State of the state
2/21/2013In his State of the State message Tuesday night, Gov. John Kasich challenged Ohioans not to “fear big ideas.” The policy platform that the governor outlined during his speech in Lima includes a raft of big ideas — several of them sound, but others that would cause the state to regress. As they evaluate Mr. Kasich’s proposals, lawmakers and all other Ohioans will have to make critical distinctions.
The best idea that emerged from Governor Kasich’s message is his decision to expand the state’s Medicaid program of health insurance to cover 275,000 more working-poor Ohioans promptly, and ultimately as many as 456,000 low-income residents. The latter figure includes 25,000 Lucas County residents.
Despite his professed distaste for Obamacare, the governor conceded the necessity of bringing $13 billion in federal aid “back to Ohio to solve our problems” with health coverage. Aside from improving the health of low-income families, the Medicaid expansion will reduce coverage expenses for insured Ohioans and employers, who now must subsidize the high costs of care for uninsured patients in hospital emergency rooms.
The governor noted that Ohio’s Medicaid program has amply demonstrated its ability to cut costs and operate efficiently. The Medicaid expansion also will create jobs and stimulate economic activity. Mr. Kasich’s fellow Republicans in the General Assembly should not block the expansion out of small-bore ideology.
Governor Kasich was on equally solid ground in calling for a substantial tax increase on oil and natural-gas production in Ohio. The anticipated boom in hydraulic fracturing will require upgrades in the state’s infrastructure as well as tougher enforcement of environmental and safety rules. The higher severance tax on nonrenewable resources will help pay for these activities; if anything, the increase Mr. Kasich seeks is not large enough.
Other priorities the governor expressed in his speech are more questionable. Instead of using revenue from the severance tax to begin to restore the devastating cuts in state aid to schools, local governments, and human services over the last two years, he would apply that money to further, counterproductive reductions in state personal and business income taxes.
Ohio has cut its personal income tax by 21 percent since 2005. The jobs and economic growth that tax-cut advocates promised have not arrived, while state government has had to cope with massive revenue losses that have hampered its ability to deliver essential services.
So Mr. Kasich invites skepticism when he asserts, as he did this week, that Ohio needs “to grow an economy and to create jobs by reducing that income tax” by another 20 percent over three years. The benefits of that across-the-board cut would flow disproportionately to the state’s wealthiest residents.
The governor also seeks to reduce Ohio’s sales tax rate from 5.5 percent to 5 percent by extending the tax base to include a broad range of services. Conceptually, the idea has some appeal, but Mr. Kasich still needs to show how Ohio will make a tax on services work where other states have failed.
Similarly, Governor Kasich deserves the opportunity to prove that he can borrow against future Ohio Turnpike toll revenues to improve the state’s highway network without slighting northern Ohio, including the Toledo area. But that proposal is no substitute for a prudent increase in the state’s motor fuel taxes to pay for urgent road and bridge repairs.
Mr. Kasich noted this week that Ohio’s unemployment rate has fallen below the national average during his term, and that our state has added 120,000 jobs since he took office. But too many Ohioans have been left out of that recovery, and too many children risk being left behind by a program of state school aid that remains inadequate and inequitable.
As lawmakers act on the two-year budget proposal that fleshes out the priorities Governor Kasich articulated this week, they need to make investments that will benefit all Ohioans, present and future.