Matt Owens

Obhof Leaves Ohio Senate with Legacy of Conservative Leadership

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Posted by Matt Owens on Friday, January 22nd, 2021, 1:43 PM PERMALINK

With 2020 coming to an end, now-former Ohio Senate President Larry Obhof has left a conservative legacy on a broad section of issues, from education, and criminal justice, to tax and regulatory policy.

Sen. Obhof led on regulatory reform that would prevent the growth of the regulatory state, and eliminate 30% of state regulations currently in place. Late last session, the final plank of that plan passed the House in Ohio Sb1.

Senator Obhof stated “This is perhaps the most sweeping regulatory reform in modern Ohio history…Now, we all know that some regulations are necessary for health and safety and the environment, but many of these restrictions create unnecessary hurdles for Ohio’s small businesses. We don’t need 100,000 more regulations than other states.”

On school choice, Senate bill 89 will expand the ability for parents to put their children in the best school possible through voucher programs. This bill offers low income scholarships to underserved communities. Obhof championed the bill and was a key player in ensuring it passed.

Under Obhof’s leadership, the Senate enacted multiple occupational licensing reforms. Ohio in 2019 had over 18 percent of their work force licensed in order to operate. SB 255 reduced this number dramatically, allowing fewer barriers to entry in competition across many industries. This served as a blessing particularly for low income residents as licensing fees and costs of education can keep those eager to compete out of the game entirely. According to a report from the Institute for Justice in 2019, Ohio Was losing almost 68,000 and $6 billion in inefficiency due to these burdensome licensing hurdles.

Obhof has also helped protect Ohio taxpayers from aggressive tax increases, and found ways to trim burdens. “Let me save you some time on this. There is 0% chance @OhioSenateGOP will raise income taxes,” Obhof tweeted last year in response to progressive groups.

On criminal justice reform, the Obhof-led Senate saw passage of a significant drug sentencing reform bill, SB3. The Senate put in the hard work of adjusting the bill over nearly two years, which led to its overwhelming passage. Unfortunately, despite the House likely having the votes to pass the bill as well, leadership ducked holding a floor vote.

With a House chamber in turmoil following an FBI investigation of one speaker, and forcing his resignation, which only gave way to Larry Householder and his ensuing mass bribery scandal, the Ohio Senate has had to often stand alone in putting taxpayers first.

Senator Obhof’s leadership and accomplishments have kept hard-earned dollars in the pockets of Ohio families, and made the state a leader on licensing and regulatory reform, so it is now easier to work and do business in the state. There is more to be done, and if both chambers follow this example, more conservative reform will get done.

Photo Credit: Ohio Senate

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It’s Time to Get Drug Sentencing Reform Done in Ohio

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Posted by Matt Owens on Wednesday, December 2nd, 2020, 12:17 PM PERMALINK

Ohio’s Senate bill 3 continues to proceed through hearings in the House, following its overwhelming passage in the Senate earlier this year. This has been a long process, and the bill deserves to get over the finish line before session ends, and a new session begins next year.

The bill would reduce many nonviolent drug offenses from a felony down to a misdemeanor, divert more addicts to treatment rather than just incarceration, and expand expungement so people are better able to get back on their feet.

While some opponents continue to bring up concerns about the impact on drug abuse should SB3 pass, the bill remains a conservative, tough and smart approach. A Pew research study found no correlation between imprisonment rates and rates of drug use. And a recent Buckeye Institute paper thoroughly puts concerns to bed:

“According to a study in the Journal of the American Medical Association (JAMA), a prison sentence has little, if any, deterrent effect on future drug use by nonviolent drug offenders. The study found that “On average, incarceration in the United States costs approximately $22,000 per month, and there is little evidence that this strategy reduces drug use or drug-related re-incarceration rates for nonviolent drug offenders. … “A separate study of 15 states (including Ohio) by the Bureau of Justice Statistics found that one-quarter of individuals incarcerated for drug crimes returned to prison within three years.”.

The reality is that the current system does little to improve the situation with drug addiction, and makes it worse by not addressing addiction while tagging people with life-altering criminal convictions that make finding work and building a life more difficult.

This is why prison alternatives should be strongly considered. Senate bill 3 could give those struggling a second chance to get back on track rather than send them into a negative feedback spiral.

