In order to balance the Ohio state budget, Gov. Ted Strickland has proposed temporarily restoring the last year of a five-year, 21 percent income-tax cut approved in 2005. This October 2009 report examines the effects of implementing the governor’s proposal together with two other measures that would raise income-tax rates on the most affluent: Restoring the 7.5 percent rate on annual income over $200,000, and creating a new, 8.5 percent bracket for income over $500,000 (sometimes known as a “half millionaire’s tax”). The analysis relies on the Institute on Taxation and Economic Policy, a Washington D.C.-based research institute with a sophisticated model of state and federal taxation systems.

According to the ITEP analysis, combining the governor’s proposal with the increases for the highest-income Ohioans would generate more than $950 million a year. Almost $600 million, or more than three-fifths of that amount, would be paid by Ohio taxpayers in the top 1 percent of the income spectrum. By contrast, the four-fifths of Ohio taxpayers making $76,000 or less a year together would pay just 14 percent of the total tax increase. On average, taxpayers in the middle fifth of the income scale – those making between $32,000 and $49,000 a year – would have to pay an additional $37 a year, or less than one tenth of one percent of their annual income. Lower-income taxpayers on average would pay less than that.

Restoring the necessary revenue to meet the needs of Ohioans and operate Ohio government can’t be done with the income tax alone. But stronger income tax is a cornerstone of a sound budget strategy for Ohio.

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Executive Summary

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The Franklin County EITC Coalition continues to reach new heights, providing free tax preparation for more than 4,000 clients last tax season. The Coalition, compromised of more than 30 partners, brought more than $5 million of federal and state tax refunds into Franklin County. The Coalition seeks to help individuals and families to claim the Earned Income Tax Credit, a refundable tax credit that provided the average Franklin County recipient $1,900. The Coalition serves low- and moderateincome families who make up to $42,000 of income, an average of $20,000 a year. …

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There are many studies of the impact of climate legislation on our pocketbooks and jobs, and they project startlingly different outcomes. For every study that projects job loss, there is another that projects job gain.

Policy Matters Ohio took a close look at the top dozen current studies to try to make some sense of it all. We found legitimate and substantive differences in assumptions about key economic concerns, such as the mix of fuels used in energy production under a cap and trade program. We also found different methods used in projection (econometric, input-output, and others); different rates and base years used in accounting for inflation; and different measures of impact on the pocketbook (“household income” or “consumption,” for example). We found studies on different versions of legislation: some consider last year’s Lieberman-Warner bill, others the early provisions of Waxman-Markey, and others, the American Clean Energy and Security Act of 2009 as passed by the House of Representatives. We found some studies excluded key elements of legislation – say, energy efficiency provisions – while others focused solely on that issue. In brief? It’s hard to make an apples-to-apples comparison.

Generally speaking, we found that for studies undertaken using econometric models, what is commonly described as ‘job loss’ or ‘Cost to Households’ is better described as a limit on otherwise projected growth. In all studies that considered gross domestic product (GDP) between now and 2050 (the time that a cap and trade program would be in place) the US economy is forecast to grow; however, in some studies growth rates are projected to be slightly less with a cap and trade program than under a ‘business as usual’ forecast, within a range of .1 percent to 3.4 percent.

We note that the ‘business as usual’ scenarios do not focus on the cost of global warming, which World Economist Nicholas Stern of the United Kingdom warns will top the most costly scenarios of the studies reviewed here.

For a background of the studies, read here:

Comparison Table

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When compared to entering kindergartners in district neighborhood schools, children entering charter and magnet schools in several of Ohio’s urban school districts performed significantly better on the Kindergarten Readiness Assessment-Literacy (KRA-L), which is taken as students begin school and reflects preparation for school rather than outcomes from school. A separate analysis found an association between scores on this required early literacy assessment and 3rd-grade reading and math scores on the Ohio Achievement Test, suggesting that schools enrolling students who do better on the KRA-L also post higher OAT scores. Given recent research that shows Ohio charter students performing at or below the levels of students enrolled in district schools, different preparation levels documented in this report highlight the need to rethink Ohio charter school policy.

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