00:00:38>> THE GOVERNOR RELEASES HIS
SECOND TWO-YEAR BUDGET - WHICH
00:00:40WILL CARRY HIM THROUGH HIS RE-
ELECTION CAMPAIGN - AND IT
00:00:44INCLUDES PREDICTED TAX CUTS AND
SOME UNEXPECTED TAX INCREASES.
00:00:46WE HAVE DETAILS ABOUT THE
BIGGEST ITEMS IN THE BUDGET -
00:00:51AND THE MOST CONTROVERSIAL ONES.
AND TWO BUDGET EXPERTS CRUNCH
00:00:55THE NUMBERS AND CHEW THROUGH
THE POLITICS BEHIND THE SPENDING
00:00:57PLAN.
ALL THIS WEEK IN "THE STATE OF
00:00:59OHIO".
GOV. JOHN KASICH'S SECOND
00:01:04BUDGET - WHICH HE LABELED OHIO'S
JOBS BUDGET 2.0 - CONTAINED
00:01:07SOME EXPECTED ANNOUNCEMENTS, BUT
A LOT OF SURPRISES.
00:01:09TWO OF THE BIGGEST ITEMS IN THE
63.2 BILLION DOLLAR TWO YEAR
00:01:16SPENDING PLAN WERE NO SHOCKERS.
THE GOVERNOR DID INDEED INCLUDE
00:01:19A SEVERANCE TAX INCREASE ON OIL
AND NATURAL GAS DRILLERS IN HIS
00:01:22BUDGET AND HE ALSO CUT THE
STATE INCOME TAX, WHICH HE'S
00:01:24TALKED ABOUT SINCE HE ANNOUNCED
HE WAS RUNNING FOR GOVERNOR.
00:01:27HE'S PROPOSING A 20 PERCENT
ACROSS THE BOARD INCOME TAX CUT
00:01:32TO ALL OHIO TAXPAYERS OVER
THREE YEARS AND A 50 PERCENT
00:01:33INCOME TAX CUT FOR SMALL
BUSINESSES OVER THREE YEARS.
00:01:37>> ABOUT 50% OF THE JOBS IN
THIS STATE ARE CREATED BY SMALL
00:01:42BUSINESS
AND WE WANT TO DO EVERYTHING WE
00:01:51CAN TO ENCOURAGE JOB GROWTH IN
SMALL BUSINESSES AND HELP THESE
00:01:54FOLKS WHO ARE BELEAGUERED
BECAUSE OF BIG GOVERNMENT
00:01:57REGULATIONS AND OVER TAXATION.
OUR INCOME TAXES ARE TOO HIGH,
00:02:02AND THEY ARE TOO HIGH,
PARTICULARLY AS THEY AFFECT
00:02:05SMALL BUSINESSES ABILITY TO PAY.
>> BUT HOW HE'S GETTING TO THAT
00:02:09INCOME TAX CUT - WHICH WILL
EVENTUALLY MAKE OHIOANS INCOME
00:02:12TAX 4.75 PERCENT - IS COMING AS
SOMEWHAT OF AN EYE-OPENER.
00:02:13HE WANTS TO INCREASE THE
SEVERANCE TAX ON BIG OIL AND
00:02:18NATURAL GAS DRILLERS THAT DO
HORIZONTAL HYDRAULIC FRACTURING
00:02:21OR FRACKING OPERATIONS, WHILE
EXEMPTING THE SMALLER, LOWER-
00:02:24VOLUME CONVENTIONAL DRILLERS.
BUT HE ALSO HAS ANOTHER PLAN.
00:02:26>> WE'RE GOING TO BROADEN THE
TAX BASE AND BEGIN TO TAX
00:02:35SERVICES WHICH IN THE PAST HAVE
BEEN TAXED ONLY TO FILL BUT THE
00:02:38POLLS.
THIS IS NOT BEING USED TO FILL
00:02:43BUT THE POLLS, THIS IS BEING
USED TO BRING DOWN SIGNIFICANT
00:02:45TAX RELIEF FOR OUR SMALL
BUSINESSES.
00:02:48WE WILL ALSO LOWER THE SALES TAX
FROM 5.5% TO 5%, AND EXCLUSIONS
00:02:55ON THE SERVICES ARE PRETTY
CONSISTENT WITH EXCLUSIONS WE
00:02:58SEE WHEN WE TAX THE NORMAL GOODS
AND SERVICES.
00:03:01SO IT WILL BE A $1.4 BILLION TAX
CUT FOR OHIOANS.
00:03:06>> IN HIS BUDGET, THE GOVERNOR
IS PROPOSING A HUGE SERVICES IN
00:03:11HIS BUDGET, GOV.
KASICH IS PROPOSING A HUGE SHIFT
00:03:12IN THE STATE'S TAX STRUCTURE,
WITH THE STATE SALES TAX
00:03:14BECOMING ITS LARGEST SOURCE OF
REVENUE, NOT THE STATE INCOME
00:03:17TAX.
TAX COMMISSIONER JOE TESTA SAYS
00:03:19BROADENING THE SALES TAX BASE
BY 30% WILL MAKE THE STATE TAX
00:03:23BURDEN MORE FAIR AND STABLE.
>> WE'RE GOING TO RECOGNIZE
00:03:26SOMETHING THAT'S BEEN GOING ON
FOR A LONG PERIOD OF TIME,
00:03:32WHICH IS THAT WE ARE SHIFTING
FROM A GOODS BASED ECONOMY TO A
00:03:36SERVICE-BASED ECONOMY.
