Gov. Ted Strickland Proposes Postponement of Income Tax Reduction in the Absence of Slots Plan

Governor Ted Strickland of the state of Ohio endorsed the postponement of a scheduled reduction of income-tax on September 30th, 2009 as the best option to address an $851 million deficit in education funding. Gov. Strickland discussed a new study that predicts an education-funding shortfall because of the Supreme Court decision on the slot machines in a press conference in Columbus.

The Ohio Supreme Court decided that the language in the budget that permitted slot machines at Ohio racing track is subject to a voter referendum. Gov. Strickland previously approved slot machines as an option to close the budget shortfalls of Ohio. He suspended the slots plan as the group that won the Supreme Court decision, LetOhioVote.org, gathers signatures to place the slots plan on the November 2010 referendum.

Legislation approved in 2005 called for lowering personal income tax rate by 4.2% each year from 2005 to 2009 in Ohio. Strickland's proposal to delay the reduction of income would raise $844 million.

For a family earning $65,000 annually, the delay in the income tax reduction would lead to a tax bill that is about $90 bigger. He said that the delay would have a less impact than an increase in sales-tax, which would affect consumer spending and affect economic growth.

Strickland said that the income tax change is a better option than teacher layoffs and the suspension of athletic programs. Without the new revenue, Gov. Strickland said that state funding to local school district would have to be slashed by 10%. For Cincinnati Public Schools, Gov. Strickland said that the cuts over two years would total $37.9 million.

University of Cincinnati's interim president, Monica Rimai, said that they appreciate Gov. Strickland's decision to resolve the budget crisis. She added that they are confident that the General Assembly will continue to collaborate with Gov. Strickland to create an acceptable solution to the problem presented by the video lottery terminal issue.

Thursday, 26 November 2009
Darren G. Strachan