Jobs Budget 2.0

Dispatch: Gov. Kasich Visits Toledo to Urge Support for the Proposed Jobs Budget

February 22, 2013 by Admin Leave a Comment

Governor Kasich was recently in Toledo to attend the Lincoln Day Dinner and talk with Ohioans about his proposed Jobs Budget. The Dispatch has more below:

TOLEDO — It was a political event, but Gov. John Kasich was of no mind to talk politics.

Instead, he focused on policy last night in a 34-minute speech to about 500 people at the Lucas County Republican Party’s Lincoln Day Dinner, the first of six such county GOP dinners on his schedule through spring.

The governor offered a shortened redux of the State of the State speech he delivered in Lima on Tuesday night, urging the Toledo faithful to get behind his proposed $63.3 billion two-year budget, while unabashedly touting his administration’s achievements.

Kasich’s litany of successes included 122,000 jobs created and an $8 billion deficit turned into a $1 billion surplus without raising taxes.

“We now in Ohio have momentum,” said Kasich, who said his budget was crafted out of a “moral obligation” to create jobs.

The blueprint, however, has received a lukewarm reception from the legislature’s Republican majorities; members question his call to expand Medicaid to 275,000 more low-income Ohioans.

As he did in Lima, Kasich passionately appealed for support of the Medicaid expansion, saying that “the Good Book says you don’t ignore the least among you.”

Noting that the expansion would save Ohioans $400 million over two years and bring in billions in federal money to insure the working poor, Kasich said: “Abraham Lincoln did what’s right to lift human beings, and our conservative Republican Party must do the same.”

Toledo Mayor Michael Bell, a Democrat-turned-independent who attended the dinner, called the Medicaid expansion “extremely important … because most of those people who do not have any type of insurance end up in emergency rooms, and that type of treatment is much more expensive.”

You can read the entire article here.

Filed Under: Blog Posts Tagged With: education, Jobs Budget 2.0, Medicaid, Ohio Jobs, tax cuts

Editorial: Gov. Kasich’s Plan Makes Sense – Ohioans Should Support

February 21, 2013 by Admin 3 Comments

In this editorial, the Dispatch explains why Ohioans should support Governor Kasich’s plans to cut taxes and reform Medicaid – both efforts to lead to job creation and stronger families:

In his State of the State address and in the budget proposal that occupied much of the speech, Gov. John Kasich has laid out a plan to sustain and accelerate Ohio’s economic recovery. That’s a prospect worth cheering for, but it won’t come to pass if an ideology-bound legislature stands in the way.

Kasich is taking heat from fellow Republicans for his plan to expand Medicaid using federal dollars. From Democrats, it’s flak over his proposal to lower state income tax and lower, but more broadly apply, state sales tax. This diverse chorus of complaints illustrates what sets Kasich apart from most politicians: He panders to no special interest but Ohio’s welfare. He works to solve problems, not play on a political team.

That will be no comfort to Ohioans if lawmakers reject his good ideas. Anyone who is putting Ohioans’ best interests first can see that expanding Medicaid under the federal Affordable Care Act is the right call.

This doesn’t suggest that the federal health-care overhaul is a good law; it isn’t. But it is, nevertheless, the law. Rejecting Medicaid expansion is not going to roll back the overhaul. So state officials’ obligation is to navigate it to Ohio’s greatest advantage. To do otherwise hurts no one except Ohioans. As long as the federal government is paying most of the cost, which it has pledged to do until at least 2020, expansion is the best deal. Kasich’s proposal calls for reversing the expansion if the feds stop covering the cost.

First and foremost, by extending Medicaid coverage to anyone earning up to 138 percent of the federal poverty level, it means that an estimated 275,000 low-income people will be guaranteed insurance coverage. The benefits accrue to everyone: People who can get preventive care won’t end up in emergency rooms with conditions that have grown unnecessarily serious and expensive. This lowers medical spending overall and eases hospitals’ burden for uncompensated care, which should help lower premiums for those who have insurance.

An economic study by four reputable groups attached some compelling numbers to the issue: the expansion would mean a net gain to the state of $104 million in 2014 and $1.4 billion by 2022.

Some state lawmakers object that the debt-laden federal government doesn’t have the means to fund this new entitlement. But that is an issue for federal lawmakers to grapple with. If state lawmakers turn down the $17 billion slated for Medicaid expansion in Ohio, the federal government will spend it elsewhere, and Ohioans will be worse off.

