House Bill 472, the mid-biennium review, proposes to lower state income taxes by 8.5 percent over the next three years and reduce the highest income tax rate to 4.88%. Governor Kasich plans to pay for the income tax cut by increasing taxes on cigarettes over a two-year period, as well as increasing the commercial activity and severance taxes. The income tax cut is expected to reduce revenue by more than $2.1 billion over three years. Even when coupled with other tax changes, Ohio will lose an estimated $174 million in the General Revenue Fund over that period.
State aid to local school districts is currently $514 million less than it was three years ago under the previous administration. School districts could utilize additional funding to support much needed technology upgrades to administer new student assessments, support the continued implementation of the Third Grade Reading Guarantee, expand access to all-day kindergarten and early childhood education, and more easily update school security systems.
Trading stable, progressive revenue from the income tax with undefined sources like the severance tax, is fiscally irresponsible.
Investing in our students and communities will strengthen Ohio’s economy.
While the tax package does include provisions that benefit lower income Ohioans such as an expanded higher Earned Income Tax Credit (EITC), which is non-refundable, the proposal further shifts the tax burden away from those who can most afford to pay taxes.
According to the Institute on Taxation an Economic Policy (ITEP) and Policy Matters Ohio, the proposal would cut annual taxes for the top 1 percent (those earning over $1 million) by $2,847, compared to the middle fifth of taxpayers ($34,000-$54,000) who would see their taxes cut by an average of $13.
Take action today! Tell legislators that while House Bill 472 proposes increasing certain taxes, the revenue would go towards yet another round of income tax cuts that predominately favor wealthy Ohioans. Urge legislators not to support Kasich’s proposed income tax cuts and instead invest in Ohio’s students and public education.