WHAT THIS PROPOSAL DOES IS IT
00:03:41ALIGNS THE SEC -- TAX CODE WITH
THE REALITIES OF THE ECONOMY.
00:03:43ABOUT TWO-THIRDS OF ALL
CONSUMPTION IS SERVICES.
00:03:48BACK IN THE 1930'S WHEN SALES
TAX WERE STARTED, IT WAS THE
00:03:52OTHER WAY AROUND.
OVER THE YEARS, THIS HAS
00:03:55CHANGED, BUT THE TAX CODE HAD
NOT BEEN ADDRESSED IN THIS AREA
00:03:59COMPREHENSIVELY TO ADDRESS THAT
CHANGE.
00:04:01WE THINK THAT TIME HAS CLEARLY
TIME FOR THAT TO TAKE PLACE.
00:04:03>> TESTA SAID CERTAIN SERVICES
WOULD BE EXEMPT - SERVICES HE
00:04:07CALLED "ESSENTIAL", SUCH AS DAY
CARE SERVICES FOR ADULTS AND
00:04:09CHILDREN, HEALTH CARE SERVICES,
AND THOSE RELATED TO EDUCATION,
00:04:12HOUSING AND SOCIAL SERVICES.
LATER IN THE WEEK THE
00:04:15GOVERNOR'S OFFICE RELEASED A
LIST OF SERVICES THAT WOULD BE
00:04:17EXEMPT, INCLUDING: ADULT AND
CHILD DAY CARE, PRESCHOOL,
00:04:20TUTORING; DOCTORS, DENTISTS,
MEDICAL TESTING AND NURSING
00:04:23SERVICES OUTSIDE A HOSPITAL;
UTILITIES AND RESIDENTIAL TRASH
00:04:27PICK UP AND DISPOSAL; SOCIAL
ASSISTANCE SERVICES, SOME LABOR
00:04:31SERVICES SUCH AS MEAT
SLAUGHTERING AND BOAT AND
00:04:35AIRPLANE REPAIRS; AND
VETERINARIANS - ALONG WITH
00:04:39PERSONAL INSTRUCTION IN THINGS
LIKE DANCE, GOLF AND TENNIS AND
00:04:42NATIONAL ADS ON RADIO AND TV IN
OHIO.
00:04:43THEN THERE'S THE LIST OF WHAT'S
NOT EXEMPT.
00:04:47ENTERTAINMENT SUCH AS CABLE TV,
TICKETS TO SPORTS AND CULTURAL
00:04:52EVENTS, AMUSEMENT PARKS,
CIRCUSES AND FAIRS, AND
00:04:56HORSERACING, BILLIARD PARLORS
AND BOWLING ALLEYS, ALONG WITH
00:05:00DIGITAL DOWNLOADS OF BOOKS,
MOVIES AND MUSIC AND MAGAZINE
00:05:03SUBSCRIPTIONS; PARKING LOTS AND
GARAGES, COIN-OP LAUNDRIES AND
00:05:07MAILBOX RENTALS; PET GROOMING
AND HORSE BOARDING; FINANCIAL
00:05:12SERVICES SUCH AS INVESTMENT
COUNSELING, TAX PREPARATION,
00:05:15ACCOUNTING AND DEBT COUNSELING;
SERVICES PROVIDED BY
00:05:18ARCHITECTS, REAL ESTATE
MANAGERS, TRAVEL AGENTS AND
00:05:20INTERIOR DESIGNERS ALONG WITH
THOSE OFFERED BY SOFTWARE
00:05:23PROGRAMMERS, COURT REPORTERS,
TELEMARKETERS AND DEBT
00:05:26COLLECTORS - AND OF COURSE
LOBBYISTS, CONSULTANTS AND
00:05:29ATTORNEYS.
ALSO ON THE LIST - FUNERAL
00:05:33SERVICES, HAIR CUTTING AND
STYLING, AND DATING SERVICES.
00:05:36THE BUDGET ALSO INCLUDES AN
EXPANSION OF MEDICAID TO PEOPLE
00:05:41WITH INCOMES UP TO 138 PERCENT
OF THE FEDERAL POVERTY LEVEL,
00:05:44WHICH RIGHT NOW IS $15,415 A
YEAR.
00:05:46THE EXPANSION COULD ADD UP TO
545-THOUSAND PEOPLE TO THE
00:05:52MEDICAID ROLLS IN OHIO AND WILL
INCREASE THE STATE'S MEDICAID
00:05:56BUDGET BY MORE THAN 13 PERCENT
IN THE FIRST YEAR AND NEARLY 10
00:06:00PERCENT IN THE SECOND.
BUT THE GOVERNOR SAYS IT WILL
00:06:03ALSO HELP OHIO TO RECAPTURE 13
BILLION IN FEDERAL DOLLARS OVER
00:06:06SEVEN YEARS.
>> I, AS YOU ALL KNOW HERE, AM
00:06:10NOT A SUPPORTER OF OBAMACARE
.
00:06:13I DO NOT BELIEVE IN THE
INDIVIDUAL MANDATE.
00:06:18I DO NOT BELIEVE IN THE
COLLAPSING OF THE RATINGS OF OUR
00:06:21INSURANCE INDUSTRY.
AND AS YOU KNOW, I DECIDED TO
00:06:24MOVE FORWARD WITH THE FEDERAL
EXCHANGE, RATHER THAN THE STATE
00:06:28EXCHANGE, WHERE I BELIEVE WE
WOULD HAVE LOST CONTROL.
