As state governments wrestle with massive budget shortfalls, a Wall Street giant is offering a solution: cash in exchange for state property. Prisons, to be exact.

Corrections Corporation of America, the nation’s largest operator of for-profit prisons, has sent letters recently to 48 states offering to buy up their prisons as a remedy for “challenging corrections budgets.” In exchange, the company is asking for a 20-year management contract, plus an assurance that the prison would remain at least 90 percent full, according to a copy of the letter obtained by The Huffington Post.

The move reflects a significant shift in strategy for the private prison industry, which until now has expanded by building prisons of its own or managing state-controlled prisons. It also represents an unprecedented bid for more control of state prison systems.

Corrections Corporation has been a swiftly growing business, with revenues expanding more than fivefold since the mid-1990s. The company capitalized on the expansion of state prison systems in the ’80s and ’90s at the height of the so-called ‘war on drugs,’ contracting with state governments to build or manage new prisons to house an influx of drug offenders. During the past 10 years, it has found new opportunity in the business of locking up undocumented immigrants, as the federal government has contracted with private companies in an aggressive immigrant-detention campaign.

And Corrections Corporation’s offer of $250 million toward purchasing existing state prisons is yet another avenue for potential growth. The company has billed the “corrections investment initiative” as a convenient option for states in need of fresh revenue streams: The state benefits from a one-time infusion of cash, while the prison corporation wins a new long-term contract. In addition, supporters of prison privatization have argued that states can achieve cost savings through outsourcing, as prison corporations give fewer benefits to employees.

“We believe this comes at a timely and helpful juncture and hope you will share our belief in the benefits of the purchase-and-manage model,” reads the letter from Harley Lappin, CCA’s chief corrections officer, who was a former director of the Federal Bureau of Prisons.

Ohio sold off one of its largest prisons to Corrections Corporation last year as a way to plug holes in its budget, and government officials estimate that outsourcing the prison could save the state $3 million annually. Louisiana Gov. Bobby Jindal (R) proposed putting three state prisons on the block last year to generate one-time revenue, but he failed to persuade state lawmakers to endorse the plan.

Others have raised serious doubts about the wisdom of selling off and privatizing state prisons, which could give private corporations substantially more bargaining power in long-term contracts with states. Prison management contracts can be canceled or re-bid frequently, with the state still retaining ownership of the prison as an asset. But if a private company owns the prison, the state would have fewer options if it wanted to cut ties. Any alternatives for housing prisoners would likely cost more, such as building a new prison from scratch or finding another company to take in its inmates.

A series of studies has also cast doubt on the private prison industry’s main selling point: efficiency. Research across numerous states has shown that the promised savings from private prisons can be illusory at best. Cost comparisons often fail to account for extra administrative expenses borne by the state, or differences in health care costs for sickly inmates who normally remain in state supervision.

What’s more, many civil liberties advocates question why a profit motive should be tied to incarceration policies, raising concerns that cutting costs could have an adverse effect on public safety. In 1998, six prisoners, including five convicted murderers, escaped from a Corrections Corporation prison in Youngstown, Ohio, putting the company in the national spotlight amid findings of inept supervision by guards and poor training by prison officials.

“It’s a real gamble for states to say, ‘Gee, we’re going to save a lot of money this way,’” said Zach Schiller, research director at Policy Matters Ohio, which did several studies analyzing Ohio’s sale of a state prison to Corrections Corporation of America. “The idea that we should do this because we need money on a one-time basis seems like awfully short-term thinking. If we want to talk about what our needs are for the budget, and what our needs are for housing prisoners, let’s look at those on a long-term basis and see what the best decisions are.”

A spokesman for Corrections Corporation of America, Steve Owen, said the company’s contracts with any government agency are completely transparent. He pointed out that in many states, including Ohio, governments require demonstrated cost savings of 5 percent or more to enter into a contract with a private operator.

“There has to be a cost savings, and they have to monitor that over time, so I think that speaks for itself,” Owen said. “At the end of the day, if we can’t provide the scope of services and the quality of services and do it at whatever the cost savings that are required, they’re not going to continue to do business with us.”

