Ohio lags in recession recovery

In most of the country, new applications for unemployment benefits were down during the week of Christmas, the federal government reported. Not in Ohio: Claims in the Buckeye State were up 1,529 from the same week in 2012. Layoffs in manufacturing were blamed.

Clearly, Ohio’s recovery from the Great Recession is lagging. Unemployment in the state actually increased last year, to about 7.4 percent. The rise was a steady progression during all 12 months.

That is leading Gov. John Kasich to recommend that Ohio legislators approve another reduction in the personal income tax. A previously enacted cut will shave 10 percent off the tax by next year.

”If you want ohio to move faster, we have to reduce this personal income tax,” Kasich told business leaders recently.

He is right, as the unemployment numbers demonstrate. More money needs to be going into the state’s economy, not to government. If Buckeye State residents have more in their pockets because of an income tax break, they will spend more. Business owners benefitting from the tax cut will put more back into their companies – and probably will hire more people.

Lawmakers may be leery of Kasich’s plan for several reasons. One is that local governments continue to pressure Columbus to increase state funding. That money will have to come from somewhere.

Another reason for concern is that Kasich proposes to fund the tax break by increasing severance taxes on some gas and oil wells. That might not be popular here and in East Ohio, where much of the gas industry is centered.

Legislators and the governor must be careful not to throw an obstacle in the way of what probably is the state’s fastest growing industry – gas and oil. Kasich insists Ohio would remain competitive even with his proposed severance tax increases. Before agreeing to them, lawmakers should be absolutely certain he is correct.

Still, however, the governor is right: The General Assembly should find some way of providing a tax break to get the state’s economy out of the doldrums and on a fast track.