July 1, 2025 • 8 mins
Greg Lawson of The Buckeye Institute goes over the budget and was most concerned about the veto of the Property Tax
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
All right, I want to talk about the state budget.
(00:03):
Governor signed that late last night. And following that for
us is Greg Lawson from the Buckeye Institute on the
Legacy Retirement Group dot com phone line. Greg, I know
I saw an email from you at one thirty this morning,
so I appreciate you getting up on short sleep. I mean,
you joined us on the show late yesterday to kind
of preview everything, and you've had a couple of moments
(00:24):
to unpack some of this stuff, and there's a lot
I think he lined vetoed out sixty seven different items
in this budget. Good morning, mister Lawson. How's the coffee
going down.
Speaker 2 (00:38):
It's going wonderful. It's definitely something you gotta do on
budget night. It's becoming later and later. It seems like
he didn't unveil the vetos until like two o'clock in
the morning.
Speaker 1 (00:47):
So we know the flat tax is remaining the two
point seven five flat tags we talked about that yesterday.
That starts to take effect today, but we'll be phased
in right over the course of the next couple of years.
Speaker 2 (01:00):
That is correct, it'll go to I believe three point
one for the year that starts now. For the current
tax here, and then it'll drop down to two point
seventy five next year and that will be the new
flat rate for now on. So that's that's happening. That
stayed in. That's a good thing. We're very happy about that.
As we talked about yesterday, Hio needs to stay competitive
(01:21):
with other states that are also doing things like lowering
their taxes. So this is something that is really important
to keep Ohio from sliding relative to other states. So
we think that's a very positive science. So we're glad
the governor did not line on and veto.
Speaker 1 (01:35):
That that cost. That cut would cost a state about
a billion dollars in revenue. How do we are we
thinking that the extra money in your paycheck will offset
that and in just you know, in economic spending and
investments in the state. How do we recoup that one
billion dollars in loss revenue with the flat tax.
Speaker 2 (01:55):
So there's a combination of things. First of all, some
of it does come back to increased economic although not
all of it. The other stuff is that the legislature
did a lot of reforms to medicaid, tried to restrain
budget growth there. They did close a number of what
we call tax fu poles where there are special tax
breaks given to certain groups or certain entities. Now, interestingly enough,
(02:18):
the Governor len had and vetoed several of those, and
I haven't looked to double check what that means. But
by not doing that, that may make it a little
more difficult to achieve some of the targets for the
revenue reduction of the income tax. So we're gonna have
to watch that pretty closely. But it's mostly to savings
closing of tax flu poles and things like that, along
(02:39):
with the positive economic growth that happens due to increased
economic activity and then the revenues generated from that.
Speaker 1 (02:46):
The other one of the other big ones that he
did not veto out was the funding for the Brown Stadium.
Six hundred million going to the Cleveland Browns and the
Haslam Sports Group, and that is coming from the unclaimed funds.
Now the state takes over the unclaimed funds and they'll
use six hundred million for Brown Stadium. And this one
was it was an emotional one. You know, anytime you
(03:09):
kind of involve sports and new stadiums, you know. My
thought on this is, and I think you will probably
agree if new stadiums were such a good investment, wouldn't
private investors be flocking to fund it themselves versus leaning
on the state or taxpayers to do so.
Speaker 2 (03:26):
Well, We've always been opposed to sports stadiums and public
financing rather of sports stadiums. The literature out there from
economists is pretty almost you knowanimous, that these things don't
actually really pay for themselves in the long run. They
don't necessarily do as much to increase the overall economic pie.
They may shift some of where that pie gets divvied
(03:47):
out in terms of the cities and the tax base
and stuff like that, but it's not a great thing.
This particular proposal that made its way into the budget
that the governor did let stand using unclaimed funds in
some ways, with much more protecting of taxpayers, and a
couple of the other ideas that had been kind of
thrown around throughout the budget writing process. Obviously, I think
(04:08):
I mentioned it yesterday. There may well be litigation on
this particular issue. We've already heard some rumblings that the
former Attorney General Mark dan might be doing a class
action lawsuit on this, So we'll have to wait, stay
tuned see if that actually stands.
