Ohio Dems: Use surplus, tax to aid communities

April 17, 2012 at 12:00a.m.

COLUMBUS

Democrats in the Ohio House are asking the Republicans who control the chamber and Gov. John Kasich to consider diverting state surplus funds and part of the proceeds of a proposed fracking tax to local governments and school districts.

Backers say their “Kids and Communities First Fund” would help offset state cuts implemented under Kasich’s biennium budget.

“Right now, Ohio has a budget surplus of $265 million and an additional $250 million in the ... rainy-day fund,” said House Minority Leader Armond Budish, a Democrat from the Cleveland area.

“The state of Ohio also has the potential for up to another billion dollars in additional new revenue under Gov. Kasich’s proposal to modestly increase the severance tax on the oil-and-gas industry. Yet despite this growing revenue and all these new policy changes ... nothing is being done to curb the growing financial crisis for schools and local communities that was brought on by last year’s historically deep state budget cuts.”

House Democrats’ plan, unveiled Monday during a press conference at the Statehouse and expected to be offered as an amendment to Kasich’s midbiennium budget bill, calls for about $400 million in state surplus funds and new tax collections to be set aside for schools and local governments.

Of that total, $265 million would come from taxes and other revenues collected but not slated to be spent under the current biennium budget plan, plus $120 million from the state’s rainy-day fund and $15 million from increased fracking taxes.

The fund would be replenished in coming years through oil and gas taxes and disbursed to schools and local governments in the form of grants and other outlays, awarded on a competitive basis.

“We are in a state of emergency,” said Rep. Alicia Reece, a Democrat from Cincinnati, concerning the need for increased funding for local governments. “If we don’t protect our communities, we undercut our economic recovery, and we hurt working and middle-class families. ... We say we’re not increasing taxes at the state level, but we cut funding at the local level ... forcing them to raise taxes at the local level.”

It’s not likely that Statehouse Republicans will support the plan, however.

“The governor’s plan is to lower the income tax for every Ohioan, make Ohio more competitive and help small businesses grow, create jobs,” said Rob Nichols, Kasich’s spokesman. “Unsurprisingly, they want to raid the rainy-day fund, grow government and spend more taxpayer money. We’ve seen this tax-and-spend movie before, and it didn’t end well.”