00:06:30BUT I THING THAT THIS MAKES
GREAT SENSE FOR THE STATE OF
00:06:34OHIO, AND MAKES GREAT SENSE FOR
THE STATE OF OHIO BECAUSE I
00:06:37THINK IT WILL ALLOW US TO
DELIVER CARE USING OUR DOLLARS,
00:06:42TO PEOPLE WHO COME UP TILL NOW,
HAVE NOT BEEN ABLE TO AFFORD
00:06:46CARE THROUGH THEIR JOB, OR WERE
NOT ABLE TO EVEN FIND A JOB AND
00:06:53ARE EXTREMELY POOR.
>> AND THE GOVERNOR SAYS THE
00:06:55DECISION TO EXPAND MEDICAID
WILL CHANGE IF THE FEDERAL
00:06:57GOVERNMENT CHANGES ITS RULES ON
REIMBURSING FOR MEDICAID
00:06:59RECIPIENTS.
BUT SOME CONSERVATIVES HAVE
00:07:02SAID THEY HAVE A HARD TIME WITH
THAT, BECAUSE IT'S DIFFICULT TO
00:07:04PULL BACK A BENEFIT ONCE IT'S
BEEN EXTENDED.
00:07:06THE BUDGET ALSO INCLUDES THE
SCHOOL FUNDING FORMULA RELEASED
00:07:12LAST WEEK, AND THIS WEEK THE
GOVERNOR'S OFFICE PUT OUT
00:07:15SPREADSHEETS DETAILING EXACTLY
HOW MUCH EACH DISTRICT WOULD
00:07:18GET.
NO DISTRICT WAS CUT, AS GOV.
00:07:21KASICH PROMISED LAST WEEK.
BUT MOST DISTRICTS GOT NO
00:07:24INCREASE WHATSOEVER.
MOST OF THOSE THAT DID GOT
00:07:28INCREASES THAT WERE UNDER 50%.
BUT THERE WERE SOME THAT SAW
00:07:31HUGE HIKES IN THEIR FUNDING:
AVON LAKE AND AVON IN LORAIN
00:07:34COUNTY, LORDSTOWN IN TRUMBULL
COUNTY, NEW ALBANY-PLAIN LOCAL
00:07:38IN FRANKLIN COUNTY, OLENTANGY
LOCAL IN DELAWARE COUNTY,
00:07:41TWINSBURG IN SUMMIT COUNTY,
VANDALIA-BUTLER CITY IN
00:07:45MONTGOMERY COUNTY AND WOODRIDGE
LOCAL IN SUMMIT COUNTY.
00:07:48THE BUDGET ALSO INCLUDES
ELEMENTS FROM THE HIGHER
00:07:51EDUCATION REFORM KASICH
ANNOUNCED LAST YEAR, IN WHICH
00:07:54AID TO COLLEGES IS TIED TO THE
NUMBER OF STUDENTS THEY GRADUATE
00:07:57RATHER THAN THOSE WHO ARE
ENROLLED.
00:07:58THE SPENDING PLAN ALSO
ENCOMPASSES THE GOVERNOR'S
00:08:01TURNPIKE PLAN ANNOUNCED LAST
YEAR.
00:08:02AND KASICH SAYS BONDING AGAINST
FUTURE TURNPIKE REVENUES WILL
00:08:06KEEP LAYOFFS AT BAY AND ALLOW
TOLLS TO BE FROZEN FOR 10 YEARS.
00:08:10AND THERE WILL BE CONTINUING
PAYMENTS FROM HIS PUBLIC-
00:08:14PRIVATE AGENCY JOBSOHIO, WHICH
LAST WEEK SAW THE COMPLETION OF
00:08:17THE TRANSFER OF THE STATE'S
LIQUOR PROFITS TO FUND ITS
00:08:20OPERATIONS.
AT THE END OF THE BUDGET CYCLE,
00:08:24KASICH SAYS THE STATE'S RAINY
DAY FUND WILL HOLD A LOT MORE
00:08:27THAN THE 482 MILLION DOLLARS IN
IT NOW.
00:08:28>> OUR SURPLUS FUND WILL GROW
TO 1.9 BILLION DOLLARS
00:08:32, AND THAT IS IN A TWO-YEAR
PERIOD.
00:08:42WE STARTED OUT WITH A BILLION
DOLLAR DEFICIT.
00:08:45SO FROM AN $8 BILLION DEFICIT
TO A $1.9 BILLION FOR +,
00:08:51TRIGGERING AN AUTOMATIC TAX CUT
OF $400 MILLION, THAT IS GOOD
00:08:56NEWS FOR EVERY TAXPAYER IN THE
STATE OF OHIO.
00:08:59>> POLITICAL REACTION TO THE
BUDGET WAS SWIFT AND STRONG -
00:09:02AND GOT PERSONAL.
THE OHIO REPUBLICAN PARTY AND
00:09:04THE OHIO DEMOCRATIC PARTY BOTH
ISSUED STATEMENTS AFTER THE
00:09:06BUDGET CAME OUT, BUT THE
RHETORIC GOT MORE HEATED A FEW
00:09:09DAYS LATER, WHEN THE GOP
LAUNCHED A WEBSITE
00:09:12STOPOHIOJOBKILLERS.COM.
ON THAT SITE, REPUBLICANS
00:09:16LISTED BY NAME DEMOCRATS THAT
GOP CHAIR BOB BENNETT SAID WERE
00:09:19ACTIVELY CAMPAIGNING AGAINST
OHIO'S IMPROVING ECONOMY BY
00:09:23OPPOSING BOTH GOV.
KASICH'S LAST BUDGET AND THIS
00:09:26ONE.
