June 30, 2025 • 11 mins
Greg Lawson says the bill will be signed by the Governor by midnight, that's the deadline. There is a lot in it, but should send Ohio in the right direction
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Let's spend a moment and go over to the Legacy
Retirement Group dot com phone line. Say good morning to
Greg Lawson from the Buck Eye Institute. Greg, I hope
you're well this morning. Thanks for the time. Today is
today the deadline for Governor Mike DeWine to sign the
States two year sixty billion dollar operating budget. There's a
lot in this. I'm going to unpack some of these things.
(00:20):
Of course, you've got the flat tax, You've got property
tax reforms. I want to talk about education, social services.
Of course, the Browns Stadium. So let's let's dive into this.
First of all, do you think the governor is going
to sign this as is? Or is he going to
start getting the red ink out and going line by line?
Speaker 2 (00:39):
Well, there's no question that I would anticipate there's gonna
be some light eyem what they call line item vetos.
I think he is going to use some read ink.
There's never really a budget where there isn't something that
gets pulled out by the governor. I think a lot
of the big questions are there's some big items here
that it's not exactly clear. The governor is a big
fan of and some of the top line headline are
(01:00):
some of the issues that he's kind of spoken about.
So you know, there's a little bit of a concern
out there about what he's going to do with the
flat tax, what he might do on some of the
Medicaid reforms that are included to keep control over a
program that is almost half of the state budget now
in total. And there's also I know a lot of
the local governments aren't real happy with some of the
(01:21):
property tax issues, and I'm sure they're blowing up the
governor as well to try to get him to line
out and vita some of those provisions. So it's something
we're definitely going to be watching with almost baited breadth,
at least those of us in policy land, because I
would expect that there's going to be a handful.
Speaker 1 (01:37):
Is there to talk about us talk about the flat
tax here for a moment. The flat tax rate two
point seventy five percent for individuals earning more than twenty
six thousand dollars annually. So you're taking you're reducing I
think it's by a percentage point and some change. And
what's that going to do to the you know, kind
(01:58):
of the revenue source for the state well, it.
Speaker 2 (02:01):
Has a hit to the revenue, but obviously when you
do reduce taxes, some of that, not all of it,
but some of that gets paid back by economic growth.
And I think the important thing to understand about what
Ohio's doing here is that this is sort of a
culmination of many, many years and multiple legislative cycles of
reducing income tax rates. And it's also something that we
(02:22):
are doing when you have to look at what other
states are doing around the country. We've got a lot
of Southern states, a lot of Western states, states that
are doing really well economically, growing like gang busters even
with the population, and they're reducing it. If we don't
stay competitive with what other states are doing, that's going
to be a problem for Ohio. So I think that
ultimately this is a wise policy and it can certainly
(02:45):
be done as you control for the spending growth, and
that's something that Ohio has historically had a lot of
couple doing. This budget is a really really big budget.
You mentioned sixty billion dollars. That's the state revenue portion
of it. It's actually if you're looking over the two years,
it's actually two hundred billion total dollars. When you factor
(03:06):
in all kinds of non tax revenue and federal dollars
that come in from Washington. So it's huge. And so
you know, if we can continue to contain our growth,
we can afford this tax reform.
Speaker 1 (03:19):
Well, and there's a handful of states that don't have
any income tax whatsoever.
Speaker 3 (03:22):
So I mean, it seems it's very doable.
Speaker 1 (03:25):
It seems like this is real and they would phase
this in, right, it wouldn't just flip the switch.
Speaker 2 (03:31):
Well, it's phased in over both years, so it doesn't.
It lowers the top rate a little bit beginning on
July one, tomorrow, and then it'll hit the two point
seventy five then in twenty twenty, next July.
Speaker 1 (03:44):
One of the other Yeah, speaking with Greg Lawson from
the Buckeye Institute. One of the other tax policies at
property tag. This one's got you know, people kind of
divided on this. It has to do with reducing property
is if school districts carry over more than I think
forty of the previous year's budget was the trigger, and
(04:06):
that's got people fired up. You know, people that support
education saying the schools aren't going to have any money.
But I mean property tax, Greg, as you well, know
it's only going to one direction, it's going up, and
there's a lot of folks that just can't afford to
staying at homes anymore.
Speaker 2 (04:20):
Well, I think you're nailing it right on the head.
We have a major problem. We have a situation where,
in particular, fixed income seniors are being threatened because obviously
they've paid their mortgage off maybe twenty thirty years ago,
and now they have the risk of being kicked out
of their house because of ever escalating property taxes. By
the way, there's also that ballot issue that's out there.
