Governor John Kasich's Budget: Tax Cuts, Tax Hikes

Gov. John Kasich’s third budget includes another round of income tax cuts, and tax increases that he has proposed before – and lawmakers have rejected. Gov. Kasich had already announced that his budget would include a $523 million dollar tax cut, from a 23 percent across the board income tax cut and the elimination of income tax cuts about a million small businesses. And it includes the doubling of the personal income tax exemption for lower-income Ohioans and the plan to expand subsidized day care to people making up to 300 percent of the federal poverty level. And as expected, the governor proposed paying for this with a package of tax increases: a dollar increase in the tobacco tax, raising it to $2.25; a 6.5 percent increase in the tax on oil and gas drillers; a 25 percent increase in the commercial activity tax or CAT; and a half-percent hike in the sales tax to 6.25 percent and a broadening of the tax to currently non-taxed services. Lawmakers revised down a previous sales tax increase, rejected his previous attempts to hike the drillers tax, and didn’t even hold hearings on last year’s 60-cent tobacco tax increase.