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The State of Ohio

Reviewing Tax Cuts and Hikes in the Governor’s Budget Update

Posted Friday, March 14, 2014

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Reviewing Tax Cuts and Hikes in the Governor’s Budget Update

Another big milestone in this election year was passed this week, as Gov. John Kasich unveiled his budget update bill, with lots of items that seem ready-made to note to voters this fall. The mid-biennium review, or MBR, features an across the board income tax cut of 8.5%, designed to bring the top tax rate down to below 5%. This tax cut comes courtesy of two increases in existing taxes – notably, they are two taxes that most voters have said in polls they have no real problem with being increased. One is a hike in the severance tax to 2.75 percent of gross receipts on big oil and gas drillers. The other proposal is a 60-cent jump in the per-pack cigarette tax, from $1.25 to $1.85. Anti-smoking activists say they’re pleased, and so do advocates for the poor, though they admit this tax increase will hit their constituency very hard. The budget update also includes several items targeted at low-income Ohioans - it triples the non-refundable earned income tax credit, and it increases the personal deductions for people making under $80,000. But Democratic critics still say the tax cut benefits the wealthy far more than the poor, and that previous tax cuts haven’t spurred the economy.

To talk about the policy and political implications of the items in this MBR are two guests who’ve been watching this rollout from their viewpoints. Mike Gonidakis is familiar to many observers as the president of Ohio Right to Life – he’s also a Republican analyst. Keary McCarthy is the chief of staff for the Ohio House Democrats.

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The State of Ohio is a weekly news program spotlighting the latest happenings at the Statehouse, in the Governor’s office, at the Ohio Supreme Court and throughout the Buckeye State, hosted by the award-winning Karen Kasler.

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Statehouse News Bureau

Statehouse News Bureau

The Statehouse News Bureau provides educational, comprehensive coverage of legislation, elections, issues and other activities surrounding the Statehouse to Ohio's public radio and television stations.

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Funding for The State of Ohio comes in part from Porter Wright Morris & Arthur LLP, the Ohio Education Association, The George Gund Foundation, The Cleveland Foundation, Eaton Corporation Charitable Fund, the George W. Codrington Charitable Foundation and the Nord Family Foundation.