The budget bill currently working through the Republican-controlled Ohio legislature would cut taxes in a way that disproportionately favors the wealthy, according to a new analysis from Policy Matters Ohio, a left-leaning policy group.
The budget bill, which was passed the Republican-controlled Ohio House with a 61-35 vote on April 18, would cut state income taxes for all Ohioans by 7 percent. Policy Matters analyzed the result for each tax bracket: For the top 1 percent, the tax plan would cut $2,717 in taxes on average. For the middle 20 percent, it would amount to a $51 cut on average. For the bottom 20 percent, it would result in $3 on average.
The report explains the disproportionate gains are caused by the structure behind Ohio’s tax system: “Ohio has a graduated income tax, so people pay more on higher levels of earnings. Because of that, across-the-board tax cuts give much more money to the wealthiest Ohioans. This reinforces inequality and adds to the unfairness of the state and local tax system, which is weighted in favor of upper-income taxpayers when all state and local taxes are taken into account.”
Zach Schiller, research director at Policy Matters, says the Ohio House tax plan will also have little impact on Ohio’s economy.
“Since the 21-percent reduction in state income taxes approved in 2005, Ohio’s economy has underperformed the nation,” Schiller said in a statement. “There is little reason to believe that another round of income-tax cuts will produce a different result.”
Michael Dittoe, spokesperson for Speaker of the House William Batchelder and Ohio House Republicans, wrote in an email to CityBeat that there are still two months for the state government to finalize the details of the tax plan as it works through the Ohio legislature.
The budget bill still has to be approved by the Republican-controlled Ohio Senate. If changes are made to the Ohio House proposal, the Ohio Senate bill would have to be concurred by the Ohio House. It would then need to be signed by Republican Gov. John Kasich, who could line-item veto certain parts of the bill or veto the entire bill.
“It’s disappointing to see that Policy Matters Ohio would begrudge an income tax cut which will benefit all Ohioans,” Dittoe wrote in the email. “Of the seven citations in their report, ironically, five of them refer back to previous ‘studies’ issued by none other than Policy Matters Ohio. Before issuing a study of this magnitude, it may be wise for them to cite something other than themselves to make the report more credible.”
Policy Matter’s findings were gathered through the independent Institute on Taxation and Economic Policy, which plugs the numbers into its own model to gauge the impact of tax cuts on different income levels.
The resulting numbers do little to deflate concerns raised by Policy Matters about Kasich’s tax proposal, which was a much larger 20-percent across-the-board income tax cut. Policy Matters found Kasich’s tax plan also favored the wealthy, except the overall plan actually raised taxes on the state’s poorest because it included an expansion of the sales tax that the Ohio House rejected (“Smoke and Mirrors,” issue of Feb. 20).
Today is Tax Day, which means income tax returns have to be filed by midnight. If you’re in a rush, there are a variety of online tax filing services out there, particularly for state and federal taxes. Cincinnati’s e-filing service can be found here.
Cincinnati is outlining the time frame for police, firefighter and other layoffs that the city says it must undertake to balance the budget. The layoffs are currently set for June 9, with layoff letters going out by then. The city administration says the layoffs are necessary because the city’s plan to lease its parking assets has been held up in court and a referendum effort, eliminating the use of parking funds to help balance the budget in time for fiscal year 2014. Opponents say there are alternatives, but Mayor Mark Mallory and the city’s budget gurus recently criticized the suggestions as misleading and unworkable.
Ohio House Republicans are once again attempting to defund Planned Parenthood in their latest budget plan, but this time they are also throwing in support for crisis pregnancy centers, which tout abstinence-only education, in a separate part of their budget proposal. The moves have sparked criticism from pro-choice groups around the state that say Republicans are trying to push their morality on women, while anti-abortion groups have praised the budget for enforcing family values and what they claim are more women’s health options.
