3/5/15 1:54 PMIncome tax cuts keep smart people in Ohio

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Income tax cuts keep smart people in OhioRichard Vedder 1:08 p.m. EST February 14, 2015

Richard Vedder is distinguished professor of economics emeritus at Ohio University and an adjunct scholar atthe American Enterprise Institute.

Throughout most of the 20 century and into the first decade of this one, Ohio was a Rust Belt economy,growing less rapidly than the nation. In 1940, Ohio was a wealthy state; income per capita was 11 percentabove the national average. That income advantage had disappeared by 1970. But the state continued todecline relatively, so by 2008 it was 11 percent below the national average – the reverse of the situation 68years earlier.

In recent years, however, an economic revival seems under way. By 2013, the income per capita deficit hadfallen to 8 percent. In the last month before Gov. John Kasich took office, December 2010, the unemploymentrate was 9.6 percent – above the national average; four years later, it is has fallen by half, to 4.8 percent, wellbelow the national average, and well below neighboring Indiana, Kentucky, West Virginia and Michigan.

What has happened? While many factors are at work, Kasich’s aggressive pursuit of a pro-growth economic policy is beginning to pay dividends.Especially important has been important reductions in Ohio’s destructive high marginal taxes on income. Productive, entrepreneurial people are highlymobile and hate to pay large income taxes. About 5 million Americans this century have moved from the 41 states like Ohio with income taxes to the ninestates that do not generally tax income. Ohio contributed mightily to this brain drain.

When Kasich took office, the top rate on the Ohio income tax was 6.24 percent, nearly double Indiana’s flat rate and substantially above Michigan andPennsylvania as well. By exercising spending constraint and devoting some of the “growth dividend” associated with rising prosperity to tax reduction, thetop rate for 2014 is a less harmful 5.33 percent. But the governor knows that we still are not as competitive in terms of taxes as we could be, and he hasproposed a bold further 23 percent reductions, to 4.106 percent, over a couple of years. That latter rate puts the state below Illinois and Michigan anddramatically reduces our disadvantage relative to other states. Scores of peer-reviewed studies conclude that economic growth is enhanced by marginaltax rate reductions. Adding icing onto the cake, the administration proposes wiping out income taxes altogether for most small businesses.

How does the governor intend to pay for this? Partly by reducing the state’s revenue intake – giving a net tax cut. But part of the tax reduction will befinanced by some modest increase in consumption taxes and levies on oil and gas production, which are scandalously low. My reading of the research(some of which I have done) suggests the negative effects of these tax increases will be modest relative to the big gains from income tax reductions. Onereason why Ohio has only three billionaires on the Forbes richest 400 list is because taxes for wealthy Ohioans are too high: This bill will help keepbusiness leaders whose wealth and smarts create jobs and help all Ohioans.

But isn’t this unfair to the poor? I don’t think so. The proposal increases income exempt from taxation, helping the poor. Other provisions allow some low-income people to keep some government child care subsidies. Recently adding hundreds of thousands to the Medicaid rolls shows compassion for thepoor. And because Ohio’s sales tax exempts food, that means it is not fiercely regressive. The more important point is that the biggest beneficiaries ofhigher economic growth are those marginal participants in the labor force who have gone from being unemployed to working.

Bottom line: The governor has proposed a budget that should help accelerate the economic momentum, erasing Ohio’s income deficit – and helping, nothurting, the poor and disadvantaged.

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3/5/15 1:51 PMFY 16-17 Budget

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What They Are Saying About Cutting Taxes"I find numerous positive aspects in Governor Kasich's budget. Foremost, it continues to rebuild Ohio'sfinances by increasing the rainy day fund, further increasing business certainty about future budgets. Ithelps incentivize work for lower-income household with targeted tax cuts and work supports. The shift tomore consumption-based taxes will further incentivize investment, though the legislature should makeevery effort to limit negative impacts on low- and middle-income households. There are long overdueincreases in the severance tax that will fund needs in impacted communities and ensure the whole statebenefits from the shale revolution. Lastly, the move to exempt small business income from taxationsupports the firms that create a disproportionate share of new jobs without picking winners."

Mark Partridge, Professor in the Agricultural, Environment, and Development Economics Departmentat The Ohio State University

"The bold proposed reduction in Ohio taxes and, in particular, the sharp proposed reduction in the Ohioincome tax, will accelerate Ohio's metamorphosis from a sleepy, slow growing Rust Belt state into arevived economic powerhouse. States with low marginal income taxes have higher rates of economicgrowth. While on net a real tax reduction, the governor's proposals to raise some taxes (such as severancetaxes on oil and gas) to help fund income and small business tax reduction also makes good economicsense."

Ohio University, Richard Vedder, Distinguished Professor of Economics Emeritus

Governor Kasich is on the right track with his proposals and should be encouraged to continue to broadenthe base on consumption tax as he pushes down income tax rates for all. And as been proven time andtime again, people are a state's most mobile resource. The state income tax places a penalty on work andworkers, and employers can easily escape it, and they do so by moving to no-tax states. As my good friendand co-author Dr. Art Laffer likes to say, "Growth is the answer."

