Kasich to cite $800M business cost in tax fight

COLUMBUS (AP) — Republican Ohio Gov. John Kasich is preparing to make an $800 million argument for his plan that would allow the state to process and distribute the taxes levied by cities, counties and villages on business profits.

An Ohio Department of Taxation estimate released today to The Associated Press suggests that's how much Ohio business taxpayers would save in compliance costs under the governor's proposal.

The plan, contained in the budget bill being debated in the Ohio House, calls for the department to process the payments then return the proceeds to municipalities, with interest minus a 1 percent administration fee.

The administration plans to use the $800 million figure to push back against objections raised by members of the Ohio Municipal League, which sees Kasich's plan as a power grab for one of the largest revenue sources municipalities continue to control.

The nonpartisan Policy Matters Ohio estimates the business-profits tax accounts for more than $600 million of the more than $4.7 billion in municipal income-tax revenue collected annually.

"It's no wonder that city councils across the state have been passing resolutions opposing the tax collection proposal," said Zach Schiller, research director for the group. "The General Assembly should be wary of this plan."

The state estimates cities would save $9 million a year on administration, a figure the Cleveland-based think tank says its calculations show is exaggerated. Among concerns is that the move eventually could lead to the state eliminating the tax altogether.