BuckeyeBlog

The latest “stimulus” plan from the Strickland Administration proposed taking ‘excess revenues’ (oh, what wonderful doublespeak!) from the Turnpike and spending on things like historical building renovation and corporate welfare enticements to Ohio businesses to hire more interns.

We’ve written about leasing the Turnpike (here and here) the $6 billion of dollars it could put into the Ohio economy stimulating growth though both direct expecture flows but also through the windfall of true infrastructure investments.

Instead of paying interest on bonds, the state would be collecting interest from a private Turnpike operator.

Now that’s a better idea!

The Center for Freedom and Prosperity has put out two videos of a three video series to explain the concept of the Laffer Curve — the notion that in some instances tax revenue goes up when taxes are cut. With a lot of muddy thinking surrounding tax rates, revenue, and economic growth, these videos are a great way of learning some fundamental truths about tax policy.

Part I:

Part II:

The Dispatch reports on how Skybus, an economy start-up airline benefiting from some $57 million in government subsidies, has crowded out service to Columbus by other airlines.

I wonder how the Columbus-based employees at Midwest, Delta and JetBlue feel about losing hours and pay, or even their jobs, to Skybus, espcially when the taxes they pay were used to subsidize Skybus and give it a financial advantage over their own employers.

The rest of us will pay a price for this particular government encroachment into the private economy as well. While Skybus may still service the routes dropped by other airlines, Zagat rated Midwest and JetBlue first and third respectively for overall airline quality among economy carriers. Having flown Skybus for business and pleasure, and as many in Central Ohio can attest to, it may be cheap and interesting, but it is not a quality service.

For many traveling to and from Columbus, Skybus would not be their first choice. Thanks to state and local government, however, it is more frequently now their only choice.

Here’s some insights into Governor Strickland’s plan to grow government spending today, while sticking the bill on our children and grandchildren tomorrow:

A Viewpoint by Sam Staley just released;

A couple of podcasts from BuckeyeVoices.org, one where Sam discusses his analysis and another where I give my initial reaction to the proposal;

Finally, my recent debate with a big government advocate on public TV will be posted here shortly.

The News-Herald of Willoughby provides some examples of local government initiative in truly improving efficiency and productivity.

However, this follow up suggestion will run into the reality of public employee collective bargaining:

[School districts] should be open to ideas such as sharing teachers or other personnel whose strengths can help neighboring districts.

We encourage school officials to find ways to trim expenses and remember that doing so helps taxpayers.

The News-Herald should turn the bright light of its investigative reporting on the teacher union contracts as they are negotiated in its communities. The paper will find how school officials – complicit though they may be in negotiating the contracts the way they do – have their hands tied when it comes to really significant cost savings and productivity improvement.

Curtis Dubay of the Tax Foundation discusses his recent report ranking Ohio 46th in state business taxes on our latest Buckeye Voices podcast.

The Tax Foundation’s annual report on business taxation appears to find that the HB 66 tax shift plan so vigorously touted by the outgoing GOP leadership is working: Ohio is now ranked 46th in the nation, up from its 49th ranking last year. Wow! Will wonders never cease?

Seriously, I’ll need to check with Tax Foundation author Chris Atkins about the degree his report captures the phase-in of HB 66’s shift from the corporate franchise and tangible property taxes to the new commercial activity. I think a large part of it is already reflected in this latest report.

If it is, it is yet another confirmation of the fact that the HB 66 tax changes are insufficient to move Ohio out of the bottom 10 states for business taxation, let alone return the state to above-average growth and prosperity.

Can we please put HB 66 behind us and start talking about real tax reform?

The Intelligencer‘s observation from across the river about Ohio tax policies is worth repeating: Companies don’t pay taxes, people do.

Actually, this simple fact bears daily repeating as the Strickland Administration seeks to squeeze more tax receipts from an ailing Ohio economy for more government spending.

Please see our most recent thoughts on this topic on our “Eye on the Statehouse” tracking of the FY 08-09 budget deliberations.