Show Me Institute, Think Tank for Limited Government, Rex Sinquefield

All in, the latest Ohio tax plan is a huge step in the right direction. If fully implemented, Ohio's tax codewould rely substantially less on income taxes and more on consumption taxes. This would have the addedbenefit of reducing state revenue volatility, as consumption taxes are far more stable than taxes derivedfrom income. More important, by changing its tax code and modestly shrinking the size of stategovernment, Ohio would move closer to becoming one of the fastest-growing states in America.

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Let Voters Decide,President Travis H. Brown

"Industry research indicates there is pent up demand by consumers to increase their number of restaurantvisits, and providing tax payers with more disposable income will help fulfill that demand. We especiallyapplaud efforts to eliminate state income tax for small business owners. This part of the governor'sproposal, if approved by the general assembly, would provide these owners with additional financialresources to invest in their business and create more jobs."

The Ohio Restaurant Association, Geoff Hetrick, CEO

"Like the focus on reducing outdated and ineffective small business regulation through the CommonSense Initiative in his first term, we appreciate the fact that the Governor is leading the discussion todouble down and recognize the economic potential of our state's smallest companies."

Council of Smaller Enterprises, Steve Millard, President and Executive Director BWC

3/5/15 1:43 PMKasich tax proposal would skew tax system further in favor of Ohio’s affluent | Policy Matters Ohio

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Kasich tax proposal would skew tax system further in favor of Ohio’saffluentTax cuts would average $11,906 a year for the top 1 percent, while bottom 60 percent, on average, wouldsee increases.

Contact: Zach Schiller, 216.361.9801

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Press release

Income tax cuts would further contribute to inequality in Ohio

The Kasich administration proposal to cut income taxes and expandsales and other taxes would produce big tax cuts for Ohio’s mostaffluent residents, while increasing taxes on lower- and moderate-income families.

The proposal would provide an $11,906 annual tax cut on average totaxpayers in the top 1 percent of the income spectrum, who mademore than $388,000 in 2014. The bottom three-fifths of taxpayers asa group, making less than $58,000 a year, would see increases instate and local taxes. Those in the bottom fifth, making less than$20,000 last year, would see an increase of $116 on average. Evenexcluding changes in tobacco taxes in Gov. Kasich’s proposal,taxpayers making less than $37,000 a year – those in the bottomtwo-fifths of the income spectrum – on average would see no benefitfrom the plan.

Those are the results of an analysis by the Institute on Taxation and Economic Policy, a Washington, D.C.-based research group that has a sophisticated model of the tax system, for Policy Matters Ohio. Table 1provides the breakdown of the overall impact of the changes proposed by the Kasich administration,excluding the governor’s severance tax plan.[1]

Income-tax cuts will flow heavily to the most affluent, further increasing inequality in Ohio while doinglittle for our economy. By contrast, the increase in the sales-tax rate and most of the other proposed tax

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increases will fall more heavily on lower- and middle-income Ohioans.

Income-tax cuts

The Kasich administration tax plan has a number of elements. The proposal would cut income-tax rates by23 percent over two years, which comes on top of previous cuts that have slashed the top rate from 7.5percent in 2004 to 5.33 percent today. Those cuts and other tax changes since then have already provided$20,000 each year on average to filers in the top 1 percent.[2] The rate cut, adjusted to include otherchanges in the package, is expected to cost $4.6 billion over the two-year budget. Under the proposal,owners of businesses with $2 million or less in annual receipts who pay individual income tax on incomefrom them would see such taxes eliminated (this would add to an existing tax break for business owners).The Kasich administration estimates this would cost nearly $700 million over two years. The proposal alsowould boost income-tax personal exemptions for those with less than $80,000 in annual income.

Among a host of measures to help pay for the income-tax cuts, the governor proposed means-testing threedifferent income-tax provisions for seniors: A deduction for Social Security income, a $50 senior creditand a credit for lump-sum retirement income. Only those with income below $100,000 would continue tobe eligible for these deductions or credits. Both these proposals and the increases in personal exemptionswould make the income tax more fair, but the proposed rate cuts and business-income tax cuts overwhelmtheir positive impact.

Altogether, ITEP found that the income-tax changes alone would produce a $13,000 gain on average forthose in the top 1 percent, who would receive 31 percent of the total tax cut. Those in the middle fifth ofthe income spectrum would see a reduction of $219 on average, while those in the bottom fifth would

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receive just $16. Altogether, the bottom 60 percent of Ohioans by income would receive just 15 percent ofthe income-tax reductions. All this is looking only at the income-tax cuts, not the rest of the tax proposal.

Table 2 shows the total of the proposed income-tax changes:

These income-tax cuts would further tilt Ohio’s state and local tax system in favor of the state’s wealthiestresidents. A separate report issued in January 2015 by ITEP showed that overall, nonelderly Ohioans inthe top 1 percent pay considerably less of their income in state and local taxes than middle-class and poorOhioans do (see http://www.policymattersohio.org/tax-report-jan2015).

Sales and other tax changes

ITEP also examined the effects of the administration’s proposals to raise other taxes. These includeincreasing the state sales-tax rate from 5.75 percent to 6.25 percent, extending the sales tax to a number ofadditional services and increasing cigarette and other tobacco taxes. The proposal also would raise the rateof the Commercial Activity Tax, while lowering the minimum CAT tax paid by some companies; increasethe severance tax on oil and gas produced using high-volume horizontal wells; and reduce or scrap someother tax breaks.

