Budget Experts Crunch The Numbers
Gov. John Kasich’s second budget – which he labeled Ohio’s Jobs Budget 2.0 – contained some expected announcements, but a lot of surprises. He included a severance tax increase on oil and natural gas drillers in his budget and he also cut the state income tax in his $63.2 billion dollar two-year budget. And he's proposing a 20% across the board income tax cut to all Ohio taxpayers over three years and a 50% income tax cut for small businesses over three years. And he's proposing a huge shift in the state’s tax structure, by applying the state sales tax to certain services - so the state sales tax will become its largest source of revenue, not the state income tax. The budget also includes an expansion of Medicaid to people with incomes up to 138% of the federal poverty level, which right now is $15,415 a year. And the budget also includes the school funding formula released last week, and this week the governor’s office put out spreadsheets detailing exactly how much each district would get.
Political reaction to the budget was swift and strong – and got personal. The Ohio Republican Party and the Ohio Democratic Party praised and blasted the budget. It's been embraced by social welfare, medical and business groups, which are pleased with the decision to expand Medicaid, and manufacturers like the income tax cuts. But the oil and gas drillers are predictably unhappy about the severance tax increase, and Tea Party and conservative groups and lawmakers are concerns about that, along with the Medicaid decision. And progressives and Democrats say the whole plan favors the wealthy and raises taxes on the middle class.
To get a perspective on how the math and the politics actually work in this budget, two longtime budget veterans share their thoughts on it. Bill Shkurti was the state budget director under Democratic Gov. Richard Celeste. And Neil Clark is the former chief financial officer of the Ohio Senate Republican Caucus.