Further Senate Bill 3 remains bad news for dangerous drug dealers. Mandatory minimums and strict enforcement would still be intact for high-level traffickers and offenders.

Getting these low level offenders out of the prison system could be prudent way to help Ohio’s already overcrowded prisons. The main focus is on reducing crime and helping individuals but, the fiscal benefits from this bill can’t be ignored. The Ohio legislative services commission estimates this bill could save the state $75 million per year.

The House and Governor DeWine should act swiftly to get SB3 passed and signed before the year is out. It would be a step towards reducing the size and scope of government power by administering proportional justice to nonviolent offenders, and reducing the need for government spending on prisons.

Photo Credit: https://www.urbanohio.com


Texas Needs a Fiscally Conservative Game Plan to Navigate Budget Hardships

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Posted by Matt Owens on Tuesday, November 24th, 2020, 11:38 AM PERMALINK

As in other states, tax collections in Texas have taken a hit due to Covid-19 and subsequent shutdowns. Texas lawmakers will be faced with the challenge of reprioritizing state spending when they convene their biennial session in January. To assist Lone Star State lawmakers in this effort, the Texas Public Policy Foundation (TPPF) has published a conservative budget plan that would limit spending growth to the rate of population plus inflation, setting a max threshold for appropriations in the next budget at $246.8 billion.

TPPF is also urging Texas lawmakers to provide property tax relief in the coming year, a goal the Americans for Tax Reform supports. Texas is one of nine no-income-tax states, yet high property tax burdens are a problem. 2021 is a great time for Texas legislators to fix that. TPPF economist Vance Ginn highlighted the excessive property tax burdens facing Texans in testimony presented to the Texas House Ways & Means Committee in September:

“Texas looks to have at least the 7th highest local property tax burden in the nation,” Ginn told lawmakers. “This is according to an effective property tax rate of 1.81% per WalletHub.com or the share of property taxes paid to owner-occupied housing value of 1.69% per the Tax Foundation. While some claim this high burden is because Texas does not have a personal income tax, the two sources above show other states with no income tax tend to have a more competitive property tax burden. Texas’s high burden is from excessive spending.”

Even though Texas has a relatively competitive state tax code (minus the state’s margins tax), local municipalities throughout Texas notoriously squeeze residents through high property taxes. The coming legislative session presents an opportunity for Governor Greg Abbott and Texas legislators to consider restructuring that relationship in order to ease property tax burdens.

TPPF’s Ginn proposes swapping the state’s patchwork of local property taxes for a uniform sales tax to fund schools.

“For the sales tax swap, we recommend replacing school M&O property taxes with final sales taxes by mostly broadening the sales tax base,” said Ginn. “In 2017, the last year for which data is available from the Texas Comptroller’s website, Texas provided an estimated $42 billion in exemptions, exclusions, and discounts to the final sales tax base, requiring a higher tax rate and higher burden on those taxed.”

The new year will be full of challenges for state lawmakers in Texas and elsewhere. But the new legislative session also presents many opportunities. In addition to balancing the budget without raising taxes in 2021, tax reform that reduces onerous property tax burdens should be a high priority for Texas legislators, as should phasing out the state margins tax.

Photo Credit: Michael Barera


Florida Minimum Wage Could Skyrocket with Ballot Question

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Posted by Matt Owens on Friday, October 30th, 2020, 4:15 PM PERMALINK

Amendment 2, which would impose a $15 minimum wage, is on the ballot in Florida, posing a risk to jobs and businesses across the Sunshine State.

If approved, it would set a schedule to gradually hike the minimum wage from $8.56 per hour now, up to $15 an hour in 2026. After 2026, the minimum wage will continue to rise in proportion with inflation.

Voters have approved 24 of 26 minimum wage increases on the ballot since 1996. According to Saint Leo University Polling Institute, 41.8 percent of Florida residents strongly support a minimum wage increase while only 12 percent strongly oppose.

Few states and cities have experimented with such a high minimum wage. New York City and State created headlines when they first ramped up to the fabled $15 an hour. Seatac, WA was the first locality to push forward with a $15 minimum wage. The results have not been great, as the artificially high wage outlaws opportunities for people just starting out. Studies have shown that jobs are lost, yes, but hours being cut is perhaps the biggest effect.