With his tax proposals, Kasich follows the sound economic policy of shifting the burden toward consumption rather than income. The sales-tax changes are not, as critics contend, a disproportionate burden to lower-income families. Some services that weren’t taxable before would become subject to tax, but the overall rate would be lowered to 5 percent from 5.5 percent, and housing, food and health-care spending would remain exempt.

Reducing income tax by 20 percent over three years, and even more for small-business owners, would give all Ohioans a break and put more money into the private economy, the ultimate source of wealth for the whole state.

As a candidate in 2010, Kasich was painted by opponents as an extremist conservative, but he has proven otherwise. He is a pragmatist who puts success ahead of ideology. Recession-weary Ohioans want lawmakers to do the same.

You can read the original article here.

Filed Under: Blog Posts Tagged With: Balanced Budget, Jobs Budget 2.0, Medicaid, Ohio Jobs, tax cuts

Daily Caller: Gov. Kasich’s Tax Cuts & Reforms are a Model for Other States to Follow

February 14, 2013 by Admin Leave a Comment

Governor Kasich’s Jobs Budget 2.0 is getting national attention and many are citing his efforts to cut taxes for Ohioans by $1.4 billion as a model for other states to follow. The Daily Caller has more below:

Ohio Governor John Kasich, a Republican, recently proposed taxing 81 services that are currently exempt from Ohio’s sales tax and using the new revenues to reduce income and sales tax rates. This is a great idea, and other Republicans should follow Kasich’s example. Almost alone among Republican governors, Kasich understands that, done right, taxing services is no revenue grab, but a way to create fairer, more efficient, and more modern state tax codes and finance massive cuts to tax rates.

The tendency to exempt most services (as opposed to goods) from sales taxes is one of the greatest weaknesses of current state tax codes. Sales taxes are a major source of funding for state governments, providing, on average, about a third of all revenues. But over the years, sales-tax bases have eroded, due to the rise of online commerce, states granting exemptions for basic necessities such as food and clothing, and consumers spending a greater share of their incomes on services and less on goods. In 1935, when Ohio’s sales tax was first designed, sales of goods constituted 56.5 percent of all personal consumption in the U.S., and services only 43.5 percent. Now, two-thirds of all spending is on services and only one-third is on goods.

And

In explaining his plan for “broad structural [tax] reform,” Governor Kasich contends that services should be “taxable unless specifically exempted, rather than being exempt unless explicitly made taxable,” just as goods are. But at present, only Hawaii, South Dakota, and New Mexico take this approach. According to the Federation of Tax Administrators’ most recent survey of trends in state service taxation, half of all states tax fewer than 40 of the 168 services included in the survey.

Huge revenues are at stake. Even after exempting healthcare, education, and other services “vital to well-being and opportunity,” Kasich’s plan would increase Ohio’s sales-tax base by 30 percent and generate almost $3 billion in new revenues, gross. The majority of revenues come from taxing lucrative professional services industries such as law, finance, and architecture, though small businesses such as hairstyling and dry cleaning are also targeted. Kasich would use the new revenues to lower the sales tax rate from 5.5 percent to 5 percent and to help finance a 50 percent income tax cut for small businesses and a 20 percent income tax cut for individuals.

Republicans now hold complete control of 25 state governments, and several Republican governors have recently proposed major tax reforms. But, thus far, only Kasich and Bobby Jindal of Louisiana have grasped the advantages of service taxation. (Jindal has proposed a tax reform package that includes service taxation, but has not yet released the details.) More Republicans should make service taxation central to their tax reform plans.

Not that service taxation is a lay-up, politically speaking. Many prior efforts at it have failed, due to lobbying by small business advocates and the deep-pocketed professional services industries. The challenge for Kasich, Jindal, and, hopefully, other Republican governors will be to buck the special interests and hold firm on their commitment to tax reform. Service taxation is critical to state tax reform. It enjoys broad support among tax policy experts and has been consistently recommended by special state commissions on tax reform. Pursuing service taxation would allow Republicans to seize the high ground in tax policy debates, to be known as the party committed to improving tax codes by making them fairer, more efficient, and better-suited to the service-based economy of the 21st century.

You can read the entire article here.

