Ohio House approves rollback of income-tax cut

10/22/2009

COLUMBUS - Warning that a budget tidal wave is on the way, two House Republicans Wednesday broke with their party to join Democrats in support of a temporary rollback of an income-tax cut promised to Ohioans four years ago.

"If we can find a way to rise above politics, perhaps we can rise above the storm,'' said Rep. Matt Dolan (R., Novelty) as he voted for a two-year delay in the last 4.2 percent increment of a total 21 percent, five-year personal income tax cut paid by individuals and many small businesses.

The bill passed the chamber 55-44 and now heads to the Republican-controlled Senate. The measure would also cut the pay of state representatives and senators by 5 percent. This, Rep. Vernon Sykes (D., Akron) said, is designed to "convey a message to the public of shared sacrifice.''

Mr. Dolan, who might have been House speaker today if Republicans had retained control of the chamber, said reconsideration of one portion of tax reforms begun in 2005 is appropriate given projected billions in budget deficits potentially facing the state.

He urged colleagues on both sides of the aisle to look beyond the 2010 election and embrace Democratic Gov. Ted Strickland's past support for the business and individual tax reforms begun under his GOP predecessor.

"Don't play politics with it,'' he said. "Say, 'Great, Governor, come to the table with us'. Then get rid of all the sacred cows. ... If you want to play politics with this vote, go right ahead. But grab a life jacket, because that wave is coming, and then grab a few more, because that wave is going to hit the citizens of our state so hard that they're going to need anything to grab onto.''

Most of his Republican colleagues, however, argued that postponement of a tax cut already showing up in Ohioans' paychecks because of reduced withholding rates is a tax increase.

"Ohioans are being nickeled and dimed to death,'' said Rep. Kris Jordan (R., Delaware). "To tell Ohioans that we're going to go into their wallets one more time is criminal.''

Democrats, who hold tenuous control of the chamber, said delaying a planned tax cut before Ohioans' final tax responsibility is settled with the filing of their returns next spring is a tax freeze.

"To delay a tax cut is not a tax hike no matter how many times you say it,'' Rep. Dan Stewart (D., Columbus) said.

The midyear rollback of the 2009 income-tax cut to 2008 levels is expected to generate $844 million over two years to help fill an $851 million hole in the education budget. The gap was created when the Ohio Supreme Court recently ruled that Mr. Strickland and lawmakers could not sidestep a vote of the people by using the recently enacted budget to authorize and tax slot machines at racetracks.

Mr. Strickland proposed the suspension of the tax cut until 2011 after previously resisting suggestions to undo the 2005 tax reforms that have combined with the effects of the recession to deal a double whammy to state revenue collections.

For a typical family of four with an income of $60,000 a year, the tax cut for 2009 would shrink from an anticipated $85 to $7. The $7 would result from an automatic inflation-adjusted increase in the personal exemption that would not be interrupted.

"No Ohioan making the same salary will pay more in income taxes this year than they did last year,'' Mr. Sykes said.

Contact Jim Provance at:

jprovance@theblade.com,

or 614-221-0496.