Friday, October 27, 2006
“Bogus,” “Hilarious,” “Laughable”
Wednesday, October 25, 2006
Yawn, 9 State Legislative Candidates Sign “No Tax Increase” Pledge
This pledge has always seemed to me to be one of the most foolish things a candidate could sign, and in fact a majority of previous signers have actually found themselves in positions where they have voted to raise taxes even after having signed the pledge. In fact of the 20 incumbent legislators who are listed as incumbent pledge signers, an amazing 75 percent of them have actually voted to increase taxes.
So here are the names of the new candidates for the Ohio General Assembly who have signed the Americans for Tax Reform pledge, we will have to wait and see if they get elected and then whether they are able to stick with their pledge:
John Adams (Republican candidate for House District 78)
William Batchelder (Republican candidate for House District 69)
Dan Dodd (Democratic candidate for House District 91)
David Fago (Republican candidate for House District 15)
Jimmie Hicks (Republican candidate for House District 9)
Matt Huffman (Republican candidate for House District 4)
Tim Knauff (Republican candidate for House District 89)
William McGivern (Republican candidate for House District 14)
William Pikor (Republican candidate for House District 99)
As a final note, the Ohio Revised Code Section 3599.10 says: "No person, firm, or corporation shall demand of any candidate for the general assembly any pledge concerning his vote on any legislation, question, or proposition that may come before the general assembly; provided that this shall not be understood to prohibit a reasonable inquiry as to such candidate's views on such question or legislation. Whoever violates this section is guilty of a corrupt practice and shall be fined not less than five hundred nor more than one thousand dollars."
Tuesday, October 24, 2006
Cuyahoga County Leads the Way, Again!
To learn more about how public and private investments in early care and education can help turn Ohio around, visit Ohio Grounwork
Friday, October 20, 2006
Budget Transparency Is a Good Thing
Friday, October 13, 2006
Anti-Government Group May Have Traded Donations for Favors
A new report entitled Investigation of Jack Abramoff's Use of Tax-Exempt Organizations was just released by the Minority Staff of the U.S. Senate Finance Committee. The report was authorized by Republican committee chairman Senator Chuck Grassley (R-Iowa). The report documents how disgraced Washington lobbyist Jack Abramoff used non-profit, tax exempt groups like CAGW to advance the interests of his corporate clients. The report documents how one Abramoff client, Magazine Publishers of America, contributed money to CAGW, and then CAGW published commentaries that were supportive of the magazine publisher's policy objectives.
Revelations like this one, and others, certainly call into question the integrity of CAGW and raise questions about any "research" or "reports" that they are connected with.
Independent Sector issued a statement in response to the report saying that "this kind of activity is inconsistent with accepted standards of practice by charitable organizations. The alleged abuse has the potential to undermine the public trust in charitable organizations as they work to improve lives and communities. "
Thursday, October 12, 2006
Over 650 Economists Agree - Raise the Minimum Wage!
Ohio voters will get a chance to reach their own conclusion and to raise the state minimum wage from $5.15 to $6.85 an hour on November 7 when they consider State Issue 2. You can learn more about the campaign to raise the minimum wage here.
Wednesday, October 11, 2006
SAL Real or Imagined Limit on Spending?
I spent much of 2005 and 2006 helping to organize opposition to the Tax and Expenditure Limitation (TEL) amendment proposals because I believed it represented such a significant threat to Ohio’s economy and our education and health care systems. Earlier this year the Ohio General Assembly adopted, and Governor Taft signed, Ohio Substitute Senate Bill 321, which created a state appropriation limitation (SAL) for state general revenue fund (GRF) budgets beginning in state fiscal year 2008. I have finally written a brief analysis of the legislation and you can find it on the Community Solutions website.
Here are a summary of the basic findings:
It’s difficult to predict the long-term impact of the SAL because it can be changed by a simple majority vote and because the Ohio Legislative Services Commission has described the amendment as not enforceable.
The SAL covers only a fraction of the public spending that would have been covered by the TEL amendment.
Under the SAL, GRF spending increases will be limited to approximately $1.2 billion for state fiscal years 2008-2009.
Education makes up the largest share of GRF spending in the state – approximately 48%.
The SAL gives the Governor new power and will result in some changes in the state budget process.
Even if the SAL remains in place, public spending proponents can easily circumvent it, as demonstrated by Secretary of State Ken Blackwell’s proposal to create and spend a multi-billion dollar JOBS fund completely outside of the GRF and therefore not limited by SAL spending limitations.
The original TEL amendment would have been a disaster for the State of Ohio. It was an economy killer, it would have devastated our education system from pre-school to higher education and it would have shut down much of our healthcare system in the state. While the SAL was much preferable to a TEL amendment I remain opposed, because at its core it retains a flawed formula and there is no guarantee that the formula will ever be changed or corrected. I remain concerned that the amendment will result in reductions in education, health care and other social services and that the burden for paying for these services will be shifted to the local governments with the result being increased property and other taxes and fees.
In a few weeks, after we have elected a new Governor, the state budget process will begin again. I will be watching to see how the SAL impacts that process. I welcome your comments.
