Gov. John Kasich says he’s cutting everyone’s taxes in his 2014-2015 budget, but an analysis released Thursday found the plan is actually raising taxes for the poor and middle class. The Policy Matters Ohio report reveals the poorest Ohioans will see a tax increase of $63 from Kasich’s budget plan, while the top 1 percent will see a tax decrease of $10,369.
For the poorest Ohioans, the new tax burden comes through the sales tax. On average, the bottom 20 percent of the income ladder will have their income taxes reduced by $8, but the sales tax plan will actually increase their average sales tax burden by $71.
The middle 20 percent fares slightly better. Under the budget proposal, they will get
a $157 income tax cut on average, but their sales tax burden will go up by
$165 — meaning they'll end up paying $8 more in taxes.
The top 1 percent get the most out of Kasich’s tax plan.
Their income taxes will be reduced by a whopping $11,150. The top 1 percent
do see the highest sales tax increase at $781, but it’s nowhere near
enough to make up for the massive income tax cut.
Kasich says his budget is all about creating jobs and spurring the economy, but the regressive tax system defies economic research. A previous analysis from the Congressional Budget
Office (CBO), which measures the budgetary and economic impact of
federal policy, found
letting tax cuts expire on the wealthy would barely dent the economy. The same report also found the economy greatly benefits from tax and social welfare programs that
disproportionately benefit the lower and middle classes.
Another report from the Congressional Research Service (CRS) also concluded tax hikes on the rich would have negligible economic impact. The findings made national Republicans so angry that they pressured CRS to pull the report. CRS later re-released the study — except this time it had nicer language to appease politicians that can’t handle reality.
Kasich’s plan proposes cutting the state income tax by 20 percent across the board and lowering the sales tax from 5.5 percent to 5 percent. To pay for the cuts, the proposal broadens the sales tax so it applies to additional services — including cable TV services, coin-operated video games and admission to sports events and amusement parks — while keeping exemptions for education, health care, rent and residential utilities.
For more analysis of Kasich’s budget, check out CityBeat’s other coverage:
Is the race for Ohio secretary of state already underway? Ohio Sen. Nina Turner, who is considering a run against Secretary of State Jon Husted in 2014, says she will introduce legislation to protect voters against Republican efforts to limit ballot access. She also criticized Husted for how he handled the 2012 election, which CityBeat covered here. Husted responded by asking Turner to “dial down political rhetoric.”
Build Our New Bridge Now, an organization dedicated to building the Brent Spence Bridge, says the best approach is private financing. The organization claims a public-private partnership is the only way to get the bridge built by 2018, rather than 2022. But critics are worried the partnership and private financing would lead to tolls.
The Hamilton County Board of Commissioners threw out
a Metropolitan Sewer District competitive bidding policy yesterday. The
policy, which was originally passed by City Council, was called unfair
and illegal by county commissioners due to apprenticeship requirements and rules that favor contractors within city limits. Councilman Chris Seelbach is now pushing for compromise for the rules.
Believe it or not, Cincinnati’s economy will continue outpacing the national economy this year, says Julie Heath, director of the University of Cincinnati’s Economics Center.
Three Cincinnati-area hospitals are among the best in the nation, according to new rankings from Healthgrades. The winners: Christ Hospital, Bethesda North Hospital and St. Elizabeth Healthcare-Edgewood.
Democrat David Mann, former Cincinnati mayor and congressman, may re-enter politics with an attempt at City Council.
In its 2013 State of Tobacco report, the American Lung Association gave Ohio an F for anti-smoking policies. The organization said the state is doing a poor job by relying exclusively on federal money for its $3.3 million anti-tobacco program. The Centers for Disease Control says Ohio should be spending $145 million.
The Air Force is gearing up for massive spending cuts currently set to kick in March. The cuts will likely affect Wright-Patterson Air Force Base.
Dennis Kucinich, who used to serve in the U.S. House of Representatives, will soon appear on Fox News as a regular contributor.
For anyone who’s ever been worried about getting attacked by a drone, there’s now a hoodie and scarf for that.
A motion proposed by a majority of City Council today would use leftover
revenue from the previous budget year to undo cuts to various programs,
including human services, parks and the Health Department.
