Tax Policy Shortchanges Ohio’s Public Services; Weak Job Growth Continues

April 24, 2007

In 2005, Policy Matters Ohio testified in the Ohio legislature against sweeping tax law changes that gave massive tax breaks to wealthy individuals and certain segments of the business community. As the Ohio House of Representatives considers making changes to the budget submitted by Governor Strickland, we call on legislators to take stock of the effects of tax reductions on public services and consider whether the tax changes have helped the economy. Nearly two years after the tax changes, Ohio’s total non-farm payroll employment stands at 5.43 million, barely higher than in the summer of 2005. The manufacturing sector, which was supposed to be the main beneficiary of tax reduction, lost nearly 29,000 jobs since June 2005. House Bill 119 reflects continuation of anemic revenue growth from previous years: Aid to local governments is barely increased after years of being frozen, higher education continues to be squeezed, and it is a struggle to find revenue even to restore parents’ coverage under Medicaid to 100 percent of the poverty level.

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