Thursday, March 13, 2014 Advocates for poor see positives in Kasich's budget update But one group is concerned that the overall tax burden continues to shift down the income scale Story by KELSEY LEYVA
In The Region:
Advocates for low-income Ohioans say there’s a lot to like in Governor John Kasich’s update of the state’s two-year budget.
But one group claims the tax burden continues to slide toward lower end of the income scale.
Kasich’s 1,600 page mid-biennium review released earlier this week looks like an election year document – it’s got something to please almost everyone. In his budget update proposal Kasich calls for an increase in the Earned Income Tax Credit, and the personal exemption for low- and middle-income Ohioans. The governor’s update also includes an 8.5 percent cut in income taxes across all levels.
The budget also streamlines the state's fragmented workforce training system, and boosts career education.
“Some of the positives are the emphasis on workforce development and education. Having programs around mentoring, some initiatives around dropout prevention and also reaching out to folks who never completed a high school diploma.”
While Honeck commends these initiatives, he’s concerned with how the state plans to fund them and pay for the $2.2 billion in income tax cuts over the next three years.
“We are concerned overall about the revenue package that’s in here in the sense that the income tax is being cut, other taxes are being raised but overall it looks like it’ll be a net loss of money to the state. And this comes on the heels of big tax cuts that occurred in the budget that was just passed last year and other big cuts to the income tax a few years ago as well.”
Honeck says the overall tax relief for low-income Ohioans may end up being a wash.
“What you might see is a decrease in the state taxes, which may in fact be offset by local governments having to increase their taxes to make up for some of those losses and the services that they can provide. Part of this just really depends on how it plays out.”
Honeck says Ohio has been steadily reducing income taxes and moving toward consumption based taxes, such as sales and property taxes. He says the net effect is a larger percentage of the tax burden moving toward low-income families.