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The State of Ohio

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Upheaval at the state teachers pension fund, with a vote to oust a chair and vote in a new one and a lawsuit to remove two of them. And two different views on two big issues being discussed in Ohio - raising the minimum wage and eliminating the state income tax. Guests in the studio are Greg Lawson and Hannah Halbert.

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00:00:39	Upheaval of the state teachers
00:00:39	pension fund with a vote
00:00:42	to oust a chair
00:00:42	and put in a new one,
00:00:44	and a lawsuit
00:00:44	to remove two members
00:00:47	and two different views
00:00:48	on two big issues
00:00:48	being discussed in Ohio.
00:00:50	Raising the minimum wage
00:00:52	and eliminating the state
00:00:52	income tax.
00:00:54	That's this
00:00:54	week in the state of Ohio.
00:01:15	Welcome to the state of Ohio.
00:01:16	I'm Karen Kasler.
00:01:18	Turmoil at the $90 billion
00:01:18	teacher's state pension fund
00:01:21	has gone from the meeting room
00:01:21	to the courtroom and back.
00:01:25	Just hours
00:01:25	before the state teachers
00:01:27	retirement system's
00:01:27	monthly board meeting.
00:01:29	Attorney General
00:01:29	Dave Yost filed a lawsuit
00:01:29	to remove two board members
00:01:32	he says are trying to steer
00:01:32	most of the funds money
00:01:35	to a private investment
00:01:35	company to benefit themselves.
00:01:39	Retired teachers
00:01:40	have been angry
00:01:40	that their cost of living
00:01:41	adjustment was suspended
00:01:41	for five years.
00:01:44	They've backed
00:01:44	elected board members
00:01:46	and calling
00:01:46	for more transparency
00:01:47	and changes
00:01:47	in the fund's investments.
00:01:50	And governor Mike DeWine
00:01:51	stress appointee
00:01:51	Wade Steen joined them.
00:01:54	Last summer, DeWine removed
00:01:54	Stein for missing meetings.
00:01:57	Stein
00:01:57	sued to get his seat back.
00:01:59	Now, Yost,
00:01:59	who said he was investigating
00:02:02	a link between board members
00:02:02	and that private investment
00:02:05	company,
00:02:05	is suing to remove Stein.
00:02:07	He's. He's
00:02:07	hiding behind litigation.
00:02:09	It's defamatory.
00:02:09	It's not true.
00:02:12	I thought there was going
00:02:13	to be a fair,
00:02:13	impartial investigation.
00:02:16	I guess this might be
00:02:17	the fastest investigation
00:02:17	ever done in Ohio history.
00:02:22	But we're going to defend this
00:02:22	vigorously.
00:02:24	None of it's
00:02:24	true. It's all false.
00:02:27	Yost is also suing to oust
00:02:27	Rudi fit and bomb,
00:02:30	with members
00:02:30	backed by retired teachers,
00:02:32	comprising a majority
00:02:32	on the STRs board.
00:02:35	They voted this
00:02:36	week to oust the chair
00:02:36	and put them in charge.
00:02:40	DeWine says he wants to ensure
00:02:40	that STRs remain solvent.
00:02:43	And he said there's
00:02:44	important evidence in the form
00:02:44	of an anonymous letter
00:02:47	outlining Strauss's
00:02:47	concerns about Stein
00:02:50	and 15 bombs, relationships
00:02:50	with that untested
00:02:53	private investment company.
00:02:54	So that was my grave concern.
00:02:57	So going forward, I think
00:02:57	the real the real question is,
00:03:02	you know,
00:03:02	how is these investments made?
00:03:06	the teachers deserve, to get
00:03:06	the best return on the money.
00:03:10	They can. We're all for that.
00:03:12	they also deserve to have
00:03:12	the board, not waste money.
00:03:16	It's thought the anonymous
00:03:16	letter came from STRS
00:03:19	staffers.
00:03:20	Yost, spokesperson
00:03:21	said in an emailed statement
00:03:21	that reads in part,
00:03:24	this lawsuit
00:03:24	allows us to obtain
00:03:26	the discovery documents
00:03:26	necessary to finding
00:03:28	answers to the allegations.
00:03:30	This is a step in the process
00:03:30	to ensure
00:03:32	that we continue to fight
00:03:32	to protect
00:03:34	teacher's hard
00:03:34	earned retirement dollars.
00:03:37	Backers of a plan to hike
00:03:37	the minimum wage to $15
00:03:40	starting in 2026
00:03:42	are circulating petitions
00:03:42	for a constitutional amendment
00:03:44	for this fall's ballot,
00:03:44	the same one on
00:03:47	which Ohio voters will pick
00:03:47	for president. U.S. Senate.
00:03:50	All 15 members of Congress,
00:03:51	the 99 members of the Ohio
00:03:51	House, 16 members of the state
00:03:54	Senate, and three justices
00:03:54	for the Ohio Supreme Court.
00:03:58	There are studies
00:03:58	on both sides on how boosting
00:04:00	the minimum
00:04:00	wage is a good or bad thing.