Monday, October 09, 2006
Middle Class Still Pay More Taxes Under New Flat Tax Plan
Forty-five percent of Ohioans would end up paying higher taxes while only 30 percent would see taxes lowered, based on an analysis of the details available on gubernatorial candidate Ken Blackwell’s plan for a flat 3.25 percent income tax. Meanwhile, the richest Ohioans would reap thousands of dollars on average in annual tax savings apiece when the plan is fully implemented, and the state would lose more than $800 million a year in revenue. Those were among the findings of an analysis by the Institute on Taxation and Economic Policy (ITEP), a research group in Washington, D.C., with a sophisticated model of the state and national tax systems. Policy Matters Ohio released the report, updating an earlier one. It analyzes a flat tax that would allow those making $20,000 or less a year after exemptions to pay no state income tax.
Thursday, October 05, 2006
First Quarter FY07 Revenues Are a Red Flag to Further Tax Cuts
Financial data published by the Ohio Office of Budget and Management (OBM) show that September's total tax receipts were off by $66 million, or 4.1%, compared to their revised FY07 projections. As a result, year-to-date tax collections were below the agency's estimates by $37 million, or 0.8%.”
On a year over year basis, collections are $80 million, or 1.8%, below collections compared to first three months of FY 2006. To a great extent the collections reflect the impact of the first phase of a 21% across-the-board income tax cut and other policy changes enacted in the state budget (HB66). The collections are also down due to Governor Taft’s executive order which caused an adjustment to personal income tax withholding tables. The order caused FY 2007 revenues to be an additional $290 million, or 1.5% below last year’s collections.
Here are the details of how Ohio’s tax reforms are performing through the first quarter.
September revenues compared to OBM estimates:
non-auto sales tax - $483.6 million, or $37 million (7.1%) below estimates;
auto sales tax - $76.2 million, or $4 million (5.1%) below;
personal income tax - $837 million, or $40.3 million (4.6%) below;
corporate franchise - $17 million, or $13.5 million above;
kilowatt-hour tax - $34.6 million, or $2 million (5.9%) above;
tobacco tax - $87.5 million, or $314,000 (0.4%) below;
total tax receipts - $1.55 billion, or $66.2 million (4.1%) below.
Fiscal year-to-date revenues compared to OBM estimates are:
non-auto sales tax - $1.589 billion, or $60.2 million (3.7%) below estimates;
auto sales tax - $253 million, or $840,000 (0.3%) below;
personal income tax - $2.057 billion, or $2.46 million (0.1%) above;
corporate franchise tax - $56.4 million, or $23 million (69%) above;
public utility tax - $45 million, or $361,000 (0.8%) above;
kilowatt-hour tax - $93.8 million, or $196,000 (0.2%) above;
tobacco tax - $195.6 million, or $953,000 (0.5%) below;
total tax receipts - $4.327 billion, or $37 million (0.8%) below.
And, how about the economic gain purchased with the tax cuts? Ohio’s economy continues to lag the national recovery. For instance, we are still 140,000 jobs below prior recession. Hardly an economic boom. Why? Because tax cuts simply don’t have the simulative impact proponents argue they do. Economists at the Federal Reserve Bank of Cleveland have explored a variety of causes of state economic growth, and found taxes play no role in stimulating incomes, jobs or output. In fact, my work and a recently released report by Policy Matters Ohio clearly demonstrates higher tax states have sronger economies.
In addition to the policy changes eroding state revenues, the consensus forecast for the national economy calls for growth to slow to 2.5 to 3 percent over the coming months.
With a huge tax cut already in place and slowing national economic growth, its hardly time to destabilize the state budget with further cuts to the income tax, capital gains tax, or estate tax during the lame duck session.
Wednesday, October 04, 2006
Investments in Early Care and Education Will Payoff Today and Tomorrow
Research studies show that young children exposed to high-quality instructional settings exhibit better language and mathematics skills, better cognitive and social skills, and better relationships with classmates than do children in lower-quality care. Subsequently, students score higher in school-readiness tests; are 40% less likely to need special education or be held back a grade State investments in early care and education saves the state and local school districts money right away.
Providing children with high-quality ECE opportunities allows their working parents to be more productive at work and have less absenteeism. Unscheduled absences cost small businesses in Ohio an average of $60,000 annually and large companies an average of $3.6 million. Nearly one-quarter of unscheduled absences are due to family issues, including early care and education needs. State investments in early care and education can saves businesses money today.
The early childhood industry in Ohio is comprised of many small businesses directly supporting nearly 57,000 jobs. This is as many people as insurance carriers and higher education, and more people than motor vehicle manufacturing. Money invested in the early care and education sector is spent on purchases, as well as on wages, which in turn feeds into and stimulates the manufacturing and agricultural sectors. State investments in early care and education can create jobs in Ohio today and tomorrow.
In North Carolina’s early care and education program Smart Start has added nearly $400 million to that state’s economy through the creation of 56,455 additional child care spaces. In addition, Smart Start child care subsidies allowed families to work, adding nearly $590 million to their economy. State investments in early care and education allows Ohio to compete economically with other states today.
The Federal Reserve Bank of Cleveland found that quality early childhood programs for low-income children generate an overall 16% rate of return on investment, 12% of which is a public rate of return. These children had much higher lifetime earnings and reduced dependence on welfare. This translates into a significant return on investment for the state. State investments in early care and education will help Ohio's economy today, tomorrow and well into the future.