Speaking today at the Ohio Chamber of Commerce, Gov. John Kasich has once again left political observers asking the question: Where have you gone Congressman Kasich? The differences between Congressman John Kasich – a firebrand anti-tax, anti-regulation conservative in the 1990’s – and John Kasich, Governor of Ohio, are stark.
In today’s address, Gov. Kasich has resurrected the decrepit corpse of last year’s Mid-Biennium Review (MBR) – a plan that would have seen a drop in personal income taxes but at the cost of higher energy costs, an increase in the regressive state cigarette tax, taxes on tobacco harm reduction products like e-cigarettes and vapor products, and an increase in taxes on small businesses. The MBR called for a 15-percent increase in the state CAT tax, a tax on doing business in the State of Ohio measured by a business’s gross receipts. The CAT tax changes, at the time, would have amounted to a $743 million tax increase by 2017.
Ohio’s oil and gas industry, under the prior MBR proposal, would have seen the oil and gas severance tax rate increase to 2.75-percent of a producer’s gross receipts. Americans for Tax Reform noted at the time: “One of the most startling components of the oil and gas tax increase, however, is the divergence of 20-percent of severance tax revenue to local governments in shale oil and gas producing regions. The state monies would be overseen by a new government bureaucracy called the Ohio Shale Gas Regional Commission (a nine member board appointed by the Governor). On the positive side, Gov. Kasich is pushing for the elimination of severance taxes on small convention gas producers – less than 910,000 cu.ft/quarter). All-in-all, the severance tax increase would amount to an $874 million tax hike by 2017.
The final tax increase component of last year’s MBR was an increase in taxes on tobacco products and e-cigarette and vapor products. Americans for Tax Reform noted at the time: Another troubling component of Gov. Kasich’s MBR is the regressive tax hike placed on tobacco consumers. Over a two year period Ohio’s tax on cigarettes would increase from $1.25 to $1.85 a pack. This tax increase will be borne primarily by lower-income earners. Even more important, tobacco taxes have repeatedly proven to be a declining source of revenue and an inadequate pay-for for permanent income tax reductions.”
“Along the same lines of the proposed tobacco tax increase, Gov. Kasich has proposed an equivalent tax on e-cigarette and vapor products. Currently, under Ohio law, these products are not taxed in the same manner as tobacco products. The fact is, e-cigarettes and vapor products are not equivalent to tobacco products and are often used as a means to quit harmful combustible tobacco products.”
Gov. Kasich’s announcement today means that the major components of the MBR will once again dominate his legislative agenda, along with increased regulations on fracking and charter schools. According to The Columbus Dispatch, Kasich stated: “We are going to fix the lack of regulation on charter schools.” He went on to call for more regulation of the fracking method of oil and gas extraction that is fueling the state’s energy renaissance and providing new jobs. Last year – when Gov. Kasich proposed his MBR – Americans for Tax Reform was clear, the plan was less than inspiring. It remains so.
Today’s Gov. John Kasich pales in comparison to the John Kasich of two-decades ago – a tax cutting, budget balancing Reagan conservative. After leaving the halls of Congress in Washington, D.C., John Kasich said: “When I left Washington, we actually had a balanced budget and we paid down the most amount of the national debt in modern history and cut taxes and created jobs. And I was the chief architect of that plan in ’97.” What happened to that John Kasich?