Columbus, OH – In a new policy brief, Budget Priorities for a More Prosperous Ohio, The Buckeye Institute outlines specific tax and education reforms lawmakers should pursue to improve Ohio’s economy and workforce.

“As lawmakers prepare the state’s next biennial budget, they should take advantage of Ohio’s robust surplus to make aggressive tax and education reforms that would help all Ohioans and improve the state’s economy,” said Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute. “By adopting tax reforms that allow workers to keep more of their own money and education policies that empower families, lawmakers will make Ohio a freer, less expensive, and more desirable place to live, learn, and work.”

In its brief, The Buckeye Institute outlines specific reforms lawmakers should adopt to make Ohio economically competitive in today’s global market.

Effective Tax Reforms should focus on improving Ohio’s most economically harmful taxes: the income tax and commercial activities tax (CAT), and fixing Ohio broken municipal tax system.

• Income Tax Reform: With state coffers currently running a surplus, now is the time for policymakers to allow workers and their families to keep more of their hard-earned income by making a move to a more efficient, pro-labor tax system. 
• Eliminate the CAT: The CAT produces less than 10 percent of total Ohio taxes, but it saddles Ohio businesses and consumers with higher prices and operating costs that suppress consumption and growth. It is time for Ohio to abandon the CAT and pursue prosperity.
• Fix Ohio’s Broken Municipal Tax System: State and local policymakers should strategically transition toward a more sustainable, long-term municipal revenue source that protects the core needs of Ohio’s communities without handicapping longer-term economic growth. 

Effective K-12 Education Reforms should fund #StudentsFirst and make every educational option and resource available and more affordable for parents.

• Embrace Robust Education Savings Accounts: ESAs can pay for tuition at private schools, and they can be used to pay for additional educational resources such as textbooks, tutors, online classes, and group learning pods.
• Increase the Scholarship Donation Tax Credit: Raising the current $750 tax credit to $2,500 would allow taxpayers to help fund more scholarships for more students.
• Make Inter-District Open Enrollment Mandatory for All School Districts: School districts refusing to participate in inter-district enrollment put disadvantaged students last, not first. That needs to change, and the General Assembly should require it.

Effective Higher Education Reforms should prepare today’s workforce for tomorrow and transform Ohio’s outdated economy.

• Rightsizing Funding by Reimagining State Share of Instruction: Ohio lawmakers should re-formulate how higher education institutions are funded to better capture schools that will train tomorrow’s workforce and provide in-demand skillsets.
• Reform Ohio’s “Pell-First” Policy: Removing the flawed Pell-First policy would further level the funding playing field, increase competition across colleges, and reduce barriers to community college attendance by helping students pay for more than tuition.
• Cap Administrative Spending: The General Assembly should reasonably restrict non-core related expenses at taxpayer-funded colleges and universities. Failure to adhere to such restrictions should proportionally reduce the school’s state share of instruction funding.

Budget Priorities for a More Prosperous Ohio is co-authored by Rea S. Hederman Jr.; Logan Kolas, an economic policy analyst with the Economic Research Center at The Buckeye Institute; and Greg R. Lawson, a research fellow at The Buckeye Institute.

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