00:04:03	But one fact is certain voters
00:04:03	in states across the country
00:04:07	have approved minimum
00:04:07	wage increases every time
00:04:10	they've been presented,
00:04:10	with one going back to 1996.
00:04:14	I talked about that
00:04:14	and more with Hannah Halbert
00:04:16	from Policy Matters, Ohio,
00:04:16	a progressive research group,
00:04:19	and Greg Lawson
00:04:19	from the Buckeye
00:04:20	Institute,
00:04:20	a conservative think tank.
00:04:23	So let's start
00:04:23	with minimum wage.
00:04:25	People working 40 hours a week
00:04:27	deserve
00:04:27	to make a livable wage,
00:04:28	according to the arguments
00:04:28	for the minimum wage.
00:04:31	So, Greg,
00:04:31	I want to ask you increase
00:04:32	the minimum wage could improve
00:04:34	employee
00:04:34	performance and retention,
00:04:36	which could lead to higher
00:04:36	customer satisfaction.
00:04:38	It could increase demand
00:04:39	for services and goods
00:04:39	because lower
00:04:41	income families would have
00:04:41	more money to spend,
00:04:43	and it could lift families
00:04:43	out of crime and reduce racial
00:04:46	and gender inequalities,
00:04:46	perhaps even lower crime.
00:04:51	what's wrong with that?
00:04:52	Well,
00:04:52	I think the challenge is,
00:04:54	how much is it being raised?
00:04:55	How fast is it being raised?
00:04:57	These are two
00:04:57	critical factors,
00:04:58	because if you do it
00:04:58	super fast,
00:05:00	you could end up
00:05:00	with a situation
00:05:01	where the the businesses
00:05:01	aren't able to adjust.
00:05:04	And I'm not talking
00:05:04	about so much big businesses.
00:05:06	I think most big businesses
00:05:07	today are probably paying at
00:05:07	or above the minimum wage.
00:05:11	a lot of what you're finding
00:05:12	is service sector jobs,
00:05:12	but a lot of smaller
00:05:14	kind of companies
00:05:14	and smaller businesses
00:05:16	that may not have access
00:05:16	to large reservoirs
00:05:19	of capital
00:05:19	and money like that.
00:05:20	Those are the kind of folks
00:05:22	that this has the potential
00:05:22	to do some damage to.
00:05:25	so the concern
00:05:25	that we would have is,
00:05:26	does it cause
00:05:26	certain businesses to,
00:05:29	not be able to hire
00:05:29	as many people?
00:05:30	That's obviously
00:05:30	the big problem,
00:05:31	because
00:05:33	the reality of a minimum wage
00:05:33	is it's
00:05:34	definitely going to help
00:05:34	people who get it right,
00:05:36	because for all the reasons
00:05:36	that you just cited.
00:05:38	The problem,
00:05:39	though, is
00:05:39	what happens to people
00:05:40	who don't get jobs, at all
00:05:40	in the first place.
00:05:43	It's sort of the unseen factor
00:05:43	that doesn't
00:05:46	always show itself up.
00:05:47	And so I think that people
00:05:47	need to understand
00:05:49	that there are sometimes
00:05:49	economic consequences.
00:05:51	You do too much.
00:05:52	And we're already seeing this,
00:05:52	by the way.
00:05:54	We're seeing it in
00:05:54	a lot of fast food
00:05:55	restaurants, for example,
00:05:56	you're seeing the kiosk
00:05:56	ization of of things,
00:05:59	and we're gonna have to start
00:05:59	learning
00:06:00	how to tap the screen
00:06:00	a lot better and go backwards.
00:06:04	Well,
00:06:04	that's actually not that bad.
00:06:05	But I will say.
00:06:06	Out raising the wage,
00:06:06	we're seeing automation.
00:06:09	Yeah.
00:06:09	The fact is, is that
00:06:11	human employees
00:06:11	are never going
00:06:13	to be the robots
00:06:13	when it comes to price.
00:06:16	Never going to happen,
00:06:17	especially if our goal
00:06:18	is to have human employees
00:06:18	able to, like, feed themselves
00:06:22	and take care of themselves
00:06:23	well enough
00:06:23	to show up in a way
00:06:25	that allows them
00:06:25	to be productive.
00:06:27	It's just not going to work.
00:06:29	We've heard that argument,
00:06:32	really for all time when
00:06:34	it comes to humans
00:06:34	and technology.
00:06:37	The fact is, is that
00:06:38	technology makes workers
00:06:38	more productive.
00:06:41	It increases wealth
00:06:41	in our society.
00:06:44	And the
00:06:44	if we really care about that,
00:06:47	we should be looking
00:06:47	at policies
00:06:49	that ensure that they increase
00:06:49	productivity.
00:06:52	That increased wealth
00:06:52	is broadly shared,
00:06:55	that we're not cut out minimum
00:06:55	wage has has nothing to.
00:07:00	It's not going to slow
00:07:00	the oncoming robots.
