Dem Senate Leaders Address Kasich Proposals
YOUNGSTOWN, Ohio – Proposals in the state budget that Gov. John Kasich put forth could be particularly harmful to communities near the state’s borders such as the Mahoning Valley, said state Sen. Eric Kearney.
Kearney, D-9 Cincinnati, who serves as minority leader, and state Sen. Joe Schiavoni, D-33 Boardman, assistant minority leader, outlined objections to various proposals by the governor during a meeting Monday with Business Journal editorial staff.
Although he was pleased with Kasich’s proposal to expand Medicare, using funds provided under the Patient Protection and Affordable Care Act, which Kasich opposes, Kearney said the state budget overall will have a “devastating effect” on businesses, particularly in communities like Youngstown and his hometown of Cincinnati. Among the provisions Kasich has proposed is reducing the state’s sales tax half a percentage point to 5% but broadening it to cover services and products not covered now under the sales tax.
Lt. Gov. Mary Taylor defended the proposal as modernizing the sales tax “to more closely match the society that we live in today, an economy that has shifted more toward the service sector,” on a trip to Youngstown last month. She also said taxes are reduced on necessities and subjected more on things that are nonessentials. Income taxes would also be cut on individuals and small businesses.
“If you’re a lawyer, an accountant or an architect in Youngstown or in Cincinnati, Ohio or in any city that has a potential rival across state lines, people will just move their businesses,” Kearney said. “They’ll just move that business opportunity for instance here over to Pittsburgh or in Cincinnati over to northern Kentucky. That’s revenue that the state of Ohio will lose.”
He also pointed out that services such as cable television, which would be taxed under the governor’s plan, are already taxed at the local level. “So it’s not applied fairly,” he said.
“It’s just shifting money around so you’re going to get certain people money back for their income taxes and then you’re going to give certain small business tax cuts. Then at the same time you’re going to nickel-and-dime every single Ohioan -- the guy that goes to the fair, the guy that brings his kids to get haircuts, travel agents, accountants, lawyers,” Schiavoni said. “It all adds up.”
An individual who makes $1 million “is going to get a whole heck of a lot more back than the guy that makes $20,000, but they’re going to pay the same to get a haircut and they’re all going to pay the same to go to the fair and to go bowling,” Schiavoni continued.
The Democratic Party leaders shared concerns over the recent fight in Columbus between Kasich and state Auditor David Yost over auditing JobsOhio, the private nonprofit agency formed by Kasich and the state legislature to oversee Ohio’s economic development efforts. Yost issued a subpoena for JobsOhio’s financial records.
“Auditor Yost has a valid point,” Kearney said. “It’s a point we raised when JobsOhio was passed in the [Ohio] Senate and that’s transparency. The public has a right to know how public funds are used. It’s a pretty simple argument when you think about it.”
“People pay their taxes [and] they want to know what their tax dollars are going to. It’s pretty simple,” Schiavoni agreed. “As a public servant you should respond to that and let people know where their dollars are going.”
The legislators also questioned the proposal to leverage Ohio Turnpike revenue to issue bonds for infrastructure projects throughout the state. Although he doesn’t object to taking a state asset and bonding it, a technique former Gov. Ted Strickland used with tobacco resources, “You should use [the proceeds] for the local community primarily,” Kearney said.
In Cincinnati, for instance, where officials are working on a bridge between Cincinnati and Kentucky, people are asking whether they are going to get funds from the turnpike bonds. “That’s not fair. It’s not fair to the people who live along the turnpike,” he said.
The turnpike bill passed by the Ohio House of Representatives last week did not contain promised provisions for guaranteeing that 90% of the money would go to projects in the northern part of the state, and lacked a definition of “nexus” to ensure that money would be spent on projects relevant to the turnpike.
The 90% provision “was what the governor went out and campaigned on” but there was no such language in the bill, Schiavoni said.
Schiavoni said he was informed yesterday morning by state Sen. Capri Cafaro, D-33, ranking member on the transportation committee, that a Senate substitute bill might contain the language and would be voted on Wednesday.
Schiavoni also, barring unforeseen circumstances, the Valley would be awarded a $2.4 million grant by the Ohio Environmental Protection Agency next week to clean the section of the Mahoning River between Struthers and Lowellville. The project will involve dam and sediment removal. “It’s a huge step in the right direction,” he said.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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