January 22, 2003

For Immediate Release
For More Information Contact:
Julie Wagner Feasel,
Director of Communications
614/228-4201
jfeasel@ohiochamber.com


Ohio Chamber Lauds Tax Reform;
Urges Streamlining of State Government

Governor Taft’s State of the State address today gave a sobering outline of the challenges facing the business community and our state at large. He noted Ohio’s dire budget situation and cited two longstanding structural problems – an eroding tax base and the explosion in health care costs – as the primary causes of this crisis.

During the 1990s, when annual general revenue fund growth exceeded 6.5 percent, we heard little talk about an “eroding” tax base. “The Ohio Chamber of Commerce believes the most critical factor in the state’s current budget crunch is that overall state spending increased at a rate more than 2.5 times inflation over the past decade,” said Daniel Navin, Managing Director of Legislative Affairs for the Ohio Chamber of Commerce. “The state has been spending at an unsustainable rate, as if a downturn in the business cycle would never occur.”

The Ohio Chamber agrees with Governor Taft that the time for structural tax reform is now. However, it is also time for the state to streamline services, consolidate programs and eliminate unnecessary or poorly performing ones. “We strongly urge the Governor and the state legislature to take the opportunity to use this adversity to revamp how the state provides services, how to deliver them more cost effectively, and abolish superfluous programs,” Navin continued.

“We appreciate the emphasis that Governor Taft and legislative leaders are placing on job creation and the need for substantial, new state investments in technology advancement and biomedical research,” Navin said. “We also appreciate his willingness to exempt ‘job creation programs’ from possible spending reductions. But, our view is that keeping Ohio taxes lower compared to other states is one of the best, if not the best, ‘job creation & retention’ programs Ohio can have.”

The Ohio Chamber will strongly advocate that the push for tax reform be based on improving Ohio’s competitive standing with other states. To spur the creation of jobs that Governor Taft and state leaders are advocating, true tax reform must eliminate the disproportional financial penalties to business investment and entrepreneurship that characterize much of our current tax code.

“We stand ready to work with the governor and lawmakers to achieve this outcome,” Navin concluded.

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