Gov. John Kasich’s State of the State address on Monday night was 8,234 words, was interrupted by applause 34 times and contained statistics that were largely accurate.
But Kasich’s policy-heavy speech also included a few missteps and points that required clarification, as did statements made on Monday by his likely Democratic challenger in this fall’s election, Cuyahoga County Executive Ed FitzGerald, a Dispatch analysis shows.
Kasich said: “Out of respect for the Ohioans who get up every day — they go to the mill, the office, the factory, the farm, out of respect for the small businesses that are into job creation, we’ve got to keep cutting taxes. We have to keep doing it. That’s why I’m proposing another round of tax cuts that will finally succeed in getting Ohio’s tax rate below 5 percent.”
Unless those Ohioans going to the mill, the office, the factory, the farm and the small business own those places, they probably already pay less than 5 percent in state income taxes. By 2015, Ohioans earning less than $800,000 — 99.6 percent of all Ohio returns — already will be paying an effective income-tax rate of less than 5 percent.
Kasich offered no details on his new tax proposal, but the $2.7 billion tax cut he signed last year was a 10 percent income-tax reduction across the board. It was paid for with a sales-tax increase, among other things.
The usually Kasich-friendly Ohio Society of Certified Public Accountants thinks the governor would seek an increase in the commercial-activities tax on businesses and sin taxes on such products as tobacco to pay for the new cut. Kasich’s office declined to comment.
Kasich said: “Since 1995 — listen to this — $12 billion in income has left Ohio for states with lower income taxes — $12 billion since 1995 walked out the door.”
Kasich based this statement on information in the book How Money Walks, by Travis H. Brown, who is a strategist and fundraiser for the Republican Governors Association. In his book, Brown tracks data from the Internal Revenue Service and U.S. Census Bureau that show migration patterns and taxable income assigned to those people who migrate from state to state.
According to the companion website for Brown’s book, Ohio lost $18.4 billion in income from 1992 through 2010. But of the five states to receive the highest amounts of Ohio’s migrating wealth, two (North Carolina at $1.51 billion and South Carolina at $1.18 billion) have income-tax rates higher than Ohio’s 5.3 percent.
Jim Lynch, a spokesman for Kasich, said the governor’s office counted a loss of $12.2 billion to more than 20 states with top tax rates below 5 percent. “There are other reasons capital leaves, we acknowledge that, but clearly one big reason is taxes,” Lynch said.
Kasich said: “Our folks have created more than 170,000 jobs over the period of the last three years. That’s 155 new jobs each day for the past three years.”
Ohio has added 170,500 private-sector jobs since January 2011 — Kasich’s first month in office. When public-sector losses over that time frame are factored in, the state’s job gains under Kasich are reduced to 138,700.
Kasich said: “To make sure Ohio is doing everything it can to help our youngest learners, we’re raising the standards for publicly funded early-childhood education so that more children enter school ready to succeed.”
The governor made this statement as he was listing a host of new policies he would soon deliver to the legislature. Lynch said a review of early-childhood education standards is ongoing, but a new policy would not be introduced as part of Kasich’s mid-biennial budget review. About $800 million a year in state and federal money is spent now on such education.
FitzGerald, in his “response” video to Kasich’s speech, taped before Kasich spoke, said: “Most troubling is the governor’s continued failure to address Ohio’s most pressing challenge: Four hundred thousand Ohioans looking for work and stagnant job growth that has Ohio ranked 45th in the nation in the creation of new jobs.”
Both of FitzGerald’s statistics are numerically correct but lack context. Ohio indeed has 415,000 unemployed workers, including 30,944 more jobless than a year earlier. But that’s 122,780 fewer than before Kasich took office in January 2011.
Ohio was ranked 45th in the U.S. in 2013 for job creation as a percentage of the state’s workforce. Kasich has always measured job growth, even when he was challenging then-Gov. Ted Strickland, based on sheer numbers of jobs added or lost.
FitzGerald said: “A simple example of how this governor just doesn’t see the real Ohio is that he actually doesn’t go and see it.”
FitzGerald made the statement within the context of Kasich’s refusal to meet with displaced workers from the shuttered Ormet steel plant in southeastern Ohio. But Kasich is well-traveled within Ohio and has not shied from places that some might consider hostile territory.
For example, Kasich’s use of the state plane through his first eight months in office was more than triple the number of flights Strickland took in all of 2010. Also in 2011, Kasich formally launched his campaign to defend Senate Bill 5 in Toledo — perhaps the strongest of union strongholds in Ohio.
By Joe Vardon - The Columbus Dispatch, Ohio (MCT)
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