Today’s DDN editorial, “Ohio’s GOP Senate to blame if cuts come” describes the needed postponement of the 4.2% income tax cut as “significant and painful.” According to the Chillicothe Gazette, Republicans in the Ohio Senate have agreed to a deal to postpone the 4.2% tax. The immediate budget crisis will be temporarily solved — by this two year delay.  Calling this temporary solution “significant and painful” seems an exaggeration — compared to the hard budget decisions that within two years will need to be accomplished.

Ohio is at the point where it must deal with the whole question of taxation. Canceling the 4.2% scheduled tax cut, not postponing it for two years, should probably be part of a long term tax revision plan for Ohio. The state needs a secure and sufficient revenue stream. A small-d democratic solution would find a way to secure revenue, while at the same time making the system more progressive. A small-d solution would work to find truly “significant” solutions.

The financial bind that Ohio now suffers from stems directly from the Republican 2005 Tax Reduction Law. Phased in over five years, this 2005 law reduced revenue to the state by $2.5 billion, or so, each year. The economic recession has contributed to Ohio’s current financial shortfall, but the chief cause for Ohio’s state budget woe is the on-going impact of the 2005 Tax Reduction Act.  (See lists of posts below.)

The shortfall of revenue to the state has had a lot of consequences. Zach Schiller of Policy Matters writes, “As approved, the budget slashed spending for important human needs, including mental health services and programs that allow seniors to stay in their homes and for children’s early care and education. At the same time, it insufficiently funded Gov. Strickland’s school plan, mass transit, libraries and food pantries, among other items. It relies on stretching out debt payments and using up reserves. This leaves a gigantic hole when the one-time sources used in this budget are not available.” Policy Ohio is recommending that Ohio, in order to generate sufficient state revenue, revise its tax code by both canceling the scheduled 4.2% tax cut and also imposing new additional taxes on large incomes.

This table shows that most of the 4.2% tax cut is scheduled to go mostly to upper incomes.

Ohio’s tax structure is regressive — meaning, the lower the income the greater percentage of tax that is demanded. According to a report from the Institute on Taxation and Economic Policy, almost every state in the union has a regressive structure. Vermont, New York, and the District of Columbia are cited as the most progressive. The report shows that Ohio’s tax on the poor is the 8th highest in the nation.

Here is a chart that shows the regressive structure of Ohio’s tax system — total tax paid by taxpayers in Ohio, as a percentage of total income, decreases as income increases:

Increasing the progressivity of the income tax would be one way to create a more equitable tax system. Here is a table that explains the chart in more detail:

The 2005 Tax Reduction Act was supposed to generate jobs. But this chart shows that Ohio has continued to trail in job production:

Here are other posts dealing with the 2005 Tax Reduction Act

• The Quinnipiac Poll Failed To Ask: “Shouldn’t Ohio’s Most Wealthy Be Taxed More?” March 18, 2009
• Governor Strickland Fails To Explain Impact Of 2005 Tax Reduction Act On Ohio’s 2009 Budget Shortfall January 28, 2009
• Gov. Strickland Should Seek Revision In Ohio’s 2005 Tax Reduction Law — Before He Asks The Feds For Cash Handout December 9, 2008
• Democratic Candidates For Ohio State Assembly Fail To Challenge Republicans On Crucial Budget / Tax Issues November 3, 2008
• Chris Widener, Republican Senate Candidate, Boasts About Tax Cuts, But How Will He Solve Ohio’s Budget Crisis? October 8, 2008
• Ohio’s 2005 Tax Reduction Law Diminished, By 21%, The Progressivity of Ohio’s Tax Code August 6, 2008

Last night, I attended the December meeting Christmas Party of the Montgomery County Central Committee at Democratic HQ on Wilknson Street.

During the business meeting, the Central Committee voted to implement a provision of Ohio Revised Code that allows the party to simplify the requirements for Central Committee candidacy.  Previously, in order to qualify as a candidate for the Central Committee, prospective candidates were required to file a petition with the signature of five registered Democrats living in the candidates precinct.  Because of last night’s vote, this signature requirement has been nullified.

For the May, 2010 Democratic Primary, Central Committee candidates will simply need to fill out a simple application with their signature only.  No additional signatures of other Democrats will be required.  Each precinct may elect one member of the Central Committee.

Central Committee elections happen every four years.  Immediately following the election is the key Reorganization Meeting, where a County Party Chairperson is elected to a four year term.

Nan Whaley spoke in favor of changing the Central Committee requirements, and seemed to be its biggest endorser. Nan’s point was that the change would make it easier to solicit candidates. In the voice vote, there were only a few lone voices in opposition.

Deadline for filing the application, in order for one’s name to appear on the May Democratic Primary ballot, is mid-February. I will post the exact date later.

The Montgomery County Board of Elections has consolidated precincts.  Ohio Revised Code says precincts may not exceed 1400 register voters.  Previously there were 548 precincts in the country,  in this next election there will be only 360 precincts.

I spoke up suggesting that the County Party spend some money on advertisement — in order to alert Democrats of this opportunity to become active in the party. My motion that an advertising committee be empowered to spend up to $500 to promote finding new candidates for the Central Committee went nowhere.

My motion, in fact, failed to get a second, and so there was not even a discussion. Wow, do I feel unpopular. And most disturbing, the one person who earlier in the day had promised to second my motion, when it came down to doing so, pooped out.  Instead, Chair Mark Owens instructed the Membership Committee to suggest a plan for increasing the number of candidates.  As it stands now, most of the 548 precincts are not represented.  At the last Reorganization Meeting, in 2006, only about 100 Central Committee members were certified to vote.

Robert Reich has expressed his discontent with the Senate’s proposed healthcare legislation in his blog. According to Reich, the legislation would establish monopolies and result in a constant rise in healthcare costs. He believes that the proposed system, which relies on private insurers, would offer no motivation to control costs of medical providers and pharmaceutical companies. For those seeking affordable and efficient healthcare services, https://www.mydocurgentcare.com/ could be a viable option to consider.

Reich says, “Without some mechanism forcing private insurers to compete, we’re going to end up with a national health care system that’s controlled by a handful of very large corporations accountable neither to American voters nor to the market.”  Other Excerpts:

1. The public option is dead, killed by a handful of senators from small states who are mostly bought off by Big Insurance and Big Pharma or intimidated by these industries’ deep pockets and power to run political ads against them.
2. But we still end up with a system that’s based on private insurers that have no incentive whatsoever to control their costs or the costs of pharmaceutical companies and medical providers.
3. If you think the federal employee benefit plan is an answer to this, think again. Its premiums increased nearly 9 percent this year. And if you think an expanded Medicare is the answer, you’re smoking medical marijuana. The Senate bill allows an independent commission to hold back Medicare costs only if Medicare spending is rising faster than total health spending. So if health spending is soaring because private insurers have no incentive to control it, we’re all out of luck. Medicare explodes as well.
4. Private insurers barely compete against each other. According to data from the American Medical Association, only a handful of insurers dominate most states. In 9 states, 2 insurance companies control 85 percent or more of the market. In Arkansas, home to Senator Blanche Lincoln, who doesn’t dare cross Big Insurance, the Blue Cross plan controls almost 70 percent of the market;
5. In light of all this, you’d think the insurance industry would be subject to the antitrust laws … But no. Remarkably, the Senate bill still keeps Big Insurance safe from competition by preserving its privileged exemption from the antitrust laws.
6. Private insurers are exempt from competition. As a result, they are becoming ever more powerful. And it’s not just their economic power that’s worrying. It’s also their political power, as we’ve learned over the last ten months.