Plan To Make It Harder To Hike State Income Tax Could Go To Voters

Mar 6, 2020

Among the possible questions voters might face on the ballot this fall is whether they want to make it harder to raise the state income tax, by requiring approval from a supermajority of state lawmakers.

Seven states have passed this idea, which is embraced by half the Republicans in the state Senate – a constitutional amendment requiring that any time the state income tax is hiked, it has to be approved by at least two thirds of the members of the House and Senate, not just a simple majority. Its sponsor is Sen. Dave Burke (R-Marysville), who presented the resolution in committee in January.

“While much public good can occur through the proper use of tax revenue, the taxing of individual productivity is counterproductive to general prosperity and freedom.”

And it’s supported by Senate President Larry Obhof (R-Medina).

“You are earning the money, you are entitled to it and there is a base level of services and a social safety net that the government should be paying for, but that the government should also be efficient and effective and not take more than it needs.”

But the proposal has plenty of opposition.

“This is a really lousy idea and one that hopefully won’t go any further in the General Assembly,” said Zach Schiller with the progressive leaning think tank Policy Matters Ohio. He has a real problem with this being targeted at the income tax.

“What you’re really saying is, we don’t want to raise taxes on rich people, and if we raise taxes, we’re going to raise them on poor people and middle class people, because that’s what the alternative is.”

But sponsor Dave Burke pushed back on that when he was asked a question in the committee considering the resolution that would create the amendment, saying this actually would help more than just the wealthy.

“It locks in the security of financially disadvantaged folks or low or moderate income folks to rest assured that the provisions and strides that we’ve made in the past several General Assemblies stay in place, unless, something catastrophic happens and we actually need to broaden that base,” Burke said.

But Schiller said states that have enacted supermajority requirements are less financially flexible, and more likely to take hits to their bond ratings, meaning they pay more in interest on their debt. The legislature’s research office agrees, saying constraints on the state’s ability to increase revenue are scored unfavorably.

But in committee, Burke said he doesn’t see that happening in Ohio.

“I don’t believe that it would because there are multiple revenue streams that the state could dwell from, as well as the ability to simply decrease expenses in any balanced approach,” Burke said.

Schiller said with the uncertainty surrounding coronavirus and the economy in general, lawmakers need options, and requiring a supermajority for income tax increases takes one of those options off the table.

And that position has brought agreement from a group that gets the attention of Republican state lawmakers in particular – the Ohio Chamber of Commerce.  The Chamber’s Tony Long told the committee that the supermajority idea could force lawmakers in the future to consider hiking business taxes if they need revenue, because that would take only a simple majority vote.

“Alternatively, the future General Assembly may push a spending program down to local governments which may put pressure on those local governments to look for revenue in increases in real property tax or local income taxes, both of which may impact businesses operating in those local communities," Long said.

Three-fifths of lawmakers in the House and Senate need to pass the resolution by August 5 before it can go to the ballot. A previous attempt at the supermajority idea was rejected by voters in 1983.