Tags: surplus | ohio | budget | kasich

Ohio Budget Surplus Could Lower Taxes

By    |   Wednesday, 08 August 2012 11:31 AM

Ohio GOP Gov. John Kasich’s administration’s new budget projections paint a much rosier fiscal outlook for the state as he works toward cutting personal income taxes. Kasich’s administration says the state has more money thanks to higher than expected tax receipts and lower spending.
This means Ohio will finish fiscal year with a $552 million surplus, reports the Cleveland Plain Dealer. The surplus is about $408 million more than originally expected.
The projection doesn’t include another $500 million the administration hopes to collect this year under a Kasich plan to lease certain state liquor sales to the JobsOhio private economic development agency.
Democrats, though, claim the surplus came on the heels of spending cuts to local governments and schools that have forced many communities to seek tax levies. In addition, the liquor sales deal is in litigation after government watch groups argued it’s unconstitutional to support a private entity with state dollars.
State Budget Director Tim Keen refused comment about Kasich’s plans for the surplus, but said the budget means the state has flexibility.
Ohio officials are working on the next two-year budget, which Kasich will announce early next year. He has also proposed taxing oil and gas drilling operations further to use the new tax revenue to help further cut the personal income tax.
However, the GOP-controlled legislature opposes the plan, but with the budget surplus, Kasich may still have enough resources for his tax cut, even without the gas drilling tax.
Democratic State Sen. Joe Schiavoni says if the surplus holds, the funds should be used to help Ohio’s struggling families and for investing in schools, not for a tax cut. But Kasich calls for local governments and schools to live within their budgets and not to expect additional state support.
The revised budget projects don’t take into account a $482 million rainy day fund. The Kasich administration has built that fund up from only 89 cents, the amount held when he took office in January 2011.

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