North Royalton resident and small business owner Greg Kelley, co-founder of Vestige Ltd., submitted testimony to the House Economic and Small Business Development Committee regarding House Bill 331, legislation Representative Mike Dovilla (R-Berea) introduced to spur job creation. H.B. 331 would bring together business, educational institutions and government to study the state’s cybersecurity operations and offer recommendations to accelerate job creation in the cybersecurity industry.
“I wish to thank Representative Dovilla for sponsoring this bill,” wrote Kelley. “House Bill 331 would go a long way towards supporting our industry by helping to set a direction for the private and public sector as they decide how best to secure their data and IT infrastructure. It would also help companies such as ours grow and by doing so, add jobs in our state.”
Founded in 2004, Vestige is a company consisting of electronic evidence experts. With offices in Ohio and Pennsylvania, Vestige employs 11 individuals who provide computer forensic, incident response, electronic discovery, and IT auditing services.
In response to Mr. Kelley’s testimony, Representative Dovilla stated, “It is crucial that our state remain competitive in attracting and retaining the best talent in the nation in one of the fastest growing industries.” Dovilla continued, “I am committed to working with our small business owners, union representatives, and educational institutions to ensure we create jobs in northeast Ohio. On January 26th, I will be hosting the Jobs Summit in Strongsville to identify further actions we can pursue to make Ohio more competitive and place our state back on a path to prosperity.”
House Bill 331 is one of several bills Representative Dovilla has introduced to advance his goal of making Ohio a more business-friendly state with lower taxes and fewer regulations that promotes economic development and job creation. The legislation will remain before the House Economic and Small Business Development Committee for additional hearings in the coming weeks.
Rep. Dovilla’s Education and Economic Development Legislation Supported by Small Business
Rep. Baker letter to Plain Dealer: Long-term, private-sector jobs don't come from higher taxes
Lower business costs earn state high marks
Tax reforms begun in 2005 help propel Ohio to better rankings in CNBC's evaluation
Wednesday, July 13, 2011 06:41 AM
By Mark Williams
THE COLUMBUS DISPATCH
Business-friendly changes in Ohio's tax structure have given the state a boost in a national ranking.
Ohio moved up to fifth this year from 29th last year in the 'cost of doing business' category that is part of business cable-television channel CNBC's 'America's Top States for Business.'
The improvement in that category was a major reason that the state jumped to 23rd on the list overall, compared with 34th last year.
"Folks across the country are starting to see the full impact of (the business-tax reforms) and that this system created in Ohio is allowing people to fully grow their business at lower costs," said Thomas Zaino, a former Ohio tax commissioner and now managing partner of the Columbus law firm McDonald Hopkins.
He said the value of the tax cuts, when fully implemented, totaled $2billion a year for businesses and consumers. The cut was significant not just for its size, he said, but because the state was able to go ahead with it despite the worst recession since the Great Depression.
"What impresses people is the thoughtfulness and logic" of the tax reforms the state has put in place, said Ed Burghard, executive director of the Ohio Business Development Coalition.
Iowa and Arkansas tied for first in the "cost of doing business" category, followed by Missouri and Kentucky.
Ohio began implementing sweeping business-tax reforms in 2005, substituting a modified gross-receipts tax for corporate income and franchise taxes and eliminating business tangible personal-property taxes.
Ohio also has been phasing in a 21 percent personal income-tax cut that will be finished this year.
Burghard said it often takes several years for reforms such as those done in Ohio to start showing up in surveys such as the one by CNBC.
"The bulk of the tax reform is actually starting to hit the numbers," he said.
The CNBC study comes after a report by the Council on State Taxation in April said Ohio had the third-lowest tax burden for new business investment.
But not everyone has been impressed with Ohio's reforms.
The conservative-leaning Tax Foundation put Ohio 46th in its 2011 Business Tax Climate Index, which also takes into account other taxes beyond those just paid by business.
Taxes are only a part of the equation that CNBC uses for its ranking on the cost of doing business. The business channel also takes into account utility costs, the costs of wages and costs for office and industrial space.
Of the 10 categories included in the rankings, the state's best finish was No. 4 in the infrastructure and transportation category. The worst finish was No. 50 in the work-force category, which takes into account factors such as the education level of the state's work force, the number of available workers and union membership.
The state also came in 42nd in business friendliness, a category that includes regulation and litigation.
The study takes into account 40 measures of competitiveness.
This program is a public-private partnership that helps new and small businesses obtain bank financing. It allows the borrower, the financial institution and the Ohio Department of Development to contribute a specified percentage of the loan amount to the Program Reserve Account, which provides added security and enables banks to provide loans to firms that may not otherwise qualify.
Within the 19th Ohio House District, two participants in the Capital Access Loan Program—Midwest Documentation, Inc. and Penial Ethiopian Evangelical Church—have effectively created and retained jobs at a very minimal state cost.
“It is encouraging in these economic times that companies are taking advantage of the Capital Access Loan Program,” said Gonzales. “These companies are demonstrating that there is help available for the new and small business owner to grow and be vital to the future of Ohio.”
To date, this loan program has created and retained 93 jobs within the 19th District.
Ohio Shows the Way on Death Tax Repeal
July 2, 2011
Ohio Gov. John Kasich made good on a major campaign promise Thursday, killing the state's estate tax in the process of enacting the 2012-13 budget. He also managed to kill off an $8 billion deficit without raising taxes—a model for fiscally squeezed states nationwide.
The end of the death tax, which goes into effect on Jan. 1, 2013, will help stop the hemorrhaging of small businesses and jobs from the Buckeye State. Ohioans had suffered long enough with the levy on inheritances, with a 6% tax on personal and business assets above the $338,333 exemption, up to $500,000, and a 7% tax on assets above $500,000. The death tax was a major reason that business, jobs and capital have fled the state.
