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By Alex Ebert
Grover Norquist dreams of making taxes a constant conversation in each state’s capital and is laying the groundwork for that goal in Ohio.
Quietly, Norquist’s anti-tax group Americans for Tax Reform opened its first-ever state chapter, Ohioans for Tax Reform, six weeks ago. But already the state group is working on a tax reform agenda it hopes will influence Republicans running in Ohio’s 2018 governor’s race, executive director Jack Boyle told Bloomberg Tax.
The Ohio chapter is the first step in a plan to open five to seven other chapters in Republican-controlled states that Norquist believes are primed for tax reform and important for national elections, Norquist told Bloomberg Tax. His goal is to capitalize on possible federal tax cuts to spurn tax-cutting competition among states, and he hopes to keep the conversation going by pushing for a tax-cut bill in every legislative session.
“As we reduce federal taxes, the state tax competition will give more opportunities to reduce more state taxes,” he said. “Our goal is to have in any state where at least the Republicans have the House, Senate and governorship, which is 26, a tax cut every year. It doesn’t have to be the biggest tax cut you’ve ever seen. But if people know there’s a tax reduction bill every year, then people are going to be constantly thinking of new ideas and tax cuts that could be done.”
Norquist said his group looks to model state chapters on other national groups, such as gun advocates and teacher advocates, that educate and monitor elected officials year-in and year-out.
“I think any successful movement has to have something before the state Legislature and state elected officials for something to focus on as the next step each year, so that you touch them, you talk to them, you remind them you’re there, and you give them a good record and a bad record,” he said. “Ohio being a swing state, key state, it’s important that we have it as a good model.”
He anticipates in the next few years opening other chapters in Florida, Virginia, and Arizona if the model is successful in Ohio.
So far, the group has lent its support to drug companies opposing Issue 2, a ballot initiative that proponents say will reduce drug prices the state pays through Medicaid, but opponents say would impose price controls and could increase prices for other Ohio patients. But Boyle, who was part of the effort that ended Ohio’s estate tax as of 2013, said the group’s bread and butter will be taxes, especially advocacy around Ohio’s income tax and property tax transparency.
“For better or for worse, we need taxes. We live in our communities, there are services they provide that are important to us that make our communities a place worth living,” he told Bloomberg Tax. “The problem is that what we think we need and what it would cost to provide those services and what we get often are not the same things.”
Greg Lawson, a research fellow with the free-market Buckeye Institute, said the Ohio think tank welcomed Ohioans for Tax Reform because the state doesn’t currently have a grassroots organizer around tax issues. He said having a group dedicated solely to tax reform might help businesses advocate for easier centralized filing methods for municipal gross profits tax—something municipalities are currently suing to have.
Critics argue, and recent budget cycles demonstrate, that routine tax cuts could falter in the Buckeye State. Gov. John Kasich’s (R) proposal to reduce income taxes and shift to revenue from sales tax was stripped by the House and Senate in the state’s 2018-2019 budget. That budget process was also complicated because the state had to patch an $800 million shortfall, which critics have linked to previous cuts and expenditures.
Linking tax cuts to economic development in a state that has lagged behind others could also be difficult for tax-cut advocates. Ohio is behind the national average on growth in personal income, wages, employment, and GDP, and is projected to underperform through 2019, according to figures from budget-planning testimony of Timothy Keen, director of the state’s Office of Budget and Management.
Any tax cut narrative will have to account for and battle a history of poor economic development during a period of Republican-led tax cuts, Zach Schiller, research director for Policy Matters Ohio, told Bloomberg Tax.
“A whole variety of tax cutting strategies have not resulted in economic growth,” he said. “Forces for tax cuts have not been successful lately. There has been a bit of tax cut fatigue.”
“Outside special interest groups may try to sprinkle around money and influence, but at the end of the day the facts are these—Ohio Republicans have spent years slashing taxes for the wealthy, using funds stripped from local communities and our kids’ schools, in turn forcing local governments and school districts to slash services and raise taxes locally,” Ohio Democratic Party Chairman David Pepper told Bloomberg Tax in an email.
“This agenda has resulted in 57 months of Ohio job growth trailing the national average, the highest level of student debt in the country, and a state public education system falling quickly in its national standing (5th to 22nd from 2010 to 2017),” he continued. “The approach has been such a failure that even Governor Kasich admitted a few months ago that Ohio was on the verge of a recession.”
Liberal and conservative tax experts both agreed tax cuts will likely take a back seat in 2018 to the state’s battle with the opioid epidemic. Leading Republican governor candidates have made the opioid crisis a pillar of their campaigns due to the state’s high death count in rural areas and rising Medicaid costs associated with care for people who overdose.
“In Ohio, we lose at least 14 people every day to opioid overdoses. It is going to take all of us working together, including parents, law enforcement, schools, churches, community groups, and government to turn this problem around, and the action items the President announced today will help on many fronts, including prevention, education, treatment, and law enforcement,” Attorney General Mike DeWine (R) said in a statement Oct. 26, praising President Donald Trump’s declaration that the crisis was a national public health emergency.
Likewise, Kasich’s chosen successor Lt. Gov. Mary Taylor’s (R) main pitch to voters has been healthcare reform. She’s been a proponent of tax reform, but her ideas have mainly focused on simplification, not cuts.
“There isn’t a free lunch. If you cut taxes, you can’t deal with the opioid crisis, you can’t make college affordable,” Schiller said. “There’s not an endless bottom of money to give tax cuts.”
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