Gov. John Kasich released his 2014-2015 budget plan today, and it has a few surprises — some pleasant, some not — for progressives. Despite his vocal opposition to Obamacare, Kasich will be taking up the federal law’s incentive to expand Medicaid, the health care program for low-income families. But instead of taking back past cuts to social services, education and local governments, the governor is pushing ahead with income and sales tax cuts. The Medicaid expansion would add more Ohioans to the state-federal health care program by raising the eligibility threshold to 138 percent of the federal poverty level, up from 90 percent. The budget summary claims the expansion makes financial sense for the state as long as the federal government picks up most of the tab. As part of Obamacare, the federal government takes all the costs for newly insured Medicaid recipients for the first three years. After that, the federal government’s share is brought down to 95 percent and ultimately phased down to 90 percent. If the federal government reneges on its promise to pay for the bulk of the share, Kasich’s budget has a trigger to wind down the Medicaid expansion. The budget also proposes income and sales tax cuts, which would come with some trade-offs. The state income tax would be brought down by 20 percent across the board, and the sales tax would be cut from 5.5 percent to 5 percent. To balance the cuts, Kasich has proposed broadening the sales tax to include other “economic activity,” while keeping exemptions for education, health care, rent and residential utilities. In another slew of tax changes, Kasich’s plan proposes revamping the oil and gas severance tax. It would eliminate the tax for “small, conventional natural gas producers,” but imposes a 4 percent tax for bigger oil and gas producers. In the past, liberals have voiced opposition to tax cuts — instead favoring investments elsewhere. Policy Matters Ohio released its own budget proposals Jan. 31, which emphasized “education, health care and human services.” The plan would also increase the income tax for top earners. City Council Member P.G. Sittenfeld released a statement criticizing Kasich’s budget for not using the extra revenue to scale back local government and education cuts enacted in the 2012-2013 budget: “At a time when local governments around the state are being forced to slash basic services, lay off safety personnel, raise taxes, and sell off assets just to stay afloat, it's out of touch for Gov. Kasich not to reverse his raid on our local government fund. We don’t pay taxes to pad the governor’s soundbites, we pay them to maintain our roads and keep cops on the street. This should not be a partisan issue. It's simply illogical governance to make the state look good while in the process hurting Ohio's cities.” The budget proposal also includes Kasich’s Ohio Turnpike plan and education reform plan.

Between October and December, the U.S. economy unexpectedly shrank by 0.1 percent — the first contraction since 2009. The downturn was primarily caused by the threat of conservative fiscal policies, particularly defense spending cuts. Dropping business inventories also helped drag down the economy. Otherwise, consumer and business spending was actually strong. Some Republicans want another go at reducing voting rights. Rep. Mike Dovilla, chairman of the newly created House Policy & Legislative Oversight Committee, says he wants to consider measures that crack down on alleged voter fraud, including reduced voting times and a photo ID requirement to vote. But in-person voter fraud is not a real problem. News21, a Carnegie-Knight investigative reporting project, found only 10 cases of in-person voting fraud in the United States between 2000 and 2012. That’s not even one case of in-person fraud each year. The real reason Republicans want to enact stricter voting measures is to hinder young, minority voters that typically support Democrats. One study found 700,000 young, minority voters were excluded by photo ID laws in 2012. A Policy Matters Ohio report found Ohio’s income tax hits the poor and middle class a lot harder than the wealthy. The numbers from the report: “The top 1 percent of non-elderly Ohio families by income, who earned at least $324,000 in 2010, on average pay 8.1 percent of their income in state and local income, property, sales and excise taxes. By contrast, the lowest fifth, who make less than $17,000, on average pay 11.6 percent. Families in the middle fifth of the income spectrum, who make between $31,000 and $49,000, on average pay 10.6 percent.” Cincinnati is extending its contract with Southwest Ohio Regional Transit Authority (SORTA) for a month despite an ongoing conflict, but the supposed conflict is really much ado about nothing. SORTA wants the city to guarantee it won’t use the transit fund for the streetcar, but City Council has already passed a resolution saying it won’t and Mayor Mark Mallory has repeatedly stated he will not use the transit fund for the streetcar. Due to the mayor’s race, the streetcar will be facing another contentious year at the ballot box, which CityBeat covered in-depth here. More than 60 percent of Greater Cincinnati entrepreneurs are expecting a net profit in 2013. Most of them also expect to hire part-time employees, according to a new survey from the Entrepreneurs’ Organization. The survey is another sign of rising confidence in the U.S. economy.The Dayton Daily News reports manufacturing is driving economic growth in Ohio, to the benefit of more than half of the state’s counties. When defending Ohio's charter school and voucher programs, conservatives often tout the magic of “school choice,” but a Policy Matters report found school choice may hurt education standards in the state. Ed FitzGerald, a popular Democrat from Cuyahoga County, is gearing up to run for the governor's race in 2014. Scientists have taught bacteria to eat electricity. The trick could eventually be used to turn microorganisms into a biofuel source.

