As Kasich ramps up his plans for a budget corrections bill, what he is calling his “mid-biennium budget review”, Plunderbund’s Budgetwatcher is back at work.

The latest post at BW discusses Kasich’s announcement about fee increase on fracking operations that would conveniently provide an approximately 1.6% state income tax cut to Ohioans right about the time Kasich runs for reelection.

Kasich is touting this as a $500 million tax break for Ohioans, but as Budgetwatcher points out, the average Ohioan’s taxes would only “be reduced by $21, or 40 cents per weekly paycheck.

40 cents per week will not have a drastic – or even a minimal – impact on anyone’s life. But this money could have a big impact in others areas. Kasich made huge cuts in his so-called “Jobs Budget”, cuts that some predicted could cost Ohio up to fifty thousand jobs.

One such cut was the Local Government Fund, which was reduced by almost exactly the same amount: $555 million.

Almost every week we’re hearing about cities cutting police officers and firefighters because of budget problems directly caused by the huge reductions Kasich made to the local government fund.

Personally, I think maintaining public safety services seems like a better use of that 40 cents per week. But hey, I’m just a crazy liberal, right?

Thing is: conservatives shouldn’t like this plan either.

For starters, Kasich kicked off his campaign for Governor with a number of promises including the total repeal of Ohio’s Income Tax. That’s a 100% tax reduction. But he seems to have completely abandoned that plan, instead replacing it with this ridiculous 1.5% cut.

Reggie Fields of the Plain Dealer covers the other issue conservatives will have with this plan, pointing out that “Kasich signed a pledge with the influential Americans for Tax Reform vowing to ‘oppose and veto any and all efforts to increase taxes.’”

And despite the fact that Kasich has, according to Fields, consulted with ATR about his plan, there’s no doubt many conservatives will consider this a tax hike on business.

There’s one more angle here that’s worth discussing and that’s local tax increases and school and other levies that have been increasingly passing around the state. These too can be considered tax increases and a great many of them can be directly traced back to Kasich’s budget cuts. Getting 40 cents per week from the state while your local taxes are going up doesn’t really count as a tax cut in my book.

Kasich’s goal with the fracking fees and income tax cut are clear: set himself up for the next election as the guy who cut your taxes. But as we’ve seen, this proposal is going to make absolutely no one happy.

Voters don’t particularly care if they see 40 cents more in their checks but they do care that their local taxes are going up and their police and fire departments are being cut. At the same time the oil gas industry and pro-business groups will have a difficult time supporting big new fees on industry.

Kasich thought he could put this plan to together in order to check off the “tax cutter” box for his reelection bid in two years. Unfortunately for him, this plan is a lose-lose for everyone affected.

Realistically, it’s hard to see how he could even get this passed in its current form. Kasich already convinced legislators to take on one disastrous piece of legislation (Senate Bill 5) this year. It really doesn’t make a lot of sense for them to support a tax/fee hike on one of their biggest campaign contributors without providing some sort of substantial benefit to another group that might actually result in votes.

Then again, I could be totally wrong. As we’ve consistently since Niehaus and Batchelder took the helm in the General Assembly, things that make sense rarely make it on the legislative agenda.

Evangelize!
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  • Ckern

    With the recent investigation showing fracking caused 12 earthquakes in the Youngstown area, one would think Kasich might want to reconsider this stand on that practice. He’s all pie in the sky and no substance. 

  • Troysteelerfan

    1 term governor…….1 term governor……..1 term governor…..one term governor……1 term governor….(and I use the term governor loosely)…..

  • stryx

     First of all, the tax should be about twice as high as proposed- 7 cents instead of 4. Just like Texas. Second, waiting to tax a well until it has recouped original capital is mindbendingly stupid- these well produce with a long tail. All the real money is in the first 4-5 years. And really, we’re going to put our faith in the accounting practices of the industry that spawned Enron? As we have learned from Hollywood, there is no net. Third, an impact fee needs to be assessed so the counties and local govs can recover from the infrastructure damage that drilling will cause. Fourth, the severance fee needs to be sufficient to shepherd this boom until infinity. We know what a shitty job ODNR has done with plain old oil and gas surface wells; we don’t need to repeat it with 1000 new toxic holes and associated contaminated well sites.

    Any plan that falls short of these points is a giveaway to industry and should be condemned.

    I’ve said elsewhere that this is an historic opportunity that is in the process of being shit on by small minded hacks. Things we could fund with the new source of new money: Science and Engineering Tuition at Ohio Universities; Broadband Access for the entire state; Highway projects; Multi-modal infrastructure improvements; a real DeRolf settlement; sewer upgrades in cities facing USEPA fines;……

    Kasich and his hackish minions are going to squander the future just so Grover Norquist and the Dick Armey types won’t get a sad.

    Ask Findlay how long a boom like this lasts.
    http://www.bgsu.edu/colleges/library/cac/ac/page48164.html

     And we’re going to do the stupid thing just so @DispatchEditor:disqus  can feel smug.

  • Xx

    Great ad.  Things you can’t do with $0.40 per week, buy cup of coffee, buy lottery ticket,  gus to drive for the day….Things you can do when we all work together through a common tax base, better police service, better fire service….

  • Dmoore2222

    Yeah. And look what happened with the last “tax cutter,” one Bob Taft. He created a huge budget deficit that got passed on to Strickland. And then there’s the tax cutting genius of all time whose name nobody in the republican party can bring themselves to utter–George W. Bush. Living happily in Texas while the rest of us are digging out from his wrecklessness and stupidity. Kasich is even dumber. He’s basing all of this on the rosy scenario the oil and gas industry is painting for fracking. The real cost for Ohio will be far greater than any benefit. The real payoff will go to a chosen few while the average Joe will be left with his finger up his nose wondering how he got screwed so badly.

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