00:07:04	We're never going to beat them
00:07:04	on purpose.
00:07:06	I want to ask you about
00:07:06	some of the specifics here.
00:07:08	I, I believe I said
00:07:08	lift families out of crime,
00:07:11	but I met with families
00:07:11	out of poverty.
00:07:12	So I want to make sure
00:07:12	I got that clear.
00:07:14	But, Hannah, let me ask you,
00:07:14	a higher minimum wage hurts
00:07:17	the job creators
00:07:17	is the other argument.
00:07:19	Labor costs would increase,
00:07:20	profit
00:07:20	margins would get tighter.
00:07:22	That could lead to job cuts
00:07:22	and more automation.
00:07:24	Like Greg was saying,
00:07:24	offshoring.
00:07:26	Perhaps that could mean
00:07:26	goods and services
00:07:28	would cost more,
00:07:28	because that won't.
00:07:31	And that won't help people
00:07:31	who are now making
00:07:34	that higher minimum wage
00:07:35	and a one size fits
00:07:35	all approach might not help
00:07:37	people who are living in areas
00:07:37	with lower cost of living.
00:07:40	So why?
00:07:41	Let's talk about that.
00:07:43	First, the job destruction
00:07:43	argument is one,
00:07:47	regardless of what policy
00:07:47	we're talking about,
00:07:50	whenever it's a policy
00:07:50	designed to increase
00:07:53	worker protections,
00:07:53	to strengthen,
00:07:57	working people,
00:07:58	whether it's in the state
00:07:58	or nationally,
00:08:00	these are the same things
00:08:00	we here. The fact is,
00:08:02	is that Ohio raise
00:08:02	the minimum wage in 2006.
00:08:05	Similarly,
00:08:05	through a ballot initiative,
00:08:07	the rate of increase
00:08:07	between the 2006 model
00:08:12	and what's
00:08:12	proposed at the ballot now, or
00:08:12	hopefully on the ballot now,
00:08:16	is pretty similar.
00:08:18	So we've experienced
00:08:18	this already.
00:08:21	These big claims
00:08:21	about lots of job destruction.
00:08:25	It's going cause
00:08:25	all of this habit havoc.
00:08:27	We're going to see,
00:08:27	small businesses shuttering.
00:08:30	It just hasn't borne out
00:08:30	by the facts.
00:08:32	And some of these jobs
00:08:32	are essential jobs.
00:08:34	Jobs we need.
00:08:35	Well,
00:08:35	and I think
00:08:36	this is actually getting
00:08:36	to the point
00:08:36	that what we would say is
00:08:38	we need to improve
00:08:38	our education system.
00:08:40	We need to we're not doing
00:08:40	very well with Stem.
00:08:42	I think in Ohio.
00:08:42	And that's not just Ohio.
00:08:44	That's across the board.
00:08:45	We are struggling to,
00:08:47	I think, get the kind of jobs
00:08:47	that we're wanting.
00:08:48	Now. We've got Intel
00:08:48	coming into Ohio,
00:08:50	we've got all these tech jobs.
00:08:51	Everybody's really
00:08:51	especially in Central Ohio,
00:08:53	everybody is talking
00:08:53	about that.
00:08:54	We need to do a better job
00:08:56	of getting people
00:08:56	those kind of skills,
00:08:57	because at the end of the day,
00:08:57	the minimum wage,
00:09:00	nobody should actually be
00:09:00	making them go
00:09:01	wait for very long.
00:09:01	Minimum wage
00:09:03	should be an introductory
00:09:03	sort of situation.
00:09:05	I can't say that
00:09:06	that doesn't happen
00:09:06	to anybody,
00:09:07	that somebody doesn't
00:09:07	get stuck in a,
00:09:09	in a tough situation
00:09:09	in their life.
00:09:10	And maybe they're, you know,
00:09:10	in a job that is not,
00:09:13	fulfilling all of their needs
00:09:13	and things like that.
00:09:16	But it really needs to be an
00:09:16	introductory job that can be a
00:09:19	ladder to more success
00:09:19	as time goes on.
00:09:22	So and we get to
00:09:22	that success is
00:09:25	we need to have better
00:09:25	education.
00:09:27	We need to have continue
00:09:28	to look at regulatory reform
00:09:28	and things like that
00:09:30	that make it easier
00:09:30	for the jobs
00:09:31	that keep getting created.
00:09:32	Of course, right now,
00:09:34	I guess I would really harken
00:09:34	to the education piece
00:09:35	because we have a lot of job
00:09:36	openings
00:09:36	and not a lot of people
00:09:37	necessarily
00:09:37	filling some of the jobs.
00:09:39	And this is a problem that you
00:09:39	see with a lot of employers.
00:09:41	And and so we need to
00:09:41	really work on that skill set.
00:09:45	I think you hear that from
00:09:45	the DeWine administration.
00:09:46	You see the lieutenant
00:09:46	Governor
00:09:47	Husted talking about that
00:09:47	all the time.
