Kasich crusades for tax cuts and the poor

Second-term governor says 2016 presidential options are ‘on the table’

As Kasich starts his second term — one that he won in a landslide victory — the 62-year-old governor is decidedly more seasoned, slightly more tactful and as determined as ever to get his way.

The Republican’s new state budget proposal shows his three overarching goals: help the downtrodden, make government more efficient, slash income taxes.

But while Kasich has long advocated for flatter taxes and jettisoning wasteful government programs, he now comes across as a fiery crusader for those in need.

“I think his focus has changed. It’s not his agenda that people need to get on board with — it’s this mission to help the poor and the underprivileged in the state of Ohio,” said state Sen. Peggy Lehner, R-Kettering.

She believes Kasich has evolved after spending the past four years traveling the state and talking with struggling Ohioans.

“I have seen a far greater focus on the poor, trying to elevate all people, and with a particular heart toward the mentally ill and children that live in poverty.”

Against the vociferous opposition from some in his own political party, Kasich expanded Ohio Medicaid under Obamacare, which extended health care coverage to an additional 430,000 low-income Ohioans and freed up millions of dollars to be spent on other initiatives. He wants to continue with the expanded Medicaid in the upcoming state budget.

‘You count in Ohio’

Kasich said his mom and his upbringing in a scrappy, blue-collar industrial town — McKees Rocks, Pa. — taught him to look out for the underdog. And he insists that “there was no Damascus road experience. There was no instant conversion here. This is something I’ve felt for a very long time.”

Traveling the state, Kasich is selling his budget to the public as lawmakers in the Statehouse begin to pick it apart and put their own stamp on it.

“The fact is that no one in this state is left out. No one,” Kasich said at a press conference. “You’re poor, you’re in the minority, you’ve been run over, you’re developmentally disabled, you’re mentally ill — you count in Ohio. You count in this state. We’re going to give you a chance to be what God made you to do. That’s the way it’s going to be here as long as I’m governor. No one is left behind, but sometimes you have to fight for it.”

Looking over his budget plan, there are elements that sound like they came from a progressive Democrat. Kasich wants to spend $118 million more on early childhood education for low-income tots, continue Medicaid expansion, spend $316 million more to help Ohioans with developmental disabilities to live and work in the community, clamp down on bad charter schools, bump up K-12 spending by $550 million over the biennium, force public colleges and universities to limit tuition increases to 2 percent next year and zero the following year, and set up a $120 million college debt relief fund.

On the tax policy side, Kasich is proposing a series of hikes to counterbalance more cuts to the state income tax. He wants to review existing tax breaks and loopholes, jack up the cigarette tax to $2.25 per pack — the first increase in a decade — levy a 6.5 percent tax on oil and gas production, increase the commercial activities tax rate and the sales tax rate.

Kasich is seeking a 23 percent across-the-board income tax cut. He wants to lower the top tax rate to 4.1 percent and eliminate income taxes on small businesses with less than $2 million in annual sales.

Tax debate

Advocates for the poor applaud Kasich for his efforts to address poverty, college affordability and other issues. But they’re opposed to a sales tax hike to pay for income tax cuts, saying it will disproportionately hurt the poor and help the rich.

“There is still a misguided approach with the goal of continuing to cut the personal income tax rates that primarily benefit the wealthiest Ohioans and shift billions of dollars away that could be invested in our communities,” said Nick Bates of One Ohio Now, a coalition of more than 100 unions and human service groups.

“I’m still wondering why. Since 2005 we have fewer jobs than we do now. Median incomes have fallen. Poverty is up. Hunger is not going away. We still haven’t figured out how to create a constitutionally funded school system. So I’m just wondering what were these tax cuts in 2005 supposed to accomplish, and why are we following that same strategy now?”

Political observers on the left and right say Kasich truly believes that the lower income taxes will spur job growth.

“That’s certainly a consistent thread you’d see back to his U.S. House days — the belief that lower taxes and less regulation will be an inducement for economic development in the state,” said Mark Caleb Smith, a political scientist at Cedarville University. “It’s a pretty consistent, conservative, small government thread that you see working through his life. I think it’s sincere. I think he truly believes it.”

Whether tax cuts lead to job growth is another question, Smith said. “The problem with government fiscal policy is that the relationship between a fiscal policy and economic outcome is tenuous. It isn’t always so self-evident — what works and what doesn’t.”

State Rep. Denise Driehaus, D-Cincinnati, the ranking minority member on the House Finance Committee, said it doesn’t work. Instead, she said, Kasich is proposing a tax shift that drains critical resources needed to pay for things that businesses want: reliable government services, an educated workforce, solid infrastructure and a high quality of life for their employees.

“I think that it is hard to reconcile the idea that we’re going to do more for the middle class and the poor and then get away from a progressive tax structure and implement a regressive tax structure. Those two things don’t match up. When you look at the budget, that is a huge piece of what is changing in the budget,” Driehaus said.

GOP nominee?

Kasich’s name consistently pops up in the media as a possible candidate for the GOP nomination for president in 2016, and Kasich, who ran briefly for his party’s presidential nomination in 2000, no longer dismisses such talk out of hand. In fact, he is heading to South Carolina — an early primary state — to advocate for a federal balanced budget amendment and the (Cleveland) Plain Dealer reported that he’ll meet with Republican strategists about a possible presidential campaign.

When asked if he’ll run, Kasich said: “I don’t know. All my options are on the table. Nothing has been taken off.”

Kasich has the political resume and track record to make him a credible candidate, but his defense of Common Core education standards and his decision to ram through an expansion of Medicaid could hurt him in the GOP primary process that pays heed to the most conservative factions of the Republican party.

He planted his political flag in the lonely land of tax-cutters and poverty advocates.

“As far as I know, I don’t know of any other Republican governor who is headed in quite this direction,” said Cedarville’s Smith.

Kasich doesn’t seem interested in bending his agenda to fit a national political career formula.

“The biggest thing here on all this is the freedom that I feel to try to solve problems without regard to politics. That really feels good,” he said.

Because he no longer faces re-election?

“No, that’s always the feeling I had when I ran — just do what you have to do. Don’t sweat it.”

Lehner said of Kasich’s political aspirations: “I think he’s trying to build a record here as a great governor in Ohio. And if that leads to the presidency, I’m sure he would not turn it down.”

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