The restorations mean no city workers will be laid off as a result of the operating budget passed in May. Previously, 60 positions had been cut, but many employees remained in different offices while the budget situation was worked out.
The cuts were previously approved with the 2014 budget before council members knew final revenue numbers for fiscal year 2013, which ended June 30. Council had to pass the budget 30 days early because the city’s use of emergency clauses, which eliminate a waiting period on passed laws, was being held up in court.
The city ended up with roughly $10 million more revenue than projected in the past budget year. The Council motion uses nearly $4 million to undo some of the $20 million in cuts carried out in the latest budget. The rest of the extra revenue will be held until the city manager makes further suggestions, but some of that money will likely be saved for next year’s budget gap, Vice Mayor Roxanne Qualls said at a press conference.
Human services funding is getting more than $510,000 restored, putting the program at 0.4 percent of the operating budget. Cincinnati has historically set a goal of directing 1.5 percent of the operating budget to human services, which flows through various agencies that aid low-income and homeless Cincinnatians.
The Health Department is getting the largest restoration at $900,000, allowing the city to bring back positions affecting junked vehicles, rodent control, litter and weed response, infant mortality and more.
Parks will also get back $400,000 out of $1 million that was cut in the previous budget. Another $312,000 is being used to restore recreation funding, particularly to keep the Busch Center open.
Other programs getting money back: the Center for Closing the Health Gap, Cincinnati USA Regional Chamber, Film Commission, African American Chamber of Commerce, Urban Agriculture Program, Office of Environmental Quality, Neighborhood Support Fund, Neighborhood Business District Support Fund, Law Department and funding to 3CDC for Fountain Square maintenance.
Qualls claimed the higher-than-projected revenues are evidence the city’s economic strategy is so far successful.
“Cincinnati’s strategy of investing in jobs, neighborhoods, people is working,” she said. “We are seeing an increase in revenue as a result of investments we are making.”
Qualls also acknowledged that the budget debate has felt like a “roller coaster” for many citizens. Originally, Mayor Mark Mallory’s administration claimed it would have to lay off police and firefighters if the city didn’t lease its parking meters, lots and garages to the Greater Cincinnati Port Authority. But when the parking lease was held up in a court challenge, Council managed to pass a budget without the public safety layoffs. Now, Council is undoing further cuts and moving forward with the parking lease.
After the press conference, Qualls told CityBeat that some of the unused revenue may also be used to finance a disparity study that would gauge whether the city should change its contracting policies to favorably target minority- and women-owned businesses.
The budget bill currently working through the Republican-controlled Ohio legislature would cut taxes in a way that disproportionately favors the wealthy, according to a new analysis from Policy Matters Ohio, a left-leaning policy group.
The budget bill, which was passed the Republican-controlled Ohio House with a 61-35 vote on April 18, would cut state income taxes for all Ohioans by 7 percent. Policy Matters analyzed the result for each tax bracket: For the top 1 percent, the tax plan would cut $2,717 in taxes on average. For the middle 20 percent, it would amount to a $51 cut on average. For the bottom 20 percent, it would result in $3 on average.
The report explains the disproportionate gains are caused by the structure behind Ohio’s tax system: “Ohio has a graduated income tax, so people pay more on higher levels of earnings. Because of that, across-the-board tax cuts give much more money to the wealthiest Ohioans. This reinforces inequality and adds to the unfairness of the state and local tax system, which is weighted in favor of upper-income taxpayers when all state and local taxes are taken into account.”
Zach Schiller, research director at Policy Matters, says the Ohio House tax plan will also have little impact on Ohio’s economy.
“Since the 21-percent reduction in state income taxes approved in 2005, Ohio’s economy has underperformed the nation,” Schiller said in a statement. “There is little reason to believe that another round of income-tax cuts will produce a different result.”
Michael Dittoe, spokesperson for Speaker of the House William Batchelder and Ohio House Republicans, wrote in an email to CityBeat that there are still two months for the state government to finalize the details of the tax plan as it works through the Ohio legislature.