Small business owners will also take a major hit. Certain types of restaurants, amusement parks, and other businesses that higher low skill workers could be seriously impacted or shut down.

Drew McLeod, owner of the restaurant Savour in Tallahassee said “There is no doubt that Amendment 2 will increase labor costs for my business significantly ($350,000 in the first 5 years of implementation and at least $100k/year thereafter)… and, with razor-thin margins as a rule, it would put my family-owned restaurant with 25 employees into a situation where we will be forced to close.”.

According to a Harvard Business School study, each one dollar increase in the minimum wage for a 3.5 star restaurant, Yelp average, results in a 14 percent increase in likelihood that a restaurant will go out of business.

Big unions also back this measure unsurprisingly, as high skilled labor would be more protected from competition if this Amendment passes, those who would suffer would only be those less established and educated. Professor Thomas Rustici articulates this point succinctly in his seminal work on the topic “Unions everywhere support the minimum wage, a fact that could be deduced from the above analysis of the labor substitution effect of the minimum wage law. Unions are labor cartels that attempt to restrict the supply of workers entering given occupations. Since nonunion labor is priced below the cartelized price of union labor, it is an attractive substitute for union workers.”

People may overlook the fact that this action will be an amendment to Florida’s constitution, and if citizens don’t like the economic impact of this minimum wage schedule, changing this or going back could be very difficult.

Florida’s minimum wage was already well above the federal wage requirement, and it is already tied to inflation. It should not be a target for the “Fight for 15” crew, but the state’s amendment process and ability for outside groups to push issues on the ballot was too enticing to pass up apparently.

The COVID 19 pandemic has shaken Florida’s economy, especially the hospitality industry.  The last thing that Florida needs right now is an arbitrary minimum wage hike that will kill more jobs and crush struggling businesses.

Americans for Tax Reform has included this Amendment in the 2020 State Ballot Measure Guide, recommending a “no” vote, and discussed the measure in-depth with James Madison Institute’s Sal Nuzzo on the “From the Swamp to the States” podcast.

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Tax Hikes on Vaping on the Ballot in Oregon, Colorado

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Posted by Matt Owens on Tuesday, October 20th, 2020, 1:08 PM PERMALINK

Misguided tax hikes on vaping threaten public health in Oregon and Colorado. Both states have upcoming ballot measures which would increase taxes on cigarettes and vaping, even though Public Health England and the Royal College of Physicians have concluded that e-cigarettes are at least 95% less harmful than cigarettes.

Oregon Measure 108 places the option on the ballot for voters to decide on a tax hike which would raise rates from 1.33$ per 20 pack of cigarettes to 3.33$. As it applies to E-Cigarettes, the ballot measure, if passed, would impose a tax at a rate of 65 percent of the wholesale sales price for the product. Cigars would also be effected by this ballot measure by increasing taxes from $0.50 to 1.00$ per cigar, this would raise the tax rate to 65 percent, which is its wholesale sales price cap.

The revenue generated from this ballot measure would go to funding multiple health programs for the state.  From 2008 to 2018 nine other ballot measures had been offered by states for a tobacco tax increase. The ballot measures in the past had all been defeated by voters; except Proposition 6 in California during 2016.

Colorado Proposition EE is another ballot measure tax hike. In Colorado cigarettes are currently taxed at a rate of 84 cents per pack.  The ballot measure would set up an incremental schedule to increase the tax rate for cigarettes to 1.80$ per pack by July 2027. This would result in a 2.64$ tax rate per pack overall. For cigars, the ballot measure would incrementally raise the tax rate from 20 percent to 22 percent by July 2027. E-Cigarettes are currently not taxed in Colorado.  This ballot measure would create a new tax for E-Cigarettes starting at 30 of percent manufactures list price in 2021, and incrementally increase to 62 percent of manufactures list price by July 2027. Most of the revenue from these new taxes will be geared towards education funding but, a sizable portion will also be directed towards the general fund.

These taxes make life-saving vape products more expensive and less accessible, and risk jobs and businesses as small vape shops will suffer. Meanwhile cigarette tax revenue is notoriously unreliable. Colorado and Oregon voters will have to consider the many downsides of these tax hikes as they head to the polls.

