10 Ways to reform the state budget
Posted June 28, 2009 in Op-Eds
2 opinions on 10 ways to reform the state budget (part 1)
1. Restore the 7.5 percent state income-tax rate on income over $200,000 (it’s now 5.925 percent).
Savings: $940 million*
2. Return other income-tax rates to 2007 levels, before the last two years of rate cuts. Savings: $1.38 billion**
3. Institute a 5 percent state earned-income tax credit for low- and moderate-income families.
Cost: $146 million
4. Restore Ohio’s all-but-defunct corporate franchise tax, set at 2007 rates, two-fifths its previous level.
Savings: $1.1 billion
5. Means-test the homestead exemption and other property-tax rollback programs.
Savings: $245 million
6. Extend the sales tax to cover lobbying, public relations and debt collection.
Savings: $66 million
7. Eliminate the special tax covering payday lenders, mortgage brokers and finance companies so they pay the same tax rate as banks.
Savings: $20 million
8. Don’t approve new or expanded tax breaks, such as the loosening of requirements for the job retention tax credit.
Savings: Potentially, some tens of millions
9. Adopt reforms that will allow minor offenders to stay out of prison.
Savings: $50 million
10. Reduce nursing-home funding in favor of in-home and community care.
Savings: $100 million
Notes: The proposed revenue adds up to more than the total deficit, but the extra is needed to start preparing for the future; without the federal stimulus and other one-time money in the next budget cycle, we are going to be at least another $5 billion in the hole.
All figures are for the two-year budget period.
* Revenue for this and other options may be somewhat less because of the decline in the economy.
** Excludes revenue from restoring top tax rate in point one.