John Kasich recently cited the need to examine closely the roughly $7.5 billion a year the state gives out in tax credits, exemptions, deductions and exclusions. Now the governor has impressive support from public policy groups reflecting a wide range on the ideological scale. They have seized the moment to reiterate their shared interest in achieving a long-overdue evaluation of the array of state tax expenditures.
The governor and his team are working on a package of tax reforms, to be introduced as part of budget deliberations next year. Kasich has made no secret of his goal to find money to lower further state income tax rates, this despite drastic cuts to schools and local governments.
The three policy groups, the Buckeye Institute for Public Policy Solutions, the Center for Community Solutions and the Greater Ohio Policy Center, acknowledge their differences on how to raise and allocate resources, but they are united on the need to bring an end to ineffective, outdated or counterproductive tax expenditures. Some date back to the 1930s; meanwhile, the legislature continues to enact new ones.
The groups have proposed a most worthy way to accomplish the goal, urging action before the beginning of the next budget cycle. During deliberations on the current budget, they targeted some tax breaks for oblivion. What the think tanks have in mind after that is attaching sunset provisions that would subject the rest to regular scrutiny, delving into the costs and benefits, the kind of analysis now sadly lacking.
Another recommendation is the creation of a Joint House-Senate Tax Expenditure Review Committee, which would make the cost-benefit assessments. Those that fail to prove their worth would be discontinued; others could be extended by a majority vote of the legislature.
Both the House and Senate already have taken tentative steps in this direction. After the election, it is time to begin taking action, putting an end to any further tax expenditures, then setting in motion a plan that captures the essential elements of the policy groups’ recommendations, bringing regular public scrutiny to billions in forgone tax dollars, based on a careful examination of what the tax expenditures really accomplish.