The biggest single increase – more than $1.5 billion over the two-year budget – would come from the risein the sales-tax rate (the figure doesn’t count Kasich’s proposed expansion of services subject to sales tax).Sales-tax rate increases fall more heavily on low- and middle-income residents, in part, because theyspend more of their income than upper-income taxpayers do. The Commercial Activity Tax, whichbusinesses pay on Ohio receipts, ultimately falls on individual taxpayers much like a sales tax.

As shown in Table 3, Ohio residents in every income group pay more under the proposed increases inother taxes. The top 1 percent on average would pay $1,190 more a year, while middle-income Ohioans

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would pay $284 and low-income residents, $132. While the amounts are smaller, for low- and middle-income residents, these increases constitute a larger share of their income.

To offset that, one obvious step is to implement a refundable state Earned Income Tax Credit (EITC), asmore than 20 states already have. Ohio has a state EITC, but it is not refundable, meaning it only wipesout state income tax liability and doesn’t help those who earn too little to pay income tax. It also is cappedfor those earning over $20,000. This tax credit for working families should be refundable like the federalEITC, extending help to far more working Ohioans.[3] The General Assembly also should consider addingsales tax credits, which provide a flat amount for each member of a family below an income threshold.

Gov. Kasich’s proposal includes a $1-a-pack increase in the cigarette tax and a boost in the tax on othertobacco taxes. As Table 4 shows, these tobacco-tax changes fall most heavily on the lowest-incomeOhioans. Cigarette taxes are charged per unit, not based on price, and lower-income individuals are morelikely to smoke.[4]

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Of course, only tobacco users will pay the added tobacco taxes. However, as also shown in Table 4,excluding the tobacco tax changes, the proposal remains highly rewarding to Ohio’s most affluent, whilecosting more on average for the bottom two-fifths of Ohio residents. Middle-income Ohioans see anaverage annual tax cut of just $16, so little that as a share of income it rounds to zero.

Some of the Kasich administration’s tax proposals, such as the boost in the cigarette tax and the severancetax, serve other worthwhile public policy goals. A higher cigarette tax can reduce smoking and improvepublic health, while a stronger severance tax can help communities affected by fracking, ensure that Ohiois receiving adequate compensation for the depletion of one-time resources and make our taxes morecomparable to those in other states. Broadening the sales tax base can be helpful because our economy hasshifted to services, many of which have been untaxed, while the Commercial Activity Tax could well beincreased, since it has never come close to replacing the revenue that was lost when it was created in placeof two other major business taxes. Policy Matters Ohio previously has endorsed certain other measures inGov. Kasich’s proposal, such as applying the sales tax to lobbying and debt collection, and reducing thevendor discount for big retailers.[5]

However, these measures and others to modernize Ohio’s tax system should be considered on their own,not to pay for unneeded income-tax rate cuts and business-income tax exemption. We should maintainand bolster the state’s progressive income tax, instead of weakening it as the Kasich administration woulddo. That would both allow us to invest in needed public services and rebalance the tax system in favor ofmost Ohioans.

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In June 2005, the Ohio General Assembly approved a 21 percent phased-in reduction of income-tax rates;the cuts were increased further in 2013. Since June 2005, Ohio has lost 1.6 percent of its jobs, while thenation as a whole has grown by 4.8 percent. Gov. Kasich’s budget proposal is based on economic forecaststhat Ohio will continue to underperform the nation during the upcoming two-year budget period inoutput, personal income and job growth.[6] There is no reason to believe that another round of tax cutswill bring a different outcome.

Data NotesThe ITEP analysis covers Ohio residents and is based on 2014 income levels.The income-tax analysis includes the administration proposals to eliminatethat tax on income from businesses with $2 million or less in annual receipts,reduce rates by 23 percent over two years, increase personal exemptions forthose with income of less than $80,000, and means-test the deduction forSocial Security, the $50 senior credit and the lump sum senior credit. Theanalysis of other tax changes includes the proposed increase in the state sales-tax rate by half a penny, the extension of the sales tax to additional services(including the local sales tax on that larger base), the reduction of the motor-vehicle trade-in tax exemption to 50 percent and capping the vendor discountfor collecting the sales tax. It also includes increasing the Commercial ActivityTax rate from 0.26 percent to 0.32 percent while lowering the alternativeminimum CAT tax for companies with gross receipts between $1 million and$2 million, increasing the cigarette tax by $1.25 a pack and the other tobaccoproducts (OTP) tax rate from 17 percent to 60 percent and eliminating thediscount for early payment of both the cigarette tax and the OTP tax.Gov.Kasich’s proposal to increase the severance tax on oil and gas is not includedin the overall analysis, but that would mostly be paid by out-of-statetaxpayers. Also excluded from the analysis is the cigarette floor stock tax, aone-time measure; the elimination of the deduction for early filing andpayment of beer and wine tax, the reduction of the watercraft trade-inexemption to 50 percent and the new vapor product tax).

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Policy Matters Ohio is a nonprofit, nonpartisan state policy research institute with offices in Clevelandand Columbus. The Institute on Taxation and Economic Policy (ITEP) is a nonprofit, nonpartisanresearch organization based in Washington, D.C. that works on federal, state, and local tax policyissues. ITEP’s Microsimulation Tax Model allows it to measure the distributional consequences of federaland state tax laws and proposed changes in them, both nationally and on a state-by-state basis.

