The governor has also opted to support expansion of Medicaid under the federal health care law, providing health care coverage to potentially half a million uninsured Ohioans. He said he still opposes the health care mandate aspect of President Barack Obama's Affordable Care Act, but he predicted funding chaos especially for small-city hospitals by rejecting the expansion offer contained in the law.

"It's an important point to make that we're recapturing something for a very useful purpose that we think in the end will allow Ohio to move forward," Kasich said.

He called it "the right decision for Ohio," and said it's important that the state send money to those most in need.

"Many of our mentally ill are in our jails today, because they received no care, or living under a bridge," he said. "It's not acceptable in a big state like Ohio."

Kasich campaigned in 2010 on a pledge to reduce Ohio's income tax, and he delivered on the promise with Monday's proposal. To fund the cut, he's resurrecting a proposal to increase Ohio's severance tax on large-volume oil and gas drillers in what the administration says is a "fair, equitable and competitive" change. Their plan eliminates the tax altogether on small oil and gas producers.

"What this proposal does is it aligns the tax code with the realities of the economy," state Tax Commissioner Joe Testa said.

The Legislature failed to act on the oil and gas proposal last session, after pushback from oil and gas producers, local communities enjoying the bounty of the energy exploration boom, and some tea party groups opposed on principle to tax increases.

___

Office of Management and Budget: http://obm.ohio.gov

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

If you liked this article you might like

What's Behind the Surge in Energy Stocks

Hillary Clinton Says Prosecuting Individuals is Key to Wall Street Reform