By Jim Siegel
Enquirer Columbus Bureau

COLUMBUS - With his effort to repeal the penny sales tax increase all but dead, Secretary of State Ken Blackwell and his tax-reform group are shifting focus to a constitutional amendment that would significantly restrict government spending and new taxes.

PROPOSAL

• A two-thirds majority for the General Assembly to increase taxes. • Limits annual state spending increases to inflation plus the percentage of population growth, unless a two-thirds majority votes to go higher. • Spending over the limit also requires approval by Ohio voters. • Establishes a rainy-day fund not to exceed 15 percent of the total budget. • Excess general revenue funds must be returned to citizens through an income tax reduction. • Prohibits state mandates on local governments without full funding. • Prohibits local governments from increasing taxes without a vote of the people.

Citing a 71 percent increase in state spending over 10 years, rising taxes, slow job growth and the rapid exodus of Ohio's young college graduates, Blackwell said it's time to end the state's "deepening economic death spiral."

If enough signatures are collected and certified, the amendment is targeted for the November 2005 election. It would cap increases in government spending at inflation plus the percentage of population growth - a limit well below recent growth of nearly five times the rate of inflation, Blackwell said.

It also would require a two-thirds majority for lawmakers to approve any tax increase.

The amendment would force future lawmakers to make tough choices in how to fund Medicaid services, schools and universities - three areas that make up 74 percent of the state budget.

Tom Johnson, state budget director, said Gov. Bob Taft has ordered $1.6 billion in cost reductions over three years, reduced the number of state workers by 3,500 since 1999, and held those workers to two-year pay freezes.

But Medicaid costs have skyrocketed, he said, driving budget increases.

Johnson had no comment on the amendment. His predecessor, former budget director and current lobbyist R. Gregory Browning, warned of tough choices.

"You have to go into this with your eyes wide open," he said. "On one hand, it's understandable with the escalating cost of government. On the other hand, you have to understand what you're buying and why you're buying it."

Blackwell has backing from some anti-tax groups and the National Federation of Independent Businesses-Ohio. But some lawmakers are skeptical.

Sen. Bill Harris, R-Ashland, chairman of the Senate Finance Committee and presumptive Senate president in 2005, said the amendment "raises lots of problems."

It could render the legislature ineffective, he said.

"Requiring a two-thirds majority, on the surface, makes a lot of sense," Harris said. "But you have to look at the repercussions of that. What flexibility does that give the legislature to govern the way people elected them to govern?"

Blackwell said the newly named Citizens for Tax Reform will present petition language to the Attorney General's Office for certification by Aug. 27.

The amendment is similar to other bills pending before the legislature, including a resolution introduced by Rep. Jean Schmidt, R-Loveland, in February.

Rep. Tom Brinkman, R-Mount Lookout, said he supports the idea of restricting government growth and tax increases, but he's worried that various anti-tax groups won't work together to make it happen.

"I'm concerned that we're going to trip all over ourselves," he said.

Scott Pullins, president of the Ohio Taxpayers Association, and Blackwell have feuded recently over campaign finance investigations.

But Pullins' Web site on Wednesday said his group would support the amendment and help circulate petitions.

This will be the second petition initiative for Blackwell's group, formerly called Citizens for Tax Repeal. Early this year it attempted to force lawmakers into repealing by December the temporary sales tax increase they approved in June 2003.

But opponents have tied up the petitions with legal challenges, and chances of the issue making the November ballot are almost nonexistent, even if Franklin County Judge Dale Crawford makes a ruling soon.

Blackwell said the sales tax is "still a high-impact political issue in the 2004 election."

E-mail jsiegel@enquirer.com