[1] ITEP modeled the administration’s full tax proposal except for the severance tax, the one-timecigarette floor stock tax, the elimination of the deduction for early filing and payment of beer and wine tax,the reduction of the watercraft trade-in exemption to 50 percent and the new vapor product tax. See datanotes at the end of this report for more description.

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[2] Schiller, Zach, “The Great Ohio Tax Shift,” Policy Matters Ohio, Aug. 18, 2014, athttp://www.policymattersohio.org/tax-shift-aug2014

[3] Halbert, Hannah, “Out-of-Step: More Needed to Make Ohio EITC A Credit that Counts,” PolicyMatters Ohio, Aug. 26, 2014, at http://www.policymattersohio.org/out-of-step-aug-2014

[4] Centers for Disease Control and Prevention, “Current Cigarette Smoking Among Adults in the UnitedStates,” athttp://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/index.htm#national

[5] See Zach Schiller, “Limiting Loopholes: A Dozen Tax Breaks Ohio Could Do Without,” Policy MattersOhio, November 2008, at http://www.policymattersohio.org/limiting-loopholes-a-dozen-tax-breaks-ohio-can-do-without and Testimony to the House Legislative Study Committee on Ohio’s Tax Structure,Sept. 11, 2011, at http://www.policymattersohio.org/testimony-to-the-house-legislative-study-committee-on-ohio%E2%80%99s-tax-structure

[6] Blueprint for a New Ohio, Governor John R. Kasich’s Fiscal Years 2016-2017 Budget, Section B,Economic Forecast and Income Estimates, p. B-4, athttp://blueprint.ohio.gov/doc/budget/State_of_Ohio_Budget_Recommendations_FY-16-17.pdf Theforecast, prepared by IHS Global Insight, predicted Ohio’s unemployment rate would be similar to thenational rate, though the Office of Budget and Management noted that Ohio’s rate has dropped and mayend up below the projection.

Filed under: --- Ohio Income Tax, --- Tax Expenditures, 2015, Browse Research, Budget Policy, HomeRecent Releases, Institute on Taxation and Economic Policy, ITEP, Research & Policy, Revenue &Budget, Sub-Topics, Tax Policy, Zach Schiller

3/5/15 1:44 PMWould Gov. John Kasich's budget help or hurt the poor? | cleveland.com

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Would Gov. John Kasich's budget help or hurt the poor?

COLUMBUS, Ohio -- Gov. John Kasich launched his budget proposal saying Ohio needs to attack of theroot causes of poverty and do more to help people lift themselves up to higher jobs and wages.

But while some of his proposals have drawn praise for trying to address the issue, others have stirredcriticism as actually harmful to people with lower incomes, while benefiting those more wealthy.

Advocates for the poor say they are encouraged that poverty is at least part of the public dialogue.

"I'm hopeful that we can start having some really serious conversations during this budget process," saidLisa Hamler-Fugitt, executive director of the Ohio Association of Foodbanks.

She cites a figure to illustrate the seriousness of the issue in Ohio -- 3,833,950. That's the number ofOhioans who do not earn a self-sufficiency wage, or 200 percent of the federal poverty level, she said.Ohio's population is nearly 11.6 million, according to the U.S. Census Bureau.

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"I believe the governor when he says he wants to address these issues and the folks who live in theshadows. These folks don't live in the shadows. We see them every day," she said. "They are living inpoverty, despite work."

While the governor's proposals won't solve all of Ohio's poverty problems, they represents a start towardaddressing the issue, said Philip Cole, executive director of the Ohio Association of CommunityAction Agencies.

"We're just talking about helping people and we're just thrilled that the governor is engaged in such away," he said. "I've been here now for five governors. They all have talked about this stuff, but only one hasdone it."

Here's a look at some of the proposals in Kasich's budget that affect low-income Ohioans and whatsupporters and critics are saying about them.

Drawing praise

Increase in subsidized child care

Kasich's budget proposes to increase the income ceiling on the subsidy for child care to make it moreavailable to Ohioans.

When he unveiled the budget, Kasich said the change is necessary to keep child care from becoming abarrier to working Ohioans with lower wages seeking better employment.

The subsidy is available now to people making up to 200 percent of the federal poverty level -- roughly$39,500 a year for a family of three. Kasich proposes raising the ceiling to 300 percent of poverty -- about$59,000 a year for a family of three -- with it gradually phasing out as income grows.

Cole describes it as a key part of the governor's proposals.

"If you have a child, the highest cost of living for you is child care," he said.

A self-sufficiency calculator prepared by the Ohio Association of Community Action Agenciesestimates that the family of three, with one pre-school aged child, would need to earn about $47,600 ayear to be self-sufficient.

It calculates that child care would be the family's greatest expense, about $740 a month, followed byhousing costs and taxes.

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Streamlining welfare and job training

Kasich's proposal to better coordinate welfare benefit programs and training programsthrough the state's Department of Job and Family Services has won praise from traditional supporters andfrom groups that have opposed other policies.

The goal is to require counties to establish point people who will make the multi-program system more ofa one-stop shop that improves access to benefits for consumers and better connects them to job trainingand ultimately to employers and work.