They're not going to get it on the ballot this year,
(04:40):
but they're aiming for next year, and there's a major
grassroots effort to put a constitutional moment on the ballot
in twenty twenty six that would literally abolish all property taxes.
So I think, and what I would encourage local government
folks from schools to townships, to counties and everybody else
and cities is to think about what the concert punches
are if property taxes get abolished. Because some of this
(05:03):
stuff is uncomfortable for him. I'm not going to try
to sugarcoat it. These are big changes to the status quo.
But they're not as big a change as literally losing
all property taxes, which is what's out there, because tax payers,
homeowners are very very worried and very very angry. And
if you go and talk to folks out across the state,
(05:24):
there is momentum for this and people are like, well,
you know, you're going to blow a big hole in
the budget. What are you going to do? And some
of these are saying, let the legislature figure it out.
We have to do. We have to have relief. We
have to have a relief now. So you got to
look at what's happening in this budget sort of within
the framework of what's going on with that ballot issue,
which is a truly dramatic thing that's out there hanging
(05:47):
over everybody's head. We think most of these reforms are good. Obviously, Again,
local governments are going to have to kind of tighten
their belt. School districts are going to have to tighten
their belt. Look at what they're doing across the board.
We need to do a lot of things, and in fact,
there's even more that we need to do above and
beyond what's in the budget. This is just a down
payment towards much bigger reform, which is absolutely necessary of
(06:09):
Ohio is going to be a good state for business,
a good state for homeowners, and protect folks from getting
kicked down their own homes.
Speaker 1 (06:17):
Well with regard to and it's very well said, Greg,
with regards to schools carrying over, I mean forty more
than forty percent, almost half of their previous years.
Speaker 3 (06:25):
But I mean schools shouldn't be a piggybank, Greg.
Speaker 1 (06:28):
I mean, if they they're not spending the money, why
should they get it.
Speaker 2 (06:32):
Well, that's absolutely right, and there's some kind of complicated
things you look under the hood there where if they've
got money that's supposed to be going to like construction
and various other things, there's actually some limitations on how
that would operate with the forty percent carryover. But in
general that's right. I mean, yes, the school discs are
going to say, well, you know, we've been very physically
(06:53):
conservative and now you're penalizing us. But I think that
there is a problem with that mindset. The mindset sort
of is our money. You know, the districts and the
superintendents and the school board sometimes think of it as
their money, but it's really not. Yes, we all know
it's taxpayer money, and yes, we need you to be prudent,
and there are some things with bonding ratings and stuff
(07:14):
like that that you got to be careful about, which
is why they actually made it to forty percent. But
at the end of the day, this is about what
can homeowners, what can property tax payers? What can they afford?
What can they do? And we need to be mindful
about that, especially in this painful time period.
Speaker 1 (07:29):
The other one too, we'll go there's we could probably
talk about this for an hour and a half, Greg,
But the other one that has got people. It's emotional,
right you start talking about sports and the Cleveland Browns
and a new stadium, it gets emotional for a lot
of people. The budget allocating six hundred million dollars for
a new Brown stadium in the suburbs. And there were
a couple of different iterations of how they were going
(07:50):
to do this, and they've settled on this unclaimed funds situation.
And you know, I tend to agree with Attorney General
Dave Gyosts. As you know, billionaires should finance their own
darn stadiums, and I agree with them on that.
Speaker 2 (08:02):
What do you think, Well, we've never been in favor
of sports stadiums and public funding for sports stadiums. If
you look at a bunch of the literature that's out
there from economists who have done studies on this for years,
and if you look at it, there's almost no economic
literature that says that these things ultimately are good investments.
(08:22):
They may shift where some of the revenue gets raised
from one city to another, but are they really growing
the overall economic pie And most economists say no. So
it's not a great thing to do. I will say
that of the three plans that are out there, the
one that they ultimately landed on is probably the most
protective of taxpayers because you're not raising taxes, which the
(08:43):
governor was initially going to do. You're not going out
and bonding at which cost debt and interests and stuff
like that, which is what the House initially wanted to do.
So this is good. This is using unclaimed funds. I
think there's going to be a litigation on this already.
Former attorneyed Mark Attorneys General Mark dan said he's likely
to sue actually maybe a class action on behalf of
(09:04):
unclaimed funds holders because technically unclaimed funds obviously isn't the
state's money. Right, it's all these funds and we've got
like four billion, that's right, four billion dollars of unclaimed
funds that the state has, and I think hundreds of
million get at it every year.
Speaker 1 (09:20):
But if you are that negligent in your own finances
and you've got money that's out there, that's been sitting
in a in a an account somewhere, I mean, that's
that's that's a you problem.
