Gov. Bob Taft has been berated much — perhaps rightfully so — by the media, especially the Toledo Blade over the investments of the Ohio Bureau of Worker’s Compensation, but his real test in his last years of governor will be how his proposed $51.2 billion state budget for the next two years will materialize.
The Blade, which has not reported on this nearly as much as Ohio’s rare coin investments, reported today that Taft signed the bill yesterday, which went into effect today.
Among the changes to Ohio’s tax system, according to the Blade:
• Decreases personal income tax rates 4.2 percent each year.
• Exempts those earning less than $10,000 a year from income tax.
• Hikes the cigarette tax 70 cents per pack to $1.25.
• Makes permanent half of temporary” penny sales tax surcharge, leaving state tax at 5.5 percent.
• Creates Commercial Activity Tax at 0.26 percent of business gross sales over $1 million.
• Phases out tangible personal property tax on business machinery, equipment, inventory, furniture, and fixtures.
• Phases out corporate franchise tax.
• Eliminates sales-tax exemption on investment coins and precious metal bullion.
• Drops 25,000 working poor parents from Medicaid family health coverage rolls.
• Reinstates and makes permanent “temporary” income tax on trusts that expired Dec. 31.
• Reduces prescription drug aid for 15,000 extremely poor, medication-dependent adults.
• Halves funding for adult Medicaid dental services.
• Provides $75,000 for Inspector General’s investigation of workers compensation losses in risky coin and hedge-fund investments.
But these overall cut in taxes will gather $1 billion fewer taxes, which means cuts were obviously made. Among those cuts:
• 25,000 of the working poor will be cut from Medicaid. Those remaining eligible will see their dental coverage cut in half and the extremely poor who are medication-dependent will see reduction on prescription drug coverage. According to Taft’s Web site, his Medicaid plan “incorporates recommendations from the Commission to Reform Medicaid, replaces the cost-based nursing facility formula with a new price-based formula, takes ambitious steps toward a system of managed care in Ohio, and establishes a study to review the best ways for Medicaid to be administered in the future.”
K-12 education will see a 2 percent increase in additional funding each year. Colleges and universities would see practically no money in the first year, but a $30 million increase in the second year.
In a rather stunning use of his line-item veto power, Taft took out a proposed ban on embryonic stem-cell research funding for Ohio’s Third Frontier program.
He also vetoed a restriction on student involvement in the Post Secondary Enrollment Options program, citing public interest and that students who become PSEO will increase college attendance.
And yes, he even took into consideration the recent coin scandal. Taft included a ban on investments on coins and other unregulated industries, assumedly for agencies like the BWC. He also allotted money for the Inspector’s General investigation of the $225 million in total losses between Noe’s coins and MDL.
The tax plan is very controversial in Ohio. While it passed in both the state House and Senate, eight Republicans in the House and one in the Senate opposed it, while only one Democrat in the House and none in the Senate voted in favor of it.Powered by Sidelines