Budget takes some steps in the right direction, but contains more ill-advised tax policies and revenue cuts for schools and local governments.

Contact: Zach Schiller, 216.361.9801

Ohioans need more state support, not more tax cuts

Gov. John Kasich’s proposed budget, released today, includes some needed initiatives, such as bolstering preschool education and stepping up efforts to fight infant mortality. However, it would divert $500 million into tax cuts that would be better spent on vital public services.

Cutting the income tax and expanding the existing tax break for business income is a failed economic strategy; after 10 years of tax cuts, Ohio still has fewer jobs than it had in 2005, while the nation has gained 6 million. While some elements of the tax plan may be good policy – a higher tax on tobacco would help public health, for instance – the overall package will further tilt the tax system in favor of those most able to pay.

The governor’s budget retains eligibility for the 450,000 Ohioans who signed up for health care through the Affordable Care Act’s expansion of Medicaid last year. We congratulate the administration for retaining their coverage in the budget proposal for 2016-17.  We hope barriers to care like complex payment systems and costly co-pays are not part of service delivery of this basic human need: health care.

The executive budget includes some positive investments, but does not adequately restore support in many areas and many communities. Local governments struggle after years of cuts in state aid, yet this budget proposal would further reduce state reimbursement for lost property tax revenues. Schools also see less revenue sharing: overall state funding for schools drops in Fiscal Year 2016.

The administration’s proposals to broaden child-care aid and extend the state’s needs-based financial-aid program to community college and branch campus students during the summer semester are small steps in the right direction. But in both cases, much more is needed.

We need a stronger restoration of state support to enable kids to be better educated, to advance economic security, and to maintain and improve our infrastructure. Policy Matters Ohio will study the budget and produce additional analysis.

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2015Revenue & BudgetTax ExpendituresTax PolicyZach Schiller