BY SANDY THEIS
Enquirer Columbus Bureau
COLUMBUS -- Democratic gubernatorial candidate Lee Fisher on Tuesday proposed a $1.1 billion tax cut that would trim homeowners' property taxes up to $275 a year.
His Republican opponent, Bob Taft, branded the plan "completely irresponsible," and some budget experts questioned how the state could pay for the tax cuts if the economy sours.
Trailing in the polls, Mr. Fisher is clearly targeting the voters who clobbered a proposed sales tax increase for schools in May by a 4-1 ratio.
Immediately after making the announcement, Mr. Fisher launched a companion TV commercial that touts his tax cut plan and pledges to "squeeze government for every wasted penny." The 30-second ad features Mr. Fisher holding a penny, then dropping it into a piggy bank.
"We're sending a message loud and clear that we are going to be speaking directly to the working families of this state," Mr. Fisher said in a telephone interview.
Mr. Fisher insisted that his plan would still allow him to properly fund public schools and prisons, and spare higher education from the budget ax. Money to fund the tax cut, which would cost about $1.1 billion over the two-year budget cycle, would come from economic growth, he said.
But there is a hitch: The plan would virtually eliminate an income tax rebate that occurs only when the state ends the budget season with a surplus. Instead of putting the surplus into the income tax reduction fund, the Fisher plan would use it to help fund the property tax cuts.
Right now, the state pays 12.5 percent of a homeowner's property taxes. Under the Fisher plan, the so-called property tax rollback would go to 27.5 percent, but would be capped at $275 per household annually.
Those in homes valued at $80,000 would receive a $221 property tax cut. Owners of homes valued at $100,000 or more would receive the maximum $275 cut, according to information supplied by the Fisher campaign.
"This will help every homeowner in the state benefit from the success of the economy," Mr. Fisher said. He also said it helps end reliance on property taxes, something the Ohio Supreme Court said the state must do to make Ohio's school funding formula pass constitutional muster.
Mr. Fisher said his plan would not eliminate the income tax fund. After the property tax cuts are paid for, any additional surplus still could be used to reduce income taxes, he said.
Because the wealthy benefit more from an income tax cut -- but property tax reductions are capped at $275 -- Mr. Fisher said his plan is a better way to distribute the state's wealth.
Mr. Fisher bases his plan, in part, on the continuation of Ohio's strong economy.
For the past three years, the economy has surpassed the relatively conservative estimates forecast by state budget writers. As a result, about $700 million went into the income tax rebate fund last year, even after the state siphoned off $200 million for school building repair and construction.
Donald Berno, president of the Ohio Public Expenditure Council, questioned how Ohio could balance the budget if the economic boom does not continue.
"One of these days, we're going to have a recession," he said. At that point, he said, state revenues will drop and demand for state services will rise.
"Then what?" asked Mr. Berno, whose non-partisan group tracks government spending.
Greg Browning, a former state budget director and senior adviser to the Taft campaign, said Mr. Fisher's plan doesn't add up.
"When you get done funding the schools and you pay for the property tax relief, you're pretty much out of gas in terms of spending your revenue growth," Mr. Browning said. "Lee Fisher's only hope is to hire Houdini for a budget director."
Mr. Fisher, however, said he will scour the budget for places to cut.
Mr. Fisher surprised Mr. Taft by announcing the tax-cut plan during a private meeting the two had with editors of the Lake County News Herald in northeast Ohio.
The meeting marked the first public face-to-face confrontation between them since the campaign began.
Mr. Taft continues to refuse to debate Mr. Fisher unless two minor party candidates are included.
With the election just five weeks away and no one-on-one debates scheduled, the Fisher campaign unsuccessfully tried to persuade the newspaper to let reporters watch Tuesday's meeting via closed-circuit TV. Instead, the newspaper gave Mr. Fisher permission to show reporters a videotape of the event three hours after it had concluded.
The videotape shows Mr. Fisher using his closing statement to urge Mr. Taft to support the tax-cut plan. "Tell us, right now, are you or are you not for a property tax cut for homeowners?" Mr. Fisher asked.
Mr. Taft did not answer the question directly. He did say he supports expanding an existing program that trims property taxes for senior citizens.
Despite his muted initial response, Mr. Taft blistered Mr. Fisher later in the day.
"This illustrates that he is either clueless to the realities of the state budget or else he's setting us up for another income tax increase like the 90 percent tax increase that he voted for in the legislature," Mr. Taft told The Cincinnati Enquirer. "This plan is both desperate and intellectually dishonest."
He accused Mr. Fisher of running a "campaign of promises." He said Mr. Fisher has promised a tax credit for worker training, expanded job creation tax credits, reduced inventory tax , and creation of an earned income tax credit.
Mr. Taft has made promises, too. In addition to pledging to increase money for school, he has called for tax deductions for college tuition and job training, an adoption tax credit, expansion of a job-training scholarship program, expanded tax credits and deductions for investment in high-tech companies, and reduced inventory tax.
