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Gov. Kasich should share Ohio’s surplus with local governments: editorial

August 19, 2018

Gov. Kasich should share Ohio’s surplus with local governments: editorial

Republican Gov. John. Kasich wants to max out Ohio’s rainy-day budget fund. He also wants to tweak withholding tables so that slightly less Ohio income tax would be withheld from Ohioans’ paychecks. For example, annual withholding for an Ohioan earning $50,000 a year would decline about $45 – or less than $1 a week.

What would make such moves possible is Kasich’s stewardship of Ohio’s budget, which is balanced and running a modest surplus. And Ohio’s “rainy-day” budget savings account, which held just 89 cents (that’s not a typo) when Kasich took office in January 2011, now totals about $2.7 billion.

But what makes Kasich’s proposals bad ideas is this stark fact: Compared to 2010, Ohio’s local governments – counties, cities, villages, townships – have lost more than $1 billion a year in state aid in inflation-adjusted terms, as of 2017, according to Policy Matters Ohio, the policy research organization. And it’s clear that those savings (to the state treasury) have helped pay for cuts in statewide taxes, tax cuts that have become a Kasich hallmark.

The hometown consequences are clear. An Ohioan’s community has had to raise local taxes, or cut local services, thanks to successive cuts in state aid to local governments which Kasich proposed and the Republican-run General Assembly approved.

In fairness, steep state tax cuts didn’t originate with Kasich. They began in 2005,  during the administration Republican Gov. Bob Taft, when the legislature repealed Ohio’s corporate income tax and the long-standing property tax on business equipment and inventories, and phased in a series of income-tax cuts. Repealing the property tax on business equipment and inventories, a long-sought goal of business lobbyists, directly affected local governments and school districts: Property taxes don’t fund state government; they help fund local governments and Ohio’s schools.

Also in fairness, it is easier to spend someone else’s money than your own. That is, the state’s reductions in local government aid may have forced communities to make choices and set priorities.

But it’s also state government’s job to make choices, and recalibrate old ones. In this instance, that means understanding that local governments are the state’s partners – not its foes – and could use some of that surplus cash for pressing local needs.

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