Speaker 1 (04:23):
My thought is it's kind of like, you know, forgetting
about a twenty dollars bill in your winter coat and
then next year you break the code out and you
find it. If you didn't know it was missing, was
it ever really even gone? I mean, if these people
had these unclaimed funds sitting somewhere and I don't know
how it's you know, anywhere from four bucks to you know,
maybe one hundred bucks or a couple hundred bucks, depending
(04:45):
on each individual. If if you don't know what's gone,
are you really missing it?
Speaker 2 (04:52):
Well, that's true. And a lot of times it's very
small amounts that happened, some bills that that somebody into
a refund for something, maybe a moved Sometimes certain things
don't get sticked stuck in probate when someone passes away,
and so you've got something from those situations that happen.
Pretty amazing how much of that there actually is in
(05:12):
every state, to some extent or another has something like this.
I do think it's important for folks to go to
the Department of Commerce website and try to search up
their unclaimed funds by their name, just to see if
they've got it. But it's easy to see how this
could happen. And the one thing I will say that
is important is this does need to be paid back
because this is not the state's money, you know, I mean,
this is still someone else's property that's being tapped into.
(05:36):
And while I think this is probably better than raising
taxes or having to pay interest back on big bonds
that you float, it's still I think somewhat controversial what
they're doing, without question, and it's still somebody else's money,
not theirs.
Speaker 1 (05:51):
Could this Speaking with Greg Lawson from the buck Eye
inst could this set a precedent? I mean, I think
there's last I checked, those one point seven billion in unclaimed.
I mean, they're only getting six hundred million for the Browns.
So could they be using this in other ways? Could
this set a dangerous precedent to tap into that money?
Speaker 2 (06:09):
Well, actually, they've already used this for other things, not
things like sports stadiums, but they have used this, for example,
to pay off unemployment when they had debt that they
couldn't pay off. They used that temporarily. So they've used
and borrowed against some clean funds for some other things
over the years. Now, this is the largest that I'm
aware of, and as a broader utilization of it that
(06:32):
they have done this. So actually that's I think one
of the reasons why this popped up was there had
already been a precedent set and the.
Speaker 1 (06:40):
Other one that was vetoed out. These are kind of
the three big ones. Was the property tax reform, the
plan to limit how much school districts could carry over.
I think that number was forty percent of their budget
from year to year, and if you eclipse that forty percent,
the rest would be kicked back to property owners to
get some relief on property tax, because which we know
(07:00):
is a huge property tax is a huge problem in
the state of Ohio. The governor said, no, that's not
going to happen.
Speaker 2 (07:06):
That's right, and actually it's even more than that. There
was a series of posseas. That's one of them, and
he did line out and veto that. But there were
some other reforms to try to deal with this property
tax issue. And I keep telling folks at the state
House and anybody that listened, there's this issue out there.
But there's a grassroots group seeking a constitutional amendment to
the state constitution to abolish all property taxes in Ohio.
(07:30):
That is a really dramatic thing to do. And if
you don't get changes made before they submit signatures to
get this on the ballot they're aiming for next year,
we could have a real title wave of a problem
hitting Ohio. And I think it's actually very disappointing that
the governor lined out and vetoed the provision you were
talking about. There were some other more complicated things that
(07:50):
were in there, but were all designed to try to
provide some degree of a beef. Frankly, that wasn't going
to be enough anyway. What was in the budget was
insufficient to deal with the whole problem. I think the
legislate and knew it. They knew they had to come
back and do more. Now with the governor's veto, they
don't even have that. And I'm actually really worried that
this is going to just continue to put additional wind
(08:10):
in the sales of the effort to abolish property taxes,
which I think is frankly a dangerous thing to do
for the state overall. But people are upset, People are mad,
and legitimately so, and they feel like people aren't listening
to them in Columbus, and you know, doing a line
on a vitail like this probably doesn't help change that
narrative in their minds.
