4/21/2006 9:08:00 AM Tax limits, tort reform top Blackwell’s initiatives for Ohio Blackwell speaks out
Ohio Secretary of State Ken Blackwell holds a copy of Thursday’s Columbus Dispatch with a headline that reads: ‘Ohioans head for exit.’ From 2000-04, 126,452 more people moved out of Ohio than moved in, according to the story. The state lost an average of 31,613 residents each year during that period. Blackwell was the guest of several Brown Publishing Company newspapers Thursday afternoon at the Roberts Centre. For more on this year’s gubernatorial races, see Pages 3A and 4A in today’s Times-Gazette.
Ohio Secretary of State Kenneth Blackwell attended a forum hosted by editors and reporters from the Brown Publishing Company Thursday in an opportunity to discuss the issues he is endorsing as his platform for a possible future as Ohio’s next governor.
Running as one of the Republican candidates in the May 2 primary gubernatorial race against Ohio Attorney General Jim Petro, Blackwell bullet-pointed his stand on issues that he believes are in need of transformational change in the state.
First on his list was a tax reform in the state that would limit the amount of state government spending, giving only voters the authority to allow state government to go above its cap or to increase taxes.
Called the Tax and Expenditure Limitation (TEL), the issue will go on the November ballot as an amendment to Ohio’s Constitution. If the issue passes, TEL will limit the state and local government annual spending growth to 3.5 percent, or the sum of inflation plus population growth, whichever figure is greater.
Leading up to why TEL was important for the state, Blackwell led the discussion, talking of Ohio’s failings in retaining the younger 25- to 39-year-old group in the state, losing high, net-taxpaying seniors and holding a smaller, older and less-affluent tax base.
“We lead the nation in the loss of 25-year-olds to 39-year-olds. They are following jobs; they are following elevated incomes, and they are motivated by a sense that opportunities are greater outside our border than inside our border,” Blackwell said. “There’s also a sense of losing net taxpaying seniors and high net worth individuals. Right now, in any 24-hour period, we lose 65 Ohioans to Florida alone...My goal is simple: to make Ohio an engine of economic growth and transform it from the present state.”
Ohio tops the national list of state government spending, with a 71-percent increase in expenditures between 1994-2005, consequently triggering the two largest tax increases in state history.
“What the TEL does is that it establishes physical guardrails that will allow us to rein in runaway government spending to create the fiscal space needed to change our tax code,” Blackwell said.
If the TEL amendment were to pass in November, Ohio’s current annual budget of approximately $25 billion would be the base budget and could not increase by more than 3.5 percent or inflation plus population growth, Blackwell said, adding that the amendment would not take away the authority of local government to appropriate their money where needed.
TEL will not cover state expenditures such as federal Medicaid, capital improvement budgets, revolving funds, enterprise funds or Workers’ Compensation. Blackwell offered as an answer to some misconceptions he had heard from Ohioans, and said that the amendment would not put in place steep cuts in state and local budgets.
“The reality is that for local government, this does not apply to capital expenditures, so all this nonsense about local government not being able to buy fire trucks, it’s just pure hogwash,” he said. “This does not affect revolving funds. If legislatures want to give kindergarten through 12th grade education a higher percentage of increase, they can do it; but they will have to look for cuts elsewhere because spending will be reined in.
“This is an obese government. We’re putting it on a diet. It’s a low carb diet; it’s not stomach staples.”
Tort reform and regulatory reform were the next two issues Blackwell felt were in need of change within Ohio’s current system. Speaking of statistics of the number of physicians leaving the state to bypass extraordinarily high state malpractice insurance costs, Blackwell said that Ohio’s lack of confronting tort reform was the catalyst in losing physicians in Ohio to states such as Indiana, where malpractice insurance is at one-third the cost that it is in Ohio. Providing an example to the urgency of the matter, Blackwell said that 80 percent of newborns in Preble County were born in Indiana because of a lack of OB-GYNs in the area.
“I would suggest to you to talk to the Ohio Medical Association and they will tell you that the package of economics in this state have gotten so atrocious that not only do we see a flow of capital [leaving the state] but we see a flow of physicians going out of this state,” he said.
The abundance of red tape and the fact that state regulatory agencies have more stringent policies, timetables and standards than their federal counterparts was the main reason Blackwell felt that regulatory reform was a necessity.
“If you get a regulatory agency in the state in line with their federal counterpart, you go a long way toward achieving an environment of regulatory predictability, which is more capital and investments,” Blackwell said. “The reason I am concerned with these three things right now — tax reform, tort reform and regulatory reform — is because, in combination, those three systems and environments have put risk-taking at risk in Ohio. And, when you put that at risk, you strangle entrepreneurship, and if you strangle entrepreneurship, then you take the drive out of the economy.”
If Blackwell does win the governor’s seat in the election, he said that the state’s plans for the education system would revolve around an initiative called the 65 Cent Solution, which would hold school districts responsible for putting 65 cents of each dollar directly in the classroom, which he says will put more than $1.2 billion into classrooms without a tax increase.
“In the classroom” items include: classroom teachers and personnel, general instruction supplies, instructional aides, activities such as field trips, special needs instruction and tuition to other institutions for special needs students.
“Ohio classrooms must be the first priority of education spending,” Blackwell said, “Research shows classroom expenditures are five times better indicator of academic improvement than overall spending. By requiring school districts to allocate a minimum of 65 percent of operational budgets to the classroom, we can increase classroom instruction by over $1.2 billion a year without a tax increase. That’s enough to purchase a new computer for every Ohio student or hire 24,000 additional teachers with a starting salary more than $40,000.”
With many districts fearing how they will be able to pay for other essential school items, which would be considered out-of-classroom expenditures and not included in the plan, such as transportation and food services, Blackwell said the solution lay in the transferring of services from the private to public sector, which in doing so, would put close to 100,000 jobs back in the market.
“Three times in the past six years, the Ohio Supreme Court has ordered the Legislature to change the education funding formula. Property taxes have skyrocketed. Yet, taxpayers are frustrated and angry with how billions more have been spent, but positive results haven’t materialized. Our solution to the education problem in Ohio has been to pump billions more into education — but more of that money has not made it to the classroom. Reform is needed,” Blackwell said.
Blackwell aims to put the 65 Cent Solution on the ballot in November through either a legislative referral or citizen petition.
The winner of the Republican ticket during the May 2 primary will face the winner of the Democratic gubernatorial candidates, Congressman Ted Strickland and former Ohio State Rep. Bryan Flannery, during the November general election.
