COLUMBUS -- A liberal advocacy group and think tank and one Democratic lawmaker are urging Statehouse Republicans to consider making the earned income tax credit for lower-income residents refundable and lifting caps to enable more Ohioans to qualify.
ProgressOhio, Policy Matters Ohio and Sen. Charlete Tavares, D-Columbus, told reporters during a press conference Thursday that increasing refunds to needy residents would put more money in their pockets and ultimately help the state's economy.
"If we were enabling our residents in the state of Ohio to not only get the refundable federal tax refund with EITC but also the state, these families would bring even more dollars back into local communities and help grow our economy, but more importantly lift people out of poverty," Tavares said.
As part of his mid-biennium budget package, Gov. John Kasich proposed increasing the earned income tax credit for low-income Ohioans to 15 percent of the federal credit from 5 percent and raising the personal exemption to $2,700 from $1,700 for those earning less than $40,000 and to $2,200 for those earning $40,000-$80,000. But the tax credit expansion would be nonrefundable, meaning those eligible to would not receive money back from the state.
The administration is defending the approach, saying it is fiscally responsible.
"What shred of credibility do any of these people have in offering us any advice on budget matters?" Rob Nichols, the governor's spokesman, said in a released statement in response to Thursday's press conference. "When their people and their policies were in place, they did not bring the EITC to Ohio, but instead blew an $8 billion hole in the budget, looted the rainy day fund and sat on their hands as 350,000 private sector jobs bled out of the state. It took Gov. Kasich and our Republican partners in the general assembly to introduce the EITC to Ohio to help lower-income Ohioans, and we are currently expanding it in a way that incentivizes work without blowing a hole in the budget."
Kalitha Williams, a policy liaison at Policy Matters Ohio, said that a 10 percent refundable tax credit would cost the state about $193 million annually.
That total should be kept in context, she said, adding, "What we're talking about is [a mid-biennium budget] tax proposal that is going to provide billions of dollars in tax cuts. ... The federal credit and most state EITCs are refundable... (ensuring) that working poor families are rewarded for work, and the refund helps them with their basic needs."