"You can't look at that person as just a number or a widget," he said at recent appearance in Columbus."You have to remember that you are in the process of rehabilitating a life."

Innovation Ohio, a left-leaning policy group in Columbus, has criticized other aspects of the governor'sbudget plan, particularly tax changes. But its executive director, Keary McCarthy, acknowledged thatbetter coordination and delivery of services could benefit Ohioans.

Drawing fire

Shifting tax burdens

Tax changes in the governor's budget plan would lead to an estimated net tax cut of $500 million over thetwo-year biennium.

Critics have said that measures that would help pay for the those cuts will adversely affect low-incomeOhioans.

The administration is asking for increases in personal exemptions in the state income tax that it estimateswould zero out the state tax bill for as many as 200,000 tax filers.

It also proposes eliminating income tax on small business income for pass-through businesses with grossreceipts of $2 million a year or less. More than half of Ohio's workers are employed by small businesses.

An analysis of the tax plan by the Washington-based Institute on Taxation and Economic Policy projectedthat the changes would lower income tax bills across the board. But the increases proposed for the statesales tax and the excise tax on cigarettes would more than make up for those reductions.

The analysis, prepared for Policy Matters Ohio, a liberal-leaning research group, found that for three-fifths of of Ohio's wage earners -- incomes of $57,000 a year or less, the amount paid in tax could actually

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go up.

The impact was most significant for the bottom 20 percent (incomes of less than $20,000), where theportion of income directed toward state taxes was expected to increase by 0.9 percent, or $116 a year.

McCarthy, of Innovation Ohio, said that shifting tax burden is of concern to his organization, too.

"The governor is greatly accelerating a shift in the tax code that benefits the highest earners in the state tothe detriment of the lowest earners in the state," he said.

Cuts to certain Medicaid programs

Democrats and some advocates for women's health have complained about a proposal to changeMedicaid coverage available for women earning up to 200 percent of poverty.

The program provided coverage for family planning, breast and cervical cancer services and health andwell care coverage for pregnant women.

The state estimates the change would save $7.4 million in its share of the Medicaid costs in 2016 andanother $31.4 million in 2017.

And it argues that women in the program should still be covered. Expanded Medicaid should pick upcoverage for those with incomes up to 138 percent of federal poverty. Those with incomes above that levelshould have insurance required by the Patient Protection and Affordable Care Act, perhaps subsidizedinsurance through the federal exchange.

Critics say about 11 percent of women will remain without insurance and argue the safety net the programoffered needs to be kept intact. An uninsured woman who becomes pregnant, for example, could notobtain insurance for well care coverage.

"Inadvertently what they're doing is if a woman gets pregnant and is not in the exchange, she would haveto wait until an open enrollment period," said Kellie Copeland, executive director for NARAL Pro-Choice Ohio.

Wishing for more

A refundable Earned Income Tax Credit

One change in the tax code that would benefit the poor but not included in the governor's plan would be to

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make the Earned Income Tax Credit refundable.

It's federal counterpart was created nearly four decades ago, providing a tax credit for low- and moderate-income families with children. For a family of four with two children, it provides up to $5,460 on taxreturns filed in 2015 for tax year 2014. Households with incomes topping $49,000 could qualify forsomething.

Ohio enacted the EITC in the 2013 budget legislation, but it is limited to 5 percent of the federalEITC, among the smallest in the country. For 2014 taxes, it is 10 percent of the federal EITC. Unlike thefederal version, it is not refundable.

For the lowest wage-earners in the state, non-refundable means not available, because once their tax bill isreduced to zero, any remaining credit is lost.

Hamler-Fugitt and others advocate changing Ohio's laws so that the remaining unused tax credit wouldbecome part of a tax refund, as federal law allows. The money would effectively be a form of economicstimulus, she says, because it would be spent in the economy immediately.

"It is the most powerful anti-poverty tool there is," she said. "It's money that makes work pay.

"If we really want to address poverty and ensure that work pays, then we have to understand thatrefundability matters."

3/5/15 1:45 PMGov. John Kasich’s budget proposal aims to address college funding - The Lantern

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Gov. John Kasich’s budget proposal aims to address college funding

Click to enlarge

Ohio State and government officials said OSU students can worry less about finances if Gov. John Kasich’s2016-17 budget proposal passes legislation.

In his State of the State address Tuesday, Kasich said the objective of his budget is to make college moreaffordable for students.

“(With) lower costs, a cap and a freeze on tuition, more students can afford college,” Kasich said in hisspeech.

In 2003, tuition passed state funding at Ohio State, and the margin has only increased since. Tuitionsurpassing state funding comes as public college enrollment is at its highest peak. In a federal study doneby the U.S. Government Accountability Office released in December 2014, the decline in state funding forpublic colleges is often attributed to competing state budget priorities, like healthcare and K-12 education.

Kasich’s proposal includes initiatives and funding to reduce student debt, limit and freeze tuition rates,and expand scholarship opportunities.

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A tuition freeze is in the forecast

Kasich’s plan includes a maximum 2 percent tuition increase in 2016, followed by a tuition freeze in 2017.

Currently, the cost of tuition and fees at OSU’s Columbus campus is $10,037 for Ohio residents and$26,537 for nonresidents. If OSU decides to increase rates by 2 percent, tuition would become about$10,238 and $27,068, respectively.

