Ohio Governor Calls for Tax, Education Changes

February 25, 2014

Read text and highlights of every governor's State of the State.

By Joe Vardon

Gov. John Kasich set the stage for an intense legislative schedule in coming months with a policy-laden State of the State address that was anchored by more than a half dozen proposals tied to education and a 6.3 percent state income-tax cut.

Kasich proposed a $10 million program to incorporate businesses and community-based organizations into schools. He would have schools draw up new education plans for students at risk of dropping out, and have school districts expand vocational education to the seventh grade.

All state funding for colleges and universities would be tied to graduation rates and overall student performance. Veterans would get "free" college credits, and more high-school students would be able to earn college credits. Standards for early-childhood education would rise.

Kasich proposed another tax cut to take the state's top income-tax rate below 5 percent -- it otherwise would be 5.33 next year -- and proposed spending $35 million from tobacco-settlement dollars to encourage cessation and aid in no-smoking enforcement.

The proposals will be in Kasich's mid-biennium review, but it could be next week before the legislature gets them. That means a shortened schedule to pass laws before legislators head home for the fall campaign.

"I know this is a lot of work, and, frankly, I've only talked about a portion of what we're proposing," Kasich told about 1,130 people in the Medina Performing Arts Center, most of them lawmakers, Kasich's cabinet members, invited guests and raffle winners. "Not all of this will get done this spring or this summer. Some of it might not get done this year.

"It's OK to take our time to get things right, but we can't drag our feet."

The speech was the third State of the State that Kasich has given outside the state capital, and it came two months into his re-election year. He acknowledged the coming election season and said the "State of the state is stronger, more hopeful, more optimistic, more excited and more confident" because of progress made in his three years as governor.

"We're not hopeless; we're hopeful," he said. "We're not wandering; we have direction."

Read the full text of Gov. John Kasich's State of the State address Cuyahoga County Executive Ed FitzGerald, Kasich's likely Democratic challenger in the November election, taped a rebuttal to Kasich's speech that was broadcast on the Internet after Kasich was finished. But FitzGerald made the video before Kasich spoke, so it contained no direct comments on Kasich's policy proposals.

"Some of what the governor said sounds reasonable, and some pieces we even agree on, but, as is too often the case, what this governor says he will do and what he has done are worlds apart," FitzGerald said in the video, echoing Democratic lawmakers who spoke later. "This governor has forgotten about the vast majority of Ohioans -- its families, police officers, firefighters, teachers and seniors."

Democrats wanted to engage Kasich on economic numbers. Kasich touted more than 170,000 jobs created during his tenure, but those are private-sector jobs. The overall total is lower. Democrats rented a truck and drove it around Medina with a billboard citing negative numbers on Ohio's economy from 2013.

But Kasich's speech was more about policy. His "Community Connectors" program would be funded with $10 million from casino-licensing fees, matching $3 for every $1 that communities contribute to design programs that better incorporate businesses and community-based groups into schools.

On tax policy, Kasich announced only his intention to get the top income-tax rate below 5 percent. Last year, he signed a three-year, net $2.7 billion tax cut, after months of fighting with the legislature over how to pay for that reduction.

The Ohio Society of Certified Public Accountants, which often supports Kasich's proposals, posted on its website that the income-tax-cut plan includes discussions of increasing the commercial-activities tax; business interests have privately told The Dispatch that could draw resistance. A fact sheet from the governor's office also referred to increasing the severance tax on oil and gas wells. "I fully anticipate efforts to try to lower the income-tax rate, and that's probably going to mean tax reform," said Senate President Keith Faber, R-Celina. "For me and my caucus, tax reform means lowering the overall tax burden on Ohioans."

House Minority Leader Tracy Maxwell Heard of Columbus said, "I don't see how that's helping the middle class or the working poor, or the people whose disposable income really is an activator for stimulating our economy. Giving tax breaks to the top 1 percent just goes into their savings and trust funds."

Republican House Speaker William G. Batchelder, the Medina native who will retire from the House at year's end, said he supports the idea of putting tobacco-settlement money into cessation programs. "It's ridiculous for us to have deprived the people of this state of that program."

Also last night, Kasich awarded Ohio Courage Medals to Amanda Berry, Gina DeJesus and Michelle Knight, the three women who were raped and held captive for years by Ariel Castro of Cleveland. The three women escaped his house last year, and Castro committed suicide in prison.

(c)2014 The Columbus Dispatch (Columbus, Ohio)