Ohio Economy Still Needs Work

Ohio’s economy and the condition of state government are in much, much better shape than just a few years ago. That does not mean Gov. John Kasich and legislators can relax their focus on both short- and long-term private-sector growth, however.

When Kasich took office in January 2011, the state’s unemployment rate was 9 percent, with 526,037 Ohioans not able to find work. In December, the last month for which a count is available, the rate had dropped to 6.7 percent and the number of unemployed had plummeted to 387,675. Unfortunately, that does not count Buckeye State residents who have simply given up looking for jobs.

That certainly represents progress, but the economy remains far from robust.

In some regions of the state, including ours, the situation is much worse. December unemployment rates for East Ohio counties were: Jefferson, 10.6 percent; Monroe, 10.1 percent; Belmont, 7.9 percent; and Harrison, 7.6 percent. While the gas and oil drilling boom has helped our area, full recovery remains elusive.

So rebuilding the economy needs to remain at the very top of state officials’ agendas, with particular attention to regions that continue to suffer badly.

Kasich already has unveiled his legislative agenda for the year, ahead of tonight’s State of the State speech. His chief proposal to spur the economy is to provide most Ohioans, including small businesses, with income tax breaks. At the same time, however, the governor proposes expanding the sales tax by including many services as well as goods in it.

Since Kasich revealed his tax proposals earlier this year, there has been debate over whether they will benefit the economy or, because of the expanded sales tax, have but little positive effect.

Clearly, however, providing income tax relief to small businesses will be a plus. Sending less money to Columbus will allow them to use it both to expand the economy in general and to hire new employees. Overall, then, the plan looks promising.

When Kasich and lawmakers looked at the state’s two-year budget in 2011, they had a clear, unmistakable duty to slash spending to balance it with revenue – without tax increases. Now, with a modest budget surplus being predicted, some in the General Assembly may decide that vigilance can be relaxed.

Nothing could be further from the truth. Unemployment figures make it obvious fiscal discipline and holding the net effect of taxes on Ohioans down remains critical. Kasich and legislators should stick to that mission.