Today in the Akron Legal News -- 2010, It's On

Today's Akron Legal News column hooks on the Wednesday after Election Day being, for us politics junkies, the official beginning of the 2010 election cycle. From that I take on a personal bugbear.

Based on what we're hearing from Republican candidates, the narrative is likely to be 1) Strickland has dithered on the economy, hence the lousy economy, and 2) the Republican's positive, innovative, not-just-hatin' proposal is to update Ohio's antiquated business tax system. Rob Portman, for one, was talking up these themes (with a dose of Obama criticism of course) when he visited the Press Club last week. He said that Ohio's tax system was designed for a traditional heavy manufacturing economy with little competition from elsewhere.

So this is what really pisses me off. That was a compelling argument six years ago, and in response Ohio revamped the system. This under a Republican administration and with Republicans in charge of both houses of the legislature. And now Republicans pretend it never happened. Drives me right out of my tree every time I hear it.

So if I have one wish for the coming election season, it is that Republicans who continue to mine this trope get called on it. Specifically I'd like to see a reporter, at least once in a while, ask why we should Candidate R's tax reform to solve all of Ohio's economic challenges when the last reform was sold the same way. And needless to say, economic utopia has not arrived in Ohio.

Of course advocates for tax reform could argue that it worked. For example, Ohio keeps going up in the Site Selection ratings. But that would obviate the rationale for a new reform. But if you argue that the old reform didn't work, your back to square one. What's a tax cutter to do? Apparently pretend that the past reform didn't happen.

Linkage.

Here's the pdf Fact Sheet on what's left of the corporate franchise tax from Ohio Dept of Taxation. Another pdf from Ohio Tax, this one showing how the old taxes are being phased out (09 is the last tax year for both the business personal property tax and corporate franchise.)

Voinovich's Red Cape

Did Sen. George Voinovich just announce that he will retire after this term? What he said is:

"We're going to have to raise more money in this country. Did you hear me? We're going to have to increase taxes in order to do the job," Sen. Voinovich said. "Anyone that tells you that's not the case isn't being truthful with you. They're not being intellectually honest with you. [From an ODP presser quoting Gongwer]

But in the modern Republican Party, that's tantamount to declaring you no longer want to be an elected official. Voinovich is waving a red cape in the face of the dominant economic conservative wing of the party, begging for a primary challenge. The sound you hear is a hundred right wing Ohio electeds stampeding to get on the phone with Club for Growth and ask for their blessing.

Issue 17 Down in Flames

Given that the issue faced no organized opposition and that the low off off off-election turnout should have tipped the issue to a good GOTV drive, this is an impressive asskicking:

From the BOE

Issue 17 - City of Akron, Income Tax
Vote For Not More Than 1
(WITH 153 OF 153 PRECINCTS COUNTED)
AGAINST THE INCOME TAX . . . . . . . . .11,489 . . . . 66.02
FOR THE INCOME TAX . . . . . . . . . . . . . . 5,913 . . . . 33.98

Bottom line: the mayor just didn't make the case. When friends to the left as well as the right vowed to vote against it, clearly the campaign was in trouble. For myself, I am just so bone tired of cities and states being held hostage by companies for handouts in the name of jobs, I just couldn't see fit on this one.

I think the case is strong for a tax about half the magnitude to replace lost state and Federal monies. I hope that's where the city goes.

Thoughts on Akron Issue 17

A week from tomorrow is Election Day. Here in Akron, pretty much the only thing on anyone’s radar screen is the city income tax hike proposed in Issue 17. The ABJ runs another preview story today.

A friend and reader asked today if I planned to write about the issue. Frankly yes, then other stuff took over. And really what I wanted to do was use the issue as a hook to rant about how state and federal budget cuts are putting cities between the rock of raising taxes so businesses and the middle class leave town and the hard place about cutting services so everything falls apart and businesses and the middle class leave town. Hmm. If I really need to go into more depth than that, it will be later.

In the meantime, we have a tax issue to contemplate. Frankly, I wish I could vote for half of it. I’m inclined to believe that Akron needs the money for basic services. This isn’t based on extensive research, so much as a look back at where we’ve been. Akron was the only major city that was not in the fiscal weeds during the last recession. In other words, the administration kept its house sufficiently in order during the relative boom that it didn’t bottom out when the bust hit. It did so despite cuts in Federal money to cities and creepingly slow growth in the Local Government Funds – Ohio’s program of state aid to municipalities.

Because Akron is pretty frugal with the taxpayer’s money, the administration should be given some credibility when it says we need the money. I’ve been asked whether the police are truly understaffed. First off, Akron certainly isn’t overflowing with police. We are experiencing a bit of a spike in violent crime (as is most of the rest of the nation.) While the Sudafed laws are having an effect, the proliferation of meth in the city is a real drain on resources. Also, recent events demonstrate the need for better community-police relations. Programs to encourage community relations are always the last to get funded.