“It’s probably a very good idea to do this freeze,” said Sam Farren, a second-year in computer science andengineering. “Even though it’s a lot of money up front, it’ll definitely be a benefit in the long run.”

Tom Walsh, OSU vice president for government affairs, said the tuition freeze will not be immediate inorder to give colleges and universities time to adjust to a new budget.

“For some institutions, to go right to a tuition freeze would be too much for some of these schools toabsorb,” he said. “The thought is, the second year, you give these schools some ability to implement someof the recommendations of the (Ohio Task Force on Affordability and Efficiency in Higher Education) sothat institutions can start taking a serious look at some of the cost-cutting measures that can help bend thecost for higher education.”

OSU froze tuition for the 2014-15 school year for in-state students, but rose the surcharge for non-Ohioresidents by 5 percent.

The Ohio Task Force on Affordability and Efficiency in Higher Education, assigned by Kasich on Feb. 10,is a group of nine members who are set to examine ways public colleges and universities in Ohio can cutdown on costs and increase efficiency.

Earlier this month, Kasich announced the selection of OSU Chief Financial Officer Geoff Chatas as taskforce chair.

In order to brainstorm ideas to decrease tuition, Kasich proposed a $20 million innovation fund,something Walsh said he is most excited for. The fund, which is set to be established in fiscal year 2017,would provide resources for “innovative and administrative redesign proposals that result in long-term,sustainable cost savings to students,” according to Kasich’s budget proposal.

“If you can find a way for universities to find efficiencies, start doing some cost-cutting measures that isresulting in natural savings or cost of attendance for students, that is ultimately where you want to get,”Walsh said.

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Swimming out of the sea of debt

Sara Wesselkamper, a third-year in zoology, is part of the 68 percent of Ohio college students to graduatewith debt.

“I think we borrow at least $7,000 a semester,” she said.

According to The Project on Student Debt, the average student graduates from Ohio higher educationinstitutions with $29,090 in debt. The average OSU main campus student graduates with $26,472 in debt.

Kasich is also proposing $120 million to go toward a student debt reduction fund, which aims to reducefinancial debt burdens on students.

Jeff Robinson, spokesman at the Ohio Board of Regents, said there will be no details on how these fundswill be used to reduce student debt until the budget passes legislation.

However, students have an idea of what they would like to see in such an initiative.

“When you’re applying for colleges, they need to tell you how to apply for scholarships and grants, andteach you ways to save money in college,” Wesselkamper said. “Every semester can help you.”

Ethan Sprunger, a third-year in public health, agreed, saying counseling services would be beneficial forcollege students facing debt.

“Is that something that can be provided? Counseling for students on how to properly manage finances andloans,” he said.

An expansion of scholarship and grant opportunities

Kasich’s budget proposal includes $8 million to go toward scholarship and grant opportunities forstudents, such as the Ohio College Opportunity Grant and scholarships for Choose Ohio First, WarOrphans and Ohio National Guard, according to a Department of Higher Education press release.

According to Kasich’s budget proposal, $1 million in each fiscal year will be added to the Ohio CollegeOpportunity Grant program.

Robinson said the expansion of the Ohio College Opportunity Grant will be helpful for students who wantto pursue school year-round.

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“If they’re getting Pell grant money, that money cannot be used in the summer,” Robinson said. “So, thisbudget would allow students to receive Ohio College Opportunity Grant money in the summer to helpcover those costs.”

Pell Grants are direct grants awarded to students with financial need who have not received a bachelor’sdegree, according to the FAFSA website.

However, Walsh said he would like to see additional expansion for the Ohio College Opportunity Grant,which is need-based rather than merit-based.

“It would allow the university to free up some additional resources so we can provide additional financialaid support to middle-income students,” he said. “We lose some of our flexibility in terms of aid that wecan give to middle-income students because our first priority is to try to minimize overall costs on thelowest-income students with need-based aid, so we exhaust our institutional aid quicker because we’re notgetting enough support from the OCOG program as we would like to see.”

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Income'Inequality'Datahttps://infocus.credit1suisse.com/data/_product_documents/_shop/368327/2012_global_wealth_report.pdf

http://en.wikipedia.org/wiki/List_of_countries_by_income_equality

CountryWealth'

GiniWorld'Bank'

Gini CIA'Gini #Adults'(000s)