Speaker 3 (09:29):
I mean, if you if you.
Speaker 1 (09:31):
Don't know your own where your own money is, that's uh,
that's I don't know.
Speaker 3 (09:35):
I don't feel bad for you.
Speaker 2 (09:37):
Well, a lot of those very small dollar things, it's
like or things that happen in a state. There's a
variety of reasons it can happen. But I think that
that's the key thing is people should go. It's on
the Division of Unclaimed Funds website. There's a search tool
where you can look up your name. I certainly encourage
everybody to go out and check it out, see if
you've got unclaimed funds. Basically, what they're gonna do is
they're going to use this and eventually new tax revenue
(09:59):
from all the development or on the new Brown Stadium
pays everything back in. Plus the funds they're creating actually
will probably be used by other teams as well. The
Sincinni Bengals has been talking about it. They're probably going
to get upgrades to their stadium, so this is not
going to be a one shot deal. The fund that
they're creating, essentially is going to probably be an evergreen
(10:20):
fund that is used for everything from the Browns, the Guardians, Reds,
you name it somewhere. They're going to probably do that. Yeah,
that's great.
Speaker 1 (10:29):
It's better nationwide. I mean they want to they want
to renovate nationwide arena on the Blue Jackets too, So yeah,
that's gonna be interesting. So what's the what's the timeline here?
Does the governor have to do all this today?
Speaker 2 (10:40):
Yes, he is supposed to sign him Usually these things
go untill kind of late in the night. Okay, he
has to sign it technically by midnight because as of midnight,
of course, it turns into July one, and so if
you don't have a good budget signed by then, technically
there's no budget for the state. So how it anticipates
somewhere later this evening he will sign it and a
(11:00):
lot of people will be looking over all of the
red ink as you mentioned, to see which which items
are in, which are out. Some of them might be
really really big, some of them might be much more,
you know, small and focused on certain groups versus others.
But it's a big deal. It's a big budget. There's
a lot of good stuff in the budget. It's not
a perfect budget. There's things in there. We would have
(11:22):
liked to have seen some more cost containment on some
big programs, a little bit more property tax reform. So
there's there's stuff that we still need to be working
on here in Ohio. But look, you know, we we
got a big income tax reform. It keeps us competitive
with other states. We're making some down payments on dealing
with property tax and local government issues. Those are those
(11:43):
are some positive steps that are going to move Ohio
in the right direction.
Let's spend a moment and go over to the Legacy
Retirement Group dot com phone line. Say good morning to
Greg Lawson from the Buck Eye Institute. Greg, I hope
you're well this morning. Thanks for the time. Today is
today the deadline for Governor Mike DeWine to sign the
States two year sixty billion dollar operating budget. There's a
lot in this. I'm going to unpack some of these things.
(00:20):
Of course, you've got the flat tax, You've got property
tax reforms. I want to talk about education, social services.
Of course, the Browns Stadium. So let's let's dive into this.
First of all, do you think the governor is going
to sign this as is? Or is he going to
start getting the red ink out and going line by line?
Speaker 2 (00:39):
Well, there's no question that I would anticipate there's gonna
be some light eyem what they call line item vetos.
I think he is going to use some read ink.
There's never really a budget where there isn't something that
gets pulled out by the governor. I think a lot
of the big questions are there's some big items here
that it's not exactly clear. The governor is a big
fan of and some of the top line headline are
(01:00):
some of the issues that he's kind of spoken about.
So you know, there's a little bit of a concern
out there about what he's going to do with the
flat tax, what he might do on some of the
Medicaid reforms that are included to keep control over a
program that is almost half of the state budget now
in total. And there's also I know a lot of
the local governments aren't real happy with some of the
(01:21):
property tax issues, and I'm sure they're blowing up the
governor as well to try to get him to line
out and vita some of those provisions. So it's something
we're definitely going to be watching with almost baited breadth,
at least those of us in policy land, because I
would expect that there's going to be a handful.
Speaker 1 (01:37):
Is there to talk about us talk about the flat
tax here for a moment. The flat tax rate two
point seventy five percent for individuals earning more than twenty
six thousand dollars annually. So you're taking you're reducing I
think it's by a percentage point and some change. And
what's that going to do to the you know, kind
(01:58):
of the revenue source for the state well, it.
Speaker 2 (02:01):
Has a hit to the revenue, but obviously when you
do reduce taxes, some of that, not all of it,
but some of that gets paid back by economic growth.