BUT DEMOCRATIC PARTY CHAIR,
00:09:28REP. CHRIS REDFERN OF CATAWBA
ISLAND, SAYS REPUBLICANS ARE
00:09:32NOW DEFENDING A BUDGET THAT
INCLUDES THOUSANDS OF NEW SALES
00:09:35TAXES ON WORKING AND MIDDLE
CLASS OHIOANS, WHICH HE SAYS
00:09:37TOTAL 2.6 BILLION DOLLARS.
AND HE SAYS BENNETT'S COMMENTS
00:09:43SHOW THE PARTY IS DRAMATICALLY
SPLIT OVER THAT.
00:09:46HEARINGS ON THE BUDGET STARTED
ON TUESDAY, THE DAY AFTER IT WAS
00:09:49INTRODUCED.
IT'S BEEN EMBRACED BY SOCIAL
00:09:52WELFARE, MEDICAL AND BUSINESS
GROUPS, WHICH ARE PLEASED WITH
00:09:56THE DECISION TO EXPAND
MEDICAID, AND MANUFACTURERS LIKE
00:09:58THE INCOME TAX CUTS.
BUT THE OIL AND GAS DRILLERS
00:10:02ARE PREDICTABLY UNHAPPY ABOUT
THE SEVERANCE TAX INCREASE, AND
00:10:05TEA PARTY AND CONSERVATIVE
GROUPS AND LAWMAKERS ARE
00:10:08CONCERNS ABOUT THAT, ALONG WITH
THE MEDICAID DECISION.
00:10:11AND PROGRESSIVES AND DEMOCRATS
SAY THE WHOLE PLAN FAVORS THE
00:10:16WEALTHY AND RAISES TAXES ON THE
MIDDLE CLASS.
00:10:18TO GET A PERSPECTIVE ON HOW
THE MATH AND THE POLITICS
00:10:22ACTUALLY WORK IN THIS BUDGET,
I'VE ASKED TWO LONGTIME BUDGET
00:10:24VETERANS TO SHARE THEIR THOUGHTS
ON IT - AS THEY DID WITH GOV.
00:10:27KASICH'S FIRST BUDGET TWO YEARS
AGO.
00:10:30BILL SHKURTI WAS THE STATE
BUDGET DIRECTOR UNDER DEMOCRATIC
00:10:34GOV. RICHARD CELESTE.
AND NEIL CLARK IS THE FORMER
00:10:37CHIEF FINANCIAL OFFICER OF THE
OHIO SENATE REPUBLICAN CAUCUS.
00:10:39THEY WERE THE CHIEF BUDGET
GURUS FROM THEIR PARTIES IN THE
00:10:43MID TO LATE 80S - AND IN MY MIND
STILL ARE.
00:10:44THANK YOU BOTH FOR BEING HERE.
LET'S START WITH THIS APPARENT
00:10:51TAX SHIFT FROM A RELIANCE ON
INCOME TAXES IN THE STATE TO
00:10:55STATE SALES TAXES.
LET'S TALK ABOUT THE KINDS OF
00:10:58THAT.
-- CONS OF THAT.
00:11:01>> THEY ARE PLENTIFUL AND THE
FACT THAT SINCE WORLD WAR II, WE
00:11:07HAVE SHIFTED FROM GOODS TO
SERVICES.
00:11:09PARTICULARLY, IT BECAME MORE
PRONOUNCED AS THE 1965, 1975
00:11:14ROLLED AROUND.
WHAT ARE THE NEGATIVES TO THIS?
00:11:17LOOK AT HOW MANY STATES ARE
DOING THIS IN THE UNITED STATES.
00:11:20REALLY ONLY THREE STATES THAT TI
SALES TAX TO SERVICES.
00:11:24THEY MAKE UP 1.8% OF THE TOTAL
POPULATION IN THE UNITED STATES.
00:11:29THREE STATES THAT ATTEMPTED IT
AND PASSED IT REPEALED IT EVEN
00:11:33BEFORE THE EFFECTIVE DATE, OR
WITHIN A QUARTER AFTER THE BILL
00:11:37WAS INTO EFFECT.
MICHIGAN, FLORIDA, AND
00:11:40MASSACHUSETTS.
WHAT PROMPTED THE COMMUNITY
00:11:43THERE TO GO IN AND OUT RICH?
IN MANY CASES, IT WAS THE
00:11:47DIFFICULTY IN COLLECTING THE
TAX.
00:11:50IT WAS THE DIFFICULTY IN
APPLYING THE TAX TO MANY
00:11:52DIFFERENT GROUPS.
AS A RESULT, IN EACH OF THOSE
00:11:55STATES, MANY POLITICIANS LOST
THEIR RACE OVER THAT PARTICULAR
00:12:00BOAT.
IT IS THE APPLICATION OF THE TAX
00:12:02THAT MAKES IT DIFFICULT TO DO.
>> AND WHAT ABOUT THE PROS,
00:12:08BILL?
>> THE BROADER THE BASE IS
00:12:12BETTER FOR TAXES, AND THAT IS
WHAT GOVERNOR KASICH HAS
00:12:17PROPOSED.
YOU COULD ARGUE THAT YOU NEED TO
00:12:20TAX ALL AREAS OF THE ECONOMY AND
THE ONE THAT ARE GROWING.
00:12:23NOW THAT WE ARE IN A MUCH MORE
ELECTRONIC AGE WHERE COMPUTERS
00:12:27CAN MAKE A MORE AUTOMATIC, YOU
HAVE A BETTER CHANCE OF
00:12:30ENFORCING THIS THAN A FEW YEARS
AGO.
