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Published: Saturday, 1/24/2004

Taft speech to focus on economy


COLUMBUS - Gov. Bob Taft s sixth State of the State address to Ohio lawmakers next week is expected to focus heavily on the state s sluggish economy.

Wednesday s speech to a joint session of the Ohio House and Senate follows word yesterday that Ohio s unemployment rate climbed three-tenths of a point to 6 percent in December while the national rate, at 5.7 percent, fell two-tenths of a percent.

“The governor will focus on the economy and improving the job-creation climate in the state,” Taft spokesman Orest Holubec said. “We have seen a rebound in the economy nationally, but Ohio has been hit hard, especially in the manufacturing sector, which has been slow to rebound.

“The governor will offer a blueprint of things we think the state can do to make Ohio more attractive for companies looking to expand in the state or move their operations to the state,” he said.

The state is approaching the eighth month of a two-year, $49 billion budget that contains little flexibility for costly new initiatives. The state, however, this year will reopen the state s capital budget for brick-and-mortar projects as well as the spending plan for the next two installments of Ohio s $10 billion settlement with major tobacco manufacturers.

Voters in November rejected the governor s proposal to borrow $500 million to invest in the state s high-technology and biotechnology industries.

Mr. Holubec said the governor “reserves the right” to use the speech to address the latest threat to the state s budget in the form of a citizens petition designed to accelerate repeal of the state s penny surcharge on the sales tax.

“It s the giant elephant in the room that no one seems to want to talk about,” said House Minority Leader Chris Redfern (D., Catawba Island).

The administration has estimated that, if repealed six months before its scheduled June 30, 2005, expiration date, the disappearance of the sixth cent of the sales tax would leave a roughly $800 million hole in Ohio s budget.

The petitions, the result of a drive led by Secretary of State J. Kenneth Blackwell, have yet to be certified.

“He needs to set the agenda for his last [two] years in office,” said Herb Asher, political science professor at Ohio State University. “He s got four commissions out there dealing with primary and secondary education, higher education, the tax system, and Medicaid that haven t reported yet.”

The governor used last year s address to call for an overhaul of the state s tax system, including the broadening of the sales-tax base, adjusting personal income tax rates, and a lowering of corporate tax rates in conjunction with a reduction in exemptions.

The General Assembly met only a small portion of his challenge. House Speaker Larry Householder (R., Glenford) said this week he wants to press forward this year.

“If we would do reforms right, we would not only be able to reduce tax [rates] in many ways, but we are probably also going to increase revenues even though we ve reduced taxes,” he said.

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