The budget bill still has to be approved by the Republican-controlled Ohio Senate. If changes are made to the Ohio House proposal, the Ohio Senate bill would have to be concurred by the Ohio House. It would then need to be signed by Republican Gov. John Kasich, who could line-item veto certain parts of the bill or veto the entire bill.
“It’s disappointing to see that Policy Matters Ohio would begrudge an income tax cut which will benefit all Ohioans,” Dittoe wrote in the email. “Of the seven citations in their report, ironically, five of them refer back to previous ‘studies’ issued by none other than Policy Matters Ohio. Before issuing a study of this magnitude, it may be wise for them to cite something other than themselves to make the report more credible.”
Policy Matter’s findings were gathered through the independent Institute on Taxation and Economic Policy, which plugs the numbers into its own model to gauge the impact of tax cuts on different income levels.
The resulting numbers do little to deflate concerns raised by Policy Matters about Kasich’s tax proposal, which was a much larger 20-percent across-the-board income tax cut. Policy Matters found Kasich’s tax plan also favored the wealthy, except the overall plan actually raised taxes on the state’s poorest because it included an expansion of the sales tax that the Ohio House rejected (“Smoke and Mirrors,” issue of Feb. 20).
The city of Cincinnati and its largest city employees union have reached a deal regarding the privatization of the city’s parking assets. Under the deal’s terms, the city will give raises and not lay off anyone for three years, but only if the city’s parking assets are privatized. However, the head of a Clifton community group is still not happy with the privatization plan. He says the plan is bad for business because it limits the amount of affordable parking in the area. But would laying off 344 city employees be better for business?
The identity of the Miami University student who put up
the infamous “Top Ten Ways to Get Away with Rape” flier may soon be revealed. The Ohio Supreme Court
will decide by Dec. 14 whether the case should be unsealed and open to public view. Robert Lyons, the Butler County part-time judge who sealed the case, has faced scrutiny in the past few months for conflicts of interest regarding drinking-and-driving cases.
Revenue from casinos in Toledo and Cleveland is dropping. The numbers paint a bad picture for Cincinnati and Hamilton County officials expecting budget problems to be solved by casino revenue.
A proposal mandating drug testing for welfare recipients in Ohio resurfaced last week. Republican legislators claim the requirement will save the state money, but a similar proposal in Florida added to budget woes as the state was forced to pay for drug tests.
Ohio’s ultra-wealthy population is growing. About 1,330 Ohioans are worth $30 million or more, an increase of 2 percent since 2011, according to a report from Wealth-X. The news could shape Gov. John Kasich’s plan to cut the income tax using revenue from a higher oil-and-gas severance tax, perhaps encouraging state officials to make the cut more progressive.
Gov. Kasich is ending the practice of giving so many tax credits to keep businesses in Ohio. The move could potentially cost the state jobs as businesses move to other areas with bigger, better incentives, but state officials and the business community don’t seem too worried for now.
If the Ohio government agencies were forced to cut their budgets by 10 percent, the results would not be pretty. The Ohio Department of Rehabilitation and Correction would have to close prisons, and the Ohio Department of Natural Resources would have a tougher time enforcing new regulations on fracking.
Ohio’s exotic animal law is facing a challenge in federal court today. Exotic animal owners claim the law violates their First Amendment and property rights by forcing them to join private associations and give up their animals without compensation. They also do not like the provision that requires microchips be implanted into the animals. The Humane Society of the United States is defending the law, which was passed after a man released 56 exotic animals and killed himself in 2011.
An Ohio court said a business tax on fuel sales must be used on road projects.
Ohio gas prices are still dropping.
The cure for leukemia could be a modified version of the AIDS virus.
It’s official: Cincinnati’s budget proposal will arrive Nov. 26. The budget will seek to close a deficit estimated to be between $34 million and $40 million. Part of the budget plan was revealed when the city manager’s office suggested privatizing parking.
Despite the deficit the city is facing, City Council pushed forward a $21,000 raise and a one-time $35,000 bonus for City Manager Milton Dohoney in a 6-3 vote. It’s the first raise Dohoney is getting since 2007, but some are unhappy with the decision in light of the deficit, which could lead to job cuts. “The city manager is a good man, he is a hard worker, but to me this just feels out of touch with the economic reality that we are in right now,” Councilman P.G. Sittenfeld told Fox 19. “You don't give the highest paid employee in the city a raise, a significant raise, when you're facing a potentially huge budget deficit. Plus, you know, there's a very real possibility of layoffs.”
