The unraveling of a plan
Akron Beacon Journal: Keith Faber and William Batchelder, the House speaker, all but declared dead the governor’s proposed expansion of the state sales tax on March 15. In their joint statement, the Ohio Senate president and House speaker pleaded for help, or ideas about how to raise revenue in other ways to make affordable a proposed 20 percent reduction in individual income tax rates.
Recall the budget plan that John Kasich unveiled early last month. It featured interrelated parts, an increased severance tax on oil and gas drilling, the expanded sales tax (with a slightly lower rate) and the income tax cut, delivering in all a nearly $900 billion reduction in the tax burden for the biennium. Fiddle in a small way, and the package begins to unravel. Do so in a big way, as many Republicans at the Statehouse wish, abandoning the sales tax element and the higher severance tax, and the challenge becomes immense.
The governor deserves credit for the concept behind the sales tax expansion, broadening the base to reflect a changing economy, moving from goods to more services. The challenge resides in how best to move forward. Florida and Michigan attempted such sweeping change, and then retreated, realizing they had gone for too much.