But estimated savings often come down to how those calculations are made, and outside researchers have questioned the numbers. In Arizona, for example, a 2010 report from the state’s auditor general showed that it cost the state more to house prisoners in private facilities than public prisons after factoring in administrative costs and adjusting for the types of medical care provided to less healthy inmates who tended to be housed in public facilities. And in Florida, where lawmakers this week could decide whether to privatize more than two dozen state prisons, reports about private prisons from the state’s legislative research office note, “cost savings estimates are subject to caveats and should be evaluated cautiously.”

EXPANDING IN TIGHT TIMES

In recent years, Corrections Corporation of America has made it clear that it sees opportunity in the new era of state budget crises. During earnings calls with investors, company executives have pointed out that the Great Recession has brought renewed interest in privatization.

“We continue to believe we are very well-positioned in a market that, despite the economic pressures faced by our customers, has provided healthy financial performance,” Corrections Corporation chief executive Damon Hininger said in the company earnings call last November. “Indeed, it is because of these pressures, which lead to severe capital constraints and the need to avoid increasing their pension liabilities, that we believe our value proposition to customers is getting stronger.”

The letter sent last month to 48 states was billed on the example of Ohio, which last year sold a prison near the shore of Lake Erie to Corrections Corporation for $72.7 million.

“We want to build on that success and provide our existing or prospective government partners with access to the same opportunity,” the letter said.

Those who follow the private corrections industry said the purchasing approach gives prison companies a new option for growth. Although U.S. prison populations have swelled to enormous proportions, growing more than sevenfold since the mid-1970s, growth has slowed and populations are expected to decline in many states.

“You’ve not seen inmate populations at the state level grow for the last two years,” said Kevin Campbell, a senior research analyst who follows the corrections industry at Avondale Partners, an investment firm. “So if you as an industry are going to continue to grow, then you have to think, ‘How do we take shares away from the public sector to the private sector?’”

The outright ownership of a prison generally makes state contracts more beneficial to a private operator such as Corrections Corporation of America, Campbell said. If a state owns a prison and contracts it out, the pricing tends to be more competitive, as numerous companies would be jockeying for the management job.

“That just keeps a lid on how profitable a management contract can be,” Campbell said. “That’s why their preference would be to own versus just straight-out manage a contract.”

Yet critics point to inherent problems in such long-term contracts, particularly provisions that require a prison to be 90 percent full throughout the life of an agreement. In Ohio, for example, contractors are guaranteed payment at the 90 percent rate “regardless of the actual number of inmates at the institution at that time.”

The mandate to keep prisons full raises questions about cost efficiency — what if there aren’t enough inmates? — but it also presents a moral question about maintaining a constant supply of new prisoners.

“It becomes a self-fulfilling prophecy,” said Shakyra Diaz, policy director of the American Civil Liberties Union of Ohio. “In order to have it at 90 percent, you need to be able to make criminals to fill it at 90 percent.”

Corrections Corporation’s filings with the Securities and Exchange Commission clearly point out that business success is tied to a status quo in criminal justice policy.

“The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws,” the company’s most recent annual filing noted. “For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them.”

QUESTIONS ABOUT EFFICIENCY

Up until last year, the sale of a state prison to a private company was unprecedented. State and local governments have considered auctioning off all sorts of public property during the economic downturn, including even the state capitol building in Arizona.

Last year, the idea of selling prisons gained traction in both Louisiana and Ohio, as states became hungry for quick fixes to budget shortfalls. Gov. Jindal’s plan in Louisiana came up short.

Legislators and state bureaucrats did not buy the idea of balancing a budget with one-time revenues from a prison sale. Louisiana State Treasurer John Kennedy compared the strategy to “a junkie selling the television set and radio to generate money for his next fix.”

When Ohio Gov. John Kasich (R) took office last year, he proposed selling off five state prisons as part of a broader plan to privatize state government.

By the time Ohio received proposals last summer from private prison companies, only one offer was deemed worthy: the $72.7 million sale of the Lake Erie Correctional Facility. In a conference call with investors last fall, Hininger, the Corrections Corporation CEO, trumpeted the Ohio deal, noting, “Ohio has been a targeted state for CCA for several years.”

Kasich’s appointed chief for state prisons, Gary Mohr, previously served as a managing director at Corrections Corporation of America before assuming his government position last year. And Kasich’s former chief of staff when he was a congressman, Donald Thibaut, now works as a lobbyist in Ohio for Corrections Corporation of America.

The state Department of Rehabilitation and Correction has pointed out that Mohr took the “extraordinary step of completely removing himself from this process,” and did not have any part in examining the proposals for prison privatization last year.

