With Gov.-elect John Kasich and soon-to-be House Speaker Bill Batchelder rising to power in January, a no-new-taxes pledge signed by both suddenly has huge implications for the next state budget.
The pledge requires signers to “oppose and vote against any and all efforts to raise taxes.” It was signed by Kasich, Batchelder and seven other Republicans beginning new terms in the Ohio House in January, including Rep. Tim Grendell, the state senator from Chester Township who will jump chambers because of term limits.[...]
[D]own at the Ohio Statehouse — where Kasich and GOP legislative leaders will hammer out a plan to address a shortfall in the next state budget that could approach $8 billion — the pledge could have the most profound implications.
Unlike the federal budget, the state budget must be in balance when the two-year spending blueprint is passed next summer. So taking tax hikes completely off the table limits the options available to policy makers.
Such a strategy has turned well-heeled lobbyists for special interests and health and human-service advocates into nervous Nellies. But the confident Kasich sounds eager to “get the snouts out of the trough,” as he put it on the campaign trail.
One of Kasich’s first pronouncements since becoming governor was to summon lobbyists to a luncheon Thursday to tell them: “If you’re not on the bus, we will run you over with the bus. And I’m not kidding.” And he’s not backing down a bit on his no-new-taxes pledge.[..]
However, that doesn’t mean that Kasich couldn’t eliminate some loopholes in the state tax code that give exemptions to special interests. For example, financial planners and lobbyists are exempt from paying state sales tax.
Under the terms of the pledge, Kasich could eliminate some of the hundreds of millions of dollars in tax exemptions in the state tax code — but there’s a big catch. He would have to offset those moves with tax cuts, so he wouldn’t gain a cent of new revenue.
“John said throughout the campaign that everything is under the microscope,” Nichols said.
I smell a Chris Christie-style battle brewing in the works, if Kasich is serious about holding to ATR’s Pledge. Those loopholes sound like they could be political hay for Democrats if he’s not careful. Ohio’s political scene might be dominated by Republicans again, but I suspect that conflict will be alive and well.