a.m.
