Support for the statewide broadcast of the state of Ohio comes from medical mutual, providing more than one point four million Ohioans peace of mind with a selection of health insurance plans online at Medda Mutual dot slash Ohio by the law offices of PorterWright Morris and Arthur LLP.

Now, with eight locations across the country, PorterWright is a legal partner with a new perspective to the business community, Morad PorterWright Dotcom and from the Ohio Education Association, representing 100 24000 members who work to inspire their students to think creatively and experience the joy of learning online at O H E A dot org campaign moves in two big races next year, and the budget is halfway through.

The legislature headed toward the June 30th deadline to experts analyze what they like in the budget and what they'd lose all this weekend, the state of Ohio.

Welcome to the state of Ohio on Karen Kasler, the second big race of twenty twenty two in Ohio is underway with the first Democrat to join it.

State House correspondent Jo Ingles caught up with Dayton Mayor Nan Whaley this week after she made the announcement that she's running for governor.

October 7th, 2000.

Nineteen Democratic Dayton Mayor Nan Whaley and Republican Governor Mike DeWine were together supporting his eighteen point gun control plan.

Do something.

Do something.

When we gathered for a vigil in Dayton the night after the Oregon district shooting, that is the cry the governor and I heard from the crowd.

And I'm glad to be standing here with him today after he heard that call to do something.

Fast forward to this week.

Certainly, Governor Duyn talks a good game, but when action is needed, he'll fold because he is too weak to stand up to the special interests and extremists in his party.

I've seen that over and over again during covid and I've seen it on other issues around safety in our community.

Eventually, you just can't take it.

If you're not going to get the work done, you got to show a new way.

And I think that's why I decided to run for governor.

This isn't the first time Weli has run for governor.

She ran against Richard Cordray four years ago, but dropped out before the Democratic primary.

Well, there's an old adage in Ohio politics you have to run wants to know the state to really get around the second time.

It's a big state.

We've seen tons of support across the state.

I'm excited about that support.

But Ohio hasn't had a Democratic governor since Ted Strickland was elected in 2006.

And Ohio's legislature has been under Republican control for most of the past three decades.

Woylie says that's the problem.

What we see is the scandals and the corruption just gets worse and worse.

Democrats have noted former House Speaker Larry Householder, who's still in the legislature, is the target of an FBI investigation into a bribery scandal that some have called the worst in recent history.

Former Ohio Republican Party chair Matt Baugus also faces charges in that scandal.

And Householder became speaker after Cliff Rosenberger resigned that office under investigation for federal charges that never surfaced.

Beyond that, Democrats have long complained about being left out of major legislation and finding out details at the last minute with Republicans in supermajorities in the Ohio House and Senate.

It's just accepted that decisions are made in the dark of night.

And here's what it is.

It doesn't have to be that way.

And we all know when we have some sunshine, when we have some disclosure, when we change laws, we can actually have a government that will work for us instead of special interests.

So far, Waili appears to be alone in the Democratic field for Governor DeWine, who's maintained high approval ratings, has said he'll run for reelection, but he hasn't officially launched his campaign.

He already has a far right primary challenger in central Ohio, farmer and businessman Joe Blystone.

And it's expected that former Congressman Jim Renacci will also join the governor's race, as he did in 2018 before quitting to run for the U.S. Senate, which he has said he did at the direction of former President Trump Jo Ingles statehouse news bureau.

Also this week, central Ohio Congressman Steve Stivers said he'll resign his seat next month and will take over the Ohio Chamber of Commerce, replacing retiring president and CEO Andy Dorel.

Stivers decision comes as the process for redrawing lines for Ohio's congressional districts will begin as soon as preliminary census figures are released.

Ohio is widely expected to lose a seat in Congress, and this also means Stivers will not join the crowded GOP primary for the US Senate, which currently features Josh Mandel, Jane Timkin, Bernie Marino and Mike Gibbons.

The state passed a landmark.

Nineteen thousand deaths from covered this week and is approaching a million confirmed cases, while there are one hundred and eighty five point eight cases per 100000 residents, which is a drop from last week's number.

It's still more than three times the number that Gov.. Mike DeWine is aiming for to lift restrictions such as the MASK mandate.

