Thinking Twice

- April 14, 2014

In this eNews: What’s happened with Gov. John Kasich’s tax proposals in the Ohio House; fracking’s impact in Carroll County, Ohio, part of a three-state shale research effort; why shifting registration for unemployment compensation online will make it hard for jobless to get the benefits they’ve earned; what Kansas can teach us about drastic tax cuts; continued slow Ohio job growth; and a report showing that the U.S. is the third least taxed country among our trading partners.

Two steps forward, one back – Ohio House action has put on hold for now the Governor’s Mid-Biennium tax proposal, which would continue to shift the share of state taxes from the most affluent to middle- and lower-income Ohioans. Great move, as the proposed income-tax cuts relied on unsustainable sources to replace lost revenue. We also applaud the increased funding proposed by the House for children’s services and adult protective services, though it would only scratch the surface of investments Ohio needs to make. Less good: also stalled is the governor’s proposal to expand the Ohio Earned Income Tax Credit from 5 percent to 15 percent, a step in the right direction but not enough to ensure the credit benefits Ohio’s poorest working families.

Understanding fracking – Shale oil and gas drilling is changing the economy, environment and culture of Carroll County, Ohio, according to a case study Policy Matters released as part of a three-state research effort. Our research shows that fracking is complicated. Whether drilling ultimately helps or hurts the economy will depend on whether money stays local, where gas is refined, who gets jobs and business, and what the costs are to our communities, environment and public health. We worked with researchers in Pennsylvania and West Virginia; all the studies, and a recording of a media conference call, are available online.

Another forward step – We presented testimony that shifting registration for unemployment benefits online with limited exceptions, which policymakers were considering, would make it very hard for some unemployed Ohioans to access the benefits they’ve worked to earn. Kudos to the House for removing the requirement after hearing from us and others. Let’s keep this bad idea out: states that have imposed similar requirements have seen large numbers of claimants denied because they could not navigate the system.

Not in Kansas – Tax cuts enacted in Kansas in 2012, among the largest ever put in place by any state, are a cautionary tale, according to a report by the Center on Budget and Policy Priorities. As some states recover from the recent recession and turn toward the future, Kansas’ huge tax cuts have left that state’s schools and other public services stuck in the recession, and declining further – a serious threat to the state’s long-term economic vitality. Meanwhile, promises of immediate economic improvement have utterly failed to materialize.

Slow – Ohio lost 4,600 jobs in February, suggesting that the state is still struggling with slow job growth. Over the last 12 months, Ohio jobs have increased by only 1 percent, underperforming the nation’s 1.6 percent increase. Without accounting for population growth, the state needs to add 138,200 jobs just to make up for the jobs lost in the recent recession.

Not Highly Taxing – Citizens for Tax Justice points out that  the U.S. was the third least taxed country in the Organization for Economic Cooperation and Development in 2011, the last year for which data are available. Only Chile and Mexico collected less in taxes (federal, state and local) as a percentage of their overall economy than the U.S.

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