Support for the statewide broadcast of the state of Ohio comes from Medical Mutual, providing more than 1.4 million Ohioans peace of mind with a selection of health insurance plans online at med mutual dot com slash Ohio by the law offices of Porter Wright, Morris and Arthur LLP now with eight locations across the country.

Porter Wright is a legal partner with a new perspective to the business community.

Maude Porter Wright dot com and from the Ohio Education Association representing 124,000 members who work to inspire their students to think creatively and experience the joy of learning online at OHEA.org More video and texts, more dark money talk and more COVID tests.

In the federal trial of Republican former House Speaker Larry Householder and ex Ohio GOP chair Matt gorgeous and views of the pros to your state budget from the right and the left.

All this week in the state of Ohio.

Welcome to the state of Ohio.

I'm Karen Kasler.

It's the third week of the trial of Republican former Ohio House Speaker Larry Householder and former Ohio Republican Party chair Matt Burgess for racketeering.

Conspiracy related to the law that bailed out First Energy's nuclear power plants.

There has yet to be five straight days of testimony, though.

My State House News Bureau colleague Andy Chow was at the federal courthouse in Cincinnati this week.

What's new this week?

So the trial once again had to take another break because another juror tested positive for COVID 19.

But before then, we saw yet another full day of testimony from FBI Special Agent Blaine Wetzel.

And at that point, he was going over a lot of the evidence that he obtained in his investigation of Matt Porges.

Now, remember, Matt Porges, the former chair of the Ohio Republican Party, was working as a lobbyist and as a consultant for First Energy, and he was one of the main players in the fight against the referendum attempt where people wanted to repeal the nuclear power plant bailout.

Burgess is accused of offering $15,000 to a consultant for that referendum campaign in exchange for information such as where petition gatherers were located and and how many signatures were being collected.

And what we were able to see was a lot of video and hear a lot of audio of that exchange.

And we even see a meeting where Tyler Furman, the campaign consultant for the referendum effort, was offered $15,000 from Matt Boyages and prosecutors showed that check to corroborate their argument.

Also this week, there was some testimony on what Larry Householder allegedly did with the money that he allegedly received.

Yeah.

So what we saw as everything wrapped up is this sort of tallying up of different personal benefits.

Larry Householder was able to receive through first energy via the alleged dark money groups.

And what we saw were bank statements where Larry Householder was able to pay off his credit card debts because of payments through generous to now and pay off home renovation projects, pay off a lawsuit settlement.

And also, according to the prosecution, become speaker of the House, all because of first energy money.

And that amounted to more than $500,000 for Larry Householder.

And one other thing you did a story about this week was about GPS devices.

Tell me what you found out in the evidence that was presented this week about how those were potentially going to be used in this referendum effort.

Yeah.

So going back to that 2019 referendum effort, what we knew then was that referendum campaigners and petitioners said that they were being followed.

They didn't know how they were being followed, but they were being followed.

And somehow these anti referendum campaigners would show up in the same locations and stop the signature gatherers from getting the signatures that they needed.

We learned through the prosecution's examination of the FBI what we learned through that is that first energy paid for a private investigator to follow the petitioners around.

And in the invoice, there was even a line that said GPS monitor and surveillance.

Now, that line item was actually canceled out.

And that said, those monitoring systems were never bought.

But what we do know through the different evidence that was provided, was that a private investigative firm was hired by First Energy Associates and First Energy spent about $80,000 to have those petitioners followed.

And I ended up talking to the spokesperson of that referendum campaign, and he called that thug tactics.

And he said the evidence that's coming up in trial right now only confirms what they already knew was that first energy wasn't playing fairly.

Work has begun on Republican Governor Mike DeWine's $87 billion, two year state budget with hearings in the House Finance Committee this week.

The budget includes spending on economic development, traditional public schools, career tech charters and vouchers, mental health and addiction treatment, and some tax changes.

But no state income tax cut.

This week I asked Hannah Halbert of the progressive think tank Policy Matters Ohio and Greg Lawson of the Conservative Research Group, the Buckeye Institute.

What they think of the budget as proposed.

