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Kasich Set To Submit Budget Update Bill To Legislature

Tuesday, March 11, 2014 at 10:23 AM

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Republican Governor John Kasich's budget update bill due out Tuesday could include a hike in the tobacco tax pay for an income tax cut.

The governor hinted at it in his State of the State speech last month….

“We’ve got to keep cutting taxes. We have to keep doing it. That’s why I’m proposing another round of tax cuts that will finally succeed in getting Ohio’s tax rate below 5 percent. (applause)”

And this election year budget correction bill Kasich’s team calls the mid-biennium review or MBR is expected to include another income tax cut. Kasich has said he’s interested in tax reform, and has also said he supports a move away from income taxes and toward sales taxes. And one tax that he’s said to be looking at is the state tax on cigarettes, which at $1.25 a pack is the 26th highest in the country. Shelly Kiser is with the American Lung Association.

“The only way we would be against a cigarette tax is if it is too low, amazingly enough, because that’s when it would not have that public health benefit. So we’re still of course waiting to hear the details of what the governor has in store, but if it is a significant tax increase that has those good public health benefits that will really encourage people to stop smoking, then definitely we’re going to be in support of that.”

Anti-smoking advocates have long said they want cigarette taxes going to programs that help smokers quit. Kasich said in the State of the State speech he wants to spend 35 million dollars in new tobacco settlement money on quitting programs.

Kiser would like that upped to 50 million, but says there’s no need to put all the hundreds of millions that could be raised with the kind of cigarette tax increase she wants into those programs.  she says Ohio has the 10th highest smoking rate in the country and notes that smoking costs add to the state’s huge Medicaid bill, so she’s like to see the tax go up to $2.75, but that seems unlikely.

In fact, Kasich may face an uphill battle to increase the tax at all, since the legislature is dominated by Republicans who have opposed tax increases in general. But he’s also likely to propose a new severance tax on oil and gas drillers, having said that the one House Republicans put together last year isn’t enough. 

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