State public policy groups have questioned how the sale of the Lake Erie prison shook out for taxpayers.

State officials have argued that selling and outsourcing the prison will generate $3 million in cost savings each year. But a report from Policy Matters Ohio calculated that selling the Lake Erie prison would actually cost more in the long term than if the state continued to own the property and pay off the construction bonds. That’s because the state has to pay Corrections Corporation of America a $3.8 million annual ownership fee for housing state prisoners, in addition to the prisoner per-diem costs laid out in the contract.

According to the report, the prison sale would cost taxpayers $11 million more over the next 20 years than if the state would have continued to own the prison.

“A closer look shows that this deal has the potential to be a net loser for taxpayers right off the bat,” the report notes.

Annette Chambers-Smith, the deputy director of administration at Ohio’s Department of Rehabilitation and Correction, said the calculations in the group’s report were “rudimentary.” She said the calculation did not account for costs the state might have for capital improvements at the prison, and did not note the additional property taxes that will come from private ownership of the facility.

“In our case we were able to not only plug the hole in the budget, but then turn around and have property taxes,” she said.

Just as cost concerns were raised in other states, groups in Ohio have questioned how much money is actually being saved by privatizing prison operations. Policy Matters Ohio said it found significant problems with the way the state calculated private prison “savings” in its report.

For example, to compare the costs at a privately run prison to a state prison, the state’s department of corrections had to create a hypothetical state-run prison that would be the same size as a privately managed prison. The hypothetical example, however, contained central office and administrative staff costs that were not figured in for the private prison, making the state prison appear more costly, Policy Matters Ohio found.

In reality, the state is tasked with overseeing and administering private prisons in the correctional system — creating an additional cost — even if state employees aren’t staffing the prisons.

Chambers-Smith, of the Ohio corrections department, acknowledged there had been inconsistencies with the state’s cost calculations in the past. But beginning in 2010, she said the department has revised calculations to directly compare each area of service — health care, utility costs, staffing.

“They don’t get to cherry-pick their inmates,” she said. “They have the exact same inmates there who were there when it was publicly operated.”

At this point, it’s unclear how many states will be interested in selling off prisons. Arizona, New Hampshire and Florida are considering privatizing the management of state prisons, but so far none have specifically broached the topic of a sale.

State corrections officials who were contacted in California, Pennsylvania, Virginia, Montana, Georgia, Texas, Illinois and New York all said they were not considering such prison sales at this time. In Illinois and New York, laws prohibit state inmates from being housed in private prisons, according to corrections officials.

Private Prison Corporation Offers Cash In Exchange For State Prisons

More than 13,000 residents work through Cleveland Saves to meet savings goals that include retirement, emergency funds, even the purchase of a car or home. Saves Week offers special incentives for new and current savers.

This webinar will explain the basics behind CHP and WER technologies, and the environmental benefits associated with projects using them. Technical experts will present the basics and then take questions from webinar participants.

2:00 – 3:00 PM ET, Tuesday, February 14. Click here to register now.

It is a great thing when Ohio can point to a model law. The 40-year-old Consumer Sales Practices Act (CSPA), lauded for its broad and solid protections of Ohioans, is just that — one of the nation’s best preventions against fraud and unfair business practices. It was adopted after an extensive study by the Ohio Legislative Services Commission, which found a need to safeguard legitimate businesse practices while prohibiting deceptive and misleading practices.

The Ohio House recently passed a badly mislabeled “right to cure” bill (H.B. 275), which would freeze CSPA suits, providing the business a chance to offer cash to “fix” the problem. Additionally, the legislation caps attorney fees at $2,500 for the “cure” process — leaving low- and moderate-income families extremely vulnerable to legal costs.

Make no mistake, the changes to the CSPA will harm consumers. In addition to weakening the consumer’s ability to collect damages and attorney fees, the bill reverses the thrust of our consumer protection law by placing the risk on the consumer. If the consumer does not accept the business’s offer and a judge or jury awards less than that offer, the customer loses the ability to receive triple damages — the heart of the CSPA. Below, we provide some basic facts about the bill.

Fact 1: H.B. 275 provides no new rights to consumers.

Despite clever naming, consumers already have a “cure.” Businesses can make an offer to consumers before a lawsuit is filed, and judges can already limit attorney fees. Obviously, consumers often do not take the offer because it does not make them whole for the damages they have suffered.

