Editor's note: This is part 1 of a three-part story.

Columbus -- It was less than three minutes into his year-end review that Gov. John Kasich focused his attention on taxes.

He touted cuts implemented since he took office five years ago, including provisions in the last biennial budget phasing out taxes on small business income up to $250,000 and instituting an across-the-board 6.3 percent reduction for all brackets.

But the governor said more needs to be done to shift Ohio away from its reliance on income taxes to a system that taxes consumption.

"We killed the income tax for small business," he said. "We have to lower the income tax more. With income taxes high, people just kind of look the other way. We are going to continue on tax reform. We have to tax consumption and reduce [taxation of] risk taking, investment and job creation. That's the way it has to be, so we're going to continue to push for that."

He added, "We have to lead on this, because the lower that income tax, the better we do."

Kasich offered the comments during a speech before an audience of cabinet and chamber of commerce members in his suburban Columbus hometown, where he was joined legislative leaders and others in recapping the past year's accomplishments.

Here are five more things Kasich said during his year-end review:

1. Ohio's Economic Status: "Ohio has grown in the last five years," he said. "We are up 385,000 jobs. That's really pretty remarkable. We also know that our wages are growing faster than the national average, and you might ask why. Sometimes I'm amazed that we don't always learn lessons, because we're structurally balanced. Our budget is in excellent shape. There are many states in this country where they can't seem to get it done, and we get it done because we're not going to settle for anything other than a stronger budget, because without it businesses aren't coming here. They're not going anywhere where they think the ground is going to shift under their feet. We're running a $2 billion surplus. Pretty remarkable. That sends additional messages to job creators about the fact that we know what the heck we're doing. And we've also cut these taxes by nearly $5 billion, more than any state that I can think of in the country. If you take balanced budgets, if you take tax cuts, if you take surpluses and you have regulatory relief, that's the formula to get work. It's not so complicated."

2. Economic Development: Kasich praised JobsOhio, the nonprofit that spearheads the state's economic development efforts, and a handful of business projects that will boost Ohio's work force numbers in coming years.

The list includes Amazon, which is building in suburban Columbus; Fuyao Glass America, which is establishing operations in the Dayton area; and PTT Global Chemical, which is studying the feasibility of an ethane cracker facility in Belmont County.

"You think about Amazon," he said. "That was really important, because we didn't do sales tax on purchases of new equipment. We're really attractive for Amazon. Think about those jobs. It's just fantastic. Now we've got the people from Thailand coming, spending $100 million to figure if we're going to build a cracker facility. People don't know what a cracker facility is, but you can have an oil and gas industry and have a bunch of people pumping stuff out of the ground -- that's not where the jobs are. The jobs are when you take that material and you translate it into other kinds of materials. That's the place where you start making plastics and you do all of these things that need to be done to drive advanced materials. Then we think about some of these other businesses, Fuyao coming from China. I mean who ever thought that a Chinese company would come in and bail out an auto plant in Dayton, Ohio. And they have -- 1,500 jobs. We have the jobs coming, the wages are up, and it's all moving in the right direction. If we didn't have JobsOhio, this wouldn't be happening because we've got smart people that can talk to CEOs and business decision-makers in the same language. We don't have to take a remedial course in economics to be able to talk to a CEO."

3. Job Training: "It's one of the most boring things to think about, but it's one of the most important things to get things advanced," Kasich said. " If you don't have a work force, they're not coming. I was down in Lima I think it was where I asked a guy, I said, 'How's it going?' He said, 'We have 100 job openings but we don't have anybody to go to work. Nobody's skilled.' I said that's where we use the community colleges to train people. We'll get it done. By the way, we're telling kids about jobs so that they're not going to school in a vacuum. They're not going to school just to go to school. They're starting to realize that they can get a job, and more and more kids are looking at the OhioMeansJobs.com site and what these jobs pay and how you get one. It's cool, and we're pushing that all the way through not only K-12 but higher ed."

4. Schools: Kasich praised the charter school reform package passed by lawmakers, which is aimed at addressing failing charters and their sponsors.

"It's some of the toughest charter school reform in the country," he said. " We don't want bad charter schools. We don't want bad public schools. Maybe we ought to spend a little time thinking about them as well."

On wider education issues: "We're doing I think really well on education," the governor said. "We've raised education by $1 billion, but we've got a lot more work to do there. I'd like to see the whole education system completely reformed. I'd like to break the old urban model where we stick everybody in a classroom and we teach them and then they go out in the fields and work. That's the system we have. We need a system of individualized education. We need a system where our young people can get excited about what their potential is because they spend time in the community working places. That's how you get people excited When you're doing all those things, you learn why the rest of education is important."

5. Addiction: "The drug problem is just horrible," Kasich said. "We've been fighting it for six years. Other people are waking up to it now. We've shut down pill mills. We've busted drug dealers -- we have the biggest hauls ever in the history of the highway patrol. We do not permit the doctor shopping. We are not permitting you go from emergency room to emergency room. Now we have protocols on both chronic and acute drugs and we have a connection to the pharmacy board so that we can tell who's not following prescribing guidelines. The writing of prescriptions has declined, but we've got this unbelievable drug called fentanyl, which we have experienced here as the tip of the spear and it's spreading across the country. Imagine this they found out there's a drug that they administer to people who are dying of cancer and if they take it and they lace it with heroin, they can get a longer high. It's just like nuts, right? How can this even be? We're working on tightening all of that, and I believe that the reporting to the pharmacy board along with the Start Talking [program] in the schools, and we need more schools to participate. Tell kids don't do drugs. And they don't have to have some sophisticated education. All they've got to do is say don't do drugs, it'll kill you. I do it all the time when I talk to kids. Just don't do it, and it will make a difference. We've got to win this. I think we're making progress, but the statistics are grim. We just keep at it."

Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.