State lawmakers are rushing to start their summer recess, so they can campaign for re-election this November to jobs they aren’t doing well now. Ohio voters and taxpayers need to be especially wary of 11th-hour mischief in the Statehouse over the next few days.
That includes an effort by the GOP-controlled General Assembly to change the state budget in ways that would benefit the state’s wealthiest earners, to the detriment of middle-income, working-class, and poor households.
The legislature is updating the two-year state budget at its midpoint. Last month, the Senate approved more than $400 million in tax cuts for the next fiscal year through budget changes, including an accelerated reduction in the state personal income tax rate and an expanded tax break for businesses.
The Senate bill also includes supposed tax relief for lower-income households, through higher personal exemptions for some taxpayers and an increase in the state Earned Income Tax Credit. But these breaks are exceedingly modest, especially compared to the benefits conferred by the tax cuts.
The progressive advocacy group Policy Matters Ohio worked with the Institution on Taxation and Economic Policy, a nonpartisan organization in Washington, to analyze the Senate bill. They conclude that most of the tax relief in the measure would go to the top 5 percent of Ohioans — those who earned at least $151,000 last year.
If the measure becomes law, the top 1 percent of Ohio taxpayers would get an annual tax cut of $1,846 next year, the study says, while the typical middle-income taxpayer would get a $24 cut and the poorest 20 percent of Ohioans would average a $4 reduction. The Senate bill does not permit the Earned Income Tax Credit to be refunded to poor Ohioans who have little income tax liability.
The case for expanding the business income-tax deduction that began last year is dubious. The break has done little to create jobs, because most of the people who qualify for it don’t employ anyone.
And the money earmarked for the tax cuts is money the state cannot invest in essential services next year: public infrastructure, health and human services, and aid to basic and higher education and local communities.
The proposed tax changes for lower-income families are “small steps in the right direction,” Wendy Patton, project director of Policy Matters Ohio, told The Blade’s editorial page. “But the tax cuts are so huge, it makes you wonder if everything else is window dressing.”
The Senate version of the bill, which is before a committee of legislators from both houses, makes other changes that shouldn’t become law. For one conspicuous example, it would prohibit school districts and local governments from appealing property valuations for tax purposes that they consider too low.
Instead, only property owners and county recorders could challenge valuations. In many cases, school systems and municipal governments challenge efforts to shift tax burdens from businesses to homeowners.
State government’s slashes in aid to schools and local communities already are forcing them to rely too heavily on property taxes. They at least should not be denied the ability to challenge low-ball assessments.
Lawmakers should not approve these giveaways, largely passed without public review. If they do, Gov. John Kasich should reject the budget measure’s worst provisions. In any event, taxpayers and voters need to pay attention.