Taft: Tax plan to create jobs, help workers
A state senator from Youngstown said many state fees are increasing.
By JEFF ORTEGA
COLUMBUS -- Taxpayers will see a phased-in 21 percent cut in personal income taxes, and the state sales tax rate will drop by 0.5 percent under changes in the two-year state budget that takes effect today.
Also, smokers will have to ante up more in cigarette taxes under the changes.
Republican Gov. Bob Taft, who signed the state spending measure Thursday in Dayton, applauded the changes.
"This historic tax reform plan creates a new business climate that will generate jobs, grow our tax base to support education and all public services, and allow Ohio workers to support their family and their community," Taft said in a statement.
The state spending plan, adopted in final form by the GOP-led Legislature in June, keeps many of the provisions pushed by Taft to rewrite the state's tax laws.
Critics say the tax plan will benefit Ohio's wealthiest citizens at the expense of middle- and working-class Ohioans.
"It's a real bait and switch," said state Sen. Robert F. Hagan of Youngstown, D-33rd, the fourth-ranking Democrat in the Senate. Hagan said the income tax cut will be phased in over five years. Also, Hagan said the 0.5 percent sales-tax decrease is actually an increase, because without the provision, the temporary 1 percent sales tax increase would have been eliminated, taking the state rate back to 5 percent. In the new state budget, the permanent state sales tax rate is 5.5 percent.
Plus, Hagan said many state fees are increasing.
Line item vetoes
The governor has line-item veto power, and he used it 27 times Thursday to block provisions that he said were not in the public interest.
Among items Taft vetoed:
UA provision that would have statutorily prescribed mandatory rates to early learning agencies for a child's weekly attendance of 25 or more hours. The governor said he opposes any effort to mandate provider rates in statute, saying the mandates inhibit the ability of state agencies to set appropriate rates and to manage programs effectively.
UA provision that would exempt waste from the manufacture of brick and ceramic products from the state's definition of solid waste, even though the material can contain pollutants such as barium that could contaminate water supplies. The governor said exempting the material could make Ohio a dumping ground for the material. Taft said he was directing the Ohio Environmental Protection Agency to develop rules by Dec. 1 to allow less costly disposal actions for the waste.
UA provision that would allow school districts to ask voters to approve levies that can grow as much as 4 percent a year. The provision was intended to help deal with phantom revenue, the glitch in the school-funding formula where districts lose money because the formula assumes they collect more local property taxes than they really do. The governor said the provision contains drafting errors and other language that could make the provision problematic.
Taft spokesman Mark Rickel said the governor supports the idea of addressing "phantom revenue" and hopes lawmakers readdress the issue.
House Speaker Jon Husted, a suburban Dayton Republican, couldn't be reached Thursday. A message seeking comment was left with Husted's spokeswoman. But Senate President Bill M. Harris, an Ashland Republican, said he didn't believe there would be any legislative attempt to override vetoes.
"I think members had issues that were important to them and will have some concerns, but that happens in every budget," Harris said.
Legislative overrides require a three-fifths majority in both the 33-member Senate and the 99-member House. The new spending plan runs through June 30, 2007.