What are your very quick takeaway from this budget?

Something really short that you want to highlight either that you like or you don't like.

And I'll start with you, Hannah.

All right.

Well, you know, this budget is a departure from what we've seen for nearly two decades now.

And that is starting to fund things.

The the strategy that Governor DeWine has put forward is one about making his vision of Ohio being the best state to raise a family, to put down roots real.

So you see investment.

You don't see these major tax cuts like we've seen in the past that primarily went to the wealthiest, to the already well-to-do folks in our state.

We see investment in, you know, everyday Ohioans.

Lots of good stuff in this budget.

Greg Larson, the quick take away one thing you liked or didn't like?

Well, I think there are some things that the governor is making some smart choices on in terms of investing in certain things.

I think that probably one of areas where we will disagree a little bit is we probably do want to see some more tax reform.

There's an opportunity now we have extraordinarily high revenues and budget basically budget surpluses.

So I think there's a way to still spend appropriately in things that we are needing to do, things like education.

Some of the economic development, workforce training, some of that is actually very much in the budget.

But I think there's still room to do some of these sort of pro-growth tax reforms, which I think is important because, again, I kind of hit this before when we're on the show.

But the thing to remember about Ohio is it's not just a state tax you got to worry about.

So even when you're doing state tax reform, you have to look at it in conjunction with local taxes and the burden of local taxes.

And I think that's something that gets lost a lot of time when we talk about tax policy in the state of Ohio.

So that's something that we're going to probably keep talking about, is how to to to continue to do the reform so that we can get an appropriate overall tax policy in Ohio that continues to work.

The Buckeye Institute put out a statement praising the Ed choice expansion, the budget and revamping the K through 12 education system with a focus on workforce development.

But you said there were areas of concern, such as the $2.5 billion All Ohio Future Fund.

It's designed to help develop huge sites for economic projects like Intel.

But across the state of Ohio.

So why not use one time money to do something like this and try to lure in big business?

Well, we might be able to actually and do spend at least a portion of that to do exactly that.

I think one of the things that we need to see is kind of the devil in the details.

We don't exactly know what this is going to look like and what is the criteria that's going to be used as they start to develop some of these sites.

One of the things I think we'd be a little concerned with is a sort of field of dreams approach.

If you build it, they will come.

That might be true, but is that inherently true?

And I think we need to be a little bit more cautious about that.

So it's not so much that we're saying there's no opportunity here.

Infrastructure is something government has to do.

Infrastructure is obviously something is going to be very important as we try to bring in a lot of these new jobs to build off of the successes of Intel and the electric vehicles, the battery stuff for Honda and things like that.

But we need to be cautious, too.

Just because you build out these sites all around the state doesn't necessarily mean people are going to come there.

So how we do it is going to be just as important to make sure that if we spend that kind of money, it's spent right.

Hannah, let me ask you about that Future Fund.

Is that a good use for this one time money?

I think this is a point where there's going to be a lot of alignment between policy matters and Buckeye.

I mean, the question is, is is it transparent?

Is it accountable?

And the bottom line of those build outs is going to be, is any of that money ever going to make it into the pockets of working Ohioans, everyday Ohioans?

What are the jobs being produced?

How are those sites being developed?

Are they being developed with a high quality union construct action, good jobs with on ramps for folks who've been shut out of those industries?

Or are we just kind of spend money and developers are the ones getting rich off of it.

So these are things that are going to be hopefully question that we dig into and that we stop this sort of idea that, well, if it's good for business or some business, it's good for Ohio, because that's just that's just not been the case.

We've had nearly 20 years of tax cuts for corporations, for pass through entities.

And the payoff from that, when you look at the measures of wellness, of quality of life and heart, you know how things like child hunger, infant mortality, the number of kids in preschool, we're at the bottom of the barrel on that.

So there's there's got to be a point where we say we can't just start continue shoveling money toward making Ohio a business friendly climate because that's that's not good enough.

Policy matters praised what you called much needed overdue spending on a few things such as the Fair School funding plan, also known as the Cut Paterson plan.

