Monday, February 27, 2006


The Tax Foundation's Rankings are Flawed

The anti-government Tax Foundation has updated its State Business Tax Climate Index for 2006. And, once again, the Foundation’s ranking scheme rates Ohio poorly. The Tax Foundation’s index suffers from a number of problems. First, the index places undue weight on taxes as a determinant of business location decisions. Businesses locate in places where there are markets for their products, with good infrastructure, and a good work force. Quality health care and education systems contributing to a good quality of life also attract businesses. Second, the index places a premium on tax rates and down plays taxes paid. For instance, Ohio has medium to high tax rates compared to other states. However, Ohio’s tax burden is lower than our rates would lead one to believe since the state’s narrow tax bases result in lower collections. In fact, their measure bears very little relation to actual corporate taxes paid. Third, the Tax Foundation’s analysis begins on the assumption that difference in taxes from one state to the next can attract businesses. In reality, state-by-state tax burdens are becoming more alike rather than different. In other words, there is less in the tax code to compete over from state to state. A final flawed assumption is that higher levels of taxation retard income and economic growth in a state when in fact higher levels of taxation are associated with stronger economies and lower levels of taxation are associated with weak economies. This is most likely because leaders in these states have recognized that economic progress comes with effective public investments.

Wednesday, February 08, 2006


School Levy Failures Point to Need for Reform

Yesterday, eighteen school districts across Ohio were on the ballot with requests for revenue increases (e.g. tax levies). Of those, only nine were successful. Of the nine that passed, one passed by only nine votes; three by less than 200 votes.

This is not a new phenomenon. Levies have become increasingly hard to pass throughout our state, pointing as the Ohio Supreme Court has on four separate occasions, to the need for true reform in our school funding system.

Tuesday, February 07, 2006


A Look at School Funding in Ohio

School funding is a hot topic on the minds of Ohioans, and especially on the top of the list for Clevelanders. Two sessions at Community Solutions' 64th annual Human Services Institute on Friday, March 24, will be of special interest: “The Ohio School Funding Crisis: School Funding 101” and “Impact of School Funding: State & Local Solutions.” Click here for program details and online registration.

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