Ohio Republicans are pushing forward with HB 298, a bill that cuts funds to Planned Parenthood. The organization has become a popular target for Republicans because it provides abortions, but abortion services only make up 3 percent of what Planned Parenthood offers. The move is just one of many recent moves in the Republican agenda against abortion rights. They recently advocated renewing the heartbeat bill, and Gov. John Kasich recently appointed two anti-abortion advocates to government positions.
The Ohio House overwhelmingly approved a bill that will put large-scale puppy mills under more scrutiny with new state standards and yearly inspections. Animal rights activists have argued Ohio has become a haven for bad breeding practices due to lax laws and regulations. CityBeat previously covered the puppy mills issue and how it enables Ohio’s dog auctions.
But that’s not all the Ohio legislature got done. The Ohio House passed a bill that further regulates “pill mills” — doctors, pharmacies or clinics that distribute narcotics inappropriately or for non-medical reasons — and a bill that cracks down on “cyber stalking.” The Ohio Senate passed a bill that essentially lowers taxes for companies that increase payroll by 10 percent.
A new study highlighted the success of some Ohio schools, including Robert A. Taft Information Technology High School in Cincinnati. The research found the schools succeeded despite high poverty and tight budgets. The study indicated some key attributes of success: principals play pivotal roles, teachers and administrators are obviously engaged and invested, school leaders provide major incentives to teachers, data is used to measure progress and teachers and administrators do not see a lack of parent or community engagement as an insurmountable barrier to success. The report also made some recommendations: establish clear transitional protocols in case a principal leaves, engage teachers, hire teachers that are on-board with the school’s goals, leverage great reputations and celebrate success.
Hamilton County could issue securities to raise revenue. County commissioners are currently working on ways to close a $20 million deficit. The securities idea comes from Todd Portune, the lone Democrat on the Board of Commissioners.
The investigation into U Square worker payments is ongoing. A City Council committee wants to see if the workers are being paid what they are supposed to be paid. Under Ohio law, workers on city-funded projects must get a prevailing wage, which is equivalent to the wage earned by a union worker on a similar project. But City Solicitor John Curp argues developers do not have to pay prevailing wages for parts of the project that aren’t getting public funding. City Manager Dohoney also argued that overzealous requirements could drive businesses out of Cincinnati.
Despite the pleas of more than 500,000, it does not look like Cincinnati-based Macy’s will dump Donald Trump. The billionaire has gained recognition as a big-name Republican and “birther” — someone who ignores all facts to call into question President Barack Obama’s country of origin. Brian Williams, news anchor at NBC News, described Trump aptly during election night: “Donald Trump, who has driven well past the last exit to relevance and peered into something closer to irresponsible here, is tweeting tonight.”
Ohio Attorney General Mike DeWine is leading a new efforts to stop the use of synthetic drugs, including bath salts.
To fill a vacancy, a new interim chair has been named at the Ohio Board of Regents: Regent Vinny Gupta. He will be replacing James Tuschman, who successfully pushed a ban on smoking in Ohio’s college campuses. Gupta’s term will run through March 2013.
Meet the loneliest planet of them all. It’s an orphan that drifted away from its parent star.
Portune also gave ideas for possible adjustments to his sales tax proposal. He said commissioners could “sunset” the sales tax hike, essentially putting an expiration date on the tax increase. He also would like to see the sales tax hike reviewed on a regular basis to ensure taxpayers aren't being burdened longer than necessary. The idea behind possible time limits for both proposals is new revenues, perhaps from an improving economy or Cincinnati's new casino, could make changes unnecessary in the long term.
If anything came from the meeting, it’s that none of the commissioners like the position they’re in. Commissioner Chris Monzel, a Republican, said he had been placed “between a rock and a hard place.” Hartmann echoed Monzel, saying it was an “unenviable position.” Despite being the one to propose the hike, Portune said, “We’re left with two options that none of us like at all.”
