Businesses and organizations have reservations about Kasich plan

Columbus Dispatch

COLUMBUS

One day after Gov. John Kasich urged lawmakers in his State of the State speech to resist those who want to avoid tax changes in Ohio, a host of business and professional organizations lined up in a House committee to voice concerns about his plan.

In his new two-year budget, Kasich has proposed $5.7 billion worth of income-tax cuts and $5.2 billion worth of tax hikes, including a sales-tax increase and expansion, along with increases in the commercial activity, fracking and tobacco taxes.

“We have to continue to win battles against the status quo if we want to take Ohio where we want it to be, where we need to be, and that means we have to continue to battle special interests that want to lock us in where we are today,” Kasich told a joint session of the Legislature Tuesday, plus about 900 others in attendance in Wilmington.

“I get it that any change to tax policy is hard. Like barnacles layering up on a pier in the ocean, the special interests cling to the status quo, and any change at all is disruptive to them.”

GOP lawmakers have expressed concern about a variety of pieces of Kasich’s tax plan, and Wedensday groups including grocers, auto dealers, accountants, newspapers, big manufacturers and lawyers told the House Ways and Means Committee why they think the tax package is a bad deal, even with income-tax cuts.

“Many businesses believe they will end up paying more in tax than they pay under the current tax system,” said Scott Wiley, president of the Ohio Society of CPAs. He highlighted the proposed 23 percent increase in the commercial activity tax (a business-paid gross receipts tax), and the sales tax that would go from 5.75 percent to 6.25 percent and be expanded to more services, including “management consulting.”

This broader sales tax, Wiley said, would leave Ohio businesses at a competitive disadvantage. Others agreed.

“We believe that there will be an added tax, and cost burden on large manufacturers headquartered in Ohio versus those with headquarters in other states,” said Robert Lapp, president of the Manufacturing Policy Alliance.

Tim Doran, president of the Ohio Automobile Dealers Association, also noted that the proposed reduction in credit for a trade-in on a new vehicle would cost a buyer an extra $663 when trading in a $15,000 used car for a $35,000 new vehicle.

The trade-in credit, Doran said, can be key to getting a customer into a comfortable monthly payment.

Rep. Jeff McClain, R- Upper Sandusky, chairman of the committee, plans to have two more weeks of hearings.

“Obviously, the business community has grave concerns about parts of the proposal,” he said. “Everyone loves the income-tax cuts, but how do we get there?”