Home / Ohio Gov. Taft’s two-year state budget

Ohio Gov. Taft’s two-year state budget

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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.

Governor Taft’s news release

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  • Just freaking wonderfull. I hadn’t been paying too close attention Shaft’s budget reforms, no wonder he is damn unpopular. Thanks to the change in the code, I and other small investors like me will now be travelling out of state/country to buy our coins and bullion. I feel sorry for all my local dealers, THEY are now added to the long list of victims Governor Shaft is leaving in the dirt.

  • Got to admire the Taft family. There are some questionable things in this budget, certainly, but it does reaffirm traditional Republican policies by being fiscally responsible and pragmatic on social issues. Liberals may not like him, but we could use a few more sensible Republicans stamped from the same mold. The democrats may have their Kennedys but no family has contributed more to the leadership of this country than the Tafts.


  • Uh, Dave, Bob Taft was the first sitting governor to be convicted of a crime in the state’s history. His approval rating is 19 percent. So I wouldn’t call much of a leader if the state doesn’t follow.

    I wrote this prior to those ethics violations, but I still think his legacy will hinge on this state budget, because it will affect the state more than any ethics reports will.

    However, the only issue on the state’s ballot he initiated — heck, maybe the only one he endorsed — was approved.

  • Actually, it went as low as 15% and that’s the third lowest rating any major public figure has had in the 80 or so years they’ve been doing these popularity ratings.

    And the crime he was convicted of was one which all sorts of politicians commit – and it’s a misdemeanor. He was basically convicted of playing golf with the wrong people.

    As for his initiative, he did veto the stem cell research ban, and that’s pretty ballsy for a Republican. Shows he might just be cut fromt he same stuff as his legendary great-grandfather.


  • This just in — Taft’s approval rating:


  • Nancy

    If he was convicted of a crime, why wasn’t he removed from office? Just curious.

  • He pleaded no contest to falsifying information on his ethics report, a misdemeanor.

    The judge told him to apologize to the state, and he did. He could have received jail time, but instead was fined.

    The majority of the state thinks he should have resigned, and I thought the Republicans had a rule saying if you were indicted of something you had to step down, like House Maj. Leader Delay. And to be convictetd? Surely I thought he would resign.

    But the next year in Ohio politics would be tumultous either way. ’06 will bring in a new governor, and with each party being equally trusted by the state (around 37 percent approval rating each), I wouldn’t be shocked if another Republican like Ken Blackwell or Jim Petro won the state.

  • Nancy

    Didn’t a Dem recently run for something there, and almost win? Also … I thought there were laws that you HAVE to leave if you’re convicted of a crime, it isn’t an option? Maybe I’ve got it confused with something else …?

  • Dem. Paul Hackett almost won a representative seat in a very conservative county. That’s correct.

    Maybe a “no contest” technically avoids a conviction under that rule. Who knows?

    And I don’t know what the line of succession would be in Ohio’s governorship, but it’s probably one of the guys (Petro or Blackwell) running for election in ’06 anyway.

  • Gov. Bob Taft will take support wherever he can get it these days.