The Medicaid expansion is uniting Gov. John Kasich, Ohio Democrats, mental health advocates and other health experts against the Ohio House Republicans’ budget proposal, which rejects the expansion. Supporters of the expansion point to studies that say the expansion will save the state money, insure nearly half a million Ohioans and help the state’s neediest, but Ohio Republicans say they’re concerned the federal funding backing the expansion will dry up at some point, even though there’s no historical precedent of the federal government failing to meet its Medicaid commitments.
State officials are moving to reform Ohio’s foster care system after several deaths were linked to poor oversight and regulations. The Foster Care Advisory Group sent out its suggestions last week, which include removing some rules to “normalize” foster children’s childhoods and eliminating county-by-county funding inequality.
Internet sweepstakes cafes have been closed in California and Florida — a move state officials are looking to replicate in Ohio.
Ohio gas prices are low this week.
A new state license plate design is now available.
A new strand of the bird flu is here, and it’s already killed 11 people in China.
Scientists have reconstructed the ancestor that came between the human and chimp.
As part of an effort supporting a state earned income tax credit (EITC), Policy Matters Ohio unveiled an interactive map today that shows the potential benefits to taxpayers in different counties.
For Hamilton County, about 19 percent of tax-filing households would qualify for the program. A 10-percent EITC would return about $15.6 million to households in Hamilton County, or about $225 on average for each qualifying filer. A 20-percent EITC would return about $31.2 million to Hamilton County, with each qualifying filer getting about $451 on average.
EITC is a tax credit that goes to working families, typically favoring low- and middle-income earners with children. It is already used by the federal government and several states to progressively reward employment.
Since then, Ohio House Republicans have rejected most of Kasich's tax proposals, instead downsizing the plan to a 7-percent across-the-board tax cut with no sales tax expansion.
Here is the interactive map, courtesy of Policy Matters:
Even as it faces budget cuts, the Hamilton County Sheriff’s office says it wants more staff to keep up with higher jail populations — especially in light of a new measure that will keep more people detained until they appear in court. The measure is in response to some people never showing up to court after being released from jail. Staff are crediting the feasibility of the measure to Hamilton County Sheriff Jim Neil encouraging them to think “outside the box.” Still, Hamilton County Board of Commissioners President Chris Monzel says the cost of the program might require Neil to think “inside the box.”
The Ohio Tax Credit Authority is giving tax breaks to 13 businesses around the state in hopes of creating 1,417 jobs and spurring $83 million in investment. Seven of the projects are in the Hamilton, Butler and Clinton counties, with one in Cincinnati.
The Ohio House easily passed a bill that would effectively shut down Internet sweepstakes cafes, but the Ohio Senate is including the measure in a more comprehensive gambling bill. Senate President Keith Faber says there are a lot of issues related to gambling in Ohio, and the cafes are just one part of the problem.Ohio Sen. Rob Portman is one of many being targeted by New York City Mayor Michael Bloomberg’s pro-gun control ad campaign. Bloomberg is a leader in supporting more restrictive gun measures, and he’s planning on airing the ads in 13 states during the ongoing congressional spring break to push for stricter background checks and other new rules.
Ohio failed to show improvement in the latest infrastructure report card from the American Society of Civil Engineers (ASCE). In both 2009 and 2013, Ohio got a C- for its infrastructure, which translates to 2,462 structurally deficient bridges and puts about 42 percent of roadways as “poor” or “mediocre” quality. But the report might not be as bad as it sounds. The Washington Post’s Brad Plumer argues that the ASCE is notoriously too harsh.
Duke Energy rolled out a new logo yesterday.
A former Miami University student is facing charges for allegedly changing his grades.
More options aren’t always a good thing, according to some science. A new study found more choices can lead to bad, risky decisions.
Policy Matters Ohio is now pushing an earned income tax credit (EITC) that would benefit the state’s poor and middle class, including more than 822,000 working families. The plan could be a progressive replacement for Republican Gov. John Kasich’s proposed tax plan, which some reports claim disproportionately benefits the wealthy.
