Guest column/Ohio regains economic edge
Just over two years ago, John Kasich and I were sworn in as governor and lieutenant governor, respectively, and we committed ourselves to turning Ohio around. Coming into that biennium, our budget confronted a $7.7 billion fiscal imbalance – a deficit most Ohioans thought would be impossible to overcome without raising taxes. I reflect back to 2009, when I was serving as auditor of state, and how discouraging it was when I found the nearly $8 billion budget deficit that Ohio faced under the previous administration’s plan – a plan that would continue down the path of out-of-control government spending.
Thanks to passage of Kasich’s Jobs Budget in 2011 and reforms introduced in Ohio’s first Mid-Biennial Budget Review in 2012, our state achieved structural balance. That balance made it possible for our administration to tackle additional reforms needed to create a sustaining jobs-friendly climate. Today, Ohio’s economic outlook is much more encouraging. We have regained our economic competitiveness and become one of the nation’s top job creators, lowering our unemployment rate nearly 1 percent below the national average. And we did this without raising taxes. As a matter of fact, Ohioans have a lower tax burden today than when we took office.
Despite the significant progress we have made in rebuilding our jobs-friendly environment, too many Ohioans remain out of work, our aging population requires more services, and there are still many reforms to control government costs that need to be addressed.
The governor’s executive budget that was recently introduced builds on the transformation that began in 2011.
This budget capitalizes on Ohio’s recent successes to create long-lasting job growth and economic well-being for all citizens of the state, and places its primary focus on five strategic areas of reform:
Improving K-12 education: To best serve Ohio students and their parents, we need a world-class education system, one that accelerates learning while fairly and equitably funding first-rate educational opportunities for all Ohio students regardless of where they live, their economic background or their individual experiences. The Achievement Everywhere Plan funds Ohio’s 611 school districts, encourages schools to pursue innovative new education strategies and gives local school districts the choice to free themselves of costly and burdensome state mandates. In addition, the plan provides more choices for parents to find the best learning environment to meet the unique needs of their children.
Producing more college graduates: Despite living in a state with some of the nation’s finest colleges and universities, only about 25 percent of Ohio adults have bachelor’s degrees – well behind the national average. That makes Ohio a less desirable place for job creators to expand or relocate. Encouraging more degree completion helps Ohioans and our economy on many fronts.
Tax reform – cutting taxes: In 2005, during my time as a state representative, I supported Ohio’s tax reform package that reduced personal income taxes by 21 percent and eliminated the tangible personal property tax, the corporate franchise tax and the inventory tax imposed on businesses – reforms that were necessary and are working, but we have more to do.
In 2011, when I began my term as lieutenant governor, Ohio’s taxes were still too high. By leaning so much on income taxes, our tax system drives jobs out of the state. According to the Tax Foundation, Ohio’s personal income tax system is one of the nation’s most complex, so we must take steps to modernize our tax system to promote economic growth that will help us remain competitive. The governor has proposed cutting personal income tax for all Ohioans by 20 percent, reducing the sales tax rate from 5.5 to 5.0 percent, and cutting small business taxes by 50 percent.
Improving health care for the neediest Ohioans: Ohio’s Medicaid reforms over the past two years have been recognized nationally for helping to reduce costs, improving long-term care, connecting behavioral and physical health care, improving care coordination and reforming the payment system. The budget continues to take steps to modernize our Medicaid system, providing improved care and coordination to Ohioans most in need.
Meeting Ohio’s crucial transportation needs: The executive budget includes the governor’s plan to leverage the value of the Ohio Turnpike by bonding against future turnpike revenue to generate more than enough funds ($1.5 billion) to reduce Ohio’s highway budget deficit, as well as rebuild the entire turnpike sooner than planned. While transportation projects in northern Ohio will enjoy most of the new turnpike funds, this plan frees up ODOT to spend the state’s gas tax and federal funds on highways downstate – which allows all projects to move forward faster.
Thanks to a leaner, more efficient state government and a growing economy, Ohio is in a much better position to tackle these areas of reform. During the past two years, state agencies have identified efficiencies to streamline and improve state government. Between 2011 and 2012, non-Medicaid spending from the general revenue fund has been reduced 5.8 percent, and state agencies have seen staff levels reduced by more than 8 percent, without hindering the delivery of services to Ohioans. In short, we are putting the State of Ohio on sound footing so that future administrations will not have to deal with the same, irresponsible decisions that we had to deal with when we took office.
There is no doubt that the Kasich administration and the Ohio General Assembly have taken steps to get Ohio back on track. I can assure all Ohioans that we will continue our hard work and are committed to growing Ohio’s economy, creating opportunities for all of our citizens and making Ohio the best that it can be.
When I served in the Ohio General Assembly, it was critical to receive feedback from Ohio residents to help shape the future policy of our state.
I encourage you to contact the Office of the Governor to share your thoughts.
(Taylor is Ohio’s lieutenant governor.