Kasich wants to stay on the gas pedal for Ohio's economic recovery

Ohio Gov. John Kasich gives his State of the State address at the Veteran's Memorial Civic & Convention Center in Lima, Ohio.
Ohio Gov. John Kasich gives his State of the State address at the Veteran's Memorial Civic & Convention Center in Lima, Ohio.

LIMA, Ohio -- Gov. John Kasich tonight turned his biggest speech of the year into a marketing tool.

Selling tax reform to skeptical lawmakers on both sides of the aisle.

Selling a Medicaid expansion plan to conservative Republicans.

Selling northern Ohio on borrowing against their future Ohio Turnpike tolls to fund highway construction across the state.

And taking on Democrats opposed to socking away nearly $2 billion into the state's rainy day budget reserves without curing the pain caused to local governments and schools in his current budget.

Despite a state economic recovery that has so far eclipsed the nation as a whole, Mr. Kasich used his speech transplanted from Columbus to Lima to urge Ohioans and the lawmakers in whose hands his proposals now rest, not to slow the pace now that the state has a few bucks in the bank.

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"Should we rest on our laurels?" he asked. "...Should we put the state on cruise control. I got another one for you. Why don't we just spend the surplus? Things are good. Just go ahead and take your foot off the gas. Well, we're going to keep our foot on the gas in this administration, and we hope you will join us.

"When we look at the great companies around the world -- companies that continue to innovate, continue to embrace change, companies that have leaders with vision...Think about this, folks. The ones that are the most exciting in the world today -- Cardinal Health, Amazon, Google, the Cleveland Clinic, IBM, and right here in Northwest Ohio, Marathon. These companies strive for change. Every day the state of Ohio must do it as well...

"The only thing that can stop us, ladies and gentlemen, is fear of change, the fear of big ideas," Mr. Kasich said. "Let's not go there. We're starting to hit on all cylinders."

The governor has proposed a broad expansion of the sales tax base to include many previously untaxed services and a hike in severance taxes paid by a burgeoning shale oil and natural gas industry to help underwite a 20 percent across-the-board income tax cut for individuals over three years and a 50 percent cut on the first $750,000 in profits for small businesses. The Republican governor would also lower the state share of the sales tax rate half a penny to 5 cents on the dollar. The plan has faced criticism from both Democrats and from members of his own party.

"First and foremost, Ohio's taxes are too high, and they are particularly punishing to our small businesses...," Mr. Kasich said. "These are the engines of job creation in our state. And let me be clear. This is a comprehensive program to cut taxes by $1.4 billion."

Democrats, doctors, hospitals, and some bsiness groups have embraced Mr. Kasich's decision to partner with the federal government in expanding Medicaid to cover those earning as much as 38 percent over the federal poverty level, a move that has him operating within the sphere of President Obama's health-care law, much to the chagrin of many conservatives. By making the move, Mr. Kasich will take advantage of 100 percent reimbursement from the federal government for the first three years of the expansion. That level would gradually drop off over the next few years to 90 percent.

"I am not a supporter of Obamacare," Mr. Kasich said. "We rejected the federal government telling us what to do on a state run exchange. They didn’t give us the flexibility that would have been best for our state... I do not believe in the individual mandate. I don't like a lot of the programs that are going to drive up insurance rates up. But in this case, extending Medicaid benefits will help us on many levels including the positive impact this decision can have on the mentally ll and the addicted. Some of them live under bridges. Some of them live on the streets. Some of them are in our jails tonight."

He urged lawmakers to keep an open mind on the expansion and asked them to envision someone who is mentally ill in their own families or on their doorsteps.

"I know it's controversial," he said.

Mr. Kasich chose Lima for his speech because he felt its economic turnaround story mirrors that of the state as a whole. The state's unemployment rate has dropped to 6.7 percent, more than a full point below the national average. The governor noted that more than 120,000 job have been added to the rolls since he took office.

He noted that the state has gone from a budget shortfall of billions to a potential year-end balance in the rainy day fund of $1.9 billion.

The governor defended his K-12 education funding formula, arguing that it drives more aid to poorer districts. Many superintendents, however, were shocked when they recently saw the printouts showing that 60 percent of the districts in the state will see no additional funding next year while a number of wealthier suburban districts would see large increases.

Mike Johnson, an Elida pipefitter enjoying a burger at Lima landmark Kewpee Hamburgers, doesn't usually follow State of the State addresses. He had no intention of changing that simply because Mr. Kasich brought the speech to his back yard. He remembers the 2011 battle over Senate Bill 5, the Republican-backed, anti-collective bargaining law that voters overturned at the polls.

He fears Mr. Kasich will eventually pursue making Ohio a right-to-work state, one in which bargaining unit members can't be required to pay fees in lieu of union dues, as Michigan recently did. Mr. Kasich, who's seeking re-election in 2014, has expressed no interest in such a move.

"I think, given the percentage that we voted down the last one, he wants to make sure he's got all his ducks in a row," Mr. Johnson said. "He's no dummy."

Toledo Mayor Mike Bell, an independent who sided with Mr. Kasich in the 2011 battle over Senate Bill 5, has had to deal with Mr. Kasich's decisions since they have affected local government funding.

"It's a little bit rougher on cities, but the other part is we have to be able to maintain out state just like I have to maintain our city," Mr. Bell said. "Sometimes you're going to make some choices that are going to be a little bit uncomfortable for people, but if we keep doing things the same way, we're going to get the same results. Fortunately, we aren't doing things the same way anymore, and the results have changed to the positive for the taxpayer."

He agreed hat now is not the time to take the foot off the gas pedal.

"It's sort of like a boxer. When you've got somebody on the ropes, you gotta knock 'em out...We got to be aggressive. We can't let up, because we don't want to go back to where we were. We can't afford that."

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