Tax plan cooperation bearing fruit in other budget areas

Published 12:00 am Wednesday, April 6, 2005

Top GOP lawmakers, while backing Gov. Bob Taft's changes to the state tax system, wasted little time nixing Taft's plan to impose a first-ever parking fee for Ohio's state parks.

Yet Taft was willing to listen to lawmakers' alternative, to tap a state recycling fund instead to help shore up the parks.

The genial debate so far reflects continuing cooperation between Taft and fellow Republicans over the tax plan, agreement that's left room to discuss other budget issues in more friendly fashion.

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''Instead of discussing the big issue, where do we go with tax policy, we're all pulling in the same direction, and we're having a discussion rather than a debate,'' said Rep. Tom Raga, a Mason Republican and vice-chairman of the House Finance Committee.

''It has opened up opportunities to focus on some of these policy issues, which at least in my experience aren't addressed this early in the budget-process discussion,'' Raga said.

By contrast, lawmakers ignored Taft's 2003 tax plan, then fought him over raising cigarette and alcohol taxes to fix a budget shortfall.

What the average Ohioan gains from this cooperation is an overhaul of the state's Depression-era tax code. Whether that's a good thing depends on what side of the issue you're on.

Proponents say the plan will improve Ohio's stagnant economy by lowering personal income taxes for many, including an elimination of taxes altogether for thousands of the state's poorest workers.

They also say it will make the state a more attractive place for businesses to locate or expand, leading to an uptick in the economy and more jobs for all.

Opponents, including many Democrats, say the income tax cuts favor the rich over the middle class. They also say eliminating taxes on machinery and equipment could hurt schools, which receive the bulk of those taxes.

Taft announced the park fees as a done deal in January, a rule created by the Department of Natural Resources and confirmed by a legislative rules-making committee last month.

Yet when news came of its demise last week, even Taft's Natural Resources director sounded more relieved than surprised.

''I can understand why they were uncomfortable in imposing the park fees,'' said ODNR director Sam Speck. ''And frankly, that will take off some of the pressure on our people who won't have to devote time to collecting those parking fees.''

Elimination of the fee is one of several proposed changes the House plans for their version of the two-year $51 billion budget they expect to approve next week.

Where Taft announced a modest $9 million expansion of the state's school voucher program for students in academically failing schools, House Speaker Jon Husted wants a major increase in the program, adding 18,000 students at a cost of as much as $81 million a year. Taft said he's waiting for details.

Husted also announced plans to require school districts to band together to buy health insurance to lower overall costs. Taft supports the idea but hadn't yet put forward his own proposal.

But despite complaints from the Ohio Chamber of Commerce and some other business groups, the House appears committed to backing the governor's tax plan.

Taft wants to lower personal income taxes, eliminate a tax on companies' inventory and equipment and replace the existing business tax with a new, extremely low tax that raises money from a greater variety of companies.

Cooperation over the tax plan has translated to cooperation over issues across the budget, said Taft spokesman Mark Rickel.

''We've got a very good relationship and it's been a good partnership,'' Rickel said. ''The communication is frequent. It's open. It's enabled us to have a very good process thus far.''

Andrew Welsh-Huggins is the statehouse correspondent for the Ohio Associated Press.