And he says he may change that metric to the number of vaccinated Ohioans.

Nearly 40 percent of Ohioans have started the vaccination process, and just over twenty eight percent, three point three million are fully vaccinated on a mostly party line vote.

The Ohio House has approved the version of DeWine seventy four point seven dollars billion two year state budget that was proposed by Republican House leadership.

The House version of the budget was mostly unchanged from when it was introduced a week ago, though Democrats proposed more than a dozen amendments to try to make changes.

The budget includes a two percent across the board income tax cut, costing the state three hundred and eighty million dollars.

It starts a six year phase in of a one point eight dollars billion overhaul of school funding, and it holds one hundred and fifty five million dollars in covid relief for bars and restaurants, hotels, entertainment venues and new businesses.

Republican leaders kept the 50 million dollars that DeWine proposed to buy around 11000 licenses for unused beds and nursing homes to cut down on crowding.

But the house stripped out twines gun regulations proposed after the twenty nineteen Dayton mass shootings, which Democrats had said weren't tough enough.

But it keeps to WINZ proposed money for police training and body cameras.

And it pushes.

Back on women's health orders by erasing covid violations for liquor permit holders and refunding fines paid and requires more agency spending to go through the panel of lawmakers on the state controlling board.

It also creates a new committee to review covid spending and hear testimony on how the billions of dollars that Ohio will get from the federal government will be used.

There are questions about the school funding overhaul, which intends to lessen the reliance on property taxes as a way to pay for traditional K through 12 schools, which was the basis of the nineteen ninety seven Ohio Supreme Court ruling that the state's school funding system was unconstitutional.

Very simply put, in this overhaul, state aid is calculated with a formula of 60 percent property taxes and 40 percent household income.

Backers of the plan have said that no district will lose money during the six year phase in of the new formula.

But spreadsheets on the Ohio House Finance Committee's website showing how much each traditional district will get.

So six districts will lose funding over the two year budget and ninety six districts will lose funding when the formula is fully phased in.

I put that to Speaker Bob Carr, whose comparison funding plan forms the basis of this budget plan.

It's a multifaceted answer.

So this the six or so in the two years is money outside the basic formula, so it's it's I think it's preschool transportation maybe, and so it's not within the formula itself.

So the basic formula, there is no district that loses money in this two year period.

The other thing to keep in mind is that this comparison is not between what districts actually got in fiscal year twenty one, but what they were originally budgeted to get.

So actually districts are getting actually a little many.

Most districts are getting a little more than this in the spreadsheet just because of the marker where the comparison marker, the marker Kopp is talking about is the point at which the line cut three hundred and fifty five million dollars for K through 12 schools.

Last summer, though, he restored one hundred and sixty million dollars in an executive order in January.

And Kopp says student populations, which are also a factor, have been skewed during the pandemic.

This week I talked with two analysts who've been looking at the budget for years from different perspectives.

Zach Schiller from the liberal leaning Policy Matters Ohio and Greg Lawson from the conservative Buckeye Institute.

Two percent income tax cut is actually very small and is not good, I think have the kind of impact that we would want to see.

So actually, we are very clear.

We issued a statement yesterday that we actually would like to see it be larger.

I think the revenues are coming in about state revenues.

This isn't just the federal money that's coming in, but these are state revenues that are coming in pretty strong and we can afford to do a broader tax cut.

This fits back to things we've talked about for a long time, which haven't changed even with all the outbreak of Cauvin in the pandemic, Ohio still has an uncompetitive overall tax system.

When you look at state and local taxes, I think that's something that oftentimes gets forgotten, is that it's the pyramiding effect of all of the taxes put together.

And so I'd like to see some of that happen.

But I'll also say that there were some missed opportunities in the budget to to do not only to do it bigger, but also pay for it through the closure of some of the tax loopholes, which is something that we've been calling for a long time.

I think Policy Matters wants to see some of those closed as well.

And I think that we we didn't do that again in this budget.

And I think that's a missed opportunity.

So, Zack, let me turn the question to you.

Why not do a tax cuts and state revenues have been coming in?

There's a lot of money coming in from the American rescue plan and give some of that money back at the state appears to be doing certainly a lot better than it was expected to do during a pandemic.

Well, I think there are two reasons.