Filed Under: Blog Posts Tagged With: Income Tax Cut, Jobs Budget 2.0, Sales Tax, Tax Reform

Column: The Jobs Budget 2.0 was Crafted to Offer Reforms that are Good for Ohio

February 11, 2013 by Admin Leave a Comment

In this guest column from the Plain Dealer, the author explains why Gov. Kasich’s proposed Jobs Budget 2.0 is both thoughtful and substantive. The goal is clearly to continue Ohio’s momentum, create jobs and offers reforms that are beneficial for Ohioans:

Any legislation encompassing taxes and spending of more than $60 billion is bound to generate controversy, and the quibbling over Gov. John Kasich’s proposed biennial budget has begun. Yet, however one may feel about any of its details, it ought to be clear that this budget is not business as usual. Indeed, it will be an achievement of historical importance, both for its substance and its break with the hyper-partisanship of recent years — if it gets through the General Assembly largely intact.

It is hard to imagine a document that better represents the much ballyhooed “balanced approach” that has been so elusive for national leaders the past several years. This balance spans the budget’s major components, beginning with real tax reforms. While lowering income tax rates for families and small businesses — sure to appeal to most conservatives but highly suspect to many liberals — it also increases business taxes on oil and gas extraction, which runs counter to a four-decade-long trend of higher burdens on families and lower taxes on business. More significantly, it reduces the rate of the sales tax while expanding its base, extending the tax to several long-excluded service industries. These are reforms touted by policy analysts from across the political spectrum.

In the field of education, primary and secondary schools would benefit from more lottery and general-revenue-fund subsidies, and the distribution of funds will more effectively assure fairness. While the first-blush praise from some education leaders has faded as details for their own districts have become known, by focusing on decades-long inequities, the proposed budget constructively frames the legislative deliberations that began last week. Similarly, the more modest increases in funding for higher education are accompanied by changes that would base state support less on body counts and more on degree completion.

In the health care arena, the administration’s proposals are extraordinarily comprehensive and forward looking. Most significant is the decision to proceed with expansion of Ohio’s Medicaid program. Providing health benefits for low-income workers and their families will benefit well over half a million Ohioans. Covering low-income individuals — many of whom have significant behavioral health problems or chronic diseases — will vastly improve the lives of some of the poorest and most severely ill Ohioans. In combination, the expansion should relieve providers, businesses and the privately insured of most of the cost of uncompensated care, making complex and dysfunctional cost shifting a thing of the past. Further, streamlined eligibility determination promises to reduce bureaucratic snafus and ridiculous difficulties for families negotiating their ways through the public welfare system. Creation of a single cabinet-level Medicaid agency — proposed to, and ignored by, previous governors of both parties — promises to strengthen management of the largest program in state government. The concurrent consolidation of mental health and alcohol and drug addiction service agencies will allow the same during a period when access to and funding of behavioral health services will undergo unprecedented expansion.

Beyond the broad outlines of the Medicaid expansion, the attention to details is noteworthy. For example, payment reforms will focus more attention on improving health, preventing disease and managing expensive chronic conditions that drive so much of health care cost. Additionally, directing Medicaid’s graduate medical education support to primary care professions and away from subspecialties is a bold first step in addressing the undersupply of general practitioners and oversupply of subspecialists. The administration’s effort to reach out to the Obama administration to explore covering a portion of the newly-covered through subsidies to private insurance is a groundbreaking alternative that might set an example for other states that are reluctant to move forward with the Affordable Care Act. And finally, the proposed trigger mechanism aborting the expansion if the federal government fails to fulfill its financial commitments provides assurance that future state leaders will not get hammered with enormous unfunded federal mandates.

Taken as a whole, Gov. Kasich’s executive budget reflects both pragmatism and principle. It is broad in its reach and extraordinarily thorough in its detail. It bears the stamp of the governor’s conservatism throughout, but borrows from the political left where he sees a benefit for Ohio. It is, in a word, balanced.

As with all legislation, the budget will be the subject of hundreds of amendments, which is business as usual. But this is decidedly not a business-as-usual budget. Nor is it doctrinaire. The thoughtful combination of its major provisions gives it an integrity that is far from the norm. It is a combination worth fighting for as a piece, and the governor should not hesitate to call on Ohioans to make their voices heard if it starts to unravel.

You can read the original column here.