No income tax for 350K Ohioans under Kasich plan

FILE – In this Nov. 10, 2016, file photo, Ohio Gov. John Kasich, following a ceremony where President Barack Obama honored the 2016 NBA champion Cleveland Cavaliers basketball team, answers questions from reporters outside the West Wing of the White House in Washington. In the weeks before President-elect Donald Trump's Jan. 20, 2017, inauguration, Kasich has emerged from a period of retreat after conceding his presidential ambitions for a second time. (AP Photo/Pablo Martinez Monsivais, File)

COLUMBUS, Ohio (AP) — Gov. John Kasich is proposing a trimmed down state budget for the next two years that delivers a 17-percent income-tax cut to Ohioans and temporarily freezes tuition and fees at the state’s public colleges and universities.

The Republican governor helps pay for the proposals with tax hikes on alcohol, tobacco products and gas drilling. He also imposes a half-percent increase in the state sales tax, from 5.75 percent to 6.25 percent, and extends it to additional services.

The spending blueprint was rolled out Monday. It spends $66.9 billion over the two years beginning July 1, down $4.3 billion from the previous biennium amid declining state tax revenues.

Kasich proposes modest additional spending for K-12 schools, higher education and prisons, while flat-funding or cutting many other agencies.

Kasich’s $66.9 billion, two-year budget shrinks the number of income-tax brackets in Ohio from nine to five and increases personal exemptions for low- and middle-income taxpayers. The administration says the plan eliminates all state income taxes for more than 350,000 low-income households.

The budget proposes a half-percent sales-tax increase, from 5.75 percent to 6.25 percent, and extends the tax to cable TV subscriptions, elective cosmetic surgery, lobbying and some other services currently not subject to the tax.

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