00:09:49	And I think you're seeing
00:09:49	the legislature
00:09:51	talk more
00:09:51	and more about partnerships.
00:09:52	And how do we get that?
00:09:53	Those are the things
00:09:53	that we should really be
00:09:55	thinking
00:09:55	about in terms of resolving.
00:09:56	I think a lot of the issues
00:09:57	that Hannah raised
00:09:57	that are real issues about
00:09:59	what does it mean, how do you
00:09:59	take advantage of labor?
00:10:01	Because
00:10:02	if you don't have the skill
00:10:03	sets to take advantage
00:10:03	of the automation,
00:10:05	then you don't
00:10:05	get the productivity gains
00:10:07	and the productivity gains
00:10:07	or what
00:10:08	actually give you wage gains.
00:10:10	Otherwise, for people
00:10:10	who are left behind,
00:10:12	they are going to, as
00:10:12	time goes on, be left behind.
00:10:16	For every
00:10:16	well-paying hard tech job
00:10:19	which like, has not yet
00:10:19	materialized.
00:10:22	With the Intel, we're like,
00:10:22	let's
00:10:24	look at the number of folks
00:10:24	out there on the spot.
00:10:26	Now, the delays,
00:10:29	you're going to have
00:10:29	some janitors, you're
00:10:31	going to have a fast
00:10:31	food worker,
00:10:33	you're going to have a child
00:10:33	care provider,
00:10:35	you're going to have a home
00:10:35	health care aide.
00:10:37	All of those
00:10:37	professions are needed.
00:10:40	They're important.
00:10:41	They make society go.
00:10:44	Those workers
00:10:44	are not going to go away.
00:10:48	And what you're really saying
00:10:48	whenever you're saying, well,
00:10:52	they should just
00:10:52	earn their way out of it,
00:10:52	is that there are some people
00:10:56	who shouldn't be paid enough
00:10:56	to survive.
00:11:00	And in Ohio, raising
00:11:00	the minimum wage up to $15
00:11:05	as per the ballot initiative,
00:11:05	we've not modeled.
00:11:08	Senator Blessing's
00:11:08	proposal. Yet.
00:11:09	I was just going to ask you
00:11:09	about that.
00:11:11	The ballot initiative
00:11:11	will move a million people,
00:11:14	million people in Ohio.
00:11:16	That's not folks who are just
00:11:16	down on their luck.
00:11:19	Those are folks
00:11:19	who are working hard every day
00:11:22	trying to get 40 hours,
00:11:24	I'm sure, or maybe string in
00:11:24	a 2 or 3 of these together.
00:11:29	they deserve to eat without
00:11:29	the need for food stamps.
00:11:32	I want to ask about Senator
00:11:32	Bill Blessing's bill
00:11:34	that would raise
00:11:35	the minimum wage to $15
00:11:35	an hour starting in 2028.
00:11:38	So it would go up over
00:11:38	four years,
00:11:40	in contrast
00:11:41	to the
00:11:41	constitutional amendment,
00:11:43	which is not
00:11:43	on the ballot yet,
00:11:44	but the signatures
00:11:44	are being gathered
00:11:46	that would raise
00:11:47	the minimum wage to $15
00:11:47	an hour starting in 2026.
00:11:51	And of course,
00:11:51	a constitutional amendment
00:11:52	can't be changed. A law can.
00:11:54	So what are your thoughts?
00:11:56	I mean, ballot initiatives,
00:11:56	when they go to voters,
00:12:00	they haven't.
00:12:00	Minimum wage
00:12:01	ballot initiatives
00:12:01	have not lost since the 1990s.
00:12:04	So it seems likely
00:12:04	that this is going to happen.
00:12:06	Well, I'd be surprised
00:12:06	if it makes the ballot,
00:12:08	and I think it probably will.
00:12:08	I think it's likely to pass.
00:12:10	I think that's just the
00:12:10	reality of the situation now.
00:12:13	I think the Senator blessings
00:12:13	Bill.
00:12:15	I give him credit
00:12:16	for trying to figure this out
00:12:16	and do something
00:12:18	I we probably can't
00:12:18	be supportive
00:12:20	of the concept inherently,
00:12:20	but I think it's
00:12:22	better than what
00:12:22	the alternative is.
00:12:25	I think there's a couple
00:12:25	of other provisions
00:12:26	in there
00:12:26	that that are important.
00:12:27	It's a little bit
00:12:27	slower in there.
00:12:29	It also the problem with the
00:12:31	not a big problem
00:12:31	with the ballot issue
00:12:32	is it
00:12:32	applies to tipped workers.
00:12:34	And so
00:12:35	I think
00:12:35	what you're going to see,
00:12:35	and I'll be shocked
00:12:37	if this doesn't come out
00:12:38	in some of the campaign
00:12:38	materials as time moves on,
00:12:41	but you're going
00:12:41	to see some tip workers,
00:12:42	I'm sure you'll see
00:12:42	people saying,
00:12:43	yeah, it's going to help us.
