Continued Cuts

Ohio leaders push back against Kasich-planned tax cuts for the wealthy

Apr 9, 2014 at 10:27 am
click to enlarge Budgetary magic!
Budgetary magic!


ity Councilman P.G. Sittenfeld helped coordinate a contingent of bipartisan, elected officials to testify at a House Finance Committee meeting last week against Gov. John Kasich’s proposed across-the-board income tax cuts, which Sittenfeld connects to a decline in important public services around Cincinnati. Kasich’s administration claims Cincinnati’s ongoing budget shortfalls stem from structural deficiencies and that the cuts are strengthening Ohio’s economy through job growth.

Sittenfeld sternly pointed the finger at Kasich’s plan to cut taxes during a meeting in Columbus on April 1, arguing that previous Kasich tax cuts caused a shortage in Cincinnati fire and law enforcement personnel. 

A divergence between Republicans and Democrats at the meeting became apparent after Sittenfeld delivered his testimony.

The committee chair, Republican Ron Amstutz, quickly dismissed Sittenfeld with a “you left us speechless” remark before Dempcratic Rep. Alicia Reece indicated she had a question. Amstutz allowed the question, but not before stating, “Oh, a Cincinnatian.”

Sittenfeld elaborated about the lack of emergency personnel services by explaining Cincinnati Fire Department enacting “brownouts” and its police department shrinking by 200 positions in the past six years. A brownout refers to a lack of firefighters on duty, which shifts from department to department and negatively affects reponse times.

“We’re not trying to do opulent things, we’re trying to deliver the basics in the city of Cincinnati, and to be very blunt, you all in the policy are making it very difficult,” Sittenfeld said to the committee during the questions portion of his public testimony.

Republican committee member questions alluded to Cincinnati’s budget structure as the culprit for staffing issues rather than a 50 percent decrease — from $24 million to $12 million — of Cincinnati’s local government funding over the past two years. The original $24 million accounted for about 6 percent of Cincinnati’s operating budget.

Sittenfeld cited several areas affecting Cincinnati’s budget, including its pension system and health care costs, but emphasized the need for help from the committee regarding an issue it can control.

He also suggested the state’s $1.5 billion rainy day fund comes from local government coffers.

Kasich’s proposal to cut income tax 8.5 percent across the board by 2016 is another step in a continuing trend that benefits Ohio’s wealthiest by shifting the weight of state taxes to middle- and lower-income classes, according to a report recently released by Policy Matters, a nonprofit policy research organization.

The proposed tax cuts and earned income credits for the poor are offset by an increase in sales taxes, another report by Policy Matters states.

Policy Matters researcher Zach Schiller criticizes the tax cut proposal, saying that Kasich’s administration is being misleading when suggesting Ohio’s poor will actually save money. He explained that after considering an increase in certain sales taxes, Ohio’s poor will end up paying more money or come out even, on average, while Ohio’s wealthiest will save an additional couple thousand dollars on average.

Instead of giving tax cuts “slanted for people who don’t need them,” Schiller suggests the state invest more in public services, a sentiment echoed by other officials across the state last week.

Another report released by Policy Matters earlier this month states Ohioans are better off if the governor invests in transportation infrastructure, emergency services and education.

Since the 2011-12 fiscal year, the report found that state aid toward communities fell $1.1 billion across several programs — a point Sittenfeld also underscores as showing the state is “pickpocketing” local communities while boasting that it has saved $1.5 billion for Ohio’s rainy day fund. Kasich also eliminated the estate tax, an important local tax source affecting only seven percent of Ohio’s wealthiest residents. Communities throughout Ohio have responded by reducing funds in several areas: capital equipment, emergency and protective services, streetlights and road infrastructure. Some closed swimming pools and recreation centers.

During last week’s committee hearing, a Democratic legislator from northern Ohio agreed with Sittenfeld’s assessment that local communities need more funding for road infrastructure, and a Toledo Democratic councilwoman testified that her district’s roads were in disrepair after a harsh winter.

Policy Matters’ April report suggests that Kasich should pour new money into various areas that need to be boosted after losing several years of funding. It states $100 million a year would restore 1,000 police and 675 firefighters to communities across the state.

To account for 1,570 staff members cut in 261 school districts across the state during the 2012-13 fiscal year, $121 million a year would restore staffing levels. (Public school districts’ funds diminished $607 million over the past four years.)

“There’s a whole array of public services that need investment in the state,” Schiller says.

Kasich’s spokesperson, Rob Nichols, points toward 235,000 private sector jobs created as a result of various tax cuts. He also took exception to Sittenfeld’s disagreements in Kasich’s proposed amendments to the state’s budget.

“The proof is in the pudding,” Nichols says. “(Cincinnati has) been a financial wreck for a decade — don’t talk to us about what our budget does or doesn’t do.”

Kasich considers the $1.5 billion surplus a success after his administration was left with an $8 billion deficit when he took office.

The tax cuts are included in one of the 14 bills comprising the proposals Kasich suggested in Ohio’s mid-biennium review, which is designed to provide alternate budget options between the state’s bi-annual renewals. All the bills have been assigned to committees but have yet to hit the House floor for a general vote.

Sittenfeld stated in an interview earlier this week he will continue opposing the tax cuts by raising public awareness to let Ohio’s voters know what’s happening.

“John Kasich is trying to keep his job — every voter is entitled to evaluate his job performance,” Sittenfeld said. “I’m going to do everything I can to highlight what the impact of his policy has been on Cincinnati and its citizens.” ©