00:12:31ALTHOUGH I DO NOT AGREE WITH
EVERYTHING IN THE BUDGET, THIS
00:12:35PARTICULAR PART OF IT,
BROADENING THE SALES TAX BREAKS,
00:12:39PICKING UP THE OIL AND GAS
REVENUES, IS A GOOD PART OF IT.
00:12:42MY CONCERN IS MORE ON THE
REDUCTION IN INCOME TAX.
00:12:45>> TO ME, YOU HAVE TO LOOK AT
WHAT IS HAPPENING IN YOUR
00:12:50SURROUNDING STATES AND THE OTHER
50 STATES.
00:12:52WHEN NO OTHER MAJOR STATE IS
USING A SALES TAX ON SERVICE, IT
00:12:56WILL SEND A CERTAIN MESSAGE OUT
THERE WITH WHAT IS HAPPENING.
00:12:58LET'S LOOK AT OUR NEIGHBORS.
INDIANA, ILLINOIS, MICHIGAN, AND
00:13:05PENNSYLVANIA ARE ALL FLAT TAX ON
INCOME TAX, RANGING FROM A LOW
00:13:09OF 3.04%, TO A HIGH OF 5%.
WE STILL HAVE A GRADUATE
00:13:15BRACKET.
IF YOU WANT TO COMPETE IN THIS
00:13:17REGION AND BE A DRIVING FORCE TO
BRING IN JOBS, LET'S GO AHEAD
00:13:21AND HAVE A FLAT TAX.
WHEN YOU TALK ABOUT RUNNING A
00:13:25SALES TAX BASE, REMEMBER, WE
CREATED A CAT TAX FOR A REASON.
00:13:31NOW WHAT WE HAVE ARE TOO MANY
TAXES COMING ON THAT ARE BEING
00:13:35PASSED ONTO INDIVIDUALS, AND IT
STARTED TO GET TO THE POINT, IN
00:13:39MY OPINION, WHERE IT IS TOO
MANY.
00:13:41WE COULD HAVE EASILY
ACCOMPLISHED THE SAME THING WITH
00:13:44THE SALES TAX ON SERVICES BY
DOUBLING THE COMMERCIAL ACTIVITY
00:13:48TAX.
>> WE DID NOT GO BACK TO LOOK AT
00:13:52THAT, BUT THIS SEEMS A LOT LIKE
WHAT WE TALKED ABOUT IN 2005,
00:13:55WHEN THE CAT WAS CREATED.
IF GRADUATED ACROSS-THE-BOARD
00:14:01INCOME-TAX CUTS.
SOME PEOPLE SAY THAT IS PART OF
00:14:04THE PROBLEM TO.
THIS BUDGET DEFICIT.
00:14:05>> THERE ARE 54,000 TAXPAYERS
UNDER THE CAT PAYING AN AVERAGE
00:14:11OF $9,000.
CONSIDERING ALL THE BUSINESSES
00:14:15IN THE STATE, THAT IS NOMINAL.
WHEN YOU LOOK AND WHAT IT WAS
00:14:18INTENDED FOR IN 2005, IT WAS
SUPPOSED TO BE A BROAD BASED TAX
00:14:23THAT WOULD APPLY TO EVERYONE AND
EVERYONE DOES PAY IT, OF COURSE,
00:14:28A FEW EXEMPTIONS AND EXCLUSIONS,
BUT THE PURPOSE WAS TO HAVE THE
00:14:32BROAD BASE.
THAT WAS A GOOD TAX BECAUSE WE
00:14:35ALSO GOT RID OF THE TANGIBLE
PERSONAL PROPERTY TAX.
00:14:38WE DID THOSE CHANGES, BUT YET,
PEOPLE ARE STILL CLAMORING THAT
00:14:43WE NEED A BROADER SALES TAX
BASE.
00:14:45I DO NOT THINK SO.
I THINK WE NEED TO TAKE A
00:14:48CAREFUL LOOK AT THE TOTAL TAX
BURDEN FOR INDIVIDUALS IN THE
00:14:52STATE.
WITHOUT GOING THROUGH A LOT OF
00:14:55DIFFERENT THINGS -- WHAT WENT
THROUGH THE REGULATIONS,
00:15:01COMMUNICATIONS -- ALL OF THESE
THING GOT PASSED ON TO THE
00:15:04CONSUMER IN THE FORM OF THIS
SALES TAX.
00:15:05>> IS THAT WHAT IS HAPPENING
HERE?
00:15:08THE ARGUMENT HAS BEEN MIDDLE AND
LOWER-INCOME PEOPLE WILL PAY
00:15:11MORE.
>> ALL YOU HAVE TO DO IS TAKE
00:15:15WHAT YOU GET IN YOUR INCOME TAX
CUT, THE LAW THAT BY 5%, AND
00:15:19THAT IS HOW MUCH YOU CAN SPEND
ON SERVICES FOR THE YEAR.
00:15:22FOR MANY PEOPLE, THAT BREAK EVEN
POINT IS A PRETTY LOW DOLLAR
00:15:25AMOUNT.
>> BILL, THE GOVERNOR SAYS WE
00:15:29HAVE GONE FROM A BILLION DOLLAR
BUDGET DEFICIT TWO YEARS AGO TO
00:15:34A RAINY DAY PERTH -- SURPLUS OF
$2 BILLION.
00:15:36IS THIS BELIEVABLE TO YOU?
>> IT IS BELIEVABLE, IN PART.
00:15:42THE $8 BILLION FIGURE WAS BASED
ON A BUDGET PROJECTION THAT A
00:15:46NUMBER OF ASSUMPTIONS WHICH I
THINK ARE EXCESSIVE.