00:12:44	And I think you're gonna see
00:12:44	some people from other states
00:12:46	where this has happened
00:12:48	say, well, actually,
00:12:48	this might be a problem
00:12:50	for tipped workers
00:12:50	because tipped workers
00:12:52	actually typically
00:12:52	if you their wage,
00:12:52	their standard wage
00:12:55	might be below
00:12:55	what the minimum wage is.
00:12:56	But when you factor
00:12:56	in all the tips
00:12:58	that they make,
00:12:58	it might not be.
00:12:59	Now, I think
00:12:59	that's going to be a question.
00:13:02	and you're starting to see
00:13:02	a little bit of tip fatigue
00:13:04	because you're starting to see
00:13:05	this show up
00:13:05	in everything that you do.
00:13:08	And if you have this increase
00:13:10	in labor costs,
00:13:10	it's going to get embedded
00:13:12	in the cost of all the stuff
00:13:12	you do.
00:13:14	It's going to and by the way,
00:13:14	a lot of people aren't
00:13:16	going
00:13:16	to like higher cost of living.
00:13:17	That's going to happen.
00:13:18	Let me and so we have to.
00:13:19	Deal with this, $20 hamburger
00:13:19	or whatever,
00:13:23	like there are places
00:13:23	not just in the United States,
00:13:27	but elsewhere in the world
00:13:27	that pay much higher
00:13:30	minimum wages and have lower
00:13:30	costs on hamburgers.
00:13:34	The fact is,
00:13:34	a lot of these businesses
00:13:36	are going to
00:13:36	raise their prices whenever
00:13:36	the public will tolerate it.
00:13:40	And at least
00:13:40	with the minimum wage,
00:13:43	you have some direction
00:13:44	shifting that money
00:13:44	to the working
00:13:47	people who are providing
00:13:47	that product.
00:13:49	It just is.
00:13:50	You know, it's
00:13:50	one of those policies
00:13:52	that actually does lift
00:13:52	all boats.
00:13:55	And I know that policy
00:13:55	matters.
00:13:56	Ohio is on board with the,
00:13:59	constitutional amendment.
00:13:59	And you said you not
00:14:00	modeled out
00:14:00	Senator Blessing's.
00:14:02	But I do want to ask you,
00:14:03	his bill include something
00:14:03	that's been long supported
00:14:05	by low income advocates,
00:14:05	and that's the refundable
00:14:08	earned income tax credit.
00:14:10	So, yeah,
00:14:10	why not go along with that?
00:14:12	It's hey, look, the
00:14:12	the policy is great.
00:14:16	Policy matters.
00:14:17	Support
00:14:17	getting more people money
00:14:19	into working people's pockets
00:14:19	as quickly as we can,
00:14:23	without large
00:14:23	economic disruptions.
00:14:25	Senator Blessing's
00:14:25	bill is a path to do that.
00:14:28	But there are real problems
00:14:28	with it.
00:14:31	One has already been
00:14:31	mentioned.
00:14:32	It is not protected.
00:14:34	There's no protections,
00:14:34	in that legislation,
00:14:38	if passed that,
00:14:38	the legislature come
00:14:41	right back and slow it down
00:14:41	to remove critical components.
00:14:45	And that's really needed.
00:14:46	That happened in Michigan.
00:14:48	We've seen that play out
00:14:48	in reality.
00:14:50	And knowing the history of
00:14:50	this particular legislature,
00:14:55	I wouldn't be surprised to see
00:14:55	with additional pressure
00:14:59	from the business associations
00:15:01	or the restaurant association
00:15:01	that they make that call.
00:15:04	In fact, this bill
00:15:05	and thank goodness
00:15:05	Senator Blessing
00:15:07	has been
00:15:07	very forthright in it.
00:15:10	He says that this bill
00:15:10	is a response to the ballot
00:15:12	initiative and from the
00:15:12	restaurant association.
00:15:16	So there is no guarantee
00:15:16	or promises.
00:15:19	there's
00:15:19	no way I would give up the,
00:15:21	the potential legislation
00:15:21	for something certain,
00:15:24	like the constitutional
00:15:24	amendment.
00:15:26	Well,
00:15:26	we could talk about this
00:15:26	all day,
00:15:27	but I want to move on
00:15:28	to the other thing
00:15:28	I want to talk about,
00:15:29	which is the elimination
00:15:29	of the income tax.
00:15:31	And this is an idea
00:15:31	that Republicans
00:15:32	have talked
00:15:32	about going back to former
00:15:34	Governor John Kasich
00:15:34	and maybe even before that,
00:15:37	there is a bill
00:15:37	that would actually do that,
00:15:41	phase it out
00:15:41	and also eliminate the rest of
00:15:41	the commercial activity tax.
00:15:45	on May 7th, the Ohio
00:15:45	Office Budget Management
00:15:47	released its monthly revenue
00:15:47	data from April
00:15:50	showing a little over
00:15:51	$1 billion in personal income
00:15:51	tax collections for April.