Mean'Wealth

Median'Wealth

RussianFederation 91.4 40.1 42.0 110,813 12,161 1,267

Ukraine 89.2 26.4 27.5 36,084 3,251 462

Lebanon 85.7 2,905 33,173 7,146

UnitedStatesAmerica 85.2 40.8 45.0 236,502 262,351 38,786

Turkey 84.2 39.0 40.2 50,754 21,947 4,471

Kazakhstan 83.8 29.0 26.7 10,857 7,689 1,679

Zimbabwe 83.8 50.1 50.1 6,420 2,343 397

HongKong 83.6 43.4 53.3 5,959 144,109 29,617

Europe 83.1 30.4 30.4

SouthAfrica 82.6 63.1 65.0 30,800 21,458 3,822

Indonesia 82.0 34.0 36.8 155,294 10,842 2,293

Malaysia 81.4 46.2 46.2 17,965 26,829 6,195

India 81.3 33.4 36.8 751,287 4,250 938

Brazil 81.2 54.7 51.9 133,355 24,600 5,852

Netherlands 81.2 30.9 30.9 12,844 173,910 61,880

Philippines 81.0 43.0 45.8 55,315 8,152 1,972

Sweden 80.6 25.0 23.0 7,245 237,297 41,367

Switzerland 80.6 33.7 33.7 6,062 468,186 87,137

Egypt 80.4 30.8 34.4 51,619 8,214 2,219

Morocco 79.6 40.9 40.9 20,953 11,088 3,007

Venezuela 79.6 44.8 39.0 18,584 9,932 2,617

Georgia 79.0 41.3 40.8 3,174 19,774 5,519

Thailand 79.0 40.0 53.6 49,163 7,415 2,166

Colombia 78.8 55.9 56.0 29,847 25,064 6,380

Namibia 78.8 63.9 70.7 1,222 23,586 5,542

Comoros 78.7 64.3 64.0 378 2,729 676

Israel 78.3 39.2 39.2 4,865 129,526 37,019

Argentina 78.2 44.5 45.8 27,884 17,629 4,993

Mexico 78.0 48.3 51.7 71,999 29,870 8,394

Norway 77.9 25.8 25.0 3,695 325,989 79,376

The\Gini\coefficient\(also\known\as\the\Gini\index\or\Gini\ratio)\is\a\measure\of\statistical\dispersion\

intended\to\represent\the\income\distribution\of\a\nation's\residents,\and\is\the\most\commonly\used\

measure\of\inequality.\It\was\developed\by\the\Italian\statistician\and\sociologist\Corrado\Gini\and\

published\in\his\1912\paper\"Variability\and\Mutability"\(Italian:\Variabilità\e\mutabilità).

The\Gini\coefficient\measures\the\inequality\among\values\of\a\frequency\distribution\(for\example,\levels\

of\income).\A\Gini\coefficient\of\zero\expresses\perfect\equality,\where\all\values\are\the\same\(for\

example,\where\everyone\has\the\same\income).\A\Gini\coefficient\of\one\(or\100%)\expresses\maximal\

inequality\among\values\(for\example,\where\only\one\person\has\all\the\income\or\consumption,\and\all\

others\have\none).[3][4]\However,\a\value\greater\than\one\may\occur\if\some\persons\represent\negative\

contribution\to\the\total\(for\example,\having\negative\income\or\wealth).\For\larger\groups,\values\close\

to\or\above\1\are\very\unlikely\in\practice.