Fact 2: Other states have not allowed businesses to stop lawsuits in this manner.

Currently, no other state has a “right to cure” law or provision that allows businesses to stop a suit after filing. The National Consumer Law Center sternly warns that adopting H.B. 275 would make Ohio’s law substantially weaker than other states. Even with decent protections, Ohio has already been home to some of the worst fraud in the country from predatory mortgages to tax preparation. Weakening enforcement and economic consequences for bad business practices would make things worse for Ohioans.

Fact 3: Very few lawsuits are filed under the Consumer Sales Practices Act.

The legal system can manage the suits that get filed under the CSPA. In 2011, roughly 100 suits were put forth. The CSPA casts a wide net, rewarding good business practices by providing serious penalties for bad ones (remember, triple damages). The strength of the current law reduces the number of lawsuits filed. H.B. 275 encourages bad businesses to force consumers into court, knowing they can cut off triple damages and shift the entire risk of litigation to the consumer.

Fact 4: The “cure” is a bad deal for consumers.

Failure to take the “deal” offered by the business leaves the consumer extremely vulnerable to a lesser settlement from the judge or jury. Imagine buying a used car for $5,000 that was supposed to be in good working condition but was not and required serious repair. After the consumer has put hundreds of dollars into repairs including mechanical work, towing, rental car and time off work, suppose the business responds with a low-ball cure offer of $5,000 or less. Few consumers would reject the low-ball offer and pursue a claim in court because few would be able to risk losing at trial and having to pay the additional legal costs.

The message, then, to businesses with bad practices is there is a low cost to rip off consumers.

Fact 5: Businesses are rarely held accountable for accidental and unintentional acts.

Reputable businesses that treat their customers right aren’t concerned about the CSPA. If a business does have a consumer dispute, the CSPA already has provisions to protect businesses from frivolous lawsuits. And the Ohio attorney general offers help so businesses can understand their obligations under the law.

The bottom line is that H.B. 275 is not pro-business and is certainly not pro-consumer, as supporters tout. It is pro-bad business practices, providing loopholes and few consequences for deceptive and fraudulent acts. Ohioans have suffered enough fraud and deserve one of the nation’s strongest consumer protection laws. The Ohio legislature should refuse to water down our consumer protections.

Nothing right about this cure

Gov. John Kasich is right to call for an increase in Ohio’s severance tax on oil and gas and a new impact fee to help localities deal with the consequences — in road wear, as just one example — of expanded drilling and “fracking.” But it’s not enough.

If shale oils and gases are as bountiful under Ohio as the industry suspects, the state needs to tighten regulations more broadly to protect its groundwater and citizens and to expand the state’s capacity to monitor the industry.

Kasich promised “tough environmental rules” in his State of the State speech (pdf) last week. They need to be state-of-the-art and include tougher liability and bonding requirements along with enough fracking-liquids disclosure to allow communities, if they so choose, to conduct baseline testing of groundwater before drilling begins.

Ohio also needs to revisit flawed laws that have removed virtually all drilling oversight from localities, given regulatory authority to a board dominated by oil and gas interests and forced some private landowners into drilling pools if within 20 acres of a neighbor who’s cut such a deal. That’s just wrong.

Increasing severance taxes is a good place to start. At current rates of taxation and production, they produce a pittance: $2.07 million statewide in natural-gas severance tax, and $487,165 for oil in fiscal 2010.

Ohio’s severance tax rates are so far below the national norm that the Policy Matters Ohio think tank calculates (pdf) Ohio will forgo up to $538 million by 2015 if the rates aren’t increased.

Additionally, highly profitable natural gas liquids are currently untaxed in Ohio; that needs to change.

Finally, Kasich and the General Assembly need to restore funding for the Ohio Geological Survey‘s seismic monitoring and bolster its resources for mapping and analyzing mineral resources. Those latter jobs are now largely financed by small slices of seven severance taxes, although a “regulatory cost recovery assessment” under a 2010 bill signed into law by former Gov. Ted Strickland goes to state coffers — a mistake that needs to be rectified.

Producers undoubtedly will decry any significant rate increase or broadening of what the tax covers. But while fracking may offer Ohioans tremendous opportunities, it also brings serious risks and costs. A fair severance tax, fairly applied, and reasonable impact fees are in the public interest.

