Gov. John Kasich is touting half a million dollars in tax cuts in his new budget proposal, released Feb. 2. But Ohio’s tax scheme could get more regressive if state lawmakers take it up as is.
The budget proposal would lower income taxes by 23 percent over the next two years and pay for it by raising sales taxes by .5 percent. All told, the proposal means $500 million less in taxes for Ohio residents.
Critics say lower-income residents will benefit least from the proposal. Kasich’s budget allows for a tax exemption increase for as many as 3 million low-income Ohio workers. But that exemption would mean only an extra few dollars per paycheck for most low-income families, according to most analyses. Another part of Kasich's budget proposal would require those making just over the poverty level (a bit more than $11,500 for a single person) to pay premiums on Medicaid. Those premiums would start at about $10 to $20.
Among the biggest moves in Kasich's proposal: a plan that would effectively eliminate the state’s income tax for more than 900,000 people who own small businesses grossing less than $2 million a year.
Studies suggest that the bottom fifth of Ohio earners pay nearly 7 percent of their income in sales taxes, while the top fifth of Ohio earners pay less than 1 percent of their income. A study conducted by liberal-leaning think tank Institute for Taxation and Economic Policy found Ohio to have the 18th most regressive tax structure in the country.
"The Ohio income tax is critical to a fair tax system and one that pays for education, health and other key services," said Wendy Patton, a director at Policy Matters Ohio, in a January statement about the state’s tax structure. "Attempts to weaken it will either redistribute income from the poor and the middle class to the rich, or cut needed public services."
When Kasich took office, the income tax rate was nearly 6 percent and Ohio’s sales tax was 5.5 percent, though state lawmakers boosted it to 5.75 percent in 2013. Under Kasich’s new budget proposal, income tax will be just over 4 percent and sales tax will be 6.25 percent.
Conservatives have also criticized the budget. Critics on the right, including tea party-aligned state lawmakers, say most of the changes aren’t cuts, they’re “tax shifting” that doesn’t result in the state spending less money.
Kasich’s plan does call for some measures that could help lower-income residents, including raising the income level at which parents can qualify for subsidies on child care. Other parts of the budget progressives might find more amenable include an increase on taxes associated with fracking.
Correction: due to a typo, an earlier version of this post said Ohio's sales tax rate will be 6.5 percent. This has been corrected to 6.25 percent.
Metal detectors could come back to City Hall, but local legislators can’t do much more regarding local gun control. Still, Vice Mayor Roxanne Qualls and other City Council members will begin pushing for more federal regulations on guns starting today. President Barack Obama is already beginning to drum up support for more regulations on guns, including a ban on assault weapons and high-capacity ammunition clips. He also wants to close a loophole that allows people to buy firearms at gun shows without background checks. At the state level, a new bill loosening gun regulations in Ohio is facing criticism. The bill will make it easier to store firearms in cars and allows them for the first time in parking garages under the Ohio Statehouse and a nearby office tower. Gov. John Kasich said he will sign the bill.
The University of Cincinnati is launching a fundraising effort for the renovation of Nippert Stadium. The project could cost as much as $70 million. The university wants to offset as much of the cost as possible to build premium seating, with the possibility of 28 new luxury boxes and more than 1,400 premium seats being added. Goals could change based on demand and fundraising efforts.
A Cincinnati-based company and its top executive have pleaded guilty to circumventing Ohio’s competitive bid process. The actions cost Ohio taxpayers tens of thousands of dollars,
according to Ohio Attorney General Mike DeWine. The company circumvented
the competitive process by submitting multiple bids on road jobs under
different names, creating the illusion of competition.
Sen. Rand Paul of Kentucky, a possible candidate for the presidency in 2016, will headline a Hamilton County GOP event. He will be a featured speaker next month at the Northeast Hamilton County Republican Club's annual pancake breakfast.
The Cincinnati College Preparatory Academy failed to follow its own compensation policies, resulting in improper over-payments of $2,325, according to Ohio State Auditor Dave Yost.
