[UPDATED]: Interesting Bedfellows: Left, Right and Center groups pushing review of tax breaks

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[Note: this story was confirmed by a report the next day in the mainstream media. See end of post for an update]

We hear rumors that an unusual coalition of think tanks has coalesced around an idea of taking a more balanced approach to the state budget problems than the Governor or GOP-controlled Legislature appear willing to consider.

The far-right Buckeye Institute, left-leaning Center for Community Solutions, and usually moderate Greater Ohio Policy Center are going around Columbus meeting with people in power in the state, proposing the following: form a commission to review tax expenditures (AKA “loopholes”) currently on the books in Ohio and propose those that no longer serve their utility be considered for elimination.

We don’t know if that’s the precise pitch, but it’s something along those lines. They’re essentially pushing for something that could be politically palatable to elected officials and that is to start work after the budget and deliver their findings after the election, so that no one is on the hook for voting for anything that could even be considered an examination of raising taxes. Even given all that, we hear some elected officials are balking at getting such a commission off the ground.

As background on this issue, every two years the State of Ohio produces the Tax Expenditure Report – a booklet putting it all in the open, all the tax breaks on the book with a price tag for how much they cost. Did you know that call centers get a $24 million annual tax break? Or that the state gives up $17 million in sales tax every year on the sale of newspapers? You will if you read this report.

For their part, the Center for Community Solutions has written about these tax breaks for years. In 2002, they issued a report, Implications of Tax Expenditures on Ohio’s Revenue System, calling for the periodic review and justification of these loopholes in the budgeting process. And here we are, in 2011, and not a single one of these loopholes has been eliminated, and the recipients have never had to testify in a budget hearing as to why they are still justified. One of the largest tax breaks on the books was created to ease the pain of a tax (Tangible Personal Property tax) that no longer exists. Still think it’s not time to take a look at tax breaks?

To hear more about some of the tax loopholes on the books, check out this video and skip to about 32 minutes into the program. CCS’s John Begala speaks on the issue at a panel last fall joined by representatives from Greater Ohio and Buckeye Institute. Maybe this is where they got the idea, who knows?

We hope that these trio of strange bedfellows will prevail upon someone on Capitol Square and get a little funding to look into this issue and make some recommendations. I can promise we’ll read their report, even if legislators are too scared to do so.

UPDATE – The Plain Dealer reported this morning that our story yesterday was accurate. After meetings with state leaders last week, the group distributed a report including some targeted tax breaks for elimination, including the sales tax break purchasers of fractional shares of luxury jets, and a $50 tax credit for contributing to political candidates. Anyone want to bet $50 that last one never sees the light of day?

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  1. Kasich against closing tax loopholes to help fill budget cuts | Ohio Budget Watch

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