Kasich Releases Budget, Pushes For Increases In Drilling & Tobacco Taxes

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Ohio Gov. John Kasich has rolled out an ambitious election-year policy document that cuts Ohio's income tax through increases in drilling and tobacco taxes and streamlines government services for the poor and unemployed.
Details of the Republican governor's mid-biennium review, or MBR, were released Tuesday. Testimony is set to begin Wednesday in the GOP-led Ohio House. The bill's prospects amid campaign season are uncertain.
Kasich, who faces re-election this fall, proposes cutting income taxes by 8.5 percent over the next three years, taking the top tax rate to 4.88 percent by 2016. Commercial activity, cigarette and drilling taxes would rise to pay for the reduction.
He also proposes streamlining Ohio's workforce development and poverty programs, tying all public-college funding to graduation rates and expanding vocational and dropout education offerings.
A look at the key proposals in Ohio Gov. John Kasich's midterm budget bill:
- Cut Ohio income taxes by 8.5 percent to bring the top rate to 4.66 percent by 2016.
- Raise Commercial Activity Tax rate from 0.26 percent to 0.30 percent.
- Increase cigarette taxes from $1.25 to $1.85 a pack, with similar increases on other tobacco products and e-cigarettes.
- Raise the severance tax rate on high-volume drillers to 2.75 percent of gross receipts, exempting $8 million per well in start-up costs.
- Earmark 20 percent of drilling-tax collections to local communities, through a combination of direct payments, competitive transportation grants and a legacy fund controlled by newly created regional commissions appointed by the governor.
- Extend vocational options to 7th and 8th graders.
- Establish dropout recovery programs for adults ages 22 and older at eligible community colleges and career centers.
- Provide $10 million in casino licensing fees for Community Connectors mentorship program.
- Tie two-year colleges' state funding to completion rather than enrollment.
- Base 50 percent of state funding to technical centers on the percentage of students who find jobs.
- Allow two-year colleges to offer students a guaranteed tuition rate.
- Create a globalization liaison at the Board of Regents to attract and retain international students.
- Fast-track state licensing and certification for veterans and their spouses.
- Grant free college credit to veterans for military training and experience.
- Allow veterans priority course registration and high-quality academic and career counseling.
- Establish state Human Services Innovation Office within Ohio Department of Job and Family Services.
- Allocate $26.9 million from the national tobacco settlement to for tobacco prevention and cessation efforts.
- Direct $6.5 million to new substance abuse prevention initiatives.
- Streamline three federal workforce training programs to avoid overlap and ease use.
SOURCE:  Ohio Governor's Office