GOP challenger John Kasich says Ohio Gov. Ted Strickland’s tax freeze amounted to a tax hike

Over the past month of their hotly contested race for governor, Republican challenger John Kasich has accused Gov. Ted Strickland of raising taxes on Ohioans, a charge the Democratic governor has vehemently denied.

Kasich has leveled the tax hike charge in his public speeches, during both gubernatorial debates and in campaign commercials. He says the governor’s decision last December to halt a scheduled 2009 income tax cut essentially took away $844 million in refunds earmarked for Ohioans and instead gave it to the government.

A television ad from the Republican Governor’s Association released this month features still photographs of Strickland with a woman speaking: "Ted Strickland promised not to raise taxes. He broke that promise."

Strickland says he didn’t raise taxes, he only temporarily froze a planned income tax cut to fill an unexpected budget hole. Strickland’s running mate Yvette McGee Brown certainly feels comfortable with that explanation.

"They had the nerve to say, the Republican Governor’s Association, that this governor (Strickland) raised taxes $800 million on Ohioans. Not true," Brown said during a rally on Sept. 27 in Cleveland with Strickland standing behind her. "And I wish PolitiFact would go check that."

So, we are.

The tax issue Kasich is referencing is Strickland’s decision last year to halt the final year of a five-year, 21-percent across-the-board income tax cut that started in 2005. The move saved the state approximately $840 million, money the governor used to fill a budget hole. The only alternative, Strickland insists, was to cut the equivalent amount of cash out of primary and secondary education.

Strickland is careful to characterize his move as having frozen the final year of that tax cut and not having eliminated it altogether. The difference: what’s frozen can be thawed and used, but it might not be possible to replicate what has been completely erased.

"We have cut the state income tax 17 percent since 2005," Strickland said during his Oct. 7 debate against Kasich, taking credit for the first four years of the tax cuts. Strickland became governor in January 2007.

And the governor notes that the postponed final year tax cut is scheduled to be reinstated next year after the current budget cycle expires. Also, the decision to freeze the tax cut required legislative approval, which means the Republican-controlled Ohio Senate had to OK the deal and it did — narrowly.

But having received the first four years of the tax cut, Ohioans were already looking forward to the final year, 4.2 percent reduction, Kasich said, until the governor snatched it away.

"He raised taxes last year to the tune of $840 million," Kasich said on Oct. 4 during a press conference at the Ohio Republican Party headquarters.

To be fair, Strickland had to find a source of revenue or would have had to slash programs. Ohio law requires the state budget be balanced. And part of the reason for the shortfall can be pinned on Republicans, who increased spending in seven consecutive budgets while they controlled the General Assembly while also cutting taxes.

And the truth is Ohioans didn’t pay any more in taxes for 2009 over what they paid in 2008, and maybe less once you factor in some inflationary indexing. So, this was not a tax hike in that sense, which Kasich concedes.

But he argues it is an increase when residents are forced to pay more in taxes than they had been promised, or to look at it another way, get back less in their state income tax refund than they anticipated.

Those who owed the state after filing their 2009 taxes, owed a little bit extra thanks to Strickland’s tax freeze. Strickland’s decision cost a family of four earning $60,000 a year about $78 last year.

Strickland prides himself on having made tough decisions in rough economic times. One of those decisions was postponing the income tax cut which meant taking money out of the pockets of Ohioans.

But while the freeze is expected to be lifted next year, there are no guarantees that will happen in what is still a rough economic landscape for Ohio. And state taxpayers, who had to pay more in income taxes than what had been promised, may continue to pay at the higher rate.

We rate Kasich’s statement Mostly True.

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