School superintendents will hear about Gov. John Kasich’s school funding proposal Thursday. The proposal, which will change how all of Ohio’s schools are publicly funded, will be released to the wider public Feb. 4. Many school officials are bracing for the worst, according to Cleveland’s The Plain Dealer. Rob Nichols previously told CityBeat that the proposal is “a big undertaking”: “Many governors have tried before. Many states have been sued over their formulas. It’s something we have to take our time with and get it done right.” Ohio’s largest prison staff union is asking Kasich’s administration to increase the amount of prison security officers following a late December report from the Ohio Department of Rehabilitation and Correction. The report found a correlation between rising prison violence and a decrease in prison security staff, affirming a position the Ohio Civil Service Employees Association has held for years. A Journal News report found substance abuse comes at a heavy loss for Ohio employers, including more workplace injuries, higher medical costs, more absenteeism and reduced productivity. Some experts advocate for drug testing to lower the costs, while others argue drug testing can often affect innocent, responsible drug users. Employers are much more likely to test for marijuana over alcohol, even though multiple studies show cannabis is less addictive and harmful. The flu epidemic may be leveling off in Ohio. The state health department revealed the amount of hospitalizations involving the flu have plateaued, but the department cautions the calm could be temporary. The women’s sections of county and regional jails are facing higher levels of overcrowding. The overcrowding is a result of a 2011 law that enables fourth- and fifth-degree felons to be held at county jails instead of state prisons. A new online tool reveals the salaries of public school teachers and staff. The extensive audit of Ohio schools and their attendance information will be released Feb. 11. The preliminary reports found Cincinnati Public Schools were clean. The investigation into attendance fraud began when Lockland schools in Hamilton County were caught falsifying attendance data. A new poll found an overwhelming majority of Kentucky parents favor raising the school dropout age to 18, up from the current age of 16. Ohio gas prices are still rising. Researchers made super-realistic lung tissue with levitating cells. The development allows researchers to better study how toxins affect the lungs.

Ohio State Board of Education President Debe Terhar posted an image of Adolf Hitler on Facebook that said, “Never forget what this tyrant said: ‘To conquer a nation, first disarm its citizens.’ — Adolf Hitler.” But the Cincinnati Republican, who was referencing President Barack Obama’s gun control proposals, now insists she was not comparing Obama to Hitler. It’s pretty obvious she was, though. Cincinnati’s seasonally unadjusted unemployment rate dropped to 6.7 percent in December, down from 6.9 percent in November. The drop is largely attributed to a decrease in the civilian labor force, which could imply less people are looking for work or seasonal changes are having an impact. Whatever the case, the amount of people who are employed and unemployed both dropped. Hamilton County’s seasonally unadjusted unemployment rate dropped to 6.2 percent in December, down from 6.4 percent in November, but that drop was also attributed to a declining labor force or seasonal factors. Greater Cincinnati’s seasonally unadjusted unemployment rate was unchanged from 6.4 percent, despite 2,600 less people working. In comparison, Ohio’s seasonally unadjusted rate was 6.6 percent in December, up from 6.5 percent in November, and the U.S. rate was 7.6 percent, up from 7.4 percent. U.S. Sen. Rob Portman, an Ohio Republican, suggested the Dollar-for-Dollar Deficit Reduction Act. The plan requires debt ceiling increases to be matched by an equal amount of spending cuts. Increasing the debt ceiling is essentially Congress agreeing to pay its bills. During the budget process and while passing other legislation, Congress agrees to a certain amount of spending. Increasing the debt ceiling just makes it possible for the president to pay those bills, even if it means surpassing a set debt level. If the debt ceiling isn't raised by May 18, the United States will default on its debts, plunging the country into depression. But the threat of destroying the U.S. economy has not stopped Republicans from using the debt ceiling as a negotiation tool to get the spending cuts they so badly want. Public employees are avoiding changes to Ohio’s public pension system by retiring before the changes kick in. The changes make it so any teacher who retires before July 1 will get a 2 percent cost of living increase to their pensions in 2015. Anyone who retires after July 1 will not get the increase until 2018. After that, retirees will get a pension increase every five years. Experts are also expecting a rush of retirees in 2015, when age and years-of-service requirements for full benefits are set to gradually rise. A new report found Ohio’s graduation rate is still improving. The U.S. Department of Education report found the state’s graduation rate was 81.4 percent in the 2009-10 school year, higher than the nation’s rate of 78.2 percent, and an increase from 78.7 percent rate in the 2006-2007 school year. A study found a link between hourly workers at Hamilton County’s Fernald Feed Materials Production Center and intestinal cancer.  As Ohio cuts back its solar program, Canada is shutting down the rest of its coal-fired power plants by the end of 2013. The Cincinnati Reds may get to host the 2015 All-Stars Game. Scientists are rushing to build robots that save lives in disaster zones. Will John Connor please stand up?

