Kasich’s plan does provide a foundation

Taking less money out of Ohioans’ pockets while making it easier for small businesses to thrive seems like a clear path to more jobs and a better economy in the Buckeye State. That is precisely what Gov. John Kasich is proposing.

Kasich’s plan is a complex, in some aspects controversial one. For example, he proposes expanding the state-federal Medicaid program, as stipulated under the new national health care law. If he proceeds with that, about 275,000 lower-income Ohioans will receive help with health care expenses.

That will come at a cost, however. Though the federal government has pledged to pay for Medicaid expansion in the beginning, much of the burden eventually will fall on the state.

In releasing his budget proposal, Kasich noted Ohio’s economy has improved substantially since he took office. At one time, there was a $7.7 billion gap between revenue and planned spending in the state’s two-year budget. That has been closed – in part through cuts in state aid to local governments and schools – to the point a $1.9 billion surplus is expected at the end of the current budget cycle.

That gives the governor and legislators some breathing room.

Kasich’s plan envisions $1.4 billion in tax cuts during the next three years. Many small businesses would find their taxes cut by half. The state income tax would be trimmed by 20 percent and the sales tax would be cut from the current 5.5 percent to 5 percent.

At the same time, the sales tax would be expanded to cover many professional services as well as goods. That may be a problem; according to a published report, it is an approach some other states have tried and had to reverse.

All in all, however, Kasich’s plan sounds good. Providing tax relief for individuals and families will allow them to spend more, boosting the economy. Relief for small businesses should permit them to create new jobs.

No doubt the proposal will be debated hotly in the General Assembly. Again, however, it appears to lay a good foundation for growth and the foundation of Kasich’s plan should be viewed favorably.