Finally, it’s unlikely the Mayor would ask for more police if he didn’t think we really need them. The Mayor and the Police Department do not have a friendly relationship. Some tension between the two entitities is probably healthy in a democracy, though at times it goes beyond healthy. But the point is, Mayor Plusquellec doesn’t carry the water for the police. He’s not asking for more as a favor to the FOP. He doesn’t much like the FOP.

So, the city services half of the Issue I would vote for gladly. I’m less happy with the economic development half. I’m deeply tired of corporations bankrolling free-marketeer Republican politicians, then walking into Democratic cities with their hands out. I’m tired of my tax money going to businesses. Again, this is probably fodder for another post, or maybe part of the rant about the current screw-the-cities vogue. But to keep it simple, I’m not happy that part of the money will be going to business development.

Finally, let’s note the obvious strategy of the campaign. For being the only real issue on the ballot, this campaign has been practically non-existent. I’ve gotten three mailers. Period. No robo-calls, no door hangers, no canvass, no requests to put up a yard sign. In fact, the only signs out are on city property. The website is pretty good, but simply part of the city website.

All of which suggests that the strategy is to target any communications that remind people that there is an election tomorrow to those who will vote for it. I’m guessing the administration will have a boiler room somewhere aggressively calling likely voters and steering clear of everyone else.

We’ll see next week if it works.

Where I'll Be Tomorrow.

Literally, physically here. But around 9:00 I'll virtually visit the Ohio Office of Budget and Management because around 9:00 they are due to post the new "Blue Book" -- the budget Gov. Strickland is proposing to the General Assembly. Today's State of the State message was the warm-up. Tomorrow's Blue Book will be the *ahem* real test.

Strickland promised a hell of a lot today. He says he will expand health care coverage and the State's share of education spending while holding overall spending growth to the lowest rate in decades. Tomorrow we get to see how he will do it. We will see which two departments get cut, which nine are getting sub-inflation increases, and what the "reasonable budget increases" for the other seven look like. And we get the specifics on what loopholes are being cut and how.

So tomorrow will be a happy day for the bean counters. For myself, I will be digesting the education proposals to get information out to members of the group I contract with. Some version of that will no doubt end up in a post, probably in the afternoon or evening.

State Treas. Richard Cordray Saves Over $700k

From a Treas. Office presser:

Ohio Treasurer Richard Cordray, acting with the support of fellow
Board of Deposit members Ohio Attorney General Marc Dann and Ohio
Auditor Mary Taylor, today exercised the State's right to terminate a
2005 contract for a Financial Transaction Device/Cash Management
Information System. Cordray's office has worked together with Key
Bank to determine whether these information system functions, which
Cordray's predecessor had decided to contract out, could in fact be
performed by Cordray's office to minimize costs and save taxpayer
money. Key and Cordray have now agreed that any further work under
the contract is not necessary.

The termination of this contract will save taxpayers up to
$600,000 per year. The system created under the contract, through a
subcontract to Govolution, Inc., was designed to allow state agencies
to review all incoming electronic financial transactions on one single
list. The system is still in development and to this point is not yet
ready for use. Cordray has advised his fellow members of the Board of
Deposit that with recent changes in IT staffing, this task can be
performed internally within the Treasurer's Office at no additional
charge.

And:

Cordray's fiscal diligence concerning this particular contract
also led to the discovery that approximately $170,000 in earnings
credit was not applied to the State of Ohio's banking fees in 2006.
Both the Treasurer's Office and Key Bank are working together to
continue to review records for prior years to compile a total of the
amounts.

Nice when a guy pays for his own salary (and then some) two months into the job. Wonder if Buckeye Institute will give him some sort of prize.

Strickland to Veto Paris Hilton Tax Cut?

A friend writes that the following was in today's PD:

Strickland said it is "highly likely" that he would veto a proposal by House Republicans to cut or eliminate Ohio's estate tax.

Neither my friend nor I can find it online, but the PD's internets stuff seems to be hurting today. I haven't gotten my headlines email yet and the

Anyway, the estate tax cut looked to me like political posturing on the Republicans' part. The budget is tight, the cut would benefit wealthy taxpayers who have already benefitted disproportionately from the last round of tax cuts, the supposed case for the cut on economic development grounds doesn't pass the straight face test and the regressive sales tax hike still sits on the books.

The Republicans could have shoved this through the lame duck session, but they concentrated on a firearms bill that Strickland would have signed but Taft vetoed. They held this back to put the most unpalatable tax cut imaginabel in front of Strickland to test his resolve and build the "Taxing Ted" meme. Good for Ted resolving not to back down to policy bullying.