Friday, May 12, 2000
Income tax cut unlikely in Ohio
Lawmakers now focus on property relief
By Spencer Hunt and Michael Hawthorne
Enquirer Columbus Bureau
COLUMBUS — The Ohio Supreme Court's school funding decision Thursday derailed a Republican plan to cut state income taxes, pushing lawmakers to instead focus on reducing property taxes.
The Senate recently advanced a bill that would make a total $345.7 million worth of cuts in income and estate taxes. That proposal was all but abandoned as lawmakers promised not to raise sales or income taxes to, in turn, reduce the state's reliance on property taxes to fund public schools.
The shift in tax-cut talk follows a blistering attack that Justice Andrew Douglas delivered on past and current tax-cut proposals. He said the $1.3 billion in taxes lawmakers cut over the past three years would have been better used to reduce school property taxes.
“We see yet today that there is talk in the General Assembly of yet another tax refund of millions and millions of dollars,” Justice Douglas wrote in a concurring opinion, “with no consideration being given to the fundamental problem that causes the lack of equal (opportunity) for all of Ohio's elementary and secondary students.”
While lawmakers search for a way to satisfy the court, one thing is certain: It will cost more money to make Ohio's school funding system more equitable. With an incoming class of anti-tax legislators, the political heat will be on Gov. Bob Taft and legislative leaders to find the money.
Neither Mr. Taft nor Senate President Richard Finan, R-Evendale, would comment about possible solutions or their price tags, saying they needed to study the ruling first. But House Speaker Jo Ann Davidson, R-Reynoldsburg, said a tax increase would not be part of the equation.
“I do not believe there is any support in the Legislature for a tax increase,” Ms. Davidson said.
Lawmakers who had supported cuts to Ohio's income and estate taxes simply shifted gears. One outspoken tax reliever, Rep. Jeff Jacobson, R-Brookville, said he now will urge his colleagues to pass property tax relief measures.
“There will still be tax cuts, but it's going to be a different tax,” Mr. Jacobson said. “As committed as I am to reducing income taxes, I believe the court's emphasis on reducing the level of property taxes takes priority at this time.”
But things are not that simple. Although the state has up to $1 billion in surplus funds available for tax relief, lawmakers may need much more than that to end funding inequities among schools and satisfy the court.
Lawmakers and then-Gov. George Voinovich watched voters reject 4-to-1 a proposed penny on the dollar sales tax increase to fund property tax relief in 1998. Since then, lawmakers have mounted no new efforts to reduce property taxes.
Instead of considering a ballot initiative, Ms. Davidson said lawmakers may direct the state's budget surplus to grant property tax relief.
Such a proposal might also include surplus dollars the General Assembly has earmarked in recent years for income tax rate reductions, she said.
Ms. Davidson and Mr. Finan will form a joint House-Senate committee to come up with possible solutions. Democrats also said they need to agree on a solution before talking about how to pay for it.
“When you show me what we want to do with education, what our priorities are, and how much it costs, I'll be the first guy at the table to stand up and say, "Amen, brother,'' said Sen. Mike Shoemaker, D-Bourneville.
Adding more pressure is a new crop of anti-tax lawmakers expected to join the General Assembly in January. A stronger anti-tax faction could make it more difficult for leaders to pass a funding plan the court would approve.
One of those likely new lawmakers is Tom Brinkman Jr., a Cincinnati Republican running for the Ohio House. Mr. Brinkman wants to amend the Ohio Constitution to bar the Supreme Court from making school funding decisions.
“I personally have taken the no-tax pledge, so I certainly could not support (a tax increase,)” Mr. Brinkman said. “We should be held responsible for schools by the voters, not the courts.”
Complete ruling at www.sconet.state.oh.us.
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