Germany 77.7 28.3 27.0 67,031 174,526 42,222

Chile 77.4 52.1 52.1 12,255 44,198 13,073

Peru 77.4 48.1 46.0 18,496 17,590 5,064

Botswana 77.0 61.0 63.0 1,159 11,066 3,095

France 75.5 32.7 32.7 47,896 265,463 81,274

Cyprus 75.3 29.0 29.0 683 112,741 40,535

Poland 75.3 34.1 34.2 30,182 22,229 7,604

CentralAfricanRepublic 74.9 56.3 61.3 2,314 747 233

Taiwan 74.9 32.6 32.6 18,298 131,124 45,451

Bolivia 74.5 56.3 58.2 5,652 4,302 1,342

CzechRepublic 74.3 25.8 31.0 8,413 40,259 14,820

Zambia 74.1 54.6 50.8 5,991 1,742 539

Romania 73.1 30.0 33.3 16,743 17,164 6,536

Nicaragua 73.0 40.5 40.5 3,329 3,435 1,183

Suriname 73.0 52.9 340 12,783 4,320

Canada 72.8 32.6 32.1 26,822 227,660 81,610

Lesotho 72.8 52.5 63.2 1,063 3,916 1,344

Paraguay 72.8 52.4 53.2 3,812 9,721 3,417

Ireland 72.7 34.3 33.9 3,447 152,563 60,953

Panama 72.7 51.9 51.9 2,276 21,870 7,568

Rwanda 72.7 50.8 46.8 5,166 721 258

Swaziland 72.7 51.5 50.4 612 5,214 1,777

Korea 72.6 31.6 31.0 37,955 69,646 27,080

NewZealand 72.5 36.2 36.2 3,194 156,428 63,000

PapuaNewGuinea 72.5 50.9 50.9 3,648 7,963 2,753

Portugal 72.5 38.5 38.5 8,593 77,402 28,832

CapeVerde 72.4 50.5 51.0 286 15,041 5,499

Singapore 72.4 42.5 47.3 3,885 258,117 95,542

CostaRica 72.3 50.7 50.3 3,176 26,034 9,190

Ecuador 71.5 49.3 47.3 8,548 11,552 4,243

Greece 71.4 34.3 33.0 9,085 90,359 35,714

ElSalvador 71.1 48.3 46.9 3,670 11,390 4,361

CongoRep 71.0 47.3 47.0 1,956 3,654 1,391

Kenya 71.0 47.7 42.5 20,172 1,866 715

Gambia 70.8 47.3 50.2 882 1,007 387

Qatar 70.6 41.1 41.1 1,263 145,596 57,027

Mozambique 70.2 45.7 45.6 11,172 805 325

Denmark 70.1 24.7 24.8 4,171 214,396 87,121

Jamaica 70.0 45.5 45.5 1,696 12,246 4,902

Uruguay 69.8 45.3 45.3 2,382 44,986 17,907

Uganda 69.7 44.3 44.3 14,556 677 279

CongoDemRep 69.6 44.4 44.0 30,811 299 121

Madagascar 69.4 44.1 47.5 10,014 444 183

Austria 69.3 29.2 26.0 6,725 178,724 81,649

Guyana 69.3 44.5 43.2 472 3,528 1,516

China 68.9 42.5 48.0 987,184 20,452 7,536

Macedonia 68.9 43.2 44.2 1,552 10,370 4,391

SierraLeone 68.9 42.5 62.9 2,833 537 227

Ghana 68.7 42.8 39.4 13,144 2,009 857

Gabon 68.3 41.5 41.0 844 20,121 8,845

Tunisia 68.3 41.4 40.0 7,324 20,583 8,999

SriLanka 68.1 40.3 49.0 14,194 4,651 2,054

Togo 68.0 34.4 34.0 3,581 2,104 935

BurkinaFaso 67.8 39.8 39.5 7,472 1,124 506

Mauritania 67.8 40.5 39.0 1,784 2,132 956

Chad 67.6 39.8 40.0 5,326 1,057 473

Djibouti 67.6 40.0 40.0 494 3,263 1,506

TrinidadTobago 67.5 40.3 40.0 981 14,145 6,567

UnitedKingdom 67.5 36.0 34.0 47,883 250,005 115,245

Guinea 67.4 39.4 39.4 5,132 862 390

Malawi 67.4 39.0 39.0 7,172 412 188

Cameroon 67.3 38.9 44.6 10,178 2,514 1,135

Senegal 67.3 39.2 41.3 6,222 2,465 1,122

Benin 67.2 38.6 36.5 4,581 2,670 1,230

Cambodia 67.1 37.9 44.4 8,867 2,406 1,118

Iran 66.9 38.3 44.5 52,257 8,705 4,042

Yemen 66.9 37.7 37.7 11,732 4,731 2,228

Liberia 66.8 38.2 38.2 2,056 1,915 910

Tanzania 66.7 37.6 37.6 21,383 859 404

LaoPDR 66.6 36.7 36.7 3,511 4,218 2,018

Lithuania 66.6 37.6 35.5 2,542 22,059 10,437

Malta 66.4 26.0 26.0 327 61,619 31,810

Iceland 66.3 28.0 28.0 249 193,946 95,685

Finland 66.2 26.9 26.8 4,173 145,693 73,487

Mongolia 66.2 36.5 36.5 1,817 12,008 5,755

Spain 66.2 34.7 32.0 36,936 104,773 53,292

Latvia 66.1 36.6 35.2 1,793 19,886 9,673

SyrianArabRepublic 66.1 35.8 36.0 13,106 6,917 3,334

Estonia 66.0 36.0 31.3 1,057 27,440 13,801

KyrgyzRepublic 66.0 36.2 33.4 3,499 5,150 2,493

BosniaHerzegovina 65.9 36.2 36.2 2,980 10,579 5,072

Jordan 65.9 35.4 39.7 3,785 14,606 7,109

VietNam 65.9 35.6 37.6 60,431 4,652 2,257

Guinea1Bissau 65.8 35.5 36.0 816 400 200

Albania 65.7 34.5 34.5 2,204 9,689 4,863

Niger 65.7 34.6 34.0 6,772 742 368

Algeria 65.6 35.3 35.3 23,438 10,305 5,040

Belgium 65.5 33.0 28.0 8,350 233,764 119,937

Burundi 65.3 33.3 42.4 4,605 283 141

Azerbaijan 65.2 33.7 33.7 6,161 14,360 7,248

Croatia 65.2 33.7 27.0 3,497 25,149 12,783

Mali 64.8 33.0 40.1 6,288 905 458

Moldova 64.8 33.0 38.0 2,694 3,785 1,944

Nepal 64.8 32.8 47.2 16,780 1,979 1,006

Bangladesh 64.7 32.1 33.2 101,751 1,719 883

Italy 64.6 36.0 32.0 48,998 212,910 123,710

Mauritius 64.6 39.0 39.0 923 38,026 20,813

Hungary 64.1 31.2 24.7 7,913 23,328 12,364

Armenia 63.9 30.9 30.9 2,244 5,587 2,969

Pakistan 63.9 30.0 30.6 103,302 4,139 2,203

Slovenia 63.9 31.2 28.4 1,651 58,140 30,835

Tajikistan 63.8 30.8 32.6 3,898 2,973 1,583

Ethiopia 63.7 29.8 30.0 41,342 372 201

Australia 63.6 35.2 30.5 16,412 354,986 193,653

Montenegro 63.5 30.0 24.3 467 20,522 11,149

Bulgaria 62.6 28.2 45.3 6,026 14,873 8,334

Serbia 62.6 27.8 28.2 7,515 13,861 7,785

Belarus 62.4 27.2 27.2 7,561 2,356 1,331

Luxembourg 62.3 30.8 26.0 385 277,119 153,967

Slovakia 62.1 26.0 26.0 4,281 25,092 14,389

Japan 59.6 24.9 37.6 104,303 269,708 141,410