One is that who is getting this tax cut?

You know, anybody making under twenty two thousand dollars a year while they're paying a lot of other taxes?

In fact, more of their income than upper income Ohioans is getting nothing.

So basically, this is producing next to nothing for middle income taxpayers, nothing for poor taxpayers is going largely to the most affluent who don't need it, who have already gotten forty thousand dollars a year on average in tax cuts over the last 15 years.

So for one thing, it's not going to, you know, Bob and Betty.

But secondly, and probably more importantly, we have all kinds of needs in this state and throwing away three hundred eighty million dollars when we don't have child care, that's affordable.

And so we have people who aren't going back to work because they don't have affordable child care.

We have a school funding formula, which while we thankfully do have a Formula One finally in here, which is really a good step, it's not as it could be better funded than it is.

We have the worst or among the worst black infant mortality of any state in the country.

We have unaffordable colleges.

We have so many needs in this state that need to be met and throwing away three hundred eighty million dollars on the tax cut that's going to go largely to the most affluent Ohioans is really misplaced policy.

Greg, I want to ask you have tax cuts.

Can you really make the argument that they have improved the state's economy?

There are so many people who lost jobs so quickly during this pandemic.

There was a lot of economic fallout here.

It could be argued that many, many years of tax cuts that we've seen in Republican sponsored budgets have really not improved the economic situation in the state.

Well, I think that you have to look at a couple of things.

First of all, we still have a tax code that's riddled with loopholes, which creates all kinds of issues as well.

We we've been nibbling.

I mean, Governor Kasich, former Governor Kasich did a lot of tax cuts, but we have never really seen the overall systematic kind of tax reform that that we've called for the Buckeye Institute.

And I think a lot of other organizations, Ashleigh, Tax Foundation, nonpartisan organizations, would like to see.

And so I'd say that this idea that we've run the experiment and it's been found a failure is simply not true.

The experiments never actually really been tried overall.

And the other thing we have to understand is, again, it's it's the total tax burden and it's the total nature of how we organize things in Ohio.

And it's the combination of both taxes is a real challenge.

And so this is one way that the state legislature can make some improvements on one level while we look to try to do things and reform things at the local level as well.

And this long predates covid.

I mean, this is something that Ohio has had a challenge with for a long time.

And certainly taxes aren't the only challenge in Ohio's economy has, but we've not we've had a stagnating population now for decades.

And there's credits, regulatory reform, which is, you know, we're big fans of a number of different areas doing more of that.

That could have been more than the budget, by the way, as well.

So another missed opportunity there.

So I think that there's a lot of things that we need to do, but we can't just put this onto the side and say we're going to just spend this money.

The other thing, too, is when you're looking at a budget, we got to be real careful that we don't set ourselves up for a fall in the future.

We've got a lot of federal money here.

We're using this to try to get out of the pandemic.

We do need to make public health investments.

We've certainly found that there were problems in our public health system in light of the pandemic.

And so we do need to make some of those improvements.

But we do have resources that are coming in.

We should avail ourselves of those resources in a smart way and one time ways to build out the infrastructure and then use our state revenues to try to create a more competitive environment as we continue to emerge.

Before I turn back over to Zach for just a moment, I want to ask you, you talk about the loopholes that are out there.

One of the loopholes that you would like to see closed is, is this correct, the deduction that allows many small businesses to take the first quarter million dollars of their income tax free.

Would you like to see that loophole closed?

I'll tell you what, if it was done as part of a phase out of the income tax overall, it's something that we would be very open to.

I think that you've got to be careful how you do it, though.

If you just closed it right off the bat and you didn't really do much with the overall rate that impacts everybody.

I think that would actually be a very negative thing.

So how you do it is what really matters as well.

So, Zach, I want you to weigh in on all this.

I mean, let's improve the economy.

There's a lot of misinformation being produced here.

Ohio is not a high tax state.

You can look at the Ernst and Young report done for the main business lobbying organization that shows you that business taxes in Ohio are lower than they are across the country.

If you look at the Census Bureau information and how much do we pay in taxes, either in relation to population or in relation to our income, we are below slightly, but we are below the national average.

So the notion that we have high taxes in Ohio is simply a false it's not correct.

