‘Success breeds success.’ Ohio is on a post-pandemic winning streak – Buckeye Institute

This opinion piece was first published by The Columbus Dispatch.

Ohios new budget extends the states post-pandemic win streak.

A federal judge recently agreed with Ohio that Congress audacious attempt to keep states from directly or indirectly cutting their own taxes was unconstitutional. Ohios response: a $1.6 billion tax cut.

Thats a big win. Last years tax revenues exceeded pessimistic expectations, allowing Ohio to cut taxes responsibly and return money to taxpayers as the pandemic subsides.

The new budget reduces most income tax rates and lowers the average taxpayers tax burden by three percent. Even better, it simplifies the tax code and pares the number of personal income tax brackets from nine to four.

Policymakers wisely cut the top tax rate now under four percent and anyone making $25,000 or less will pay no income tax at all. Win, win, win, and win.

Success breeds success.

These tax policy victories will keep Ohio economically competitive and on a winning track. Low tax states like Arizona and Texas have been grown their economies by strategically reducing taxes and regulations to attract workers and businesses.

High tax states like Illinois and New York have shrunk their economies, shed residents, and discouraged businesses. To stay competitive, Ohio must welcome new businesses, entice employers with low-tax incentives, and allow workers to keep more of their paychecks.

Not only will families enjoy lower taxes, but those with school children will soon see fuller benefits of school choice. With the budgets education savings accounts or ESAs families will receive state education dollars in designated accounts to spend on educational supplies and services. Families earning up to three times the federal poverty level will receive $500 to help pay for tutoring, curricula, language classes, and tuition at learning centers.

As families grapple with the pandemics ongoing disruptions, this one-time, limited ESA will not only help pay for rising education costs, it will highlight the benefits of school choice and more parental control in learning.

Parents know best what their child needs, and ESAs provide additional financial resources to meet those academic needs. Although not as generous as ESAs in Florida and Arizona, Ohios new ESA lays a solid, workable foundation. Another win.

The new budget also extends Ohios leadership in criminal justice reform, expanding eligibility for the Targeted Community Alternatives to Prison (T-CAP) program. T-CAP helps low-level, non-violent offenders obtain necessary treatment and rehabilitation. Expanding eligibility will extend that help to more offenders while keeping communities safe and saving taxpayers money in the long run. One more win.

Like every budget, of course, this one has some flaws. Big spending increases for some government programs will pressure decision-making down the road when revenues recede. As Ronald Reagan wisely quipped: The closest thing to immortality is a government program.

Short-term spending programs created today must remain short-term programs and not morph into long-term spending obligations that refuse to die. Vigilant fortitude will be required.

Ohios budget delivers strong victories, reducing and streamlining taxes, enhancing school choice, and expanding successful criminal justice reform.

The fiscal belt should have been tightened and more fat could have been trimmed moves that will be needed later for sustainability but across-the-board tax cuts and smart policy reforms extend Ohios winning streak and give us all something to cheer.

Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute.

See more here:

'Success breeds success.' Ohio is on a post-pandemic winning streak - Buckeye Institute