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Wednesday, February 5, 2003

Taft's tax hike requires rush job


Assembly faults budget director

By John McCarthy
The Associated Press

COLUMBUS - Gov. Bob Taft's month-end deadline to approve legislation to fill a $720 million budget hole is too late, and lawmakers must push through the bill in just over two weeks, House Speaker Larry Householder said Tuesday.

Taft, a Republican, has asked the General Assembly to approve tax increases on cigarettes and alcohol and to broaden the state's sales tax base to include services such as cable television and real estate sales.

Should they fail to do so, Taft said, he would be forced to cut state spending drastically, including college subsidies and, for the first time, per-pupil spending in primary and secondary schools.

Householder, a Glenford Republican, said the House has not decided whether to approve Taft's proposal. But any bill containing tax increases would have to be completed well before it could go into effect.

"The administration said they needed nine to 10 days to implement anything we do," Householder said. "That is an extremely aggressive time frame."

Taft discussed the bill at a private meeting with top legislative leaders of both parties.

One option would be for the House and Senate to work on separate parts of the legislation, then send them to a joint committee to work out differences, Householder said.

The legislation will address the current budget, which ends June 30. On Monday, Taft introduced his $49.2 billion budget for the two years that begin July 1.

Householder wanted to put off policy decisions, such as tax increases or broadening the sales tax base, until the next budget is debated.

"We'd like to do this once - make up what the deficit is, then go into the two-year budget and talk about other things," he said. "But in the time frame we're under, it's going to be impossible to do that."

Taft's budget director, Tom Johnson, agreed that the General Assembly must act quickly. Testifying before the House Finance Committee on Taft's new budget, Johnson said there was no alternative to raising more money.

"We have cut a great deal, and it is my opinion that further cuts are not an option," Johnson said.

The committee, which will hear both the correction and two-year budget bills, limited questioning to the two-year plan, but lawmakers grilled Johnson on Taft's plan to raise taxes.

Some committee Republicans and Democrats want Taft to slash spending further and avoid a tax hike. Rep. Tim Grendell, R-Chesterland, told Johnson it was difficult to expect citizens facing new taxes to help revive the economy.

"Has anybody calculated how taking $500 to $1,000 out of the pockets of consumers ... will spur economic growth?" Grendell said.

Rep. Peter Ujvagi, a freshman Democrat from Toledo, said Johnson and Taft should have done a better job of predicting the state's revenue shortfall.

Meanwhile, Senate and House Democrats on Tuesday called for Johnson's resignation.

"Either we got misinformation or the department is incompetent," said Sen. Greg DiDonato of New Philadelphia, the top-ranking Senate Democrat.

Johnson defended the work of his Office of Budget and Management, saying the failure to forecast the economic condition was a nationwide problem.




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