Top state officials will begin pushing and outlining school safety efforts in the wake of the massacre at Sandy Hook Elementary School in Newtown, Conn.
State Impact Ohio has a fantastic infographic showing the growth of charter schools in Ohio. In the Cincinnati urban district, charter schools now host 6,642 students.
A new state policy will automatically refund businesses when they’ve overpaid their taxes. The first round of the policy will refund businesses in Ohio $13 million.
The animal takeover continues. Due to the effects of climate change, some animals are moving into cities.
It was “Rich People Voice Their Concerns Night” at city councils across town last night, as proponents of the $1 sale of Music Hall packed Cincinnati City Council chambers even though the proposed lease deal wasn’t on the agenda. Mayor Mark Mallory insisted that any middle ground that will allow the nonprofit Music Hall Revitalization Co. to renovate the building will require that the city retain ownership.
Across town (and about 10 miles northeast toward the area with mass trees), Madeira City Council shot down a plan to develop a luxury apartment complex on Camargo Road. Council voted 6-1 to scrap the plan for a 184-unit complex after residents who voiced concern said the complex would be “too dense” and take away from the city’s single-family character. Word on the street is that the Council majority didn’t want scumbag renters like this guy to be able to move into the neighborhood and start playing music really loud out of their car stereos.
Cincinnati City Council yesterday pretty much canceled its plans to build an atrium at City Hall. Six council members approved a motion asking administrators to shut it down, and City Manager Milton Dohoney says he’ll abide by it even though he technically doesn’t have to because the funding was approved in a spending ordinance.
Council also voted yesterday to keep the property tax rate pretty much the same next year despite a projected deficit.
Now that the Supreme Court has temporarily upheld part of Arizona’s racist
controversial immigration law, no-name state legislators in Ohio and
Kentucky plan to break out the laws they couldn’t previously get passed.
According to The Enquirer’s Mark Curnutte (who apparently won a
national book award for his work covering poverty in Haiti — big ups,
Curnutte!), some dudes named Courtney Combs (R-Ross Township, Ohio) and
John Schickel (R-Union, Ky.) have some great ways to rid of their states'
illegal immigrants, at least until the court strikes down the rest of
New York Times: "Arizona Ruling Only a Narrow Opening for Other States"
Housing prices are going up in most cities due to low interest rates and cheap prices.
A new Obama campaign ad refers to Mitt Romney as “outsourcer in chief.” Ouch!
The War on Drugs is making the AIDS epidemic worse by driving people away from treatment, according to a report released today by the Global Commission on Drug Policy.
California condors are being threatened by lead poisoning from bullets left behind in dead carcasses shot by hunters, which the birds eat.
Facebook changed users' listed email accounts, and people on the Internet are mad. Gizmodo explains how to fix it.
The Spice Girls are reuniting to create a musical called Viva Forever! at London's Piccadilly Theatre.
Cincinnati City Council on Friday approved a budget that relies on parking privatization as a means to plug a $34 million budget deficit while also raising property taxes in 2014.
Mayor Mark Mallory opened up the council meeting with a moment of silent prayer for the 27 students and adults killed at an elementary school in Connecticut.
“I want us all to take a moment and put into perspective what we’re doing today,” he said.
Council voted to increase the property tax by about 24 percent, from 4.6 mills (a mill is equal to one-tenth of a cent) to 5.71 mills. That means Cincinnatians would pay an additional $34 for every $100,000 of their home’s value.
The vote reverses a move made last year by conservatives on council, who reduced property taxes.
Council also passed a budget that relies on $21 million from a proposed lease of the city’s parking facilities — a deal that is expected to be voted on in March. Of the proposals submitted to the city so far, Cincinnati stands to gain $100 million to $150 million in an upfront payment and a share of the profits over the 30-year lease.
“My concern about balancing this budget with a onetime revenue source by selling our parking system seems to be ill advised,” said Independent Councilman Chris Smitherman. “We don’t know how council will vote in March … but we have tied not only the budget to this one time revenue source, but we have also tied reciprocity.”