The EITC is a tax credit targeted at working people who have low to moderate income, particularly those with children. It is currently used by the federal government, 24 states and Washington, D.C.
The report from Policy Matters, a left-leaning policy research group, found a 10-percent EITC would cost about $184 million per year, producing an estimated $224 million in economic benefits, and a 20-percent EITC would cost about $367 million per year, producing an estimated $446 million in economic benefits.
If state legislators set aside Gov. John Kasich’s tax proposals, the state would be left with about $280.4 million in general revenue available for fiscal year 2014 and about $690.2 million available in fiscal year 2015, according to an analysis of Kasich’s budget bluebook. That would be more than enough money in fiscal year 2014 to pay for a 10-percent EITC, and even a 20-percent EITC would only eat up about half of available funds in fiscal year 2015.
Using a model from the nonpartisan Institute for Tax and Economic Policy, the Policy Matters report found a state EITC would benefit Ohioans making less than $51,000 per year. Under a 10-percent credit, qualifying families making less than $18,000 would get $190 on average, qualifying families making between $18,000 and $33,000 would get $323 on average and qualifying families making between $33,000 and $51,000 would get $149 on average, according to the report.
Under a 20-percent credit, benefits would be bumped up to $381 on average for qualifying families making less than $18,000 per year, $646 on average for qualifying families making between $18,000 and $33,000 and $298 for qualifying families making between $33,000 and $51,000, according to the report.
These benefits would then be spent in a way that helps families, local communities and small businesses, according to the Policy Matters report: “Families that claim the EITC use the refunds to pay for basic needs like housing, food, transportation and child care. These purchases stimulate local economies. A number of studies focusing on the economic impacts of the EITC find that small businesses and other taxes benefit from a cash infusion into the local economy.”
The report claims a state EITC would also result in a fairer tax system that better helps the state’s low- and middle-income earners, stronger incentives to work and better social and economic results for EITC recipients.
The Policy Matters report touts the federal EITC, which was created by former President Gerald Ford in 1975 and has been expanded by every presidential administration since, to support adopting a similar policy in the state: “The federal Earned Income Tax Credit does more than any other program to keep working families out of poverty. … (It) is lauded for its direct impact in keeping families with children above the poverty line, making work pay, and sending federal dollars to local communities.”
Anyone making $50,270 a year or less qualifies for the federal EITC. The tax credit is built so it particularly benefits families with children, and it “encourages families making at or near minimum wage to work more hours since the credit has a longer, more gradual phase-out range compared to other programs,” according to the Policy Matters report.
The report says the federal EITC has already benefited more than 950,000 Ohio families with an average refund of $2,238.
In previous analyses, Policy Matters found Kasich’s tax proposals disproportionately benefit the wealthy and actually raise taxes on the state’s poor and middle class (“Smoke and Mirrors,” issue of Feb. 20). But Kasich says his tax plan will cut taxes for “job creators,” particularly the state’s small businesses.
The governor’s tax proposals are facing bipartisan resistance, and the Republican-controlled Ohio House is currently considering setting the proposals aside while the rest of the budget is worked out, according to Gongwer.
In a press conference on March 14, local officials around the state, including Councilman P.G. Sittenfeld, suggested dropping income tax cuts and instead using the revenue to restore local government funding cuts, which have totaled $1.4 billion since Kasich took office.
Cincinnati’s plan to lease parking assets to the Port of Greater Cincinnati Development Authority remains on hold as a lawsuit arguing the law should be subject to referendum works through the Hamilton County Common Pleas Court. The legal dispute is focused on City Council’s use of the emergency clause, which eliminates a 30-day waiting period on implementing laws and takes away the possibility of a referendum. Emergency clauses are routinely deployed in City Council, but opponents of the parking plan say that doesn’t make them right.