00:15:55	Now, that
00:15:55	is 13% lower than estimates.
00:15:59	Obama
00:15:59	said that's because of higher
00:15:59	than expected refunds.
00:16:02	But last fiscal year,
00:16:04	the personal income
00:16:04	tax brought in $10.7 billion.
00:16:07	The state budget
00:16:07	just for general revenue
00:16:07	funds was $42.5 billion.
00:16:11	How on earth
00:16:11	you make up that quarter
00:16:15	of the General Revenue
00:16:15	Fund budget?
00:16:17	If there's no personal
00:16:17	income tax?
00:16:19	I think we have to be
00:16:19	very careful.
00:16:21	We've been on the record.
00:16:22	and I'll say this,
00:16:22	I think actually
00:16:24	some of our local issues
00:16:24	and local government
00:16:26	issues and municipal
00:16:26	income tax
00:16:27	is probably actually
00:16:27	more important now
00:16:29	for the state
00:16:29	than even further reductions
00:16:31	to the state income tax.
00:16:32	Those would probably possibly
00:16:32	increase if.
00:16:34	You got rid of it.
00:16:35	So so I think we need to
00:16:35	look at that.
00:16:36	And I think what we have
00:16:36	said is there is
00:16:39	there are positive elements
00:16:39	of how much growth
00:16:41	you could see
00:16:41	if you get rid of it.
00:16:43	But I think you have to do it
00:16:43	in a very smart way. Right.
00:16:45	You can't just do it,
00:16:45	in a very short time period.
00:16:48	You have to have a long glide
00:16:48	path.
00:16:50	If you try to rapidly do it,
00:16:51	you're
00:16:51	going to have a major problem,
00:16:53	but you can kind of
00:16:53	grow your way out over time
00:16:55	by doing it with a long glide
00:16:55	path. That's point one.
00:16:57	Point two is,
00:16:59	I don't think that's
00:16:59	in the legislation right now,
00:17:01	but we have talked
00:17:01	to legislators
00:17:03	and we'll continue to talk
00:17:03	about
00:17:04	what other states have done
00:17:04	when they've been doing
00:17:06	tax reform,
00:17:06	which is to do revenue
00:17:07	triggers,
00:17:08	which means that
00:17:09	if you have revenues
00:17:09	that don't come in
00:17:11	as the way you want them to,
00:17:13	then there's a circuit
00:17:13	breaker.
00:17:14	And so you don't continue to
00:17:14	do the march on the tax cut.
00:17:16	I think that's a
00:17:17	more responsible way
00:17:17	because what it does, it
00:17:19	says, okay, hey,
00:17:19	we got a problem here.
00:17:21	We we slow it down
00:17:22	so that we're not doing
00:17:22	something,
00:17:24	that puts you
00:17:24	in a budget hole,
00:17:25	because I do think it's
00:17:25	going to be not possible.
00:17:29	and I can tell you, too, you
00:17:29	know, we got to be realistic.
00:17:31	We have Medicaid expenses.
00:17:33	Medicaid is already
00:17:33	the state budget,
00:17:35	as former Governor
00:17:35	Voinovich once called it.
00:17:37	And it's not going to go away.
00:17:38	Nursing homes alone
00:17:39	are getting hundreds
00:17:39	of millions of more dollars
00:17:41	and are suing for more
00:17:41	right now.
00:17:43	and so that's happening.
00:17:44	You've got the K-12
00:17:44	education issue.
00:17:46	We haven't fully funded
00:17:46	the new, fair funding plan.
00:17:49	So you've got that sort of
00:17:49	situation, you've got school
00:17:51	choice expenses that are
00:17:51	obviously happening as well.
00:17:53	And how do you. Pay
00:17:53	for all of that?
00:17:54	So it's ready to say welcome
00:17:54	to the Policy Matters team.
00:17:58	Their career. Absolutely. Look
00:18:02	how we collect
00:18:03	taxes is just as important
00:18:03	as how we spend them.
00:18:06	And the idea this march
00:18:06	to zero on the personal income
00:18:10	tax is just not nonsensical
00:18:10	for this state.
00:18:15	Ohioans are, looking at
00:18:15	this is if if this happens,
00:18:20	we're looking at cuts of like
00:18:20	37% that is,
00:18:25	health insurance for kids,
00:18:25	schools.
00:18:28	It's just the idea
00:18:28	that we are entertaining this
00:18:32	in a state like Ohio,
00:18:34	where the middle class
00:18:34	has been squeezed
00:18:37	and is being squeezed
00:18:37	from all directions.
00:18:40	Just what a waste of time.
00:18:43	The estimate of one
00:18:43	of the sponsors is that Ohio's
00:18:46	economy would grow from $750
00:18:46	billion to $1 trillion
00:18:49	by 2030, and population
00:18:49	growth would be more members
00:18:52	of Congress.
00:18:54	Yeah.
00:18:54	So this, how many times
00:18:54	do we have to hear.
00:18:58	Don't worry, it's
00:18:58	going to trickle down.
