Tuesday, April 8, 2003

House ponders tax increase or gambling

Ohio voters have rejected both before

By John McCarthy
The Associated Press

COLUMBUS - Voters could be asked this fall to approve video slot machines at Ohio racetracks or face a sales tax increase, two ideas they rejected in the 1990s.

The proposal by Republicans is one option the House Finance Committee was considering as it prepared on Monday to work on a final version of the general spending budget for the two years beginning July 1.

It was uncertain whether voters would be asked to pick slots or higher taxes or just asked to approve the gambling proposal. However, lawmakers would first pass a temporary, penny-per-dollar increase in the state's 5-cent sales tax. In November, voters would be asked to approve the slots at the state's seven racetracks.

If voters rejected the idea, the tax increase would continue for a specified time.

"The campaign will be either/or," said Rep. Jim Trakas, a Republican from Independence. "People will understand the alternative is higher taxes or allowing people who gamble to pay for it."

Republicans expect a shortfall of between $3 billion and $4 billion in Gov. Bob Taft's $49 billion budget proposal. They have trimmed about $1.2 billion of that, and would cover the rest by cutting more, raising taxes or a combination of both. The sales tax increase would generate about $1.2 billion each year. Revenue from the slot machines is estimated at $400 million to $900 million a year.

Voters rejected, by a 4-1 ratio, an identical sales tax increase in 1998 as a way to solve Ohio's school-funding lawsuit. They also defeated proposals to put casinos in Lorain or on riverboats in Ohio cities in 1990 and 1996.

Such either/or elections, should the proposal be worded that way in Ohio, are rare. Michigan voters in 1994 had a choice of two proposals to change the way schools were funded. One, which voters approved, lowered property taxes and increased the sales tax from 4 cents to 6 cents a dollar. The second lowered property taxes and raised the income tax.

James Ruvolo, a Democratic campaign consultant who helped defeat a ballot issue that would have required treatment over jail for nonviolent drug abusers, called the GOP proposal "trickery."

He said it would be tough convincing voters that either a temporary tax or video gambling would solve Ohio's budget problems.

"It sounds like the public will say, 'Come on guys, who are you kidding?' " Ruvolo said.

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