Whether the parking deal does go through or not, the Tower Place Mall renovations will be carried out. The city originally included the renovations as part of the plan, but Meg Olberding, city spokesperson, told The Cincinnati Enquirer that the city is planning on selling the the property to a subsidiary of JDL Warm Construction for an undisclosed sum, and the company will then pay an estimated $5 million for the redevelopment.
Gov. John Kasich’s plan to expand the sales tax to fund tax cuts is being heavily criticized by some members of the business community, but Rep. Ron Amstutz, chairman of the Ohio House Finance & Appropriations Committee, says he is looking into ways to save the proposal. Kasich’s plan would expand the application of the sales tax to include more services, including cable TV and admission to sport events, but it would lower the sales tax rate from 5.5 percent to 5 percent and carry out 20-percent across-the-board income tax cuts. CityBeat wrote about Kasich’s budget proposal in further detail here.
As part of Kasich’s education plans, the state’s school voucher program is expanding to help students meet a Third Grade Reading Guarantee, which requires third-graders pass a test in reading proficiency before they can move onto fourth grade. Supporters argue the voucher program provides more choice and control for parents, but opponents say the state should not be paying for private educations. A previous Policy Matters Ohio report found expanded school choice through more vouchers can have negative effects on education, including worse results for students and teachers.
State Auditor Dave Yost is pushing for a full audit of JobsOhio, the publicly funded private, nonprofit agency, but Republican state legislators are joining Kasich in opposition. The opposing Republicans say the state auditor can track any public funds used for JobsOhio, but they say the agency is allowed to keep its private funds under wraps. Kasich says he plans to replace the Ohio Department of Development, which can be fully audited by the state auditor at any time, with JobsOhio.
The Ohio Department of Education apparently knew or should have known of ongoing data scrubbing in schools as early as 2008, according to The Toledo Blade. Emails acquired by The Blade show officials analyzed and discussed data reports that year after media reports detailed how urban districts excluded thousands of test scores on state report cards.
Supporters of the Anna Louise Inn gathered Friday in celebration of International Women’s Day and to stand against Western & Southern’s repeated efforts to run the Inn out of the neighborhood.
The U.S. Census Bureau says Cincinnati commutes are much shorter than the national average, with only 2.9 percent of Cincinnatians spending more than 60 minutes one-way during their commute, as compared to the 8.1 percent national average.
The Cincinnati Enquirer unveiled its new tabloid format today. Ben Kaufman says it looks nice and arrived on time.
The Killers are coming to the Horseshoe Casino.
A new study says results from fMRI scans are unintentionally distorted and inaccurate — to the point that some studies on the human brain that use fMRI results may be seriously questionable.
A YouTube video that went viral over the weekend may have broken the rosy illusions the average American has about wealth and income inequality.
Using data from Mother Jones,
Dan Ariely, ThinkProgress and CNN, the video compares the average American’s ideal distribution of wealth, what the average American says wealth inequality looks like and how wealth is distributed in reality — ultimately showing that the average American says the nation is much more equal than it really is.
The video suggests investment income as one of the drivers of inequality. The top 1 percent wealthiest Americans hold 50 percent of the nation’s stocks, bonds and mutual funds, while the bottom 50 percent of Americans only hold 0.5 percent of such investments, according to the video.
“The average worker needs to work more than a month to earn what the CEO makes in one hour,” the narrator says.
In the past, the United States was a lot closer to equality. As the video points out, the top 1 percent only took home 9 percent of the nation’s income in 1976. Today, that number is up to 24 percent.
Ohio isn’t immune to the trend. A previous report from the left-leaning Center on Budget and Policy Priorities found Ohio’s income gap — the income difference between the rich and poor — is wide and growing, and low-income and middle-income Ohioans have actually seen their incomes drop since the 1990s.
The video doesn’t make any suggestions on how to fix the problem — it simply shows massive inequality exists — but there are plenty of ideas out there. A paper from the Congressional Research Service suggested the tax system may be playing a role in driving up income and wealth inequality: “However, the top tax rate reductions appear to be correlated with the increasing concentration of income at the top of the income distribution. … The statistical analysis in this report suggests that tax policy could be related to how the economic pie is sliced — lower top tax rates may be associated with greater income disparities.”
