Kasich seeks more tax cuts to get Ohio moving faster

Governor touts jobs and budget

12/26/2013
BY JIM PROVANCE
BLADE COLUMBUS BUREAU CHIEF
Ohio Gov. John Kasich is drawing criticism from his opponents as he pursues greater tax cuts while attempting to reinstate work requirements for people receiving food stamps.
Ohio Gov. John Kasich is drawing criticism from his opponents as he pursues greater tax cuts while attempting to reinstate work requirements for people receiving food stamps.

COLUMBUS — Gov. John Kasich’s wish list for 2014 looks a lot like what he got in 2013: tax cuts.

“We have to get the [top bracket] income tax below 5 percent,” he recently told Ohio’s business community. “Let’s take as many bite-sized chunks as we can. ... We have to do it. If you want Ohio to move faster, we have to reduce this personal-income tax.”

But the Republican governor is also aware of the criticism he has faced from Democrats for pursuing tax cuts at the same time he’s restoring work requirements as a condition for food-stamp clients considered to be able-bodied adults to continue receiving benefits in 72 of Ohio’s 88 counties.

“It’s a sin not to help people who need help,” Mr. Kasich said. “My mother told me this, and frankly it’s biblical as well. It’s also a sin to continue to help people who need to learn how to help themselves. ... It’s probably some kind of connection between help, education, training, and probably having to do also with a number of social services that come together at a point where we can get people lifted.”

The contrast is likely to be front-and-center next year when Mr. Kasich asks voters to give him a second four-year term, an election that will be watched closely at the national level because of Ohio’s tradition of picking presidents and conjecture that Mr. Kasich could be in the GOP mix for 2016.

While Mr. Kasich makes his case that Ohio has set itself apart as a leading place to do business in the United States, his likely Democratic opponent, Cuyahoga County Executive Ed FitzGerald, has argued that the former congressman has rewarded wealthier Ohioans with tax cuts at the expense of the middle class.

It remains to be seen whether either will face primary election challenges. The filing deadline is Feb. 5. At least one third-party candidate, such as Libertarian Charlie Earl, is expected on the ballot to complicate matters.

Mr. Kasich has his metrics by which he measures Ohio’s progress on his watch: 174,800 new private-sector jobs, a balanced budget after inheriting a $7.7 billion shortfall, a nearly $1.5 billion balance in the state savings account that once held less than a dollar, and business-magazine surveys that praise the state’s improved business outlook.

“We are halfway back to what we lost in private-sector employment,” he said. “Even in a slower period, we’ve grown ... about 17 percent in job creation.”

Cuyahoga County Executive Ed FitzGerald, the likely Democratic gubernatorial candidate, says Governor Kasich’s income tax cuts have benefited the wealthy at the expense of the middle class.
Cuyahoga County Executive Ed FitzGerald, the likely Democratic gubernatorial candidate, says Governor Kasich’s income tax cuts have benefited the wealthy at the expense of the middle class.

He even sees those orange construction barrels and lane closings as dollar signs, much of it made possible by an unprecedented $1.5 billion in Ohio Turnpike bond issues for road projects well off the turnpike corridor.

“That’s like falling off a log to figure out what you ought to do,” Mr. Kasich. “And it’s going to unleash $3 billion [counting federal and local matching funds] that we never anticipated before. ... So when you drive around and you see those orange barrels, and the thing goes down to one lane, don’t be mad. Be glad. ... We’re shining up Ohio.”

But Democrats contend the state’s savings account has been replenished with dollars taken from local governments and that the governor fails to mention public-sector job losses when discussing employment.

The state’s unemployment rate is now 7.4 percent after hitting a low of 6.7 percent a year ago. The current rate is four-tenths of a point higher than a national average that used to trail Ohio.

“Job growth in Ohio is not consistent with what he’s been saying,” said state Rep. Mike Sheehy (D., Oregon), northwest Ohio’s newest member of the Ohio House of Representatives. “Maybe he’s reading different newspapers, but the periodicals I’ve read indicated Ohio has not recovered anywhere near what he’s claiming his administration has provided. JobsOhio still has yet to prove itself to be an economic boon to the state.

“I’m not trying to trash-talk him,” he said. “I give him a lot of credit for having taken his position on expanding Medicaid in the state. There are people in the legislature talking about running someone against him as a candidate for him having taken that position. However, I don’t agree with his position on cutting back on food stamps.”

The current two-year budget that took effect July 1 included a $2.7 billion net tax cut for individuals and small businesses over three years. Mr. FitzGerald and Democrats have criticized the state’s concurrent sales-tax hike of a quarter cent per dollar, to 5.75 percent.

As he did two years ago, Mr. Kasich is expected to pursue a series of midbudget initiatives. At the top of his list is another income-tax cut.

“People don’t run up to you and say, ‘Oh, thank you for cutting my income tax,’ ” he said. “But it’s almost like exercise. Nobody thanks you for exercising, but over the long haul you’re healthier.”

In his recent speech to Ohio chambers of commerce, he criticized them for not always championing income-tax cuts.

“We can debate what [the tax cuts] ought to be, but at the end of the day we have to get to that conclusion,” he said.

He plans to pursue additional borrowing to keep “shining up” Ohio, including expansion of a bond issue to tackle local water, sewer, road, and other infrastructure projects and a capital budget to address a backlog of maintenance at state parks.

“It’s consistent with everything we’re doing,” he said. “Government has a role in terms of making sure we take care of our infrastructure. There will be people working as a result of this, just as there are people working on highway construction. That’s good.”

And even though his pet JobsOhio economic-development entity is engaged in promoting the state to business, Mr. Kasich is looking for even more from his friend Les Wexner, the chief executive of L. Brands Inc.

“I don’t know if we’re going to have a Victoria’s Secret-type marketing plan for Ohio, but it isn’t a bad thought, huh?” Mr. Kasich said with a smile.