But you also said the 20 $500 per child tax credit or tax deduction does not go nearly far enough.

You calculated it out that it's about $67 per child if you make between 26,040 5000.

And for families making less than 26,000, there is no benefit because it's nonrefundable.

So but those families aren't paying state income tax anyway.

But they're paying other kinds of taxes.

They may not be paying income tax, but they're paying sales tax.

And certainly, as Ohio has shifted more to funding shared services that we all need and shared institutions, these public goods to being paid for by the sales tax, those families are actually seeing an increase in their overall tax burden, which I think might be surprising for some.

So they have skin in the game.

It's just that they don't get the benefit of these refundable tax credits that so many pass through entities like Corporation and LLC do.

And so it sounds great on the surface, 2500 bucks back in your pocket, but that's not what we're talking about.

If you're earning under probably like $31,000 a year, you ain't going to see anything.

If you're a family of three and you have someone making more than 200,000, well, you might get back like 200 bucks or something.

You don't need that 200 bucks.

But my goodness, don't our schools need that?

Greg, the governor had said that this is where the tax relief is.

There's no income tax cut in this budget, that there's tax relief specifically targeted at families.

With this and also the elimination of state sales tax on baby products.

Is this good enough tax relief?

No, I think that what we need to see is we need to have a strategy for trying to get to a broader, more pro-growth sort of approach to things.

It's something that we've talked about for years.

Ohio, you know, while we're supportive of things that have happened with some of the income tax reductions over the years, it has been a very piecemeal approach.

It hasn't necessarily been done in a strategic fashion.

So I think that's a conversation that the General Assembly is going to have to have, because here's the deal.

We have $11 billion now of tax expenditures, the tax loopholes and the latest information.

That's a lot.

And this is going to be more.

Right.

That's going to be added to that.

And when you do that, one of the areas where I think we've agreed historically with policy matters is we need to, you know, close some of these things down.

And we've done in the past looked at some of these and we'll look at some of them again as we go through this budget cycle.

Because while we might differ on on what we want to do with the revenue that's gained when you close those loopholes, they are carving out things in the tax base and not really achieving the objectives in a lot of ways that you want to achieve.

Is one of the objectives you'd like to see a bill that's been proposed that would eliminate the state income tax, which is a third of the tax revenue, as the second largest revenue producing entity in the budget.

Well, I think the first thing you had to do, he's got to start getting to a flatter tax, which we have been moving in that direction.

We've reduced the top rate and we've actually dropped excuse me, some of the lower brackets in previous budgets.

So we have moved into the flatter direction.

I think that was something that is that big of a revenue generator for the state.

That's not something that you can just snap your fingers and make that happen.

But if you're going to do that, you have to look at things like revenue triggers, which are ways where you can circuit break tax cuts if certain revenue targets that that we feel are necessary aren't met.

I think that is a more responsible way of doing things and just saying we're going to just do this come hell or high water.

But it also gets you on a pathway to where you could get there eventually.

Again, it's about being strategic about it.

I think that's something we'd like to see because that's a more responsible way.

But it gets us to the to the end zone, so to speak.

Super Bowl weekend here.

So I'm optimistic that we can have that kind of dialog, but I don't think that's something you can see just happen overnight.

Republicans have said that they want to put a state income tax cut in this budget and there are some that want to see the elimination state sales tax weigh in on that.

Pay it say that's their position and I'm sorry to tell them that is actually counter to what the majority of Ohio voters want.

When we polled Ohio voters, what, 70?

I got to look at my notes cause it's kind of hard to believe 71% of those supported increasing taxes on people making over $250,000 a year and having an additional bracket on those making over 500,000.

So exactly the opposite of what's being proposed here.

Everyday Ohioans know that, you know, this idea, the flat tax, it's it's not fair.

It sounds simple.

But let me put it this way.

If I have $1,000 and I need to loan you 100 bucks, well, if I have 1800 bucks, I can swing that.

What's that to me?

If I don't have if I had $10, if I have $100 and I need to loan you ten, that that's going to feel a lot different.

So if if we're talking 4%, 4% doesn't mean the same thing to everyone.