It’s Martin Luther King Jr. Day. On this day, it’s worth re-watching his I Have a Dream speech. Local governments are hopeful they won’t see big budget cuts in Gov. John Kasich’s 2014-2015 budget. Townships, municipalities and counties were economically hit by big cuts in the last budget. The local government cuts added up to $1 billion on a state level, and Hamilton County shared $105 million — more than 10 percent — of the cuts, according to Cuts Hurt Ohio. Education saw $1.8 billion in cuts statewide, with Hamilton County taking $117 million of those cuts. Gov. Kasich announced that his state of the state address will take place in Lima, Ohio. Kasich’s speech last year was labeled “bizarre” by outlets like The Hill. During the speech, Kasich imitated a person with severe Parkinson's disorder and called Californians “wackadoodles.” Union Terminal is falling apart. Cincinnati Museum Center executives say they need nearly $180 million for repairs. The damages are largely due to how the building was constructed. Its design lets moisture get behind bricks, which then causes supporting steel beams to rust.The judge in the Miami University rape flier case gave a deposition Jan. 15. The document outlines Judge Robert Lyons’ reasoning for letting the rape flier case go: “What I remember about him is that there was certainly concern about his, say, his mental health and there were grounds stated on the record for the necessity of sealing the record. It had to do with his — probably as I recall, more so mental well-being than anything else.” Former governor Ted Strickland is tired of raising campaign money, but that didn’t stop him from joining City Council candidate Greg Landsman Friday. Landsman was Strickland’s field director for his congressional campaign, and when Strickland was governor, Landsman was director of the Governor’s Office of Faith-Based and Community Initiatives.Rumor has it the Carew Tower will be going residential, but the owners are denying it all. The denial letter, which assured current tenants they won’t be kicked out, makes reference to a “softness in the general downtown office market.” The Greater Cincinnati Foundation made $1.3 million in grants. The grants will help a variety of businesses and groups. A $225,000 grant will go to Cincinnati USA Regional Chamber’s Minority Business Accelerator, which helps local businesses owned by minorities. Garbage collection will be delayed by a day this week due to Martin Luther King Jr. Day. Will the first neanderthal in 30,000 years be given birth by a human mother? A Harvard geneticist says he’s close to making it possible.

Ohio’s unemployment rate dropped to 6.7 percent in December, down from 6.8 percent in November, according to new numbers from the Ohio Department of Job and Family Services. In comparison, the U.S. unemployment rate was at 7.8 percent in December. The amount of unemployed dropped from 391,000 to 388,000. Unfortunately, the amount of employed also dropped, indicating that some people are leaving the labor force. The Republican State Leadership Committee admitted the only reason Republicans kept a House majority was politicized redistricting. The admission from a memo titled “How a Strategy of Targeting State Legislative Races in 2010 Led to a Republican U.S. House Majority in 2013.” The report even singled out Ohio as a state that benefited Republicans due to redistricting. CityBeat previously covered the issue in-depth here. Cincinnati is among three finalists in the World Wildlife Fund’s (WWF) Earth Hour City Challenge. The contest judges efforts to combat global warming. Cincinnati, Chicago and San Francisco were chosen by WWF and global management consultancy Accenture for preparing their cities for a “climate-friendly future,” according to a statement from WWF. At this point, it’s looking like Gov. John Kasich’s budget proposals will take months for legislators to sort through. The proposals include major changes to taxes, the Ohio Turnpike, education and Medicaid. Ohio, Indiana and Kentucky signed a landmark water agreement to leverage Greater Cincinnati’s water technologies. The agreement seeks to spur legislation, according to the Business Courier. The Cincinnati Zoo may need a levy to stay afloat. Ohio hospitals spent $3.1 billion in free health care in 2010, up from $2.9 billion in 2009, according to an Ohio Hospital Association report.  On the bright side, overall crime is down in Cincinnati.  Bad news, everyone. Chipotle is likely to raise prices this year. To avoid Obamacare’s health care requirements for businesses, some businesses may begin cutting jobs. Some in the scientific community want to establish national parks on Mars.