By Randy Ludlow, The Columbus Dispatch, and wire reports
COLUMBUS – Ohio Gov. John Kasich has traveled this taxation road before only to find fellow Republicans refused to clamber aboard for the ride.
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Similar to his 2015 budget proposal, the second-term Republican stepped forward Monday with another plan to increase the state sales tax by one-half cent to 6.25 percent while also enacting other tax hikes.
The $3.1 billion tax take over two years would be used to fill the gap created by reducing income taxes by 17 percent amid a consolidation in the number of tax brackets from nine to five.
Kasich’s array of proposed tax moves, including higher taxes on cigarettes and vaping products, alcoholic beverages and oil and natural gas produced by fracking, may well again be dead on arrival in the General Assembly.
It would require a lot of legislative lifting to produce an overall net tax cut of about $20 million a year.
Kasich long has favored consumption taxes over income taxes, which he again contended Monday serve as a drag on the business climate and job creation in Ohio.
But majority GOP lawmakers have proven to be a hard sell. Kasich also proposed a half-cent increase in the sales tax — which would amount to an extra 50 cents on a $100 purchase — in his last budget to finance a larger income tax cut, only to see the measure die. Lawmakers instead approved a 6.3-percent cut in income taxes, only a fraction of the 23-percent reduction championed by Kasich, while also exempting small businesses from income taxes on up to $250,000 a year.
Both Senate President Larry Obhof (R-Medina) and House Speaker Cliff Rosenberger (R-Clarksville) have indicated that while they support reducing the number of income tax brackets, they have no interest in increases in other taxes to pay for another income tax cut.
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Certain Medicaid beneficiaries would be required to pay a new monthly premium under Kasich’s proposal
The $66.9 billion, two-year spending blueprint relies on $200 million from new premiums paid by childless, non-pregnant participants in the federal-state health care program with incomes above poverty.
The administration says Ohio will seek federal approval for the plan, which would cap monthly premiums at 2 percent of household income. Premiums are estimated at about $20 a month.
The proposal also makes prescription-drug changes to Medicaid saving roughly $40 million.
Last year, federal regulators rejected a more expansive Ohio plan to require Medicaid beneficiaries to pay a monthly premium, saying the proposal could lead to tens of thousands of low-income people losing health care coverage.