I think also that we've had a 16 year experiment.

We have cut our income tax by a third.

We have generated a one billion dollar new tax loophole.

We've cut business taxes.

We eliminated the corporate income tax.

We got rid of the estate tax altogether.

We have cut seven billion dollars a year in revenue that the state would have received.

But for those changes.

What has it done?

We are going to lose another congressional seat, another to one's own budget, because revenues in this budget are based on an economic forecast that says by virtually every measure, Ohio will underperform the rest of the country over the next two years.

This is an experiment that has failed.

It's gone on too long and it should not be continue to expand the idea that, oh, yeah, let's give rich people more money and they're going to invest more.

We've tried that for 15 years and it's failed miserably.

Let's try something else.

Let's try instead putting those resources into Ohioans so that they can, in fact, perform, as you would know that they will.

Well, we've tried the alternative experiment is something that we did try a long time ago to in Ohio's been behind the national average for decades, going back to at least the 60s and if not the 50s in terms of job growth under every governor that's been in office of cutting the income tax by a third do with that?

Well, that's the point I'm making, is it is that that we had a lot of spending.

We had a high tax rate going back to you.

Look at the 80s and income taxes, but we can get into a debate about that.

But I'd say that the the reality is that it's not just taxes.

And I think that it's we've been very clear about whether we're talking about taxes or cutting taxes has not worked.

And so the point is that higher taxes got regulatory OK, we've got a thousand things.

Cutting taxes has not worked in this state.

And it's time that we ended higher taxes didn't work either in the previous year or two.

But we'll leave it there.

I want to ask Zack for a final thought here before we move on to another part of the budget.

So, Zack, I mean, I hear from Republicans that the idea that putting that money back in taxpayers pockets is a better use of that money than some of the things that you're suggesting.

Your final thoughts?

Well, whose pockets?

Is it going into?

As I've said, it's not going into lower and middle income Ohioans pockets.

So for one thing, I think that's misplaced.

I think also that they're engaging in a risky strategy here.

The federal government is under the rescue plan, providing five point six billion dollars to the state of Ohio.

That's badly needed for broadband, for making up for the educational losses that have occurred over the past year for all of these different purposes.

They're putting at risk that money or at least a portion of that money, because that same plan said it did not say we can't cut taxes.

That's something seemingly repeated constantly by the news media and politicians.

And it's not what the law says.

The law does not say you can't cut taxes.

It says if you cut taxes, you have to pay back the amount that you cut taxes on a net basis.

Because you can't use that federal money to subsidize your tax cuts.

That's what it says.

And so we are risking having to pay three hundred eighty million dollars back to the federal government until the Treasury Department tells us how that is going to be interpreted.

So why are they taking that risk?

I would question and that's something that's that's something that's being litigated.

Ohio Attorney General Dave Yost was the first to file a lawsuit against that provision in the American rescue plan.

We're still finding out more details about that.

But I want to move on to school funding in this budget.

There is a one point eight billion dollar overhaul of state school funding formula, as it's described.

Most of that seems to be left to future legislatures, though only one hundred and fifty million dollars, it seems like, is from this legislature.

So, Zack, I want to start with you.

Is this a good idea if the state wants to guarantee that this formula that's been described is fairer and more transparent, more predictable, is it a good idea to leave so much of that to future legislatures for that to continue?

Well, I think this just underlines why we're throwing away the three hundred and eighty million dollars in tax cuts, we could apply that to better fund this formula to pay for these other needs that I mentioned.

And I think that this is a real step forward that finally would fix or at least go a long way toward fixing the unconstitutional formula that we have that we have had all these years.

It would, in fact, mean that we've looked at what it takes to educate a kid and or kids in general and try to come up with a system that does that it doesn't it isn't completely paid for.

It's phased in.

It doesn't do enough for economically disadvantaged kids, which, again, is something that we could pay for more if we use that tax money differently.

And so I think I really I think you have to differentiate between one seeing that this is a positive step forward that we should embrace and yet also seeing that we do need to take further steps to fund it appropriately.

And Greg, I want to ask you, the Buckeye Institute has said the funding formula change is, quote, a laudable increase in transparency and contains the seeds of a much better model.

But it unfortunately doubles down on funding the broken system.

