Status quo will not create jobs for Ohio

How do we create jobs and attract businesses to Ohio, a state with one of the highest tax burdens in the nation? The short answer is, we can’t—mostly because in a highly mobilized economy where businesses can relocate to better business environments, Ohio can no longer compete.

We have a talented workforce and a long history of industrious success. So why has Ohio lost 231,000 taxpayers between 1993 and 2008, 105,000 of whom relocated within the past five years? The answer is simple, yet somehow consistently overlooked by those who control Ohio’s purse strings: our state taxes are too burdensome.

The root cause of Ohio’s financial crisis is a poor business climate and heavy tax system that has systematically repelled people from the state, which has led to a shriveled state economy and smaller tax base. At the same time, uncontrolled state spending has caused unreasonable taxes on Ohio’s remaining citizens.

Businesses are not static and will relocate to states that are most business-friendly, mostly those with the lowest taxes. In turn, entrepreneurs and college graduates will go wherever the jobs are, leaving Ohio with even less revenue and jobs than before.

And based on this past budget cycle, how can we expect Ohio’s Democrats to address another revenue deficit? You guessed it—with another tax increase.

Ohio has continued this dangerous downward spiral for years, and the effects have never been clearer. Whether the economy is prospering or struggling, we cannot afford any more tax increases that will reduce spending and investments by families and businesses.

In just three decades, Ohio’s tax burden has gone from the fifth lowest to the seventh highest in the nation. Today, taxes consume approximately 10.5 percent of Ohio’s income. Even regionally, our state has fallen far behind our Midwestern neighbors that all have moderate taxes.

Yet the high spenders in the Statehouse still wonder why we are bleeding jobs and families?

First and foremost, I believe that Ohio needs to alleviate some of the tax burden on small businesses. Small businesses create 80 percent of new jobs annually, and they are the leading employer of Ohioans. For this reason, encouraging business growth and retaining our homegrown businesses is one of my top priorities as your state representative.

Additionally, I have continued to advocate for a more fiscally responsible state government, one that is lean, transparent and accountable. Before the Legislature turns to the taxpayers to bail out the state’s finances, state leaders have an obligation to ensure that each tax dollar is being spent wisely and efficiently. This is why I have staunchly supported Republican proposals to streamline spending and reduce government waste. Without first making our state government work cost-efficiently, we will be unable to improve the tax code and make Ohio nationally competitive again.

The state cannot continue to soak the taxpayers with heavy taxes, because eventually we’ll realize that there are no taxpayers left to tax.

Lawmakers should promote job growth, not hinder it

Ohio’s unemployment rate recently rose to 10.5 percent, and the Ohio Legislature should be focused on attracting, retaining and creating jobs to get people back to work. However, House Democrats have hit another nail in the coffin by raising taxes during our state’s most difficult economy in decades.

In October, a measure passed the Ohio House that will increase the tax burden on Ohio's families. House Bill 318, which was promoted by Governor Strickland and championed by House Democrats, eliminates the final installment of the 2005 income tax reductions and will increase your family’s 2009 tax rates by 4.2 percent.

Supporters of House Bill 318 claim that this bill is not a tax increase but a “tax freeze.” Essentially, this legislation changes your 2009 tax rates back to your 2008 rates and, in the process, increases your taxes retroactively. This bill is a tax increase because it “freezes” your tax rates 11 months late, which raises your taxes rather than freezing them. As a firm believer that tax increases will discourage job growth and economic development, I maintain that raising taxes at this time is irresponsible and shortsighted because it will hurt families when they are most vulnerable.

There is no question that as a Legislature, we need to adapt to the challenges that are thrown our way, and immediate action was needed to address the nearly $900 million deficit. However, House Republicans predicted this budget crisis back in January, and since that time we have offered numerous proposals to spur job growth, reduce government waste, and make state operations more efficient and effective.

The House majority has time and time again disregarded our viable alternatives to tax increases. House Republicans remain hopeful that 2010 will bring cooperative, bipartisan conversations about Ohio’s future. We need to take immediate action toward fixing what is broken with our economy, so we can revive our dying industries and bring new businesses and families to this state.

Unless we take a closer look at Ohio’s fundamental budget problems, we will continue to experience deficits and job loss year after year. Instead of returning to the taxpayers to bail us out again, the Ohio House should work cooperatively to find sustainable solutions to help, not hinder, our economic recovery.

Higher taxes are NOT the answer

Governor Strickland and House Democrat's proposal to raise taxes on families and small businesses passed the Ohio House and Senate in December. House Bill 318 will eliminate the final installment of the income tax reductions set forth in 2005, which will force taxpayers to relinquish an additional $851 million in new taxes.

Governor Strickland and House Democrats supported the 4.2 percent tax increase while ignoring House Republican calls for waste reduction and government accountability. With a heavier burden being forced upon the shoulders of entrepreneurs, House Republicans fear the effect this tax increase will have on Ohio's long-term job potential.

"We have to keep in mind the fact that taxes are more than just a way for government to raise revenues, they are also a way to modify behavior.” Martin said. “When we want to encourage a certain behavior we offer tax incentives, when we want to discourage a certain behavior we increase taxes. House Bill 318 will discourage investment by raising taxes on the people who create jobs.”

Small businesses have generated 64 percent of net new jobs over the past 15 years, according to the Small Business Association. They also employ approximately half of all workers in the U.S. and pay 44 percent of total private payroll.

House Republicans believe that raising taxes in this economy will ruin Ohio's competitiveness in creating jobs and attracting new business opportunities. With one of the top ten highest state income tax rates in the country, further raising Ohio's income taxes will compel families and businesses to relocate elsewhere.

“House Bill 318 is a tax increase on all levels, affecting the rich, poor, middle class and small businesses,” Martin said. “Ohio's leaders need to make a choice whether they would rather create jobs or continue to feed our bloated government with more waste and inefficiencies.”