Ohio Continues Down the Road of Economic Success
When Governor John Kasich was elected in 2010, the state of Ohio had an $8 billion budget deficit. Today, the state has a $2 billion surplus. Just last year, the state of Ohio was ranked the forty-fourth worst state in which to do business. Today it is ranked twenty-second, a thirteen point improvement in just one year. Ohio currently has an unemployment rate of 7 percent, gradually falling from 10.6 percent since 2009 – 2010. The momentum is just beginning. Promoting a favorable tax environment for Ohio businesses is step one. Enticing other companies, people and their personal wealth to relocate to Ohio is step two.
Most recently, attracted by a 50 percent Job Creation Tax Credit (JCTC), which was approved by the Ohio Tax Credit Authority, Illinois manufacturer PQ Shelters announced its intention to move its operations from Illinois to Mason, Ohio. There they expect to begin by hiring 100 new employees, joining the 300 currently employed by parent company Armor in Mason. The PQ division projects $4.6 million in annual payroll at their new facility within the next three years. Ohio has already added more than 170 thousand new private sector jobs between January 2011 and May 2013.
As the governor is quick to point out, the positive gains have only just begun, and he attributes them to the implementation of many of the pro-growth policies laid out in the 2012 – 2013 budget. Working closely with the General Assembly, a final 2014 – 2015 budget has been produced. It is designed specifically to further accelerate this positive trend.
Ohio’s economic growth has significantly increased the revenues to the state. While some governors may find new ways to spend the money by adding new expensive programs and increasing entitlements, Ohio will continue down its fiscally responsible path. As the cornerstone of the budget, $2.7 billion in further tax relief will be available for all Ohioans and job creators. This will include additional cuts in personal income taxes over the next three years. Taxable income from small business will be reduced by 50 percent on the first $250 thousand of business income. It is estimated that this measure alone will free up more than $1.6 billion in capital, allowing for new equipment investments and increased hiring.
On the cost-cutting side, the budget continues the 2-year spending reductions that down-sized the state bureaucracy by 10 percent, and eliminated the number of sub-cabinet positions. Redundant state agencies were also merged for greater efficiencies.
In the area of higher education, state funding will be based more on successful graduation than increased enrollment. University funding tied to graduation will increase from 20 percent to 50 percent. In-state undergraduate tuitions and fees will be capped at 2 percent increases over the prior academic year.
To the credit of state legislators and governor Kasich, the Buckeye State has developed a clear blueprint for a better Ohio. It is one that builds on prior successes, and focuses on the two most important elements for future growth – increasing revenues while reducing costs.