COLUMBUS, Ohio - The most affluent will benefit the most from the major tax changes in Ohio's recently approved budget bill, according to a new report.

Four income-tax cut provisions will accelerate the lower income tax approved last year, expand tax breaks for business income, increase personal exemptions and boost the state Earned Income Tax Credit, the report found.

Report author Zach Schiller, research director for Policy Matters Ohio, said the cuts total more than $400 million, most of which will go to the wealthiest Ohioans.

"Half of that goes to the top 5 percent, who made over $151,000 last year. People in the top 1 percent will see a cut of over $1,800," Schiller said. "On the other hand, at the bottom 20 percent, people who made less than $19,000 will get an average tax cut of $4."

Cutting the income tax does little for the poorest Ohioans because they don't have much income-tax liability to begin with, Schiller said. As they review current tax breaks, Schiller said, state leaders should restore and expand funding to local governments, schools, and health and human services, all of which he said would improve communities and create opportunities for business.
The analysis was conducted for Policy Matters Ohio by the Institute on Taxation and Economic Policy.

Schiller said the $400 million being cut from the tax rolls could be used to better address Ohio's many needs.

"We have among the highest infant mortality rates in the country, which is shocking," he said. "We have unaffordable colleges, to too great a degree. We can do more to expand preschool. These are all things that would benefit the health and welfare of Ohioans."

Other new tax breaks offer benefits to narrow groups of taxpayers, including one that allows investors to more easily receive tax credits for investing in small companies. It's intended to encourage companies to generate jobs, but to qualify, Schiller said, all the companies have to do is continue to pay existing employees.

"Bad enough that we're giving tax cuts to people that don't need them," he said. "If we're giving tax breaks to people for investing in companies that all they do is pay their existing workers, - if we continue more of that policy and it'll lead to not only money ill spent, it's really questionable."

Supporters argue that tax cuts will boost the economy and create jobs. Schiller disagreed, noting that since 2005, when Ohio lawmakers reduced income-tax rates and ended Ohio's corporate income tax, the state has lost jobs.

The full report is online at policymattersohio.org.


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Today, groups working with lower-income families in Connecticut are raising awareness about the state's "benefits cliff" with a day of action.

The benefits cliff is when a person might get a raise, have a kid with a part-time job, or some other income increase which then makes them ineligible for certain benefits. The changes can have severe impacts on communities and disproportionately affect families with children.

Stephen Monroe Tomczak, professor of social work at Southern Connecticut State University, said it is part of a larger workforce problem.

"People, particularly people of low income, are in a sense disincentivized to participate in the labor force and denied adequate jobs and income when they try to do that," Tomczak explained.

Several General Assembly budget bills could have dealt with the issue but most failed, which inspired today's action, a mock funeral procession to the governor's office to eulogize the bills, including the refundable Child Tax Credit, a housing voucher funding boost bill, and a bill eliminating the asset limit on the HUSKY C medical insurance program.

Social service advocates know the bills will resurface in next year's budget process.

Rose Ferraro, program lead of health justice policy advocacy for the Universal Health Care Foundation of Connecticut, said people are taking alternate steps like going to food banks or avoiding medical care to cover lost benefits.

"Folks will lose their rental assistance and then, they will sort of have to make some tough decisions," Ferraro noted. "'Do I put food on my table or do I make sure to pay rent?' And, so it becomes a sort of untenable position."

Ferraro added interwoven state and federal funding makes it hard to reach the core of the issues leading to benefits cliffs. One eulogized bill would have established a benefits cliff pilot program. For two years, it would have provided subsistence for people who've reached the benefits cliff.

New York towns are reaping many benefits since the Inflation Reduction Act was passed.

Along with funds for larger clean energy projects, the state was awarded $158 million for the IRA's Home Energy Rebates program.

Smaller towns and villages use these grants to implement their climate action plans.

Brighton Town Councilmember Robin Wilt said an IRA grant they applied for will help upgrade the town's HVAC system.

"We will be implementing geothermal and then use a solar array to make the system close to net zero, not quite," said Wilt. "I think we'll get 55% of our energy back with the solar panels."

The bureaucratic process to access the funding was challenging, but some groups are working with the Department of Energy to improve it.

Wilt said feedback on the clean energy projects has been positive. Future projects using IRA funding include increasing walkability and sustainable redevelopment.

Critics have said the IRA includes multiple provisions to increase fossil fuel production.

Towns nationwide are using IRA grants to bolster clean energy projects.

Joel Hicks is a council member for the Borough of Carlisle, Pennsylvania.

They've just applied for a grant to work on energy efficiency and solar projects with Harrisburg. He said this will have positive impacts beyond establishing clean energy.

"We were really excited at this potential," said Hicks, "because we saw that the cost savings we would have for putting in substantial solar projects on our public property would actually fund many of our other public municipal goals."

These include purchasing an electric vehicle fleet and having more efficient solid waste programs.

One thing Hicks said he wants to see in future is state and local governments helping small towns and municipalities with putting together their IRA grant proposals.

A new report analyzes Pennsylvania's existing voucher programs, that divert public funds to private schools.

This comes on the heels of Gov. Josh Shapiro's plan to create a new voucher program for K-12 students.

Diana Polson - senior policy analyst with the Keystone Research Center - said last year's Commonwealth Court decision ruled that Pennsylvania's system of funding public education is unconstitutional, therefore the state doesn't have a dollar to waste on expanding existing private-school voucher programs or creating a new one.

"The basic-education funding commission estimated the state must pay $5.1 billion over the next seven years to make sure our public schools are funded equitably and adequately," said Polson. "Meanwhile, our report finds that existing private-school voucher programs are siphoning millions from taxpayers with little to show for it."

Supporters argue that vouchers let children leave under-performing public schools and get a better education at private schools.

Polson said Pennsylvania's voucher programs have no "meaningful educational or financial accountability," so they really have no way of knowing if these programs operate as intended or are beneficial to low-income or moderate-income students.

Polson said the report reveals that the programs have grown, and just this year they will cost the state nearly $500 million.

However, these voucher programs exclude students in rural areas, because there are few if any participating private schools in these regions.

Local public schools remain the primary option for most rural families.

"We also found that private schools receiving these funds are allowed to - and do - routinely discriminate against students for reasons including disabilities, sexual orientation, religious beliefs and more," said Polson. "These programs are also exclusive. They subsidize the state's most elite and expensive private schools as well as affluent families."

Polson said the report reveals that the Independent Fiscal Office estimated that the average EITC program scholarship was $2,314, while the Opportunity Scholarship Tax Credit was slightly less at around $2,000.

The cost of attending one of the top 25 private schools in Pennsylvania is around $41,000 per year. This means these schools are still out of reach for many low- and moderate-income families.