Today, Governor Ted Strickland of Ohio announced that he was planning on putting off the complete phase in of the 2005 income tax cuts for two years. The tax cuts were initially passed by then Gov. Taft and the Republican legislature, providing for a 21 percent cut in income taxes for Ohians over 5 years. The problem Gov. Strickland faces is that his proposal is actually a tax increase. He is calling his proposal a postponement of the tax cuts, when in actuality, the final phase in of the tax cuts were put in place on January 1, 2009, making this a tax increase.
The tax cuts were fully phased in on January 1st, individuals and businesses are already planning to take advantage of the tax cuts that are in place and now the Governor is looking to hike them in order to take care of Ohio’s mismanaged budget. This tax hike is worth an estimated $844 million in Ohio’s FY2010-2011 state budget. He chose to seek this tax hike after his plan fo raise $851.5 million in new slot money from racetracks was held up when the Supreme Court of Ohio said that it would have to be voted on by the people.
The Governor has been trying to find ways to push these problems past the 2010 election since the 2009 session. In the budget, he was able to take money that was supposed to go to education and move it to the General Revenue Fund in order to create a "hole" in education funding. With this "hole", he was then able to claim a need for more money from slots. When the slots failed to work, he is now saying that this "postponement" of the phase out is needed in order to keep federal stimulus funding. This shell game has been used to create a dilemma. Rather than trying to come up with more money from the taxpayers’ pockets, he needs to find savings in the budget if he wants to claim education funding is the priority.
Lawmakers should not go back to the people asking for more money to spend in the midst of this overspending problem that Ohio finds itself in, rather they need to seek out savings in wasteful programs and ways to make the state work more efficiently with the money they already consume.
To see ATR’s press release regarding Governor Strickland’s proposed tax increase, click here. To read more of Governor Strickland’s previous attempts to push Ohio’s budget problems down the river, click here.
Photo credit: ronnie44052