00:15:48BUT HAVE WE GONE FROM A BUDGET
DEFICIT TO SURPLUS?
00:15:52ABSOLUTELY.
BUT HE IS NOT THE FIRST GOVERNOR
00:15:55TO DO THAT -- HE DESERVES CREDIT
FOR THAT -- BUT HE IS NOT THE
00:15:58FIRST.
IF YOU LISTEN, IT MAKES THEM
00:16:02SOUND LIKE THEY ARE THE FIRST TO
DO IT.
00:16:04ALMOST EVERY GOVERNMENT COMES IN
IN BAD ECONOMIC TIMES,
00:16:08PARTICULARLY WHEN PARTIES
CHANGE, THEY HAVE HAD TO ADDRESS
00:16:11THE DEFICIT IN ONE WAY OR
ANOTHER.
00:16:12>> NEIL SAID THAT THE FLAT TAX
OR DEALING WITH THE CAT WOULD
00:16:22HAVE BEEN A GOOD IDEA.
WHAT IS YOUR IMPRESSION?
00:16:24>> YOU NEED TO LOOK A DISK
COMPREHENSIVELY.
00:16:29THE PART WHERE I WOULD DISAGREE
A LITTLE BIT IS, THERE IS A LOT
00:16:35OF CONJECTURE GOING BACK AND
FORTH ABOUT WHETHER THIS
00:16:37PARTICULAR SALES TAX BROADENING
FALLS ON THE MIDDLE-CLASS OR ON
00:16:41THE UPPER CLASS PEOPLE.
MIDDLE-CLASS PEOPLE GET
00:16:44HAIRCUTS, USE WASHING MACHINES,
AND SO FORTH, CABLE-TV.
00:16:49THERE IS OFFSET THEIR.
RICH PEOPLE WILL BE MORE LIKELY
00:16:55TO USE ACCOUNTS AND LAWYERS AND
AT WHAT SORT OF THING.
00:16:57EVERYTHING IS PONTIFICATING.
THERE PROBABLY NEEDS TO BE A
00:17:04SERVICE COMMISSIONER OR OFFICER,
SOMEBODY THAT IS NON-PARTISAN,
00:17:08TO LOOK AT THE BURDEN.
THE FLIP SIDE OF THIS IS THAT IS
00:17:11ONE PART OF IT.
THE INCOME TAX CUTS, 20% OF THE
00:17:15GOVERNOR PROPOSED, REALLY HELPS
THE HIGHER INCOME PEOPLE.
00:17:17THE PERCENTAGE IS THE SAME, BUT
DOLLAR AMOUNTS, THEY SAVE A LOT
00:17:21MORE.
THAT IS WHERE I WOULD DISAGREE
00:17:23WITH WHAT ABOUT GOVERNOR HAS
PROPOSED.
00:17:25WE HAVE HEARD THIS MANTRA FROM
REPUBLICANS FOR THE LAST 50
00:17:31YEARS, IF YOU WANT ECONOMIC
GROWTH, CUT TAXES AND REDUCE
00:17:35REGULATIONS.
THEY HAVE BEEN IN CONTROL FOR
00:17:37ALMOST ALL OF THIS PERIOD.
WE HAVE GONE THROUGH A 20%
00:17:42INCOME TAX CUT AND ALSO A
REDUCTION IN THE TANGIBLE
00:17:45PERSONAL PROPERTY TAX, WHICH I
AGREE WITH.
00:17:46BUT WHAT HASN'T GENERATED FOR US
IN JOBS?
00:17:50I AM SURE THE GOVERNOR WOULD
SAY, LAST MONTH WE WERE THE
00:17:53GREATEST JOB PRODUCERS IN THE
COUNTRY.
00:17:56THAT IS TRUE, BUT THAT IS A
SHORT RUN THING.
00:17:59OVER THE LONG RUN, THE QUESTION
IS, HOW WILL YOU REVITALIZE
00:18:04OHIO'S ECONOMY?
I WOULD ARGUE CUTTING TAXES HAS
00:18:07BEEN TRIED AND HAS NOT WORKED.
>> I WAS A STAFFER WHEN GOVERNOR
00:18:15CASEY WAS IN THE SENATE.
THE UPPER TAX BRACKET WAS 3.5%
00:18:18THEN.
OVER A PERIOD OF TIME, WITH
00:18:21GOVERNOR CELESTE AND GOVERNOR
VOINOVICH, THAT RATE WENT UP TO
00:18:269 1/6%.
OVER TIME, IT HAS BEEN REDUCED
00:18:28AND CONTINUES TO BE REDUCED.
IF WE COULD GET BACK TO 1980
00:18:32NUMBERS, IT WOULD CERTAINLY MAKE
US MORE COMPETITIVE WITH STATES
00:18:36AROUND US.
IN THIS BILL, PROBABLY THE BEST
00:18:39TAX BREAK IS THE TAX BREAK FOR
SMALL BUSINESSES UNDER PASSED
00:18:43THROUGH ENTITIES.
HE NEEDS TO BE APPLAUDED FOR
00:18:45THAT.
THAT IS A SPECTACULAR WAY TO
00:18:47CREATE CAPITAL INVESTMENT IN
THIS STATE.
00:18:49I CANNOT REALLY SAY HERE THAT
THIS IS A 20% INCOME TAX CUT,
00:18:53BECAUSE IT IS NOT.
IT IS 7.5% FOR THE FIRST YEAR,
00:18:58SECOND YEAR, AND IN THE THIRD
YEAR, IF WE STILL HAVE A
00:19:02REPUBLICAN-CONTROLLED GENERAL
ASSEMBLY AND A REPUBLICAN
00:19:05GOVERNOR, ANOTHER 5%.