Most labor experts agree that education is the strongest determinant for success in the modern-day workplace, and new government job forecasts indicate more education is better for job seekers.

Regardless of industry, the fastest growth is projected for occupations that require at least a master’s degree. Those professions will grow by 22 percent through 2020, according to the latest figures from the U.S. Bureau of Labor Statistics. Jobs requiring doctoral degrees will see the second-fastest rise, growing by about 19 percent over the next decade.

All occupations that require more than a high school education will grow faster than those that don’t; and wages will be considerably higher for those educated workers, according to the government report.

The outlook is bracing for a majority of the state’s nearly half-million jobless workers — most of whom lack college degrees.

About 43 percent of unemployed workers in Ohio had no more than a high school diploma in 2010.

Another 16 percent never received a high school diploma or equivalent, according to a recent report from the Ohio Department of Job and Family Services.

About 10 percent of jobless Ohioans have bachelor’s degrees and 3 percent have at least a master’s, but the vast majority of unemployed Ohioans do not match up well with the highest-paying and fastest-growing occupations.

“Where the economy is recovering, what we’re seeing is the jobs that are resurfacing aren’t the same as the ones we lost,’’ said Bill Even, an economics professor at Miami University who studies labor issues. “Part of the problem is that the workers without jobs don’t necessarily have the skills that the folks with the job openings are looking for.’’

While jobs that do not require degrees will continue to comprise the bulk of all new jobs created over the next 10 years — just over 60 percent — the low skill level required for those occupations will be reflected their median annual wages.

The median wage for workers with less than an associate degree ranges from $20,000 to $34,000 a year, the BLS reports. By comparison, occupations requiring at least a two-year degree bring median annual wages of $60,000 and higher.

The disparity in educational attainment and wages underscores the lopsided jobs recovery nationwide and in Ohio in which prospects for college graduates have gradually improved while workers without degrees continue to struggle.

“Unfortunately, not every person is a four-year school person,’’ said Gus DeLucia, team leader at the Dayton office of Belcan TechServices, an information technology recruiter. “Generally, the people we are employing have gone to at least a two-year school and often a four-year school.’’

Most of the jobs created in Ohio since the recovery began in 2009 have been in education and health services and professional and business services.

Ohio still has a vibrant manufacturing industry, but jobs are not as plentiful or pay as much as they did before the recession.

It is a situation that could keep many of Ohio’s displaced workers on the sidelines and create a persistent underclass of unemployed and marginally employed workers, said Hannah Halbert, policy liaison with Policy Matters Ohio.

The gap between educational attainment and available jobs “should be viewed as a call to action to boost educational attainment and to directly address our sluggish economy,’’ Halbert said.

She notes that without an educated and well-trained labor pool the state will struggle to attract and retain those employers who can offer the best jobs.

An increasing number of displaced Ohio workers are trying to reinvent themselves to fit in with the fast-evolving needs of the state’s biggest employers.

In 2010, about 20 percent of unemployed Ohioans who dropped out of the labor force said the main reason they were no longer looking for work was that they were in school or receiving other training.

Even without a degree, the days of graduating from high school and landing a well-paying job with no further training have virtually ended.

According to the state jobs department, 55 percent of all new jobs created in the next decade will require some form of postsecondary education.

“We are seeing an uptick in requests from employers, but they have specific skill-set requirements,’’ said Kathy Trautman of Manpower employment services in Dayton. “If it’s manufacturing, they’re not just asking for assembly or production people. There asking can you send me a skilled trades person who can set up the machine, program the machine, troubleshoot the machine and lead the team.’’

Education strong determinant with work success: Most jobless Ohioans have no more than a high school diploma

As Ohio prepares to usher in a multibillion-dollar gas drilling industry, it is relying on an honor system with well owners for the purpose of collecting taxes and fees, and the numbers don’t add up.

An alternative – We teamed up with the Institute on Taxation and Economic Policy to analyze the impact of restoring previous tax rates on income over $250,000 and further boosting the rate on income over half a million dollars. The result: an additional $650 million in annual revenue that the state could use on education and infrastructure crucial to our future. Those in the top 1 percent of income would pay the vast bulk of the increase with close to 99 percent seeing no increase. Read the issue brief here.

