What are some Ohioans saying about Governor Kasich’s proposed Jobs Budget 2.0?

Richard K. Vedder, Professor of Economics at Ohio University and Former Senior Economist at the U.S. Joint Economic Committee: “Governor Kasich’s tax proposals are welcome, because they address Ohio’s biggest long term problem, sluggish growth in job opportunities and incomes. Despite some meaningful improvements in the past three years, Ohio still has income levels below the national average, and too many of our best and brightest youth are leaving the Buckeye State for greener pastures elsewhere. As Tiger Woods and Phil Mickelson have recently demonstrated, productive people are repelled by high state income taxes, and the 20 percent reduction in the Ohio income tax over three years is particularly important for the state’s future development, helping to close a gap with neighbors like Indiana and Michigan. The sales tax proposal likewise broadens the base and lowers the rate. The base broadening is desirable because it both reduces distortions in economic activity and probably reduces the regressive nature of the tax, making it fairer as well. The proposal to increase severance taxes is reasonable given the changes in energy technology, and will not kill the advantages we can derive from fracking and other new innovations–and will help finance the income tax reduction.  On the whole, this is a bold, pro-growth tax proposal that I hope is enacted into law by the Ohio General Assembly.”

Tony Caporale, Professor of Economics and Finance at the University of Dayton: “Governor Kasich’s proposed tax changes seem designed to try to jump start state economic growth.  The proposed 20% reduction in the state tax rate should increase Ohio’s competiveness and lead to an expansion in employment and income.  Economic theory and empirical evidence tells us that the true cost of a tax is not amount paid but the amount not paid (or avoided).  The cost of taxing work, income, and investment is that it leads to less work, income and investment.  An Ohio income tax cut should reduce these distortions to job growth and business expansion.  Therefore, there would be a benefit to a tax reduction even if Ohio were a low tax state in our region.  The fact that several bordering states have lower taxes makes the case for tax cuts even stronger.  Capital is very mobile, and business and jobs will flow to the states where they are less penalized.  The reduction in the sales tax rate is also welcomed.  Although sales taxes are a direct tax on spending, they economically serve as a tax on current and future income and wealth.  Having these rates lowered should also help make Ohio a more attractive place to do business.  Given budget constraints these tax reductions are partially financed by the proposed increase in severance taxes on oil and gas exploration (fracking).  As long as Ohio’s tax treatment is largely on par with other states the proposed change seems unlikely to kill or seriously damage this burgeoning new industry.  Overall, the proposals seem like a good policy mix.”

Mark Partridge, Rural-Urban Policy Professor at The Ohio State University: “The Governor’s proposal is a good first step to ensure that all Ohioans benefit from the current energy boom. It guarantees that Ohio’s energy industry remains competitive against all other producing states. The proposed changes to the income tax will help the competitiveness of Ohio’s businesses across the overall economy, enhancing economic growth for the benefit of the state.”

Scott Shane, Professor of Economics, Case Western Reserve University: “When it comes to formulating policies to help small business owners create jobs and generate economic growth, few elected officials go beyond the platitudes. That’s why the budget plan put forth by Ohio’s governor, John Kasich, is intriguing. It offers three components for unleashing the power of small business that can serve as a model for other elected officials interested in enhancing small business hiring and its contribution to economic growth.  Cutting taxes on income earned from investing in small businesses is an important component to stimulating the small business sector because many growth-oriented small business owners need to obtain capital from other sources to expand. This policy shift will encourage angel investors and others not actively involved in the businesses in which they invest to provide more capital to small business owners, making it easier for small company owners to get the money they need to grow their businesses.”

The Ohio Manufacturers’ Association: “The OMA commends Governor Kasich and his team for putting on the table a bold personal income tax reform proposal that, if enacted, would facilitate investment, growth and job creation in Ohio’s manufacturing sector. In particular, the Governor’s proposal to reduce by 50 percent the personal income tax on the first $750,000 of income of the owners of ‘pass through’ entities is truly innovative and could have a significant positive impact. The effect of this specific proposal would be to free up much-needed working capital for small businesses across Ohio, increasing job-creating investment in those companies. The proposed personal income tax reduction also would help entrepreneurs in early-stage businesses where the risks are high and working capital often is in short supply.”

In this article, the Toledo Blade offers some highlights from Governor Kasich’s two-year state budget proposal. The plan includes tax cuts, more vouchers for students, and  much more:

COLUMBUS — Gov. John Kasich wants to slash taxes $1.4 billion over three years through a 20 percent cut in the income tax paid by individuals, a 50 percent cut in the income tax paid by small businesses, and a half-cent reduction in the state’s share of the sales tax to 5 cents on the dollar.

On top of that, all Ohioans and small businesses would share in $400 million in automatic income tax rebates for this calendar year because the new surplus-fueled balance in the state’s budget reserves is about to trigger a provision in state law that’s been dormant for about a decade.

The plan — announced today in Columbus — would at least partly be financed by a broadening of the sales tax base to include services not currently covered and by hiking taxes on an anticipated boon in natural gas and oil exploration. The governor argues that reducing the income tax for small businesses at a greater rate than individuals will free up capital for hiring and make them more competitive.

The sales tax base would be spread more widely to cover nearly everything but housing, education, medical, and construction spending. This includes a number of professional services like lobbying that former Republican Gov. Bob Taft tried to tax about a decade ago only to be confronted with a brick wall in the General Assembly.

And

Mr. Kasich last week announced his $15.1 billion, two-year funding plan for K-12 education. That plan would drive greater state support to poorer districts and would target funding toward programs for gifted, special needs, reading, and students for whom English is a second language.

It also expands the number of students eligible for vouchers to attend private and religious schools, increases support for charter schools, and creates a $300 million competitive grant program for schools tackling innovative cost-savings measures.

You can read the entire article here.