SO I WANT TO THE BELLY WITH
00:19:09THINGS AS THEY ARE TODAY.
FOR THE FIRST YEAR, 7.5%, WITH A
00:19:145% INCREASE IN SALES TAX ON
SERVICES, REDUCTION IN SALES TAX
00:19:19FROM 5.5% TO 5%.
>> I WANT TO ASK YOU ABOUT THE
00:19:24SPENDING.
SOME CONSERVATIVES SAY THERE IS
00:19:27TOO MUCH SPENDING.
THE AVERAGE SPENDING INCREASES
00:19:31OF THE BUDGETS HAVE BEEN OVER.
>> HAVE YOU GET FROM THE
00:19:41STRUCTURAL IMBALANCE TO THE
PROFIT?
00:19:42I HAVE SPOKEN TO A LOT OF
CONSERVATIVES.
00:19:47THEY ARE CONCERNED.
NOT AS MUCH ABOUT THE EDUCATION
00:19:50FUNDING.
THEY ARE CONCERNED ABOUT ONE
00:19:52ITEM OF INCREASED SPENDING, AND
THAT IS THE MEDICAID EXPANSION.
00:19:56THAT HAS A LOT OF PEOPLE
CONFUSED, A DIFFICULT CONCEPT TO
00:20:01BE ABLE TO WRAP YOUR ARMS
AROUND AND REALLY SEE WHAT THE
00:20:05REALITY IS PIER THAT IS WHAT IS
BOTHERING THEM.
00:20:08THREE MONTHS AGO, WE DID
POLITICAL COMMERCIALS BASHING
00:20:11THE DEMOCRATS FOR OBAMACARE, AND
NOW WE'RE COMING BACK SAYING, WE
00:20:15WILL TAKE THE MONEY.
WE DO NOT WANT OBAMACARE, BUT WE
00:20:19WILL TAKE THE MONEY.
>> THIS IS A CASE WHERE
00:20:23REPUBLICANS HAVE CREATED THEIR
OWN PROBLEM WITH THAT.
00:20:25ANY GOVERNOR WHO IS WORRIED
ABOUT THE STATE -- AGAIN, I DO
00:20:30NOT ALWAYS AGREE WITH GOVERNOR
KASICH, BUT IN THIS CASE HE IS.
00:20:34HE WOULD LEAVE --
>> IS THERE A CHANCE IT WOULD
00:20:40NOT BE THERE IN THE FUTURE?
>> YOU HAVE THAT CHANCE WITH
00:20:44ANYTHING, BUT YOU HAVE THE
COMMITMENT AT LEAST FOR THOSE
00:20:47THREE YEARS.
400,000 PEOPLE WITHOUT INSURANCE
00:20:49THAT WOULD GET IT.
IT HELPS THE STATE BUDGET AND
00:20:52MOVE THIS DATE FORWARD.
I THINK -- EVERYBODY THINKS, YOU
00:20:57ARE JUST DOING THIS TO BE KIND
TO THE POOR, SOME SORT OF
00:21:01SOCIALISM.
THE REAL SUPPORTERS OF THIS ARE
00:21:03THE BIG HOSPITALS, PHYSICIANS,
THE PEOPLE THAT PROVIDE THIS
00:21:06CARE.
IT IS EITHER NOT GETTING PAID
00:21:08FOR OR BEING CHARGING -- BEING
CHARGED TO EVERYONE ELSE.
00:21:12OBAMACARE MAY NOT BE PERFECT,
BUT IT IS AN IMPROVEMENT OVER
00:21:17WHAT WE HAD.
OHIO NEEDS TO TAKE ITS STAND AND
00:21:20SEE IF WE CAN MAKE THIS WORK TO
GET PEOPLE INJURED.
00:21:23>> MY RESOLUTION TO THIS IS TO
TAKE IT OUT OF THE BUDGET AND
00:21:28HAS IT AS A SEPARATE BILL.
BUT THOSE WHO WANT TO VOTE FOR
00:21:31IT, VOTE FOR IT.
>> BUT IT IS SUCH A HUGE PART OF
00:21:35THE BUDGET, HOW DO YOU PULL IT
OUT?
00:21:37>> WE DID THAT WITH MBR'S.
THERE IS NO SUCH THING AS NOT
00:21:44BEING IN COULD DIVIDE THINGS UP.
WE STILL LAUGH WITH THE BUDGET
00:21:48WHEN IT WAS 1200 PAGES.
NOW IT IS 6000 PAGES.
00:21:51THERE IS NO SUCH THING AS A RULE
THAT SAYS YOU CANNOT.
00:21:56I THINK PEOPLE SHOULD BE GIVEN
THE OPPORTUNITY TO VOTE ON THIS
00:21:59AS A SINGLE ISSUE.
IT MIGHT MAKE IT EASIER FOR THE
00:22:02CONSERVATIVES, AND DO YOU REALLY
NEED TO BE AT 130% TO GET THE
00:22:08100%?
MAYBE YOU COULD DROP THE NUMBER
00:22:10DOWN AND PICK UP SOME
REPUBLICANS TO SAY, LET'S GO FOR
00:22:14A SMALLER NUMBER.
NO ONE IN THEIR RIGHT MIND CAN
00:22:17SAY THAT THIS PROGRAM WILL GO ON
FOREVER BECAUSE THE UNITED
00:22:19STATES GOVERNMENT HAS A $16
TRILLION DEFICIT THAT IS GROWING
00:22:23EVERY DAY.