Council nixed a plan to eliminate tax reciprocity for people who lived in Cincinnati but worked elsewhere and paid income tax in both cities.
Though the budget doesn’t mention parking privatization, council hasn’t mentioned other options to close the budget deficit.
If opponents of parking privatization want to keep facilities under city control, they would have to come up with $21 million in revenue elsewhere or make $21 million in cuts.
Councilman P.G. Sittenfeld suggested using casino revenue, cutting travel expenses, downsizing the ratio of managers to workers, sharing services with nearby jurisdictions and downsizing the city’s fleet as ways to cut down the budget.
Councilwoman Laure Quinlivan, long an advocate of downsizing the police and fire departments, voted against the property tax increase in protest of what she said was bloated spending on departments that were outpacing population growth.
The budget also requires Cincinnati to accept police and fire recruit classes in 2014, regardless of whether the city gets a federal grant to fund the classes.
The budget also restores the Cincinnati Police Department’s mounted patrol, which patrols downtown on horseback. The city will use $105,000 from off-duty detail fees from businesses that hire off-duty officers. Council also voted to start charging those businesses an extra $1.64 on top of the off-duty pay.
Council also voted to shift $50,000 for repairs and upgrades to the Contemporary Arts Center to pay for maintenance and beautification at Washington Park, which is operated by 3CDC.
President Barack Obama announced a new trade action against China during a Cincinnati campaign stop on Monday, where he also took the opportunity to attack Republican challenger Mitt Romney.
The U.S. filed the case at the World Trade Organization on Monday and claims that China offers “extensive subsidies” to native automakers and auto-parts producers.
The Chinese government filed its own complaint before the WTO on Monday, challenging tariffs the U.S. imposes on Chinese products ranging from steel to tires. The tariffs are meant to protect American manufacturers against what the U.S. government claims are unfair trade practices by China.
“(The U.S. action is) against illegal subsidies that encourage companies to ship auto part manufacturing jobs overseas,” Obama said before an estimated crowd of 4,500 at the Seasongood Pavilion in Eden Park. “These are subsidies that directly harm working men and women on the assembly lines in Ohio and Michigan and across the Midwest.”
“It’s not right, it’s against the rules, and we will not let it stand. American workers build better products than anyone. ‘Made in America’ means something. And when the playing field is level, America will always win.”
Obama went on to criticize his Republican challenger, saying Romney made his fortune in part by uprooting American jobs and shipping them to China. Obama accused Romney — who has criticized Obama’s foreign policy, saying the president apologizes for American interests — of talking the talk without being able to walk the walk.
The Romney campaign countered with an email after the rally, saying that Obama’s economic policies were hurting the private sector and harmed manufacturing.
“The President’s misguided, ineffective policies have hampered the private sector and allowed China to flaunt the rules while middle-class families suffer,” Romney campaign spokeswoman Amanda Henneberg wrote.
“As president, Mitt Romney will deliver a fresh start for manufacturers by promoting trade that works for America and fiscal policies that encourage investment, hiring and growth.”
The email pointed to reports from Bloomberg finding that manufacturing and production have shrunk recently.
Before the Obama rally several Ohio Republicans held a news conference behind a Romney campaign bus near Eden Park, where they focused more on the deficit than foreign trade.
U.S. Rep. Steve Chabot said it was “laughable” that Obama considers himself a budget hawk. He pointed to the decline in budget negotiations between the president and the Republican-controlled House of Representatives, saying Obama “walked away” from talks with Speaker John Boehner.
“Basically as president from that time last August until now, it’s been all politics,” Chabot said.
Chabot also attacked Obama on foreign policy, claiming the president has left Israel hanging in the Middle East and is not serious with Iran, who he says is on the brink of getting nuclear weapons.
The president in his speech said he did have a plan to reduce the federal deficit, and would reduce it by $4 trillion over the next 10 years without raising taxes on the middle class.
Monday’s visit to Cincinnati was Obama’s second of this campaign and his 12th trip to Ohio this year. Romney has visited the state 18 times during his campaign.