Photo Credit: Bonnie Moreland


A Number Of Tax & Fee-Related Measures On The November Ballot In Colorado

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Posted by Matt Owens on Monday, September 28th, 2020, 2:32 PM PERMALINK

As the general election draws closer there are two major ballot measures coming up this November that will affect the personal finances of most Colorado residents. One is Proposition 116, which would reduce Colorado’s flat income tax from 4.63 percent to 4.55 percent.

Prop. 116, if approved in November, will allow individuals, families, and thousands of small businesses across Colorado keep more of their hard-earned income, at a time when it is most needed for many. Opponents of this tax cut, which include leading Colorado Democrats, argue that the income this measure would allow taxpayers to keep would be better spent by state government.

Another 2020 ballot measure that will affect Colorado taxpayers is Proposition 117, which would subject future fee increases to the same voter approval that tax hikes are subjected to in accordance with the state’s Taxpayer’s Bill of Rights (TABOR). Under TABOR in Colorado, an increase in taxes must be approved by voters through a ballot measure. Colorado politicians have long used fee increases as a way to circumvent TABOR in an effort to grow the size of government.

 In 2019, the Colorado Supreme Court ruled that business fees were not considered taxes and therefor outside the purview of TABOR. Proposition 117 looks to close this loophole by requiring voter approval on any fee increase that raise more than $100 million in revenue during the first 5 years.

Propositions 116 and 117 are not the only tax and fee-related ballot measure that Colorado voters will decide upon this fall. There are also measures on the Colorado ballot to raise residential property taxes by repealing the Gallagher Amendment, along with a measure that seeks to impose a massive tax hike on tobacco, e-cigarettes, and vaping products. The outcome of all these measures will provide an up-to-date indicator on views on taxes in a consequential purple state trending blue.

Photo Credit: Einar Einarsson Kvaran

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The Hidden Costs of Fines and Fees

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Posted by Matt Owens on Friday, September 25th, 2020, 1:30 PM PERMALINK

Often times local governments like to get “creative” about raising revenue. One of the most pernicious avenues for this is fines and fees relating to the criminal justice system.

Local governments may view fines and fees as an easy way to make money that doesn’t require raising tax rates. They also may use this tactic to avoid caps on local tax increases, to keep growing government. The reality is that using fines and fees as a revenue source is far less consistent and effective than politicians might hope.

A recent analysis found, “Most (local governments) fail to collect 20 to 30 percent of the fines and fees that they assess” … “One New Mexico county pays $1.17 to collect every dollar it brings in.” What looks like any easy cash grab at first, might not pan out that way. Even though most governments are taking in money overall, it is inefficient.

“Hundreds of municipalities rely on them for more than 20 percent of their general fund revenues.” This turns fines and fees into taxes, and turns police officers into tax collectors. It creates a strange incentive system where in order to cover their budget for the year, government must impose a large number of fines. Meanwhile, actual crime rates are trending down. It begs the question, is the purpose of our system justice or revenue? Are punishments being applied to offenders because we believe them to be appropriate or because we want to raise funds? 

Some say the quota shake down is real, Officer Adhyl Polanco told NPR, "The culture is, you're not working unless you are writing summonses or arresting people.”

The true cost of fines and fees gets worse when you consider that many states allow courts to suspend peoples’ driver’s licenses as a punishment for owing court debt.

This practice means people who have not committed an offense related to safe driving can lose their ability to get to and from work because they owe fines and cannot afford to pay them. This creates a vicious scenario where someone has to risk committing another, often worse offense, driving without a license, or risk losing their job. Not working only makes it harder for someone to afford their court debt.

Some states are pursuing solutions to these challenges. A number of states have ended the practice of suspending one’s driver’s license as a punishment for owed court debt. While other states have limited how reliant local budgets can be on fines and fees, as ATR President Grover Norquist writes in the Chicago Tribune:

Missouri passed legislation limiting fines, fees and court costs to a total of $300 and preventing cities from jailing people simply because they couldn't pay. Missouri also passed legislation lowering the cap on the percentage of a city’s budget that could come from fines and fees from 30% to 20%.”

Much more progress needs to be made. The justice system should place public safety and justice first, not what is profitable.

 

Photo Credit: Needpix.com

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