And I think the important thing to understand about what
Ohio's doing here is that this is sort of a
culmination of many, many years and multiple legislative cycles of
reducing income tax rates. And it's also something that we
(02:22):
are doing when you have to look at what other
states are doing around the country. We've got a lot
of Southern states, a lot of Western states, states that
are doing really well economically, growing like gang busters even
with the population, and they're reducing it. If we don't
stay competitive with what other states are doing, that's going
to be a problem for Ohio. So I think that
ultimately this is a wise policy and it can certainly
(02:45):
be done as you control for the spending growth, and
that's something that Ohio has historically had a lot of
couple doing. This budget is a really really big budget.
You mentioned sixty billion dollars. That's the state revenue portion
of it. It's actually if you're looking over the two years,
it's actually two hundred billion total dollars. When you factor
(03:06):
in all kinds of non tax revenue and federal dollars
that come in from Washington. So it's huge. And so
you know, if we can continue to contain our growth,
we can afford this tax reform.
Speaker 1 (03:19):
Well, and there's a handful of states that don't have
any income tax whatsoever.
Speaker 3 (03:22):
So I mean, it seems it's very doable.
Speaker 1 (03:25):
It seems like this is real and they would phase
this in, right, it wouldn't just flip the switch.
Speaker 2 (03:31):
Well, it's phased in over both years, so it doesn't.
It lowers the top rate a little bit beginning on
July one, tomorrow, and then it'll hit the two point
seventy five then in twenty twenty, next July.
Speaker 1 (03:44):
One of the other Yeah, speaking with Greg Lawson from
the Buckeye Institute. One of the other tax policies at
property tag. This one's got you know, people kind of
divided on this. It has to do with reducing property
is if school districts carry over more than I think
forty of the previous year's budget was the trigger, and
(04:06):
that's got people fired up. You know, people that support
education saying the schools aren't going to have any money.
But I mean property tax, Greg, as you well, know
it's only going to one direction, it's going up, and
there's a lot of folks that just can't afford to
staying at homes anymore.
Speaker 2 (04:20):
Well, I think you're nailing it right on the head.
We have a major problem. We have a situation where,
in particular, fixed income seniors are being threatened because obviously
they've paid their mortgage off maybe twenty thirty years ago,
and now they have the risk of being kicked out
of their house because of ever escalating property taxes. By
the way, there's also that ballot issue that's out there.
They're not going to get it on the ballot this year,
(04:40):
but they're aiming for next year, and there's a major
grassroots effort to put a constitutional moment on the ballot
in twenty twenty six that would literally abolish all property taxes.
So I think, and what I would encourage local government
folks from schools to townships, to counties and everybody else
and cities is to think about what the concert punches
are if property taxes get abolished. Because some of this
(05:03):
stuff is uncomfortable for him. I'm not going to try
to sugarcoat it. These are big changes to the status quo.
But they're not as big a change as literally losing
all property taxes, which is what's out there, because tax payers,
homeowners are very very worried and very very angry. And
if you go and talk to folks out across the state,
(05:24):
there is momentum for this and people are like, well,
you know, you're going to blow a big hole in
the budget. What are you going to do? And some
of these are saying, let the legislature figure it out.
We have to do. We have to have relief. We
have to have a relief now. So you got to
look at what's happening in this budget sort of within
the framework of what's going on with that ballot issue,
which is a truly dramatic thing that's out there hanging
(05:47):
over everybody's head. We think most of these reforms are good. Obviously, Again,
local governments are going to have to kind of tighten
their belt. School districts are going to have to tighten
their belt. Look at what they're doing across the board.
We need to do a lot of things, and in fact,
there's even more that we need to do above and
beyond what's in the budget. This is just a down
payment towards much bigger reform, which is absolutely necessary of
(06:09):
Ohio is going to be a good state for business,
a good state for homeowners, and protect folks from getting
kicked down their own homes.
Speaker 1 (06:17):
Well with regard to and it's very well said, Greg,
with regards to schools carrying over, I mean forty more
than forty percent, almost half of their previous years.
Speaker 3 (06:25):
But I mean schools shouldn't be a piggybank, Greg.
Speaker 1 (06:28):
I mean, if they they're not spending the money, why
should they get it.
Speaker 2 (06:32):
Well, that's absolutely right, and there's some kind of complicated
things you look under the hood there where if they've
got money that's supposed to be going to like construction
and various other things, there's actually some limitations on how
that would operate with the forty percent carryover. But in
general that's right. I mean, yes, the school discs are
going to say, well, you know, we've been very physically
(06:53):
conservative and now you're penalizing us. But I think that
there is a problem with that mindset. The mindset sort
of is our money. You know, the districts and the
superintendents and the school board sometimes think of it as
their money, but it's really not. Yes, we all know
it's taxpayer money, and yes, we need you to be prudent,
and there are some things with bonding ratings and stuff
(07:14):
like that that you got to be careful about, which
is why they actually made it to forty percent. But
at the end of the day, this is about what
can homeowners, what can property tax payers? What can they afford?
