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Mixed Reviews for Kasich Budget Items Aimed at Helping Low-Income Ohioans

Wednesday, March 12, 2014 at 7:41 PM

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Gov. John Kasich in a YouTube video announcing his mid-biennium budget proposal.

Republican Gov. John Kasich's budget update includes a tax cut aimed at the top income earners in Ohio. But it also includes some measures designed to help the state’s poorest people. Statehouse correspondent Karen Kasler reports those items are getting blasted as well as praised.

The budget update includes two tax-form items targeted at low-income Ohioans. It triples the non-refundable earned income tax credit, from 5 percent of the federal credit to 15 percent—which is an average benefit of $84 for 475,000 Ohioans.

Phil Cole with the Ohio Association of Community Action Agencies says it helps low income Ohioans and the economy.

“Low income people, when they get extra money, are more likely to spend it,” Cole said. “They’ll buy food, they’ll buy clothing, they’ll buy an extra piece of furniture. They’ll take things off the shelf that have to be replaced by other things, which have to be made by somebody. So it creates jobs.”

The budget update also suggests increasing the personal deduction of $1,700 to $2,200 for families with incomes of less than $80,000, and to $2,700 for incomes under $40,000.

Conservatives including Greg Lawson at the Buckeye Institute say these deductions and credits are a good idea for now.

“It’s OK, it’s decent, it targets, it’s trying to help people out who are on the somewhat lower scale of the income,” Lawson said. “As a way station, OK, but we really need to get to the point where it’s all gone.”

Along with the increases in the EITC and personal deductions, the MBR includes a 8.5 percent, $2.6 billion income tax cut. It’s paid for in part by a 60-cent hike in the state’s $1.25 per pack cigarette tax, a 48 percent increase in what is the state’s third largest source of income.

And since the majority of Ohio’s smokers are lower-income, this hits them hard. Advocates say studies show higher taxes on cigarettes help convince people to quit.

But Lisa Hamler-Fugitt at the Ohio Association of Food Banks says the tax needs to be part of a holistic approach if there’s hope that it will help low-income people.

“We advocate for a balanced approach when it comes to both tax revenue and tax expenditures and that we need to focus any additional tax cuts on the least among us to make sure that work pays,” Hamler-Fugitt said.

And critics have long said income tax cuts benefit the rich far more than the poor.

Jack Frech is the director of the Athens County Job and Family Services Department, one of the busiest in the state. He says the combination of more tax reductions with hundreds of millions of dollars in cuts to food stamps and cash assistance over the last few years means that the poorest Ohioans are really suffering, in spite of Kasich’s move to expand Medicaid and his focus on workforce training and drug addiction.

“Drug treatment programs, medical intervention – none of those things clearly work very well for people who don’t have food to eat every day and who don’t have a roof over their heads,” Frech said. “You have to have your basic needs met before those kind of interventions are going to work.”

Frech says 100,000 Ohioans have lost cash assistance during Kasich’s administration, and with three job seekers for every opening, he says desperation is setting in.

Hamler-Fugitt is pleased with the proposal to create a Human Services Innovation Office within the Job and Family Services agency, which she hopes can streamline the process of linking people who need food, housing and other assistance with ways to get it.

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Economy, Government/Politics

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