00:19:00	There will be a business boom
00:19:00	unlike we've ever seen.
00:19:04	The fact is,
00:19:04	is that Ohio has been cutting
00:19:04	the personal income tax.
00:19:08	The only tax, by the way,
00:19:08	that is based on a person's
00:19:12	ability to pay it.
00:19:13	Right,
00:19:13	which is a very important.
00:19:15	38% of Ohioans
00:19:15	do not pay the income doing.
00:19:18	That for decades.
00:19:20	And, you know,
00:19:20	it took like a pandemic,
00:19:24	recession, massive
00:19:24	federal investments, the Chips
00:19:27	act, huge additional
00:19:27	tax breaks,
00:19:30	and suddenly
00:19:30	we're in a different age.
00:19:33	The fact is, is that the taxes
00:19:36	aren't creating the business
00:19:36	environment.
00:19:39	It's having good schools,
00:19:39	higher education,
00:19:42	place that safe, a place
00:19:42	that people want to live.
00:19:45	And all those things
00:19:45	take public resources.
00:19:48	It's time we stop giving
00:19:50	the top 1% a handout
00:19:50	and start thinking about
00:19:54	how do we build a tax program
00:19:54	for the the 60%?
00:19:58	Well, and we could do that
00:19:58	if we had targeted tax credit.
00:20:02	I think tax.
00:20:03	Credits like the child tax
00:20:03	credit they refundable EitC.
00:20:07	That is in Blessing's bill,
00:20:07	a refundable sales tax.
00:20:11	Like there's tons of ideas
00:20:11	and Greg like it's it's
00:20:15	really incredible to hear you
00:20:15	agreeing that you know maybe
00:20:19	it's time we take the foot off
00:20:19	the gas and and look at.
00:20:22	So I think we need to be smart
00:20:22	about what we do.
00:20:24	And we need to get rid of the.
00:20:26	Another thing
00:20:26	that I think you would agree
00:20:27	with is tax expenditures. It's
00:20:27	something else that we do.
00:20:30	We have
00:20:30	what, over $11 billion,
00:20:30	maybe even closer to 13.
00:20:33	I'd have to look at the latest
00:20:33	one. Looked at.
00:20:35	And and and
00:20:35	we should be looking at that.
00:20:37	Because if we don't do that
00:20:37	that's another thing.
00:20:39	So so so how do you get to the
00:20:39	if you wanted
00:20:41	to do the income tax,
00:20:41	how do you get there?
00:20:43	It's got to be partly
00:20:43	that it's got to be done
00:20:45	over a longer period of time.
00:20:46	There have to be revenue
00:20:46	triggers.
00:20:48	you have to have either
00:20:48	either cuts or more likely,
00:20:52	what you'd want to do
00:20:52	is limit
00:20:53	the growth of spending,
00:20:53	which is something
00:20:55	that has been talked
00:20:55	about periodically in Ohio,
00:20:57	which is,
00:20:58	you know, do you tie
00:20:58	growth of general revenues
00:21:00	and things like that
00:21:00	to population and growth?
00:21:02	Because he's had a problem.
00:21:03	The thing that I think is,
00:21:04	is that government continues
00:21:04	to grow in Ohio. Right?
00:21:06	And it continues to grow,
00:21:06	at a lot of different levels.
00:21:10	It's not just at the state
00:21:10	level.
00:21:11	It can happen
00:21:11	at the local level, too,
00:21:13	but on a per capita basis,
00:21:13	if you look at Florida
00:21:15	and states
00:21:15	that now Florida is different,
00:21:17	I'm not trying to say
00:21:17	we're going to
00:21:18	have sunny beaches
00:21:18	and everything else,
00:21:21	but I so I understand that.
00:21:22	But they have a lot
00:21:22	less spending, but
00:21:25	they have a lot less spending,
00:21:25	on a per capita basis.
00:21:29	And I and I think that's
00:21:29	one of the questions is
00:21:31	how are we structuring
00:21:31	some of our government.
00:21:34	Bodies in what you're able
00:21:34	to do in terms of education,
00:21:37	in terms
00:21:37	of supporting people's health.
00:21:39	Structure as. Well?
00:21:39	Infrastructure, like we don't
00:21:39	want Florida is not the goal.
00:21:44	What we want is an Ohio
00:21:44	that really does
00:21:47	create a place for working.
00:21:49	Families,
00:21:49	can have a middle class life
00:21:52	where you can take
00:21:53	your kids on vacation,
00:21:53	where you can save for college
00:21:56	or trade school,
00:21:57	where you don't have to worry
00:21:57	about living from paycheck to
00:22:01	paycheck.
00:22:02	And you can't do that
00:22:02	whenever you insist upon
00:22:05	cutting the income tax
00:22:05	so much.
00:22:08	In order for the top
00:22:08	1% of the state
00:22:12	to get a bigger cut,
00:22:12	you can't do it.
00:22:15	I want to ask you
00:22:15	final question.
