TAX NEWS - JUNE 2010

Ohio Tax: Republican candidate pledges no tax hikes

Republican gubernatorial nominee John Kasich has ruled out raising taxes to help close a projected $8 billion shortfall in Ohio's next two-year budget.

Kasich has signed a pledge "to oppose and veto any and all efforts to increase taxes," meaning that if elected in November, he would be left with only the option of making steep reductions in state services and programs to close the massive budget hole that likely will face the next governor.

Lis Smith, campaign spokeswoman for Gov. Ted Strickland, said Strickland views such pledges as "nothing more than gimmicks" and he has refused to sign them during his political career.

"I think it's outrageous that John Kasich would sign this pledge when he has consistently refused to provide any details about his plans," Smith said.

Asked if that meant Strickland would consider raising taxes as part of a budget-balancing solution, Smith declined to be definitive: "Ted believes it's irresponsible to make blanket statements about future governing decisions without knowing what the future circumstances will be. However, given the economic recovery that the nation and Ohio are beginning to see, he continues to believe that a tax increase would be unwise."

As he did during his 18-year stint in Congress, Kasich signed the so-called Taxpayer Protection Pledge sponsored by Americans for Tax Reform, a conservative group headed by Grover Norquist.

"John Kasich knows that lower taxes are the key to creating jobs and reviving our economy," said Rob Nichols, Kasich's campaign spokesman. "Ted Strickland believes in higher taxes, which is why our state is in such bad shape, and we are happy letting the voters decide who's right."

Asked if Kasich would rely solely on cuts to balance the next budget, Nichols sidestepped, saying Kasich would offer a comprehensive plan that will create jobs to generate more tax revenue.

The state income tax has been reduced by 16.8 percent in the past five years, and property taxes for senior citizens also have been cut.

Gayle Channing Tenenbaum, spokeswoman for the Public Children Services Association of Ohio, said a "balanced approach" will be needed to solve the impending budget crisis, and relying on cuts alone would devastate programs for children, the elderly, the mentally ill and others in need.

"You can't cut your way out of an $8 billion deficit,"

Tenenbaum said. "The safety net would be totally shredded. It would be a dreadful thing."

Kasich also has proposed eventually eliminating the state income tax, which generates more than 40 percent of the state's tax revenue used to fund schools, universities and myriad services.

Sen. George V. Voinovich, R-Ohio, has refused to sign the tax pledge, saying it conflicts with federal lawmakers' responsibility to deal with the country's $13 trillion debt. Some 31 of Voinovich's 41 Senate GOP colleagues have signed the pledge opposing any new tax increases.

"What they have to understand is that that pledge is inconsistent with the oath of office that they took when they became members of the United States Senate," Voinovich told The Hill newspaper, predicting that citizens will demand that lawmakers "act responsibly" to deal with budget deficits.