GOP: We won’t back tax increases

By Mark Kovac | April 26, 2011 at 12:00a.m.

COLUMBUS

The chairman of the House Finance Committee wasn’t offering many specifics Monday on how Republicans in his chamber plan to alter Gov. John Kasich’s $55.5 billion biennial budget proposal.

But Rep. Ron Amstutz, a Republican from Wooster, and Rep. Christina Hagan, a Republican from Alliance, did make one thing clear: The House GOP isn’t going to back tax increases as a means of balancing the budget.

“That’s not in the interest of the majority of the House,” Hagan told Statehouse reporters Monday. “It’s not something that we’re willing to take on. ... Ohio’s combined state and local tax burden is more than most other states, so that’s not something we’re willing to look at if we want to be open for business.”

Kasich’s two-year spending plan includes a mix of agency spending cuts and policy reforms to fill a projected $8 billion budget gap resulting, in part, from the loss of federal stimulus and other one-time funds.

The governor’s budget calls for more than $2 billion in taxes formerly distributed to local governments and school districts to be redirected into the state’s coffers.

Critics of the plan have called on lawmakers to consider tax increases to cover the costs of needed state services rather than taking funding away from local governments.

But Hagan and Amstutz said such increases would be a mistake. Citing projections from the Ohio Department of Taxation, Hagan said income-tax rates would have to be increased 46 percent to 56 percent in order to fill an $8 billion hole.

That would equal about $761 more in tax payments for an Ohio family of four with an adjusted gross income of $66,000.

“Ohio’s economy is very fragile, and we have a slow recovery coming,” Hagan said. “Having said that, it’s important that we don’t rely on taxation at this point for any type of recovery.”

Amstutz is chairman of the House’s Finance Committee, which has played host to extensive hearings in recent weeks on the state budget.

That process included about 1,000 amendments offered by Republicans and Democrats for changes they would like to see made to Kasich’s budget proposal.

House Republicans are busy early this week drafting a substitute bill, which they expect to introduce later this week, with an eye toward a vote by the full chamber late next week.

“We will be ready to put the substitute bill out for review late afternoon on Thursday,” Amstutz said. “We’ll try to give people a chance to start reading that. And we’ll start hearings then the next morning, public hearings, so that folks can come in and talk to us about their take [on it].”

Afterward, the process will begin again in the Republican-controlled Ohio Senate, which will have its own hearings and make its own changes to the budget. The spending plan needs to be passed by lawmakers by the end of June in advance of the new state fiscal year.