Taxes & Spending

Blackwell Seeks to Repeal Ohio’s Republican Tax Hike

Ohio Gov. Bob Taft (R.) received a scare early in his 2002 re-election race against former Cuyahoga County Commissioner Tim Hagan (D.). An early September poll showed Taft running below 50%, and leading by just 11 points over Hagan who, with only 60% name recognition, still had a chance to gain ground.

In the end, Hagan was no real threat. Taft coasted to an impressive 20-point victory, attacking Hagan as “Tax-Hike Tim.”

But just months later, Taft’s attitude toward taxes changed. Facing a modest $720 million deficit, the governor rammed a two-year tax package through the Republican legislature, expanding the range of taxable goods and “temporarily” adding 20% to the state sales tax until June 2005. Critics call the $2.5 billion package the largest tax hike in state history.

But now Republican Secretary of State Ken Blackwell is breaking ranks with the state’s moderate Republican establishment by trying to repeal the tax hike by popular referendum-and he is taking heat from party leaders for his efforts.

In an interview with HUMAN EVENTS, Blackwell agreed that comparisons to California’s budget crisis were appropriate.

The Golden State’s $38 billion deficit stemmed from a Democratic legislature dedicating a one-time revenue windfall in the late 1990s to permanent spending programs. In Ohio, a Republican legislature eagerly snatched windfall revenue and increased spending well beyond the state’s normal resources.

Blackwell insisted that Ohio, like California, has a spending problem and not a revenue problem. The state’s new biennial budget included an 11% spending increase in spite of the deficit. As in California, the governor and legislature sought new tax money to cover their excessive spending.

Ironically, on the same day the new tax hike went into effect, the state reported that it had exceeded revenue projections and ran a surplus for fiscal 2003 of $181 million.

With the new tax hike, Ohio has the nation’s fourth most hostile tax climate for businesses, according to the non-partisan Tax Foundation.

“We have a business tax climate that is unfriendly to business formation, job creation, and economic growth,” said Blackwell, who notes the state has lost 174,000 manufacturing jobs in recent years.

To put the tax repeal measure on the ballot, Blackwell must gather 96,870 signatures by December 20. The legislature would then have four months to repeal the tax on its own, before Blackwell could put it on the November 2004 ballot.

A successful initiative could spell trouble for the state GOP if angry voters emerge to repeal the Republican tax hike. For that reason, GOP state chairman Robert Bennett has denounced Blackwell’s efforts. Bennett did not respond to HUMAN EVENTS’ inquiries.

Blackwell shrugged off accusations by Bennett and other Republicans that he is merely positioning himself for the 2006 gubernatorial primary election.

“If they think that is a political maneuver, then that explains why they have done nothing to accelerate economic growth and to create an environment that is friendlier to capital and to workers and to families,” said Blackwell.

He added that support for the initiative runs deep, claiming that he had 1,500 new volunteers sign on to the initiative campaign in one day last week.


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