All right, I want to talk about the state budget.
(00:03):
Governor signed that late last night. And following that for
us is Greg Lawson from the Buckeye Institute on the
Legacy Retirement Group dot com phone line. Greg, I know
I saw an email from you at one thirty this morning,
so I appreciate you getting up on short sleep. I mean,
you joined us on the show late yesterday to kind
of preview everything, and you've had a couple of moments
(00:24):
to unpack some of this stuff, and there's a lot
I think he lined vetoed out sixty seven different items
in this budget. Good morning, mister Lawson. How's the coffee
going down.
Speaker 2 (00:38):
It's going wonderful. It's definitely something you gotta do on
budget night. It's becoming later and later. It seems like
he didn't unveil the vetos until like two o'clock in
the morning.
Speaker 1 (00:47):
So we know the flat tax is remaining the two
point seven five flat tags we talked about that yesterday.
That starts to take effect today, but we'll be phased
in right over the course of the next couple of years.
Speaker 2 (01:00):
That is correct, it'll go to I believe three point
one for the year that starts now. For the current
tax here, and then it'll drop down to two point
seventy five next year and that will be the new
flat rate for now on. So that's that's happening. That
stayed in. That's a good thing. We're very happy about that.
As we talked about yesterday, Hio needs to stay competitive
(01:21):
with other states that are also doing things like lowering
their taxes. So this is something that is really important
to keep Ohio from sliding relative to other states. So
we think that's a very positive science. So we're glad
the governor did not line on and veto.
Speaker 1 (01:35):
That that cost. That cut would cost a state about
a billion dollars in revenue. How do we are we
thinking that the extra money in your paycheck will offset
that and in just you know, in economic spending and
investments in the state. How do we recoup that one
billion dollars in loss revenue with the flat tax.
Speaker 2 (01:55):
So there's a combination of things. First of all, some
of it does come back to increased economic although not
all of it. The other stuff is that the legislature
did a lot of reforms to medicaid, tried to restrain
budget growth there. They did close a number of what
we call tax fu poles where there are special tax
breaks given to certain groups or certain entities. Now, interestingly enough,
(02:18):
the Governor len had and vetoed several of those, and
I haven't looked to double check what that means. But
by not doing that, that may make it a little
more difficult to achieve some of the targets for the
revenue reduction of the income tax. So we're gonna have
to watch that pretty closely. But it's mostly to savings
closing of tax flu poles and things like that, along
(02:39):
with the positive economic growth that happens due to increased
economic activity and then the revenues generated from that.
Speaker 1 (02:46):
The other one of the other big ones that he
did not veto out was the funding for the Brown Stadium.
Six hundred million going to the Cleveland Browns and the
Haslam Sports Group, and that is coming from the unclaimed funds.
Now the state takes over the unclaimed funds and they'll
use six hundred million for Brown Stadium. And this one
was it was an emotional one. You know, anytime you
(03:09):
kind of involve sports and new stadiums, you know. My
thought on this is, and I think you will probably
agree if new stadiums were such a good investment, wouldn't
private investors be flocking to fund it themselves versus leaning
on the state or taxpayers to do so.
Speaker 2 (03:26):
Well, We've always been opposed to sports stadiums and public
financing rather of sports stadiums. The literature out there from
economists is pretty almost you knowanimous, that these things don't
actually really pay for themselves in the long run. They
don't necessarily do as much to increase the overall economic pie.
They may shift some of where that pie gets divvied
(03:47):
out in terms of the cities and the tax base
and stuff like that, but it's not a great thing.
This particular proposal that made its way into the budget
that the governor did let stand using unclaimed funds in
some ways, with much more protecting of taxpayers, and a
couple of the other ideas that had been kind of
thrown around throughout the budget writing process. Obviously, I think
(04:08):
I mentioned it yesterday. There may well be litigation on
this particular issue. We've already heard some rumblings that the
former Attorney General Mark dan might be doing a class
action lawsuit on this, So we'll have to wait, stay
tuned see if that actually stands.
