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Sunday, January 4, 2004

Tax repeal brings reality check


Editorial

Ohio lawmakers will face a needed reality check on state taxes and spending this year, thanks to a petition drive led by Secretary of State Ken Blackwell.

Last month, Blackwell's Citizens for Tax Repeal group filed petitions with more than 140,000 signatures - far more than the 96,870 required for an "initiated statute" under Ohio law - to repeal the "temporary" one-cent sales tax hike the General Assembly enacted last year to help patch a multibillion-dollar deficit.

The petitions will force state legislators to consider rolling back the tax hike. If they do not, Blackwell will gather a new round of signatures to put the issue on the November ballot, where voters likely would favor repeal. Officially, that would terminate the penny increase six months early - it's now scheduled to end June 30, 2005 - but with some lawmakers already talking about extending the "temporary" increase, it could have a longer-term impact.

It would force the General Assembly to make hard choices on spending, instead of taking the easy way out with a "quick fix" tax hike. Blackwell says spending could be trimmed without drastic cuts in services.

More important, it should compel lawmakers to address the fundamental questions of how the state's tax system is structured and how state government operates. If they had adopted the core of Gov. Bob Taft's tax modernization proposal early last year, many of these questions would have been resolved. Taft's plan, modeled on what several other states have done, would change a range of taxes - personal income, business, sales and more - to better reflect the realities of the 21st century service economy. Ideally, it would remove unwarranted exemptions and loopholes, and make the system fairer and clearer.

As House Speaker Larry Householder, R-Glenford, told the Enquirer, "We have to get our tax code right. It has to be overhauled." He's right. They'd better get it done this year.

But Householder's dismissive comment about the voter petition drive - "This is just a bunch of people who don't know the state's budgeting process" - rings hollow. Ohio lawmakers, the supposed "experts," haven't demonstrated a great grasp of the state budgeting process themselves in recent years. During the past decade, state spending increased 70 percent - more than any other state. Last summer, the Legislature passed a budget that increased spending by 11 percent, even though everybody knew the state faces further deficits in the billions in coming years.

It'll take a big wake-up call to force Ohio lawmakers to change their way of doing business. Blackwell's repeal effort could provide that call.




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