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Ohio Gov Proposes Income Tax Cut, Hikes Elsewhere

The revisions will impose sales taxes on professional services â¿¿ including lawyers, lobbyists and accountants â¿¿ in a move that is sure to set off a contentious policy fight at the Statehouse. States that have tried something similar, including Michigan and Florida, have quickly had to backpedal amid concerns implementation was unworkable. The Ohio plan continues to exempt from the tax some widely used daily services, including child care, housing and medical services.

The administration hopes to ease some of the opposition by reducing the overall sales-tax rate while expanding the tax to other areas. Kasich said the time has come to rewrite the code to include those services.

The budget package also incorporates Kasich's answer to Ohio's unconstitutional school funding plan. The overhaul outlined last week delivers $1.2 billion in additional funding to districts over the biennium, which the budget couples with a new formula for higher education funding that ties half of state subsidies for public colleges and universities to the number of students who graduate, rather than attend, their institutions.

Kasich's "Achievement Everywhere" education plan would bring all school districts up to the tax base level of a district with $250,000 in property value per student, easing wide disparities in millage revenues from local property tax levies that have contributed to courts declaring the current system unconstitutional.

It would establish a $300 million fund to pay for competitive innovation and efficiency grants among other proposals, and delivers additional add-ons to districts to account for the number of poor, special-needs, gifted and college-bound students.

The governor said districts should not be nervous about their individual state subsidies, because the plan takes into account their ability to pay.

"There's no anxiety to have, you are who you are," Kasich said. "If you're not 6-foot-tall, you can't ride on the big roller coaster. ... It's an exact science. It's not a matter of political opinion."

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