Parsing Gov. John Kasich's State of the State Speech
TG: Nick, why don’t we start with the economy? Let’s play a clip here of a claim Kasich has made often about his economic leadership -- that the picture was bleak when he came into office.
"We had lost 350,000 private-sector jobs," Kasich said. "That’s filling the Ohio Stadium three times with some left over who no longer had any work.”
TG: Nick, is he right?
NC: Well, it depends on when you start counting. Private-sector employment in Ohio reached a peak in 2000, and we haven’t seen that level since. We had slow and steady declines in employment, and then of course the sharp drop off as the Great Recession set in. We lost more than 433,000 private-sector jobs from early 2006, which was sort of a peak, until we hit bottom in February 2010. From there, we started to climb. Kasich defeated Gov. Strickland that November -- and by the time Kasich took office in January, Ohio had already recovered 69,000 jobs.
TG: And since then, where have we gone here?
NC: The governor says we’ve gained more than 170,000 jobs since he took office – and what we've gained are 170,000 private sector jobs, though we've lost more than 30,000 government jobs. And the other nuance here is the pace of recovery. More than half of those jobs we gained were in 2011. Over 2012 and 2013, job growth was slower.
TG: Education played a big part in the governor’s speech, and already Democrats have taken him to task over what they say are cuts in money for schools. Who is right here?
NC: Our StateImpact Ohio team did a lot of reporting on the governor’s budget proposal for education last year, and what they found was this. When Gov. Kasich’s first budget went into effect in 2012, aid to schools was dramatically lower. In Gov. Strickland’s budget, state school funding was being propped up by money from the federal stimulus program. But that was one-time funding, it expired, and so we saw a cut to education in 2012. Now, Kasich did increase state aid to schools in his second budget, but overall spending on schools isn’t yet at the levels it had reached under Gov. Strickland.
We should note that there is another school funding source known as the revenue distribution fund that is providing less money than it used to. And some other changes mean new property tax levies are going to cost taxpayers more than they would have a couple years ago, and some folks are worried that it’ll be harder for new school levies to succeed.
TG: Now the governor made a number of new tax changes last year – something he referred to in his speech – and he’s promising more in the coming months. Nick, could you explain how things have changed?
NC: This latest budget phases in a 10 percent income tax cut. Kasich now says he wants to introduce even more cuts. Groups like liberal think-tank Policy Matters Ohio argue that the tax cuts put more money in the pockets of the wealthiest Ohioans, and give far less money back to the poorest. And at the same time, we also saw an increase in the state sales tax in the latest budget.
TG: Kasich also took note of what he called a 50 percent tax cut for small businesses. What does he mean by that?
NC: This tax cut allows some types of business groups to deduct up to 50 percent in taxes on the first $250,000 of income. Now the governor’s office has argued in the past that this tax cut is nearly $2 billion being put back into the economy. An analysis by the Plain Dealer last year determined that most small businesses would get only about $400 back each year.
TG: ideastream’s Nick Castele, thanks very much.
NC: Thank you.