And someone who has to use their income to make rent, buy groceries, put gas, gas in the car.

That 4% is going to hurt a lot more than someone who has to use their income to take a sweet vacation.

I want to that's what we're talking about when we say flatten it.

So let's this is a question and I think Greg's right on this.

What do we want to be as a state?

Do we want to be a state that has rankings like the 42nd in infant mortality where black Ohioans are expected to live six years less than their white counterparts.

Where child food security.

Where 36th or 35th.

Sorry about that.

Opioid death rate.

46th in the nation.

Do we want to be the state that has those numbers, or do we want to use the power of our government, of our shared pooled resources to solve this, to make life easier for everybody out there who's working and paying the bills and trying to make ends meet?

I want to ask.

You about that.

I want to say one quick thing on that, because I actually agree we don't want to be a state that hits those metrics that we were just talking about.

Those are very bad signs.

I think the challenge is how do we how do we fix those things?

I think our perspective is we have to do better in economic growth and long term job growth and we have to do a better job.

And honestly, look, Ohio has not done a great job and this is a multi-decade problem and we've talked about it for years.

When you look at you know, and we fact the census numbers are going down, we're going to actually lose a drop in population rankings probably by the time the next census is because people aren't coming to Ohio.

So how do you get people to come here to then expand the tax base to be able to pay for the services that we're talking about?

And I think that's where the disagreement.

Probably the weakest on taxes to make that happen.

Like what's that number where we actually start to see this reverse because we've had 17 years of tax cuts that are primarily gone to the wealthiest among us.

And this is the outcomes, right?

This is what we get for making that strategy are our only strategy for growth.

Right now, we have 4.2 unemployment.

We have employers who are saying they can't find enough workers to get their jobs.

It's not a problem of growth.

On business side, it sounds like we got a problem of taking care of our people, making sure people have what they need to get out there and do the job that they need to do.

And so labor force participation, we have wrote about this as long as I've been both ten plus years, you all we have surrounding this alarm.

So I'm so glad you all are like looking at it because it's a real problem.

And when you talk to young people and ask them what they want, they want things like transit.

They want to have an open and welcoming community, an environment.

They don't want to see themselves or their friends or their family members attacked for who they are, whether it's the color of their skin, who they love, how they show up, what they believe.

And those are things that this current General Assembly don't seem prepared to address, but in fact, seem prepared to double down on.

I want to ask you about the expansion of choice here in the budget.

Budget director Kim Onyx told me the estimate is about 28,000 students taking advantage of that expansion in the first year of the budget, 33,000 in the second.

She says that's about a $22 million increase in the first year, about a $50 million increase in the second year.

That is not really a lot of kids or a lot of money.

HANNA So what's wrong with that?

Because this pulls money out of public institutions.

We have a responsibility as the it as governor DeWine mentioned this in his state of the state.

It's a moral imperative.

It's a constitutional responsibility and a moral imperative to have good public schools for every kid in Ohio.

Schools that cannot reject students because who they are, how they show up, an ability or disability that they have.

We have a response ability to do that.

And instead of making that our top priority, we have policymakers who want to sort of fund everything but that everything but that 90% of kids are educated in public schools.

Greg, I want to ask you, that's not a lot of kids or a lot of money.

How can the claims be that vouchers are popular at the Save Traditional Public Schools money and also the expansion of choice to 400% of the federal poverty level?

That's $120,000 a year for a family of four.

For a lot of people, that sounds like, well, if people want vouchers, if they want to send their kids to a charter school, they can afford to do that.

Well, I think here's the thing.

We look we're on the record.

We want universal school choice in the state.

And what we want to be able to do is have the situation be where you're funding the students, not funding necessarily any individualized system.

Now, are you in favor of the backpack bill?

Something like that.

But I think there are some things that can be modified in that.

And I think there's also a bill that Sandy O'Brien's got in the Senate Senate bill 1111.

It's different than backpack, but it sort of is in that wheelhouse of a conversation.

And I think that what we're talking about is maximizing and empowering families.

We have a situation in here where a lot of families we have historic learning loss in the wake of the COVID pandemic.

