Guest Column for Representative Jay Hottinger
State Budget Makes Reforms to Benefit Ohio Taxpayers
When we began the process of passing House Bill 59, the state budget, we wanted to be sure that we would have a piece of legislation that would benefit all of the hardworking citizens of Ohio. I believe we achieved this, in one way, by reforming our tax system, which will make a positive impact in the state.
A challenge we faced was moving the state more towards a consumption-based tax structure and away from an income tax system. The income tax system essentially punishes those who are having economic success. H.B. 59 allows for a net tax cut of over $2.7 billion over the next three years. Small businesses will receive a tax cut of 50% while the personal income tax will be cut by 10%. This affects all Ohio income earners. These cuts will also ensure that Ohio continues to be an inviting state for new businesses to locate. It goes without saying that growing the state economy through new business has a direct impact on every citizen, regardless of location. Not only will Ohio see an influx in money being pumped into the state economy, but with each new business comes new jobs.
In order to stay current, the state sales tax rate will increase from 5.5% to 5.75%. This modest increase will help accomplish the goal of giving people more control over the taxes they pay. Instead of the government deciding who will pay more, this consumption based tax is consumer run, where the tax amount is based on the spending habits of the consumer.
In addition, medium- and lower- income Ohioans will have the option of receiving a new Ohio Earned Income Tax Credit that is equal to 5% of their federal EITC. This will allow for an additional $1.4 million tax cut for these Ohioans.
Tax reform, although imperative to our economical success, is only a part of the state budget. Primary and secondary education received a boost in funding to continue our focused support of education in this state. State aid increased to nearly 70% of Ohio’s schools. Every district will at least receive the same amount of funding as it did in FY’13.
Higher education is an important entity in Ohio and the budget worked to encourage degree completion by making sure that these schools were more affordable for students and their families. By capping tuition at 2% annually for every state school, we are making headway in this area.
I believe this budget is another way Ohio is improving the economy, creating jobs and educating students more efficiently. In fact, this last May, Ohio was the number one job creator in the United States. In addition, unemployment has declined from 9.0% to 7.0 %. Lastly, with a newly reformed tax code, 98% of Ohioans will see a tax cut. Great things are ahead for the Buckeye State and we are on the track to more success in our workplaces, schools and homes.
Rep. Hottinger may be reached by calling (614) 466-1482, e-mailing Rep71@ohiohouse.gov or writing to State Representative Jay Hottinger, 77 South High Street, Columbus, Ohio 43215.