Spend Ohio’s Budget Surplus On Schools / Local Govt, Or, Reduce State Income Taxes? -- Assembly Candidates Should Answer


Should Ohio’s surplus revenue be used to restore funding cuts to schools and local governments or should the surplus revenue be used to make across the board reductions to the Ohio income tax? In a functioning democracy, any candidate seeking election to the Ohio Assembly would be expected to take a stand on how this budget surplus should be spent.

John Kasich, Republican Governor of Ohio, is estimating that by July 1, 2013, in time for the new two-year budget, Ohio should have a $408 million surplus. And in addition, if the courts rule favorably on the JobsOhio plan, the state will receive an extra $500 million. Then, in addition to these amounts, there is the chance for a big increase in revenue from new taxes on fracking.  Kasich is recommending that taxes on fracking be increased and it is estimated that, if the new tax is approved, over $500 million will be raised each year.

Kasich is already on record as indicating that after replenishing the “rainy day fund,” he wants any surplus to be used to implement an across the board decrease in Ohio’s income tax.

In the last budget, the Republican dominated Assembly had to solve a budget gap and, in order to do so, gave Republican Governor Kasich pretty much everything he wanted –  including big reductions in funding for to public education, and big reductions to local governments. Kasich, it appears, now wants to keep this reductions in place and, according to State Senator, Mike Skindell, in this next budget, Kasich intends on making even more reductions.  See: Mike Skindell, Democrat For Ohio Supreme Court, Says Next Kasich Budget Will “Strangle” Local Communities 

Candidates to the Assembly should be clear. Candidates Should Answer: Spend Ohio’s Budget Surplus On Schools / Local Govt — Or, Reduce Income Taxes?

The Ohio Legislative Service web-site shows a history of Ohio’s budgets and I adjusted each to the dollar value in 2012. For example, I multiplied each budget amount for 1978 by a factor of 4.78, and each subsequent budget year by the inflation index amount.  Some surprising results: The Ohio budget peaked in 2003 and has decreased each year and over the years the amounts budgeted to higher education and to local governments have been greatly reduced.

Each year is multiplied by the appropriate inflation index number in order to show the amount in 2012 dollars. Surprisingly, the Ohio budget peaked in 2003, then diminished.

 

After 2003, one expenditure category showing sharpest decline is higher education.

 

Also showing a sharp decline, since the peak at 2003, is the amount allocated to the Local Government Fund.

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