This week, Mayor Frank G. Jackson formally voiced opposition to Gov. John Kasich’s proposed 2018-2019 Ohio Biennial Budget. The proposed budget will lessen the amount of dollars allocated to the City of Cleveland and tax away more of the city’s “home rule” authority.
Here’s why Mayor Jackson opposes Governor Kasich’s proposed budget:
- Attack on Cleveland’s “home rule” powers by centralizing business tax collection to a newly created State Agency – Currently, cities in Ohio collect business taxes on earnings generated within their city limits. The proposed change in the State of Ohio budget would shift municipal business tax collection to a state agency – eliminating the city’s ability to oversee an integral part of its tax base. Centralizing business tax collection would be yet another diminishing of local governance power and would ultimately result in less dollars for Clevelanders.
- More Cuts to Local Government Fund dollars – The State wants to again change the Local Government Fund distribution model. Under the proposed new model, if the City of Cleveland is deemed able to “raise revenue” via tax increases, then it will receive less state dollars. The money lost would go to other state municipalities deemed “in need.” In other words, if Cleveland were deemed to be “prosperous,” its Local Government Fund monies would be allocated to a different municipality though Cleveland itself is in need. This has the net effect of redistributing tax dollars earned in cities like Cleveland to rural areas.
- Sales tax increase harms Clevelanders – The state proposes to raise the sales tax rate from 5.75 percent to 6.25 percent and expand its tax base. The expanded base includes purchases like cable television, certain surgeries and landscaping. This tax increase is considered “regressive” because those with lower incomes spend a larger portion of their income on sales tax relative to those who are wealthier. This new tax increase would push the tax burden onto those with lower incomes more than those with higher incomes.
- Tax cuts for the richest Ohioans hurts Clevelanders – The budget would reduce the number of tax brackets from nine to five and allow for a tax cut for the top bracket. The City of Cleveland opposes tax breaks for the rich at the expense of the poor and middle class. Income tax cuts for only the highest tax bracket, no cut for middle class or low income Ohioans.