So you have a totally different perspective.

You want to argue for education, savings accounts?

What what is what is that and why would that help?

Well, here's what it is.

It's about getting money directly into the hands of families.

When we say we're funding the system, we're really doing it for funneling money into each of the individual school districts and we're funneling that.

And then historically, we've taken money out of that and then send it to other alternatives.

What we should be doing is directly funding the student and empowering the families, especially in the current environment where we've had unprecedented education disruptions with a lot of closures and a lot of variability across different school districts around the state.

So another thing that we need to do is open enrollment so that students are able to go into, if they want to, another public school that we have that for most school districts.

But the place that we don't have it are suburbs.

Suburbs around urban areas do not almost all of the suburbs do not have open enrollment.

And we are trapping, frankly, a lot of African-American students in a situation where if we had true open enrollment that was universal, we could do that.

So we should be thinking about that.

And how does the funding formula allow the money to do that so that we can create opportunities as well?

I think that's something else that we would be very favorable towards.

And finally, that's a topic for another day.

But finally, I want to ask you, you both expressed concerns about student debt policy matters.

Ohio ranks Ohio seventh among the states, the most student loan debt.

Forty fifth in college affordability.

You have different ideas, though, on how to improve that.

I want to start with you.

What are your ideas on how to how to deal with student debt in Ohio?

Well, I think there are a few things.

For one thing, I think that we need to do more appropriately fund the classroom instruction.

It's called the state structure of instruction.

We have appropriately funded that.

And that is what has led to higher tuition levels over time.

That makes Ohio one of the least affordable places to go to college in the country and has helped create that student debt to begin with.

So I think that we need to expand the amount that we're spending on instruction and supporting our public colleges and universities.

We need to also do more to increase college opportunity.

Grant, that's the way that low income students get support, which is still nowhere near the levels that it was a little over a decade ago.

We can certainly afford to do more for low income students.

That said, we also need to take a less punitive approach to going after students and, you know, stop withholding transcripts and.

Basically, we've done a whole number of reports looking at the extent to which I think the approach of the attorney general in going after student debt is basically much more punitive than it needs to be in.

That needs to be reexamined as well.

Really quick last word, Greg, what are your quick ideas on how to deal with student debt?

Well, I think one thing is we need to leverage our community colleges better than we do in the state of Ohio.

We don't spend, frankly, of the pot of money that we're putting into the SSI that that mentioned a lot is going to four year universities and there's nothing inherently wrong with that.

But the amount that's going to community colleges and the nature of the students that they are helping, the fact that community colleges are kind of where the rubber meets the road with a lot of businesses that are saying, get me, get me employees, get me training, we could fund those better.

And frankly, the opportunity that is mentioned is very limited in terms of how it can be used in community colleges.

And there's policies in place that I think prevent that we should undo those policies.

So there's more flexibility on the OKOK, as he calls it, for community colleges, because, again, they're lower cost.

They get whether it's certifications, whether it's associates degrees, they can also, of course, be a pipeline so we can get lower cost first couple of years before we transfer to a four year university.

We need to leverage them.

And frankly, we spend way we're spending a lot of money at the four years and we are kind of leaving a lot of scraps on the table for the two years, even though they have a lot of students that are minority students that use community colleges and need access to them more.

And that's just a missed opportunity that we have because it's an asset that Ohio has that we are not fully leveraging.

Let's take some of that three hundred eighty million and spend it for the community colleges.

I say go for it.

And that is it for this week.

Please check out the Ohio Public Radio and Television State House News Bureaus website at statenews.org.

And you can follow us and the show on Facebook and Twitter.

And please join us again next time for the state of Ohio.

We close with a look at some surprising spring snowfall that blanketed parts of Ohio earlier this week.

Support for the statewide broadcast of the state of Ohio comes from medical mutual, providing more than one point four million Ohioans peace of mind with a selection of health insurance plans online at Medda Mutual dotcom slash Ohio by the law offices of PorterWright Morris and Arthur LLP.

Now with eight locations across the country, PorterWright is a legal partner with a new perspective to the business community, Morad PorterWright Dotcom and from the Ohio Education Association, representing 100 24000 members who work to inspire their students to think creatively and experience the joy of learning online at O H E A dot org.