00:22:16	If not,
00:22:16	cutting the income tax,
00:22:19	what about the flat tax,
00:22:19	which is also been talked
00:22:20	about going to like a 2.5%?
00:22:22	I think that would make sense.
00:22:24	And I and I think two key
00:22:24	thing on the state level,
00:22:26	it would too.
00:22:27	And and I would
00:22:27	I would say one thing
00:22:28	that also needs to be
00:22:28	looked at
00:22:29	is that,
00:22:30	you know, states all across
00:22:31	the country are cutting
00:22:31	the income tax and,
00:22:34	and on now, you know, North
00:22:34	Carolina, Georgia,
00:22:36	I mean,
00:22:36	lots of states are doing this.
00:22:37	And one of the problems
00:22:37	that you have is the notion
00:22:40	that you can,
00:22:40	you know, raise it or not,
00:22:42	continue
00:22:42	to try to stay competitive
00:22:43	with other states,
00:22:43	I think is problematic
00:22:45	because other states are doing
00:22:45	it. You're in a competition
00:22:48	overseas,
00:22:48	extremely competitive.
00:22:50	And I so I think
00:22:50	but I think that that's.
00:22:51	You have a flat tax does not
00:22:51	get you out of the problem.
00:22:54	Well let let's think services
00:22:54	and also delivering
00:22:59	that's a cut for the richest
00:22:59	folks whenever you buy.
00:23:02	The but
00:23:02	but I think the bottom line
00:23:02	with all is the bottom line is
00:23:05	you can't just stay static,
00:23:05	because if you're not moving,
00:23:09	you're going to be losing.
00:23:10	And that is a problem to.
00:23:11	Cut but tax entirely.
00:23:13	Right.
00:23:13	Well, and I'm saying again
00:23:15	we got to be very smart
00:23:15	in how we do that.
00:23:16	And I've been very clear
00:23:16	about that.
00:23:18	And and well Kansas screwed up
00:23:18	and how they did it.
00:23:21	They they didn't
00:23:21	cut any spending.
00:23:23	They didn't do any better
00:23:23	than North Carolina. And.
00:23:26	Well, and they have revenue
00:23:26	triggers,
00:23:28	which is something
00:23:28	that I mentioned.
00:23:29	And I'm
00:23:29	going to keep mentioning that
00:23:30	because that's the key piece.
00:23:31	You can't just gut government
00:23:31	overnight.
00:23:33	You you can't do that.
00:23:35	I mean, we want to
00:23:35	restrain government.
00:23:37	We want to keep it limited
00:23:38	because we don't want it
00:23:38	to take over the world.
00:23:41	you know, like
00:23:41	some kind of vast colossus.
00:23:43	But you got to be smart
00:23:43	about it.
00:23:44	Once you've built it out, it's
00:23:46	going to take time
00:23:46	to adjust. Right?
00:23:47	So that's why you need
00:23:47	to be strategic about this.
00:23:50	hope,
00:23:50	And one of the things that I
00:23:51	policymakers
00:23:51	are going to think about is
00:23:53	if you're going
00:23:53	to keep going down this road,
00:23:54	how do we do it in a way
00:23:55	that is sustainable
00:23:55	and makes sense?
00:23:57	I think there's arguments
00:23:58	for why you want to go
00:23:58	somewhat down the road.
00:24:01	What do you go
00:24:01	all the way down
00:24:02	the road is going
00:24:02	to be a question we can ask,
00:24:03	and it might be hard to do
00:24:03	in the next budget.
00:24:05	I mean,
00:24:05	the revenues are lower.
00:24:07	like you mentioned
00:24:07	before that,
00:24:08	you know,
00:24:08	how are we going to wrestle
00:24:09	with that
00:24:09	with all those expenses?
00:24:11	So we need to be smart.
00:24:11	We need to be strategic.
00:24:13	I think the key thing,
00:24:13	though, is
00:24:15	you can't just
00:24:15	raise these things in a world
00:24:17	where everybody else
00:24:17	is competing on this,
00:24:18	because if you do that,
00:24:18	you're going to have problems.
00:24:21	And Ohio has a long standing.
00:24:22	We have to leave it
00:24:22	there. And unfortunately.
00:24:25	Greg said the
00:24:26	the goal at the end
00:24:26	is to cut government overtime.
00:24:30	And let me tell you,
00:24:30	you can't have a middle class
00:24:33	if you got government.
00:24:35	I think I said
00:24:35	not getting government
00:24:36	overtime is what I said.
00:24:38	You can't get government
00:24:38	all at once, right? Yes.
00:24:42	And if you want a middle
00:24:42	class,
00:24:44	you better have health care.
00:24:46	You better have education,
00:24:46	you better have a safety net.
00:24:50	And, that's the thing
00:24:50	that taxes afford.
00:24:53	All right.
00:24:53	And that is it for this week
00:24:53	for my colleagues
00:24:55	at the Statehouse News
00:24:55	Bureau of Ohio
00:24:56	Public Radio and Television.
00:24:56	Thanks for watching.
00:24:59	Please check out our website
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