COLUMBUS - Revitalizing Ohio's economy to create jobs andattract business was the major focus for state officials yesterday at theannual Associated Press legislative seminar, where they outlined theirpriorities for 2005.
Gov.Bob Taft's proposal to cut personal income tax rates, which are among thehighest in the country, by 21 percent across-the-board during a period of fiveyears garnered wide support from Republican officeholders.
"Taxreform is the single most important piece of unfinished business we mustaccomplish to send a strong message that Ohio is open for business," Taftsaid.
Loweringincome taxes is crucial to retaining the states' more than 300,000 smallbusinesses that employ 2.5 million workers and create two-thirds of new jobs,Taft said.
Underthe new tax system, people making less than $10,000 per year would not have topay income tax. But Senate Minority Leader C. J. Prentiss, D-Cleveland, saidnot to get lost in the rhetoric - it would only save them $12.
Tofund the tax reform, the governor wants to renew half of the penny sales taxset to expire June 30 - a proposal that has drawn criticism from Democrats.House Minority Leader Chris Redfern, D-Port Clinton, called the possibleextension of a tax that was sold as temporary yet another "brokenpromise" from Taft.
Redfernand Prentiss said the proposed reform would benefit only people in high-incomebrackets and would victimize retailers and the lower and middle classes.
Increasedtaxes on beer and cigarettes, coupled with the half-cent sales tax, would limitthe ability of the middle class to purchase consumer goods and to pump moneyinto the economy, Redfern said. And because the proposed income tax cut isacross-the-board, people who earn more, keep more.
"Thenotion that flattening the income tax would create economic development isillogical," Redfern said.
Ina heated panel, three Republican contenders for governor - Secretary of StateJ. Kenneth Blackwell, State Auditor Betty Montgomery and Attorney General JimPetro - turned the legislative seminar into an informal gubernatorial debate.
Themain point of contention was the merit of Blackwell's proposed constitutionalamendment to limit government spending, tying it to the rate of inflation withadjustments for population growth. In addition, he proposed paying a fixed rateof the general revenue fund to the local government fund - a fund which accountsfor a substantial amount of local governments' funding.
Montgomerysaid she thought a fixed rate for the fund is short-sighted and that the bestway to help people on a local level is to stimulate the economy and create newjobs, which requires funding cuts.
Petrorecognized the importance of local government funding, citing townships thatrely on state funds for 90 percent of their budget. But, he also disagreed withBlackwell's proposed amendment, saying "The reality is that everything ison the table right now."
Thelocal government fund constituted 11.6 percent of the Athens County budget for2004, and is estimated by local officials to contribute 10.5 percent to the2005 budget.
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