The EITC rocks – David Rothstein traveled to D.C. to mark EITC Awareness Day, presenting these remarks at a briefing organized by the National Community Tax Coalition. He emphasized that the Earned Income Tax Credit is the “largest poverty relief program for working families” and called for renewed efforts to boost free tax preparation programs because of their high return on investment.

Scraping by – For too many Ohio families, making ends meet is a day-to-day struggle, according to the 2012 Assets & Opportunity Scorecard we co-released here with the Corporation for Enterprise Development. Ohio ranked 37^th among states in part because residents lack adequate savings or other assets to cover expenses for three months if they lose a steady income.

Make it, green – Our partner BlueGreen Apollo released a plan for growing green manufacturing jobs in Ohio. Recommendations include improving clean energy policies with loan programs for manufacturers that want to go green. Here’s the link to Ohio’s Green Manufacturing Action Plan.

Good move – In January, the Ohio House voted to extend unemployment benefits for some 20,000 Ohioans; a few days later, Gov. John Kasich signed HB 337 into law. This was a common-sense first step. Congress must now act to extend emergency jobless benefits that cover 80,000 Ohioans and last year brought nearly $1.4 billion to the state.

Not so fast – The economy may be getting stronger, but don’t let Ohio’s falling unemployment rate fool you. Two months of marked improvement in the official numbers suggest a revived economy, but the data clearly show that the rate continues to reflect a shrinking labor force rather than job growth and expanded employment. Our January JobWatch lays it out in plain English.

Calling all candidates – Want to learn more about what you can do to move Ohio forward? If you’re an elected official in Ohio, or are engaged in a campaign to become one, call us to learn more about the high-road approach to building an economy that works for everyone. Policy Matters Ohio offers briefings on a nonpartisan basis about the issues we research. For more information or to schedule a briefing, email us at prosado @ policymattersohio.org or call 216.361.9801.

Tweets-R-Us – We may not be early adopters, but when Policy Matters jumps in, we go headfirst. So check out our new Twitter feed. (Special thanks to Tracy Moavero, our newest Cleveland staffer.)

Thanks from Amy Hanauer and the Policy Matters team.

Policy Matters Ohio says the state could generate about $650 million annually by levying higher income tax rates on wealthy Ohioans.

PMO says that by reinstituting the state income-tax rate of 7.5 percent on income higher than $250,000 and creating a new 8.5 percent tax on income higher than $500,000, the state could generate more than a half-billion dollars each year.

Figures were based on analysis from the Institute on Taxation and Economic Policy, a national research institute.

PMO says the tax increases would impact 1.3 percent of taxpayers.

The research says the state could reverse half the cuts made to public schools and local governments in the current two-year budget.

“Public services, though sometimes invisible, are a crucial element in a thriving economy,” said Zach Schiller, report author and Policy Matters research director. “To restore critical services and invest in the future, Ohio should boost income-tax rates on its highest earners.”

Group wants higher Ohio taxes on high-income earners

Report outlines what higher rates on top earners would mean

A research brief released today by Policy Matters Ohio analyzes a proposal that would reinstitute the state income-tax rate of 7.5 percent on income over $250,000 and implement a new, 8.5 percent rate on income over $500,000. This combination would generate about $650 million annually, according to an analysis by the Institute on Taxation and Economic Policy (ITEP), a national research institute with a sophisticated model of state and federal taxation system

That would allow the state to reverse nearly half the cuts made to public schools and local governments in the current two-year budget. Those cuts are hitting Ohio’s schools and communities hard, prompting teacher layoffs, undercutting public health and leaving some local governments struggling to maintain their police levels.

Just 1.3 percent of Ohio’s taxpayers would be affected by such tax-rate changes, and the vast bulk of the increase would be paid by taxpayers in the top 1 percent of the income spectrum, who are expected to make more than $340,000 this year. The increase amounts to just 1.2 percent of the group’s average income of $981,000. Even after the proposed changes, taxpayers in the top 1 percent on average would pay a smaller share of their income in state and local taxes than those earning a tenth as much. 

This proposal would not change the amount of taxes paid by nearly 99 percent of Ohio taxpayers. It would affect only the most affluent, who can most afford to pay, and the increases for them would be relatively small.

“Public services, though sometimes invisible, are a crucial element in a thriving economy,” said Zach Schiller, report author and Policy Matters research director. “To restore critical services and invest in the future, Ohio should boost income-tax rates on its highest earners.”

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