Speaker 1 (04:23):
My thought is it's kind of like, you know, forgetting
about a twenty dollars bill in your winter coat and
then next year you break the code out and you
find it. If you didn't know it was missing, was
it ever really even gone? I mean, if these people
had these unclaimed funds sitting somewhere and I don't know
how it's you know, anywhere from four bucks to you know,
maybe one hundred bucks or a couple hundred bucks, depending
(04:45):
on each individual. If if you don't know what's gone,
are you really missing it?
Speaker 2 (04:52):
Well, that's true. And a lot of times it's very
small amounts that happened, some bills that that somebody into
a refund for something, maybe a moved Sometimes certain things
don't get sticked stuck in probate when someone passes away,
and so you've got something from those situations that happen.
Pretty amazing how much of that there actually is in
(05:12):
every state, to some extent or another has something like this.
I do think it's important for folks to go to
the Department of Commerce website and try to search up
their unclaimed funds by their name, just to see if
they've got it. But it's easy to see how this
could happen. And the one thing I will say that
is important is this does need to be paid back
because this is not the state's money, you know, I mean,
this is still someone else's property that's being tapped into.
(05:36):
And while I think this is probably better than raising
taxes or having to pay interest back on big bonds
that you float, it's still I think somewhat controversial what
they're doing, without question, and it's still somebody else's money,
not theirs.
Speaker 1 (05:51):
Could this Speaking with Greg Lawson from the buck Eye
inst could this set a precedent? I mean, I think
there's last I checked, those one point seven billion in unclaimed.
I mean, they're only getting six hundred million for the Browns.
So could they be using this in other ways? Could
this set a dangerous precedent to tap into that money?
Speaker 2 (06:09):
Well, actually, they've already used this for other things, not
things like sports stadiums, but they have used this, for example,
to pay off unemployment when they had debt that they
couldn't pay off. They used that temporarily. So they've used
and borrowed against some clean funds for some other things
over the years. Now, this is the largest that I'm
aware of, and as a broader utilization of it that
(06:32):
they have done this. So actually that's I think one
of the reasons why this popped up was there had
already been a precedent set and the.
Speaker 1 (06:40):
Other one that was vetoed out. These are kind of
the three big ones. Was the property tax reform, the
plan to limit how much school districts could carry over.
I think that number was forty percent of their budget
from year to year, and if you eclipse that forty percent,
the rest would be kicked back to property owners to
get some relief on property tax, because which we know
(07:00):
is a huge property tax is a huge problem in
the state of Ohio. The governor said, no, that's not
going to happen.
Speaker 2 (07:06):
That's right, and actually it's even more than that. There
was a series of posseas. That's one of them, and
he did line out and veto that. But there were
some other reforms to try to deal with this property
tax issue. And I keep telling folks at the state
House and anybody that listened, there's this issue out there.
But there's a grassroots group seeking a constitutional amendment to
the state constitution to abolish all property taxes in Ohio.
(07:30):
That is a really dramatic thing to do. And if
you don't get changes made before they submit signatures to
get this on the ballot they're aiming for next year,
we could have a real title wave of a problem
hitting Ohio. And I think it's actually very disappointing that
the governor lined out and vetoed the provision you were
talking about. There were some other more complicated things that
(07:50):
were in there, but were all designed to try to
provide some degree of a beef. Frankly, that wasn't going
to be enough anyway. What was in the budget was
insufficient to deal with the whole problem. I think the
legislate and knew it. They knew they had to come
back and do more. Now with the governor's veto, they
don't even have that. And I'm actually really worried that
this is going to just continue to put additional wind
(08:10):
in the sales of the effort to abolish property taxes,
which I think is frankly a dangerous thing to do
for the state overall. But people are upset, People are mad,
and legitimately so, and they feel like people aren't listening
to them in Columbus, and you know, doing a line
on a vitail like this probably doesn't help change that
narrative in their minds.
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