WHEN IT COMES TO CUTTING THE
00:22:25BUDGET, EVERYTHING IS ON THE
TABLE.
00:22:27TO PRETEND THAT WE ARE GOING TO
GET THIS MONEY FOR A LEAST THREE
00:22:30YEARS IS FOOLISH.
WE NEED TO ACCEPT THE FACT THAT
00:22:33WE HAVE A LOT OF PEOPLE WHO ARE
UNINSURED.
00:22:35WE HAVE A LOT OF PEOPLE WHO NEED
TO BE TAKEN CARE OF, AND WE
00:22:39OUGHT TO FIND A WAY TO TAKE CARE
OF THEM.
00:22:40>> ANOTHER THING THAT PEOPLE
HAVE ARGUED ABOUT IS THE SCHOOL
00:22:45FUNDING FORMULA.
I WONDER ABOUT YOUR THOUGHTS
00:22:48ABOUT THE SCHOOL FUNDING
FORMULA.
00:22:50NOBODY IS GETTING LESS
APPARENTLY, BUT YOU HAVE SOME
00:22:53DISTRICTS GETTING HUGE
INCREASES, INCLUDING NEW ALBANY
00:22:57PLANE THE LOCAL, HIGH WEALTH
DISTRICTS.
00:23:01>> WHAT THE GOVERNOR SAID HE
WANTED TO DO, BEFORE THE
00:23:06PRINTOUTS -- THE PRINCIPLES THAT
HE SET OUT ARE ABSOLUTELY
00:23:12APPROPRIATE.
HE WANTED THE STATES TO EVEN THE
00:23:17DIFFERENCE BETWEEN THE TRACKS.
THE MATTER WHERE THEY ARE BORN,
00:23:21EVERYONE HAS AN EQUAL CHANCE TO
SUCCEED AND EXCEL.
00:23:23I DO NOT THINK ANYBODY COULD
DISAGREE WITH THAT.
00:23:26THE CHALLENGE HAS ALWAYS BEEN,
FOR ANY GOVERNOR, WHEN YOU WORK
00:23:32THAT THROUGH A FORMULA AND YOU
HAVE 600-SOME GERRYMANDERED
00:23:36SCHOOL DISTRICTS, THE MATTER
WHAT YOU DO, IT COMES OUT FUNNY.
00:23:39IT WAS INTERESTING, THE
GOVERNOR'S PEOPLE WERE RELUCTANT
00:23:42TO RELEASE THOSE PRINTOUTS.
AT FIRST THEY SAID THEY DID NOT
00:23:45HAVE THEM.
NOW WE SEE WHY.
00:23:49IT IS NOT THAT THEY WERE TRIED
TO DO SOMETHING EVIL OR BAD, IT
00:23:52IS JUST THE WAY THAT THE NUMBERS
RIPPLE THROUGH.
00:23:55THEY HAVE NOT MADE ANY CHANGES
IN FIVE YEARS, SO NOW THEY HAVE
00:24:00ALL THESE THINGS IN.
ON THE SURFACE, SCURRY RESULTS.
00:24:04I LIVE IN UPPER ARLINGTON, A
WEALTHY DISTRICT, BUT NEW ALBANY
00:24:10-- I SUSPECT A BIG PART OF THAT
IS ENROLLMENT.
00:24:14>> WHEN THEY SAY THEY HAVE NOT
MADE CHANGES IN FIVE YEARS, THAT
00:24:21IS NOT ACCURATE.
THE ONE THING THAT IS
00:24:23INTERESTING FOR BOTH BILL AND I
-- BILL WAS HERE A FEW YEARS
00:24:26BEFORE ME.
IN MY 33 YEARS, WE PROBABLY
00:24:30CHANGE THE FORMULA SIX OR SEVEN
TIMES.
00:24:33I WOULD LIKE TO HAVE A FORMULA
WORKED FOR 13 YEARS, ONE TIME.
00:24:36I APPLAUD HIM FOR DOING THIS.
EVERYTHING THAT HAPPENED THERE
00:24:43HAS TO BE DONE, BUT WE ALSO HAVE
TO ACCEPT THE FACT THAT TO GET
00:24:47IT BACK TO EQUAL STATUS, SO THAT
EVERYONE IS TREATED THE SAME,
00:24:52SOMEBODY IS GOING TO HAVE TO BE
DISPLEASED IN THE SHORT TERM.
00:24:54>> TOO LOW, TOO HIGH?
>> I SUPPORT WHAT THE GOVERNOR
00:25:01IS TRYING TO DO.
>> IS A BIG ENOUGH?
00:25:03>> YOU COULD ARGUE FOR MORE BUT
IT WOULD BE POLITICALLY ARE TO
00:25:09GET THAT THROUGH.
YOU CAN TRY.
00:25:10GIVEN WE HAVE A REPUBLICAN
HOUSE, SENATE, AND GOVERNOR, YOU
00:25:14WILL NOT GET MUCH, BUT AT LEAST
YOU CAN HOPEFULLY GET THAT.
00:25:17>> THANK YOU BOTH FOR BEING
HERE.
00:25:20>> AND THAT'S IT FOR THIS WEEK.
FOR MY COLLEAGUES AT OHIO PUBLIC
00:25:23RADIO AND TELEVISION, THANKS FOR
WATCHING.
00:25:24IF YOU'D LIKE TO ASK QUESTIONS,
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00:25:28WEEK'S SHOW OR EARLIER EPISODES,
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00:25:30STATENEWS.ORG.
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00:25:32FACEBOOK.
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00:25:35TIME FOR "THE STATE OF OHIO".
Note : Transcripts are compiled from uncorrected captions