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Published: Thursday, 2/7/2013

Ohio governor visits Maumee firm seeking tax-cut plan support of business lobbying groups

BY TOM TROY
BLADE POLITICS WRITER
Gov. John Kasich speaks in Maumee. Wednesday’s visit was Mr. Kasich’s second stop on a road tour to tout his budget proposal.
Gov. John Kasich speaks in Maumee. Wednesday’s visit was Mr. Kasich’s second stop on a road tour to tout his budget proposal.
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Gov. John Kasich exercised his former skills as a talk-show host to generate support for his new budget plan, meeting with local business people at a Maumee manufacturing company to tout the tax-cut elements of the proposal.

Mr. Kasich, who had a public affairs show on the Fox News network before he became governor in 2011, urged his listeners to put pressure on business lobbying groups. “I need you to contact the [National Federation of Independent Business] and tell them to get out there and support small business,” Mr. Kasich said.

The federation’s support likely would help overcome Republican objections to the governor’s plan to widen the range of services that would be subject to the state sales tax, while at the same time slashing the state income-tax rate by 20 percent across the board.

Maumee was Mr. Kasich’s second stop on a road tour that took him to Cleveland on Tuesday and will take him to Dayton today to sell the two-year, $66.3 billion state spending plan.

Mr. Kasich and Ohio Tax Commissioner Joe Testa on Wednesday went through a foam-board presentation showing that the combination of business and income tax cuts will give 98 percent of business owners in the state a 50 percent tax cut.

Clearly energized by his plan, which coincides with enough of a rise in the state’s economy to create a $1.9 billion surplus, Mr. Kasich said he still needs backing from Ohio’s business owners.

“There are so many big things here that people are having a hard time digesting it all,” Mr. Kasich said to the audience of about 60, mostly northwest Ohio family business owners. They gathered at the headquarters of Service Spring Corp., headed by Chief Executive Officer Mike McAlear. The business, with 150 employees, makes springs for overhead garage doors.

Mr. Kasich said the school-funding formula in his two-year budget addresses a problem that has been the subject of decades of constitutional law wrangling.

“I’ve been very, very pleased with the reaction. I’m very hopeful this will make it through the legislature, and once that happens we can lower the volume on all the fighting,” he said.

He also boasted of his plan to expand Medicaid to take advantage of an offer from the federal government under the Affordable Care Act to reimburse the state for raising income eligibility to include nearly 450,000 added Ohioans.

“It takes the working poor out of the emergency rooms where they get their primary care,” he said, and returns $13 billion in federal funds “back to Ohio.”

And he said his plan to borrow against Ohio Turnpike tolls will help pay for $3 billion worth of infrastructure spending and create 65,000 jobs and is turning opposition into clamoring to get the work started.

Mr. McAlear’s son, Kevin, 25, in charge of emerging technology at Service Spring, described how the company provides a social-media platform to all its 150 employees. He said not all of the comments are work-related, by design, to create a sense of relaxed communication.

When Mr. Kasich asked Kevin McAlear to comment on the tax-cut plan, Kevin McAlear said: “When you lower taxes, it gives us money to do more of what we’re doing.”

Roger Geiger, the executive director of the Ohio chapter of National Federation of Independent Business, said his group hasn’t finished evaluating the budget, which was released Monday. He said he is supportive of the tax-cut plans but is studying whether that gain is wiped out by potential increases on small business owners by expanded sales taxes.

For example, barbers who don’t employ accountants may have to do so to become a tax collector for the state, he said. “[The tax cut] will have a huge impact on small businesses being able to reinvest,” Mr. Geiger said. “The expansion of the sales tax on services — that’s what we don’t know yet. Is it still a net plus for the small business community? I don’t know. My gut tells me it will be.”

The governor rejected arguments that the additional sales taxes will hurt the poor, mentioning spas and lobbyists as businesses that would be subject to the sales tax.

“I don’t know that many poor people that are hiring architects,” he said.

However, Democrats said businesses that could face sales taxation include laundromats and barbers.

Contact Tom Troy at: tomtroy@theblade.com or 419-724-6058.

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