Gov. John Kasich has signed off on a $62 billion state budget that includes an income tax cut, new ways of funding education and other key elements of his political agenda as he prepares to seek a second term.
Kasich, no stranger to soaring rhetoric, touted the budget in the context of Ohio's economic recovery, which is sure to be one of the themes of his re-election campaign. "There is no reason why Ohio cannot take its rightful place on the mountaintop," he said. "There is no reason why Ohio cannot reclaim prominence. There is no reason why Ohio cannot be the greatest state in all of the states of the great country of America. We can get there."
The governor used his line-item veto to strike 22 provisions from the budget, most notably one that would have barred the state's Medicaid program from covering the additional low-income residents allowed under the Affordable Care Act. Kasich had sought an extension of Medicaid, expanding coverage to up to 366,000 low-income Ohioans, but GOP legislators balked at an action perceived as being supportive of "Obamacare." The governor's veto is an indication that he believes the fight on Medicaid isn't over.
Kasich also vetoed a bid to impose the state sales tax on transactions between out-of-state Internet retailers and Ohio residents, which would have benefited local retailers who find themselves at an unfair advantage with online vendors such as Amazon. The governor said similar state attempts on Internet sales taxes have sparked "extensive litigation." He believes it's up to Congress to act on the matter.
He chose not to veto a new requirement that doctors inform pregnant women seeking abortions of any fetal heartbeat through a mandatory external ultrasound. Kasich, who is pro-life, had no objection to the requirement. Democrats and women's rights groups were sharply critical of it.
The budget also delivers an estimated $2.7 billion in overall tax cuts to Ohioans over the next three years, including a phased-in income tax cut for individuals and small businesses. That's in line with Kasich's philosophy that lowering taxes will spur a stronger economy and make Ohio more attractive for business development.
While the income tax cut undoubtedly will be popular -- especially in an election year -- Ohioans might be advised to look closer at the fine print in the budget before they begin spending their modest windfalls.
As the income tax goes down, the state sales tax will be going up -- from 5.5 percent to 5.75 percent. That isn't much of an increase, but it definitely will boost the cost of major purchases, such as automobiles and appliances.
Another provision of the budget will be felt by homeowners: A 12.5 percent property tax credit on school levies, a longstanding tax break, has been eliminated. That means any new school levy approved this year will take a larger share of property taxes.
The bottom line, as far as taxes are concerned: They're going down a bit and they're going up a bit. There's a mixed message on tax relief from the mountaintop.