Obama was scheduled to fly to Columbus Monday afternoon for a campaign appearance there.
A local developer has offered to build a new jail adjacent to the Justice Center, a cost of $65 million, in return for the county leasing it for 30 years at $10 million a year, according to The Enquirer. The developer, Rob Smyjunas, said the offer isn’t about making a profit, just making the county better for his and other families.
Mayor Mallory didn’t answer The Enquirer’s questions about the potential for a Council majority to block the property tax increase in City Manager Milton Dohoney’s proposed budget. A Mallory spokesman says he’ll work behind the scenes on a budget that will win a Council majority and that he’s off to New Orleans for a conference on reclaiming vacant properties.
An environmental summit in Rio de Janeiro kicked off on Wednesday, with environmental groups and activists disappointed with the Rio+20’s lack of progress on creating clear goals for sustainable development.
The Sanford, Fla., police chief who drew criticism for not investigating the shooting death of Trayvon Martin has been fired. Sanford City Manager Norton Bonaparte said he relieved Bill Lee of his duties because the police chief needs to have the trust and respect of the community.
A video of middle school kids in upstate New York bullying a 68-year-old bus monitor has drawn international media attention. The woman says the kids are all pretty much normal and are OK to deal with one-on-one.
The bullying continues unabated for about 10 minutes in the video, reducing Klein to tears as a giggling student jabs her arm with a book. Recorded by a student Monday with a cell phone camera, the brazen example of bullying went viral and spurred international outrage.
A population of chinstrap penguins in Antarctica has declined by 36 percent due to melting sea ice.
"Actually, in the '90s it was thought that the climate change would favor the chinstrap penguin, because this species prefers sea waters without ice, unlike the Adelie penguin, which prefers the ice pack," study researcher Andres Barbosa told LiveScience. He added that at the time, chinstraps, named for the thin black facial line from cheek to cheek, seemed to increase in numbers, with some new colonies being established. The sea-ice decline in the winter, however, has become so big that it is now impacting krill populations, said Barbosa, of the National Museum of Natural Sciences in Madrid.
Researchers found evidence of ice on the moon.
A new study has found that eating disorders are common among older women. Researchers say weight and eating concerns do not discriminate based on age.
College football BCS commissioners have endorsed a
four-team playoff format to determine college football’s national
champion instead of the current computer-human two-team system. The plan will go to the BCS presidential oversight committee
on June 26 for approval.
LeBron James and the Miami Heat are one win away from winning the NBA championship after going up 3 games to 1 with a 104-98 win in Game 4 Tuesday.
Activists gathered on Thursday outside of the West Chester office of U.S. House Speaker John Boehner, asking the House’s top official to look at reducing military spending when coming up with a budget.
The group of nearly two dozen — which included nuns, a veteran, a retiree advocate, a small businessman and progressive activists — held signs reading, “It is time for Nation Building in the United States. Cut Massive Pentagon Budget Now!” and “End Tax Breaks for Richest 2%.”
“We’re here today in front of Speaker of the House John Boehner’s West Chester office to drive home the fact that we believe that over 50 percent of the budget magically, this elephant in the House, has failed to be discussed as we discuss taking away services that provide human needs,” said David Little of Progress Ohio.
“Any discussion that fails to address excesses in that budget is failing the American people.”
Little added that it was possible to support the troops and veterans without spending billions on pointless wars.
Butler County attorney and Navy veteran Bruce Carter said the military can be more efficient in what he called the changing mission.
“When you refuse to have a discussion on over half of the budget, that’s like trying to tell the Bengals to win a game without going over the 50 yard line,” he said.
The group had a letter to deliver to Boehner, which contained what they called a statement of principles.
“We believe in a holistic approach to the budget crisis, and in order to protect the middle-class, cuts to the Pentagon need to be at the forefront,” the letter states. “We understand that Pentagon cuts are a controversial issue, however, Pentagon cuts in the sequester do not threaten our national security.”