Commissioners mostly repeated previous arguments during most of the meeting. Hartmann continued saying he was unsure how he would vote, but he said the two options presented are the only options left. He called Portune's plan “bold.”
Portune claimed the sales tax hike was more equitable because it spreads out the tax burden to anyone who spends money in Hamilton County, including visitors from around the Tristate area. In contrast, eliminating or reducing the property tax rollback would place the burden of the stadium fund exclusively on residential property owners in Hamilton County.
The property tax rebate and sales taxes are both regressive, meaning they favor the wealthy more than the poor. In simple terms, as income goes down, spending on goods and services take bigger bites out of a person’s income. A sales tax makes that disproportionate burden even larger.
One analysis from The Cincinnati Enquirer found
the wealthy made more money from the property tax rebate than
they were taxed by the half-cent sales tax raise that was originally
meant to support the stadium fund. For a previous story covering the stadium fund, Neil DeMause, a journalist who
chronicled his 15-year investigation of stadium deals in his book Field of Schemes, told CityBeat
the stadium fund’s problems stem from the county government making a
“terrible deal” with the Reds and Bengals.
Monzel said he will continue to try to find alternatives to raising taxes. On Nov. 28, Monzel told CityBeat he would rather keep the stadium fund balanced for one year with short-term cuts, including a cut on further investments in The Banks development, before raising taxes. In the long term, Monzel says commissioners could see if revenue from the new Horseshoe Casino and a possible deal involving the University of Cincinnati using Paul Brown Stadium would be enough to sustain the stadium fund.
The commissioners will vote on the proposals on Dec. 5.
The Republican head of Hamilton County’s governing board outlined his own alternative for a 2013 budget on Monday, proposing an austere path forward after rejecting other budgets that would raise some taxes.
Board of County Commissioners President Greg Hartmann said his proposed budget would reduce the size of county government by 30 percent, compared to five years ago. He said he wants the board to approve a budget before the Thanksgiving holiday.
“It is a budget of austerity and investment in growth,” Hartmann said.
He added, “It is a structurally-balanced budget,” that doesn’t use one-time sources of cash to make up for shortfalls.
Hartmann’s proposed budget would cut the Sheriff’s Department by about $57,000 or 0.01 percent from 2012 levels; reduce the coroner’s appropriation by 3 percent or $99,000; cut economic development by 5 percent; cut 5 percent from adult criminal courts; and reduce subsidies to the Communications Center and Sheriff’s Department.
Hartmann stressed that it is important to fund public safety as fully as allowable in these tough economic times, as economic development is not possible without it.
Hartmann’s budget comes after commissioners rejected three proposals from County Administrator Christian Sigman.
Sigman proposed $18.7 million in cuts, which Hartmann’s budget maintained in addition to his own reductions.
Two of Sigman’s proposals involved increasing the sales tax to balance the budget.
Fellow Republican Commissioner Chris Monzel said he supports Hartmann’s efforts at austerity, but is working on his own budget proposal as well.
“An austerity budget is the way we’re going to go, and it’s going to be hard,” he said.
The board’s sole Democrat, Todd Portune, said he too is working on his own proposal that he had hoped to have prepared for the Nov. 5 meeting, but was still making tweaks and hoped to present it by the following week.
He hinted that the results of Election Day might impact how he crafts his budget proposal.
“Tomorrow’s results may have an impact as well on the budget that I present as it relates as well to those who are running for county seats,” Portune said. “We have in some cases two very different visions in terms of solutions.”
Both he and Hartmann are up for re-election. Portune is running against Libertarian Bob Frey. Neither candidate has a major party challenger.
Hartmann, who has actively campaigned for Republican presidential candidate Mitt Romney, had a joke in response to Portune’s waiting for the election results.
“I thought you were predicting Romney’s win would make the economy go on the right track,” Hartmann cracked. “I was thinking that’s what you were going to go with.”
A vote on the 2013 Hamilton County budget is being delayed a week at the request of the sole Democrat on the Board of County Commissioners.
Commissioner Todd Portune asked Board President Greg Hartmann at a Monday staff meeting to push back the vote a week to address funding to juvenile courts and the county’s plan for future financial stability.