In December, The Washington Post posted 10 empirically supported ideas, which included funding preschool education, making unions easier to join and promoting trade in highly skilled professions.
In his 2013 State of the Union, President Barack Obama suggested raising the federal minimum wage to help combat poverty and income inequality — a policy that economist Lawrence Mishel of the Economic Policy Institute recently advocated.
Here is the full video:
While fact checking an interview, CityBeat discovered it will be possible to circumvent the parking plan’s cap on meter rate increases through a multilayer process that involves approval from a special committee, the city manager and the Port of Greater Cincinnati Development Authority. The process adds a potential loophole to one of the city manager’s main defenses against fears of skyrocketing rates, but Meg Olberding, city spokesperson, says raising the cap requires overcoming an extensive series of hurdles: unanimous approval from a board with four members appointed by the Port Authority and one selected by the city manager, affirmation from the city manager and a final nod from the Port Authority. Olberding says the process is necessary in case anything changes during the 30-year time span of the parking deal, which CityBeat covered in detail here.
Democratic mayoral candidate John Cranley launched DontSellCincinnati.org to prevent the city manager’s parking plan, which semi-privatizes the city’s parking assets. The website claims the plan gives for-profit investment companies power over enforcement, guarantees 3-percent rate increases every year and blows through all the money raised in two years. The plan does task a private company with enforcement, but it will be handled by Xerox, not a financial firm, and must follow standards set in the company’s agreement with the Port Authority. While the plan does allow 3-percent rate increases each year, Olberding says the Port Authority will have the power to refuse an increase — meaning it’s not a guarantee.
Arnol Elam, the Franklin City Schools superintendent who sent an angry letter to Gov. John Kasich over his budget plan, is no longer being investigated for misusing county resources after he paid $539 in restitution. CityBeat covered Elam’s letter, which told parents and staff about regressive funding in Kasich’s school funding proposal, and other parts of the governor’s budget in an in-depth cover story.
To the surprise of no one, Ohio’s oil lobby is still against Kasich’s tax plan, which raises a 4 percent severance tax on oil and wet gas from high-producing fracking wells and a 1 percent tax on dry gas.
Local faith leaders from a diversity of religious backgrounds held a press conference yesterday to endorse the Freedom to Marry and Religious Freedom Amendment, an amendment from FreedomOhio that would legalize same-sex marriage in the state. Pastor Mike Underhill of the Nexus United Church of Christ (UCC) in Butler County, Rabbi Miriam Terlinchamp of Temple Sholom, Pamela Taylor of Muslims for Progressive Values and Mike Moroski, who recently lost his job as assistant principal at Purcell Marian High School for standing up for LGBT rights all attended the event. CityBeat covered the amendment and its potential hurdles for getting on the 2013 ballot here.
Vanessa White, a member of the Cincinnati Public Schools board, is running for City Council. White is finishing her first four-year term at the board after winning the seat handily in 2009. She has said she wants to stop the streetcar project, but she wants to increase collaboration between the city and schools and create jobs for younger people.
The Ohio Bureau of Motor Vehicles’ (BMV) policy on providing driver’s licenses to the children of illegal immigrants remains unclear. Since CityBeat broke the story on the BMV policy, the agency has shifted from internally pushing against driver’s licenses for Deferred Action for Childhood Arrivals (DACA) recipients to officially “reviewing guidance from the federal government as it applies to Ohio law.” DACA is an executive order from President Barack Obama that allows the children of illegal immigrants to qualify for permits that enable them to remain in the United States without fear of prosecution.
A survey from the Ohio-Kentucky-Indiana Regional Council of Governments found locals are generally satisfied with roads, housing and issues that affect them everyday. The survey included 2,500 people and questions about energy efficiency, infrastructure, public health, schools and other issues.