What can they do? And we need to be mindful
about that, especially in this painful time period.
Speaker 1 (07:29):
The other one too, we'll go there's we could probably
talk about this for an hour and a half, Greg,
But the other one that has got people. It's emotional,
right you start talking about sports and the Cleveland Browns
and a new stadium, it gets emotional for a lot
of people. The budget allocating six hundred million dollars for
a new Brown stadium in the suburbs. And there were
a couple of different iterations of how they were going
(07:50):
to do this, and they've settled on this unclaimed funds situation.
And you know, I tend to agree with Attorney General
Dave Gyosts. As you know, billionaires should finance their own
darn stadiums, and I agree with them on that.
Speaker 2 (08:02):
What do you think, Well, we've never been in favor
of sports stadiums and public funding for sports stadiums. If
you look at a bunch of the literature that's out
there from economists who have done studies on this for years,
and if you look at it, there's almost no economic
literature that says that these things ultimately are good investments.
(08:22):
They may shift where some of the revenue gets raised
from one city to another, but are they really growing
the overall economic pie And most economists say no. So
it's not a great thing to do. I will say
that of the three plans that are out there, the
one that they ultimately landed on is probably the most
protective of taxpayers because you're not raising taxes, which the
(08:43):
governor was initially going to do. You're not going out
and bonding at which cost debt and interests and stuff
like that, which is what the House initially wanted to do.
So this is good. This is using unclaimed funds. I
think there's going to be a litigation on this already.
Former attorneyed Mark Attorneys General Mark dan said he's likely
to sue actually maybe a class action on behalf of
(09:04):
unclaimed funds holders because technically unclaimed funds obviously isn't the
state's money. Right, it's all these funds and we've got
like four billion, that's right, four billion dollars of unclaimed
funds that the state has, and I think hundreds of
million get at it every year.
Speaker 1 (09:20):
But if you are that negligent in your own finances
and you've got money that's out there, that's been sitting
in a in a an account somewhere, I mean, that's
that's that's a you problem.
Speaker 3 (09:29):
I mean, if you if you.
Speaker 1 (09:31):
Don't know your own where your own money is, that's uh,
that's I don't know.
Speaker 3 (09:35):
I don't feel bad for you.
Speaker 2 (09:37):
Well, a lot of those very small dollar things, it's
like or things that happen in a state. There's a
variety of reasons it can happen. But I think that
that's the key thing is people should go. It's on
the Division of Unclaimed Funds website. There's a search tool
where you can look up your name. I certainly encourage
everybody to go out and check it out, see if
you've got unclaimed funds. Basically, what they're gonna do is
they're going to use this and eventually new tax revenue
(09:59):
from all the development or on the new Brown Stadium
pays everything back in. Plus the funds they're creating actually
will probably be used by other teams as well. The
Sincinni Bengals has been talking about it. They're probably going
to get upgrades to their stadium, so this is not
going to be a one shot deal. The fund that
they're creating, essentially is going to probably be an evergreen
(10:20):
fund that is used for everything from the Browns, the Guardians, Reds,
you name it somewhere. They're going to probably do that. Yeah,
that's great.
Speaker 1 (10:29):
It's better nationwide. I mean they want to they want
to renovate nationwide arena on the Blue Jackets too, So yeah,
that's gonna be interesting. So what's the what's the timeline here?
Does the governor have to do all this today?
Speaker 2 (10:40):
Yes, he is supposed to sign him Usually these things
go untill kind of late in the night. Okay, he
has to sign it technically by midnight because as of midnight,
of course, it turns into July one, and so if
you don't have a good budget signed by then, technically
there's no budget for the state. So how it anticipates
somewhere later this evening he will sign it and a
(11:00):
lot of people will be looking over all of the
red ink as you mentioned, to see which which items
are in, which are out. Some of them might be
really really big, some of them might be much more,
you know, small and focused on certain groups versus others.
But it's a big deal. It's a big budget. There's
a lot of good stuff in the budget. It's not
a perfect budget. There's things in there. We would have
(11:22):
liked to have seen some more cost containment on some
big programs, a little bit more property tax reform. So
there's there's stuff that we still need to be working
on here in Ohio. But look, you know, we we
got a big income tax reform. It keeps us competitive
with other states. We're making some down payments on dealing
with property tax and local government issues. Those are those
(11:43):
are some positive steps that are going to move Ohio
in the right direction.
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