Did you see the numbers?

September 19, 2014 by

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numbersOhio’s poverty rate is down to 16.0% for 2013 from 16.3% in 2012. Ohio gained 200 new jobs last month and unemployment stayed the same. More Ohioans have insurance than before, but many Ohioans are still going hungry…and on and on and on.

All the numbers can become mind-numbing and lost in translation. Here is the big thing we take away from all the numbers that have recently been released – people are still struggling to get by. College debt, school fees, childcare, car repairs, and much more are making it more and more difficult for more Ohioans to get by day-in and day-out. Is this level of struggle for many Ohioans the New Normal? We can’t accept a 16% poverty rate to be celebrated.

10 years ago we cut taxes, and Ohioans were told that this would help our state create jobs and then more people would have opportunities. The wealthiest 1% of Ohioans are paying nearly $20,000 less than they would have, and the majority of us are actually paying more in taxes to maintain our roads, schools, parks, and basic public services. Tax cuts simply didn’t work. Poverty is up, jobs are down, and people are struggling.

If Ohio begins to invest wisely into efficient and effective services, we can make a difference. Ohioans would feel the investments in higher educaiton, preschool, and parks and recreation very quickly for those directly impacted by those services. Those improvements will spread throughout the entire economy as families are more economically stable and people have the opportunities for success.

Filed Under: One Ohio Now

Inequality slows state revenues – income tax part of solution

September 15, 2014 by

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money scalesThe Standard & Poor’s (S&P) released a report on Sept. 15th highlighting the impact of economic inequality on state revenue. Their findings conclude that state revenue growth has declined in recent years as a result of this inequality. Most notably, states that are more reliant on sales tax see a larger impact from inequality on state revenues, while states with a progressive income tax are able to partially offset the impact of inequality on their state revenues.

The research analyzes data from 1950-2012 and concludes that slower state revenue growth is a structural problem connected to economic inequality and not a result of normal economic cycles. From 1950-1979, states averaged growth of 9.97% and since 2009 states average growth of 4.36%. State income tax cuts have not produced the promised economic growth over the past decade.

This report along with many others should lead Ohio’s leaders to re-think our 10 year trend of cutting Ohio’s personal income tax. A balance of revenue sources is needed for states, like Ohio, to maintain responsible fiscal policy and address slumping and volatility in revenues. An income tax cannot solve inequality on its own, but through smart public investments in schools and community services, Ohio can create the opportunities for all Ohioans to succeed.

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Cuts add up to big impact on local communities

September 8, 2014 by

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State decisions impact our local communities. As a result of state budget cuts, many communities have cut hours at rec. centers, reduced police and fire department staff, and cut services for those most in need. The Cincinnati Enquirer (Gannet News) compiled the numbers to compare local government revenues. As a result of state decisions, local governments and schools have lost nearly $2 billion since 2011.

 

What did the state do? 

  • - 50% cut to the Local Government Fund
  • - Cut TPP reimbursements. (The Tangible Personal Property (TPP) tax allowed local property taxes to be levied on equipment and machinery. In 2005 the state eliminated that local tax, but guaranteed to help local governments transition their tax base). These reimbursements were cut in 2011.
  • - Elimination of the estate tax in 2013
  • - Phase out of the utilities tax (started in 2007).
  • - Eliminated a 12.5% property tax rollback on future levies.

“The Cuts Were Small – you can handle them.” – Governor Kasich. Local communities lost nearly $2 billion. This is a substantial amount of money spent primarily on income tax cuts for the wealthy that do little to benefit the rest of the state.

While the Local Government Fund doesn’t finance the majority of a city’s operations (the cut  amounted to a 3-5% loss for local communities), it accounted for revenue to invest where the local community needed it. These funds were used to keep rec. centers open, provide services to at-risk teens, or financed activities to senior citizens. A 3-5% cut dramatically reduces or eliminates these programs. 3-5% cuts matter.

Likewise, the elimination of the estate tax was not, by itself, a devastating blow to local communities, (we can’t count on wealthy individuals dying for annual budget solvency), but many communities used this revenue to replace aging equipment (like fire trucks), or restore the neighborhood park and playground. Without these funds, those fire trucks aren’t replaced and playgrounds and ball fields aren’t updated.

Small cuts to communities lead to big impact for community services.  Yes, as a result of a growing economy, increased income and sales tax revenues have helped many communities.  Many Local communities weathered state cuts by making their own cuts and raising taxes at the local level. Forgone maintenance, suspended cost-of-living adjustments, reduced hours of operation, and under-staffed offices are the new normal. These cuts continue to ripple throughout our state.

New investment is needed. Nearly 1 out of 4 of Ohio’s kids are in poverty.  With many unmet needs in our communities and across Ohio, we need to find new ways to invest in Ohio’s future. Budgets are more than balance sheets and acronyms. Budgets matter to the people who are part of the community. We all benefit from great public services that strengthen our communities.

 

 

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