Hartmann, who earlier denied Portune’s request to issue securities to raise millions to balance the budget, agreed. He said it was important that all three commissioners agree on the budget.
Portune told reporters he wanted to see more funding for juvenile courts. The proposed budget would cut about $3 million from the juvenile court’s 2012 appropriation.
He said he also wants to see specific plans on how and where the county will invest in economic development. He and Hartmann disagree about whether that kind of planning belongs in a budget.
Hartmann had the proposal developed after commissioners rejected three plans from County Administrator Christian Sigman, two of which would have raised taxes. The $192 million budget under consideration cuts about $14 million from the 2012 appropriation levels without raising taxes.
The proposed budget makes a number of what Hartman calls “modest cuts” in almost every county department.
All three commissioners have stated that public safety funding is a priority. The Sheriff’s Department would see a small reduction of $27,033, bringing its budget to almost $57.5 million.
However, the department would also face an additional $4.3 million in expenses next year, giving incoming Sheriff Jim Neil an effectively reduced budget.
The Emergency Management Agency would get a nearly 40 percent increase in the proposed budget, up to $400,000.
The Board of Elections would see its budget slashed 36.2 percent to $6.9 million. However, its expenses would also be lower in 2013 because there is no presidential election as there was in 2012.
The proposed budget would bring the Department of Job and Family Services’ appropriation to $832,900 — a reduction of $10,360. However, that funding level is dictated by the State of Ohio and not the county.
The Hamilton County Prosecutor would also see a small increase of $37,597 intended to hold level its funding from 2012, as the department went over-budget. The prosecutor has the ability to sue the county over its budget appropriation, so the department typically maintains level funding.
The plan to lease Cincinnati’s parking assets to the Port of Greater Cincinnati Development Authority remains up in the air today after court rulings kept a court-mandated restraining order in place until at least March 15, when a hearing is scheduled at the Hamilton County Common Pleas Court.
The hearing on March 15 will establish whether the lawsuit should move forward and whether the restraining order will remain until the lawsuit is resolved. The latter poses a budgetary challenge to the city; if the restraining order is kept in place and opponents gather the signatures required for a November referendum on the parking plan, the city says it will have to make cuts before July to balance the budget for fiscal year 2014, which could result in layoffs.
“We’ve been very clear that, by state law, we need to have a balanced budget starting July 1, so we will need to do all things necessary at that point,” says Meg Olberding, city spokesperson.
The lawsuit was originally moved to federal courts on March 7 because it included complaints regarding civil rights. Plaintiffs removed the mention of civil rights, which then prompted Judge Michael Barrett to send the lawsuit back to the Hamilton County Common Pleas Court.
City Council approved the parking plan in a 5-4 vote on March 6, but the plan was almost immediately held up by a temporary restraining order from Hamilton County Common Pleas Judge Robert Winkler. The restraining order is meant to provide enough time to process a lawsuit filed by Curt Hartman, an attorney who represents the Coalition Opposed to Additional Spending and Taxes (COAST), on behalf of local activists who oppose the plan and argue it should be subject to referendum.
“If there was even five seconds without a temporary restraining order in place, the city’s going to sign that lease,” Chris Finney, another attorney that represents COAST, said in a public statement after the hearing with Barrett. “At that point, the city will argue that the case has moved and that the (referendum) petitions are void.”
The legal dispute is focused on City Council’s use of the emergency clause, which eliminates a 30-day waiting period on implementing laws but takes away the possibility of a referendum.
In an interview on March 7, Vice Mayor Roxanne Qualls, who voted for the parking plan, told CityBeat the dispute over emergency clauses is politically motivated: “I think it’s nothing but a political controversy that’s generated for political gain and for political purposes. Council passes many of its ordinances with emergency clauses. In fact, the other candidate for mayor himself consistently voted for emergency clauses.”
The other mayoral candidate Qualls is referring to is John Cranley, a former council member who opposes the parking plan and says he will support a referendum effort.
“Just because the emergency clause may be used too often doesn’t make it right,” says Cranley. “I never voted for an emergency clause when there was a stated grassroots effort to have a referendum on a vote that I was facing.”
CityBeat previously covered the parking plan in further detail here.