Ohio Attorney General Mike DeWine revealed 7,000 Ohioans have received more than $280 million in consumer relief as part of the National Mortgage Settlement announced one year ago. The $25 billion settlement between the federal government and major banks punishes reckless financial institutions and provides relief to homeowners in the aftermath of the 2008 financial crisis.
Ohio received a $3 million federal grant to continue improving the state’s health care payments and delivery programs.
Cincinnati home sales reached a six-year high after a 27-percent jump in January.
CityBeat’s Hannah “McAttack” McCartney interviewed yours truly for the first post of her Q&A-based blog, Cinfolk.
Crows have a sense of fairness, a new study found.
A new report found “renters by choice” — those who can afford to own a house but choose not to — and people returning to the market in the Great Recession’s aftermath may be driving a rush to rent in Cincinnati, reports The Cincinnati Enquirer. The report from CB Richard Ellis found the average apartment occupancy rate was 93.6 percent in 2012, underscoring the need for new apartments in Downtown and Over-the-Rhine. News of the report came just one day after City Manager Milton Dohoney Jr. announced his parking plan, which will add 300 luxury apartments to Downtown.
Gov. John Kasich and Ohio legislators are getting some bad feedback on the governor’s plan to broaden the sales tax, reports Gongwer. Numbers from Policy Matters Ohio found the sales tax plan would outweigh sales and income tax cuts for the lower classes, but won’t be enough to dent tax savings for the wealthiest Ohioans. CityBeat covered Kasich’s budget in detail here.
Not much new information came from a special City Council meeting last night that covered Cincinnati’s public retirement system, reports WVXU. The one piece of new information was that preliminary numbers show Cincinnati's Retirement System had an 11.9 percent return on its investments in 2012 — higher than the 7.5 percent that was originally projected.
Mayor Mark Mallory is using his plan to lower Cincinnati’s infant mortality rate to try to win the Bloomberg Philanthropies’ Mayors Challenge. Mallory’s proposal would create an Infant Vitality Surveillance Network, which allows pregnant women to enroll in First Steps, a care program that maintains a secure database of new mothers and monitors pregnancies, according to a press release from the mayor’s office. The program could be especially helpful in Cincinnati, which has a higher infant mortality rate than the national average. The Bloomberg challenge pits mayors around the country against each other to win $5 million or one of four $1 million prizes for their programs aimed at solving urban problems and improving city life. With Mallory’s program, Cincinnati is one of 20 finalists in the competition. Fans can vote on their favorite program at The Huffington Post.
A local nun may have committed voter fraud, reports WCPO. Rose Marie Hewitt, the nun in question, died Oct. 4, but the Hamilton County Board of Elections still received a ballot from her after she died. Hewitt apparently filed for an absentee ballot on Sept. 11 — less than one month before she died. In a letter to Board of Elections director Tim Burke, Hamilton County Prosecutor Joe Deters wrote there’s enough probable cause to believe criminal activity occurred.
In 2012, 88,068 new entities filed to do
business in the state — making the year the best ever for new state filings, according to Secretary of State Jon Husted.
A new bill in the Ohio legislature that allows poll workers to help blind, disabled and illiterate voters file their ballots is getting widespread support, but another bill that makes it more difficult to get issues on the ballot is getting a stern look from Democrats, reports Gongwer.
Think your landlord is bad? An Ohio landlord allegedly whipped a late-paying tenant, reports The Associated Press.
The University of Cincinnati surpassed its $1 billion fundraising goal for the Proudly Cincinnati campaign, reports the Business Courier.
President Barack Obama is coming back to Ohio to give the commencement speech at Ohio State University, reports the Business Courier.
Donald Trump is threatening Macy’s protesters with a lawsuit because they want the Cincinnati-based retailer to cut ties with Trump, who is currently contracted as a spokesperson, reports the Business Courier.
Popular Science has seven reasons coffee is good for you.