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Bigger paychecks in time for the holidays? Gov. John Kasich wants to use a state budget surplus to make it happen

August 7, 2018

Bigger paychecks in time for the holidays? Gov. John Kasich wants to use a state budget surplus to make it happen

COLUMBUS, Ohio -- Gov. John Kasich wants to fill the state’s rainy day fund and put a little more cash in Ohioans’ pockets before he leaves office in early January. 

Kasich, eyeing a projected $368 million budget surplus, wants to reduce income tax withholding rates at the end of this year to match a previous tax rate cut. So instead of seeing any extra money withheld in a tax refund next spring, workers would get slightly larger paychecks.

Kasich proposed the withholding change in 2016, but lawmakers passed on the plan. Making the change would cost $147 million, state Budget Director Tim Keen said. Some taxpayers would see a smaller refund come tax time, and others could owe taxes when they file returns. 

Kasich also wants to top off the state’s budget stabilization fund, known as the rainy day fund. A July deposit in the fund brought it to $2.67 billion -- about $68 million short of the maximum allowed by law.  

“I think we’re in a position to responsibly save a little more money to protect our kids and the poor and provide a little tax relief to the citizens of the state,” Kasich said. 

Kasich said he wants to wait a few months, to watch the economy, before taking the plan to the legislature. But later, Keen wouldn’t answer reporters’ questions about whether lawmakers would need to sign off on the plan. 

Kasich’s comments came at a Statehouse press conference where he was inducted as an honorary member of the International Union of Operating Engineers. 

Kasich reiterated calls for his successor, either Democrat Richard Cordray or Republican Mike DeWine, to protect the state’s nest egg and only tap it when “the rain does fall.” Democrats and local governments have suggested the fund be used to bolster local efforts against Ohio’s opioid abuse and overdose crisis. 

Kasich said the fund should be used to protect children and poor people, who are most at risk for funding cuts when state budgets take a hit.  

“The idea that this is sort of free money, that this is Christmas Day, is basically irresponsible and just political rhetoric jargon in an effort to buy votes,” Kasich said. 

The two-year budget Kasich signed in June reflected a projected $1 billion budget hole generated after several months where revenue lagged behind estimates. Budget officials adopted much lower estimates going forward. 

Keen said the state is on track to end the fiscal year in 2019 with a $368 million surplus.

When asked why not use that to bolster areas that have been cut in past budgets, Keen said surpluses are one-time monies and shouldn’t pay for ongoing expenses. 

“These proposals will responsibly dispose of a projected surplus that will not have outyear negative impacts,” Keen said.

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