We have all kinds of issues at the state school board.

That's a whole other kind of Pandora's box of things to talk about.

But we also know that there are bits that work for some kids and not others, things that might work for one child in a household, but maybe not work for another.

But families, even middle class families, when you talk about that, I know that sounds like a lot.

And it's and it's obviously a higher amount of what we have now, but that's actually not nearly as much as you might think when you have maybe two or three kids and you're trying to figure out what is the right situation, maybe I need some additional tutoring for one of my students because they're not able to get all the services that they need within the public district here.

I think what we want to see is if you're going to fund the education, we're funding the children.

So as we're making these decisions about what the costs are, then let's give parents additional choices while we also fund that.

And I think that's what you're going to see.

We're running out of time.

So I want to ask you.

Go ahead.

We're getting this.

Where do I start?

I first of all, I want to be in the.

Oh, how we're $100,000 this middle class right now.

It's much lower on the scale.

We're talking about families who are like 65,000.

That's middle income here in Ohio.

So so that right there, this is going to help the upper middle class people who don't need the help getting this stuff done.

And I do want to you know, choice is choice is a real thing that we should talk about and we should think about and choice.

Whenever the person choosing or parents choosing have good information, transparency, account information, they can make some choices.

But that's not what we're talking about here.

We don't have comparable information.

And really, whenever we're we're doing this and putting the private school in the driver's seat, what we're doing is is setting up a funding stream to give these private schools a choice of which students they're going to serve, who they're going to let come in.

They have no obligation to serve children with the disability.

If we want to talk about real choice, we can have that conversation.

But what we know is that right now we are serving the school choice.

It ain't the parents choice.

The institutions are the people who have actual transparent information.

What we're doing now is that we have a system where we want to expand choice so much that we're going to give tax credits up to $2,000 to homeschool parents.

And we just saw what last week some of the controversies coming out of that.

I mean, my goodness, the curriculum.

Could you imagine and let us not forget the school that made its debut on ESPN.

That was just a football school.

There was no school there.

So there some real questions about transparency, accountability, aside from the fact that we have a constitutional and moral obligation to provide every child, every child in this state a good education.

Greg, last word real quick.

Well, look, I think school choice is something that a lot of parents are wanting.

A lot of parents, especially in the wake of COVID, when you had a lot of public schools that were closed and some of the private schools stayed open.

When you look at national report card data from the feds, you see that interestingly enough, certain private schools, usually in this case Catholic schools, didn't have the same level of drop off.

Now, there's a lot of nuances to that, and I don't want to say that it's just because they would a private school, and that's the only reason.

But I think there's a lot of pieces here that parents are going to look at when you look at various data points.

They're going to say this might be the right fit.

We have the ability to fund the public schools.

We are funding public schools.

We are spending more every year in our funding formula.

We're going to spend more in this budget as well.

But it's also time that as we do that we need to recognize this is the 21st century.

We can choose whatever we want to choose with our Roku device or our entertainment device and do all of this.

But we tend to still have a little bit of a bureaucratic stovepipe methodology that it's got to be only this way.

And if your zip code and by the way, another thing we should be doing is we should be making open enrollment in the state universal.

We don't do that.

If you've talked and seen things about this, suburban school districts around urban areas tend not to do that yet.

Many other districts that aren't that do.

If we want to watch school choice, we should do that too.

And we're going to actually suggest that.

And that's it for this week for my colleagues, the Statehouse News Bureau of Ohio Public Radio and Television.

Thanks for watching.

Please check out our website at state news dot org and follow us on the show on Facebook and Twitter.

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

For support for the statewide broadcast of the state of Ohio.

Comes from medical Mutual, providing more than 1.4 million Ohioans peace of mind with a selection of health insurance plans online at med mutual dot com slash Ohio by the law offices of Porter Wright, Morris and Arthur LLP now with eight locations across the country.

Porter Wright is a legal partner with a new perspective to the business community.

More at Porter Wright dot com and from the Ohio Education Association representing 124,000 members who work to inspire their students to think creatively and experience the joy of learning online at OHEA.org