COLUMBUS, Ohio - The most affluent will benefit the most from the major tax changes in Ohio's recently approved budget bill, according to a new report.

Four income-tax cut provisions will accelerate the lower income tax approved last year, expand tax breaks for business income, increase personal exemptions and boost the state Earned Income Tax Credit, the report found.

Report author Zach Schiller, research director for Policy Matters Ohio, said the cuts total more than $400 million, most of which will go to the wealthiest Ohioans.

"Half of that goes to the top 5 percent, who made over $151,000 last year. People in the top 1 percent will see a cut of over $1,800," Schiller said. "On the other hand, at the bottom 20 percent, people who made less than $19,000 will get an average tax cut of $4."

Cutting the income tax does little for the poorest Ohioans because they don't have much income-tax liability to begin with, Schiller said. As they review current tax breaks, Schiller said, state leaders should restore and expand funding to local governments, schools, and health and human services, all of which he said would improve communities and create opportunities for business.
The analysis was conducted for Policy Matters Ohio by the Institute on Taxation and Economic Policy.

Schiller said the $400 million being cut from the tax rolls could be used to better address Ohio's many needs.

"We have among the highest infant mortality rates in the country, which is shocking," he said. "We have unaffordable colleges, to too great a degree. We can do more to expand preschool. These are all things that would benefit the health and welfare of Ohioans."

Other new tax breaks offer benefits to narrow groups of taxpayers, including one that allows investors to more easily receive tax credits for investing in small companies. It's intended to encourage companies to generate jobs, but to qualify, Schiller said, all the companies have to do is continue to pay existing employees.

"Bad enough that we're giving tax cuts to people that don't need them," he said. "If we're giving tax breaks to people for investing in companies that all they do is pay their existing workers, - if we continue more of that policy and it'll lead to not only money ill spent, it's really questionable."

Supporters argue that tax cuts will boost the economy and create jobs. Schiller disagreed, noting that since 2005, when Ohio lawmakers reduced income-tax rates and ended Ohio's corporate income tax, the state has lost jobs.

The full report is online at policymattersohio.org.


get more stories like this via email

Congressional Republicans are taking a hard look at Medicaid as they pursue spending cuts and a new report shows how the public health program is preventing care access from further eroding in rural North Dakota and elsewhere.

A House GOP proposal floats a nearly $2.5 trillion Medicaid reduction. Findings from Georgetown University's Center for Children and Families showed people in rural areas are more likely than metro populations to receive health coverage through Medicaid.

Katy Kozhimannil, professor of health and policy management at the University of Minnesota School of Public Health, said the program is a key contributor to pregnancy care in these settings.

"Offering obstetric care is a financial challenge for hospitals as revenues may not cover the costs of providing that care," Kozhimannil pointed out. "Medicaid covers nearly half of all births nationally and plays a substantially larger role in paying for births in rural areas."

The report said in 2022, 52% of rural hospitals no longer had maternity wards, compared with 36% of urban hospitals. There is concern the gap would widen with Medicaid cuts and North Dakota almost leads the nation for lack of rural OB/GYN services. Some House Republicans insist the programs need reform to avoid a fiscal collapse. But skeptics said drastic changes are a way to offset a planned extension of federal tax cuts.

The report also pointed out residents in rural areas have worse health outcomes.

Joan Alker, executive director of the Georgetown University Center for Children and Families, said it demonstrates why Medicaid is so important, adding it serves as a lifeline to a range of populations living in these communities.

"It is serving children. It is serving seniors in nursing homes, people with disabilities," Alker outlined.

Alker noted Medicaid helps recipients get ahead of health challenges through preventive care, as
opposed to letting conditions worsen.

"People wind up sicker and then they're in the emergency room and children can't get their asthma inhalers and they miss school," Alker explained.

In their pursuit of slashing government spending, Congressional Republicans are taking a hard look at Medicaid. But a new report shows how this public health program is preventing care access from further eroding in rural Minnesota and elsewhere. The incoming Trump administration promises major budget cuts, and a House GOP proposal floats a nearly $2.5 Medicaid reduction. But findings from Georgetown University's Center for Children and Families show people in rural areas are more likely than metro populations to receive health coverage through Medicaid.

Katy Kozhimannil, associate professor in the University of Minnesota School of Public Health, said its providers rely on it, too.

"Medicaid is an absolutely essential source of revenue for those hospitals to keep operating and to provide different types of services and additional training and support for clinicians," she said.

A key Medicaid component is the Children's Health Insurance Program. At 7%, the Georgetown report says Minnesota is among the states with the largest difference in the share of kids covered by CHIP when comparing smaller towns to urban centers. Some House Republicans insist these programs need reform to avoid a fiscal collapse. But skeptics say drastic changes are a way to offset a planned extension of federal tax cuts.

Joan Alker, executive director and co-founder of the Center for Children and Families at Georgetown University, called these budget proposals "horrifying," while suggesting the public might be caught off guard because the program wasn't really discussed on the campaign trail last fall.

"There was complete silence about it, despite the fact that it is the largest source of public coverage by far in the United States," she said. "It's also a very popular program with the voters of all political stripes."

Report authors stress the timing of the proposed cuts is especially bad as rural areas continue to grapple with hospital closures. 120 facilities have either closed or ceased offering inpatient services over the past decade. Many rural hospitals opt to shutter less lucrative units such as maternity wards. And the experts say Medicaid covers a majority of pregnancy care in smaller communities where these units still operate.

One topic expected to make a big splash during Wyoming's general legislative session is property taxes at many levels.

First on the agenda for the Freedom Caucus, Wyoming's House majority faction, is a 25% property tax cut on homes up to $2 million in value, passed by both chambers in 2024. Gov. Mark Gordon vetoed it, calling the fix "temporary and very expensive," as the state would have to pay the backfill.

Hank Hoversland, executive director of the Wyoming Taxpayers Association, said another piece at play is a state constitutional amendment voters passed in November.

"That provides the legislature a vehicle to make a separate class for property taxation purposes, that is, residential real property," Hoversland explained. "Then, it also allows there to be a subclass for owner-occupied, single-family residences."

Though the amendment passed, Hoversland pointed out legislators need to take action this session in order to give the change legs.

At the industry level, Wyoming law includes a property tax exemption for "property used to eliminate, control or prevent air, water or land pollution." Senate File 61, sponsored by Sen. Cale Case, R-Lander, would clarify carbon dioxide shouldn't count as pollution so the state can tax incoming carbon capture projects.

Hoversland stressed energy companies pay a large portion of taxes in the state.

"Just this past tax year, minerals paid about 46% of property taxes, while the all-other category -- including industrial, commercial, residential and ag -- paid 54% total," Hoversland outlined.

Earlier this month, the state also certified the first Wyoming citizen's ballot initiative in 30 years, slated to appear on ballots in 2026. It proposes cutting residential property taxes by 50% for homeowners who have lived in Wyoming for at least one year.


get more stories like this via email