OUR VIEW: A better way to spend Medicaid windfall

reconsider rush to cut taxes; aid schools, local government

Published:

Republicans in the Ohio

Senate who dug in their heels against Gov. John Kasich's bid to expand Medicaid appear to have found a silver lining in the plan.

Kasich was able to do an end run around his GOP opposition by turning to the State Controlling Board to push through the Medicaid expansion. Assuming his ploy survives a court challenge, Medicaid coverage will be extended to thousands of low-income Ohioans, leveraging federal funding available through the Affordable Care Act.

That will translate into a $400 million savings for the state, and Senate Republicans think the best way to put that to use would be to return it to Ohioans in the form of a tax cut.

Senate President Pro Tem Chris Widener has introduced legislation calling for a 4 percent cut in the state income tax rate. That would amount to about $70 per year for an Ohioan earning $60,000.

House Speaker William Batchelder has raised a cautionary voice on proceeding with the tax cut, saying that legislators ought to consider other pressing needs before proceeding with it. "We have a lot of problems. I think we probably should look there first," he said last week as the Senate Finance Committee began considering the tax cut measure.

Speaker Batchelder, a Republican veteran of the Statehouse, is right. While pushing through what will translate into a relatively paltry cut in taxes might be the popular thing to do, there are better ways to spend $400 million.

Funneling a decent share of that money into Ohio's schools would be a wiser way to invest the windfall. Cuts in state funding in recent years have posed challenges for districts across the state, including many in Portage County. Tuesday's ballot includes four levy requests from local school districts; all have pointed to declining state support as a reason for going to the voters.

Other areas have seen cuts in state funding in recent years, such as local government funding and support for libraries. They also could benefit from some of the Medicaid windfall.

Talking about cutting taxes is a sure way to score political popularity points, and parceling out $400 million to individual taxpayers might sound like a great idea -- but it really doesn't translate into much money for the average wage earner. Sharing the wealth with schools and others that depend on state support is an idea worth considering before rushing through a tax cut.

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  • Well said, a tax cut just makes the rich richer while schools and local governments have to beg for money from local residents.

    http://www.dailykos.com/story/2011/03/30/961357/-The-fallacy-that-tax-cuts-stimulate-economies#