Kasich proposal includes income-tax cut

Republicans troubled by sales rate expansion

4/2/2013

COLUMBUS — Ohioans will see an income tax cut in the state’s next budget, Gov. John Kasich’s administration predicts. It’s just a question of how big and how it’s financed.

Some of Mr. Kasich’s highest profile proposals in his $63.3 billion, two-year budget before lawmakers are in trouble with fellow Republicans.

That’s especially true of his plan to broadly expand the sales tax base to include previously untaxed professional services and to raise taxes on shale oil and natural gas drillers to help underwrite an income tax cut for individuals and small businesses.

But while the front end of that equation is in trouble, Mr. Kasich’s office makes the case that the back end is very much alive.

“We have the long-standing goal to reduce the personal income tax rate,” said Kasich budget director Tim Keen. “With this budget, there’s the small business cut and the [individual] rate cut. Some is paid for with spending restraint and revenue growth, some through the tax reform proposal.

“What I feel very good about is the general consensus that we will be cutting the income tax,” he said.

Mr. Kasich’s proposal was to use revenue from the tax expansion and hike to help pay for a $1.4 billion, net income tax cut. That includes a 20 percent cut in rates for individuals over three years and an immediate 50 percent cut on the first $750,000 in profits from small businesses.

Mr. Kasich’s proposal to partner with the federal government to expand Medicaid eligibility to cover hundreds of thousands more uninsured Ohioans under the federal health-care law is getting more plaudits from Democrats than fellow Republicans.

“Inclusion of the Medicaid expansion would certainly weigh heavily in our caucus and would likely result in Democratic votes…,” said Rep. Matt Szollosi (D., Oregon), the No. 2 House Democrat.

“There’s considerable opposition on the Republican site to the Kasich [Medicaid] proposal,” he said.

“I don’t see his resolve lessening. As the [House Finance] committee process goes on, it’s going to be very interesting to see if the House Republicans come up with an alternative proposal, which still meets the goals of insuring the uninsured, or whether they dig in in opposition to Kasich proposal.”

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.