The letter suggests that some of the money currently being spent on the Defense Department goes to providing services for veterans.
The military accounted for about 52 percent — or $600 billion — of discretionary spending in fiscal year 2011.
In contrast, education, training and social services collectively made up 9 percent of the budget.
The group of four activists weren’t allowed into Boehner’s office, but a young staffer met them outside. He said that the speaker thought everything should be on the table when it came to budget cuts.
Policy Matters Ohio is now pushing an earned income tax credit (EITC) that would benefit the state’s poor and middle class, including more than 822,000 working families. The plan could be a progressive replacement for Republican Gov. John Kasich’s proposed tax plan, which some reports claim disproportionately benefits the wealthy.
The EITC is a tax credit targeted at working people who have low to moderate income, particularly those with children. It is currently used by the federal government, 24 states and Washington, D.C.
The report from Policy Matters, a left-leaning policy research group, found a 10-percent EITC would cost about $184 million per year, producing an estimated $224 million in economic benefits, and a 20-percent EITC would cost about $367 million per year, producing an estimated $446 million in economic benefits.
If state legislators set aside Gov. John Kasich’s tax proposals, the state would be left with about $280.4 million in general revenue available for fiscal year 2014 and about $690.2 million available in fiscal year 2015, according to an analysis of Kasich’s budget bluebook. That would be more than enough money in fiscal year 2014 to pay for a 10-percent EITC, and even a 20-percent EITC would only eat up about half of available funds in fiscal year 2015.
Using a model from the nonpartisan Institute for Tax and Economic Policy, the Policy Matters report found a state EITC would benefit Ohioans making less than $51,000 per year. Under a 10-percent credit, qualifying families making less than $18,000 would get $190 on average, qualifying families making between $18,000 and $33,000 would get $323 on average and qualifying families making between $33,000 and $51,000 would get $149 on average, according to the report.
Under a 20-percent credit, benefits would be bumped up to $381 on average for qualifying families making less than $18,000 per year, $646 on average for qualifying families making between $18,000 and $33,000 and $298 for qualifying families making between $33,000 and $51,000, according to the report.
These benefits would then be spent in a way that helps families, local communities and small businesses, according to the Policy Matters report: “Families that claim the EITC use the refunds to pay for basic needs like housing, food, transportation and child care. These purchases stimulate local economies. A number of studies focusing on the economic impacts of the EITC find that small businesses and other taxes benefit from a cash infusion into the local economy.”
The report claims a state EITC would also result in a fairer tax system that better helps the state’s low- and middle-income earners, stronger incentives to work and better social and economic results for EITC recipients.
The Policy Matters report touts the federal EITC, which was created by former President Gerald Ford in 1975 and has been expanded by every presidential administration since, to support adopting a similar policy in the state: “The federal Earned Income Tax Credit does more than any other program to keep working families out of poverty. … (It) is lauded for its direct impact in keeping families with children above the poverty line, making work pay, and sending federal dollars to local communities.”
Anyone making $50,270 a year or less qualifies for the federal EITC. The tax credit is built so it particularly benefits families with children, and it “encourages families making at or near minimum wage to work more hours since the credit has a longer, more gradual phase-out range compared to other programs,” according to the Policy Matters report.
The report says the federal EITC has already benefited more than 950,000 Ohio families with an average refund of $2,238.
In previous analyses, Policy Matters found Kasich’s tax proposals disproportionately benefit the wealthy and actually raise taxes on the state’s poor and middle class (“Smoke and Mirrors,” issue of Feb. 20). But Kasich says his tax plan will cut taxes for “job creators,” particularly the state’s small businesses.
The governor’s tax proposals are facing bipartisan resistance, and the Republican-controlled Ohio House is currently considering setting the proposals aside while the rest of the budget is worked out, according to Gongwer.
In a press conference on March 14, local officials around the state, including Councilman P.G. Sittenfeld, suggested dropping income tax cuts and instead using the revenue to restore local government funding cuts, which have totaled $1.4 billion since Kasich took office.