Ohio's nearly 200,000 small businesses employ some 2.3 million people—about half the civilian labor force—and support annual payrolls exceeding $77 billion. But businesses and jobs have been leaving Ohio for years, many to the 28 states without a death tax.
The stampede for the exits comes as no surprise: Dying in Ohio was expensive. When federal (35% on all assets exceeding $5 million) and state taxes are combined, an Ohio family with a successful business could lose up to 40% of everything they had worked for.
While some opponents of repeal defend the death tax on the grounds that the state, like the federal government, needs the revenue, the truth is it yielded little revenue—around 2% of the average local jurisdiction's revenues in Ohio, less than two-tenths of 1% for Columbus, and around 1% for Washington.
What estate taxes do produce is flight. Business owners flee high-tax states for low-tax or no-tax states, and wealthy people dodge the entire matter by hiring expensive lawyers who establish trusts, foundations and other devices that protect them from the tax man.
The owners of family businesses and family farms typically can't afford such games. For all practical purposes, they're cash-poor, with most of their capital—and net worth—tied up in land, buildings, equipment, inventory and payroll.
The story of Dave Johnson—president of the 100-year-old, fourth-generation family-owned business, Summitville Tiles, Inc. (a ceramic tile and brick manufacturer whose products festoon both the roof of the White House and the floors of McDonald's restaurants around the world)—is typical.
Mr. Johnson, like many other small to mid-sized manufacturers, struggles to keep his business competitive in the face of the construction-industry meltdown. It hasn't been easy. And the estate tax is another worry. If he didn't have to contend with it, he could invest in more machinery, technology and employees—confident that the business would endure into the next generation.
It's much the same elsewhere. A 2008 study by the Connecticut Department of Revenue Services, for example, named the estate tax the primary reason wealthy residents left the state and, in many cases, took their businesses with them.
The study also showed, if further confirmation were needed, that the economies of states without estate taxes grew 50% faster, and created nearly twice as many jobs, than states with death taxes.
Against this backdrop, a two-year volunteer grass-roots campaign took hold in Ohio, garnering 85,000 petition signers for repeal of the estate tax and uniting a coalition that called on Ohio lawmakers to end the destructive tax. With this support and a state legislature committed to increasing jobs and local revenues over the long haul, the failed status quo was defeated.
Not surprisingly, public officials in some of Ohio's wealthiest cities were the most vocal opponents of repeal. Because a portion of Ohio's estate tax revenue goes to the locality where the decedent lived, wealthier jurisdictions received the bulk of the revenue. The estate tax might seem a boon for rich communities that want a new park or pool, but it offered little to poorer jurisdictions.
What most of the critics don't understand is that repeal of the estate tax ultimately means more tax dollars, not fewer. A 2009 Duquesne University study found that state and local governments lost some $3 in non-estate tax revenues for every $1 increase in federal estate tax revenue. Overall, the study calculated, eliminating the federal estate tax would boost state and local tax revenues by approximately $9.3 billion annually. With Ohio business owners now able to focus their energy and resources on growth and success, rather than on the survival of their businesses after they die, we can expect them to invest more money in those 200,000 businesses, hire more workers, and increase purchases—all of which will help increase the tax base.
Ohio's repeal of its estate tax, after nearly 120 years, may not lead to an avalanche of repeal activities around the country, but it's already having a positive effect. Last month, for example, Maine lawmakers doubled their estate tax exemption to $2 million from $1 million. Oregon lawmakers rejected a proposal to increase their estate tax, as did North Carolina. Momentum is moving in the right direction.
State governments may need tax revenue, but they don't need taxes that destroy wealth and drive away job-creating business owners.
Mr. Batchelder is speaker of the Ohio House of Representatives. Mr. Boyle is the co-founder of Citizens United to End Ohio's Estate Tax. Mr. Patten is president of the American Family Business Institute in Washington, D.C.
They come here to make a living and to raise their families. From day to day, we go about our lives, going in and out of our storefronts without a thought as to how fortunate we are. We sometimes take for granted the many small businesses in our community--the places we go to grab a bite to eat, to get a haircut, or to buy some odds-and-ends items that we can't go without.
These are the places that are the backbone of our economy. Seventy percent of all jobs are created by small businesses. And in Ohio, small businesses play an even greater impact than in many other states. If we want to see Ohio's economy develop and get our people working again, the best place to start is by bolstering our small businesses.
Just this week, I joined together with members of the House Economic and Small Business Development Committee to highlight the ways that government can allow businesses to grow, create jobs and make a profit. The House began this effort by passing a bill to create JobsOhio, a nonprofit, private entity that will aggressively address the needs of businesses without the hindrance of government bureaucracy getting in the way. That's also why we have passed the Common Sense Initiative, an office tasked with ensuring that government regulations and red tape won't negatively affect business development and job creation in our state.
While we continue to work on a number of pieces of legislation that will benefit Ohio business by keeping tax rates down, reducing state spending and changing areas of law that just don't pass the common-sense test, we recognize that there's much more we can still do.
This summer, House Republicans will continue to solicit feedback from business owners around the state on what government should or shouldn't do to help their businesses grow. Having toured many of these types of businesses throughout my years as a legislator, I know that issues are always popping up that add to the list of challenges they are facing.
It's my hope that at the conclusion of the summer, we will introduce a whole host of bold, innovative solutions for the small businesses of this state. With all they do to make Ohio a better place, I see it as fitting for the state government to make efforts that will help to better them. In many cases, it has been a lifelong dream of Ohioans to own and operate these establishments. Far be it from this government to squash that dream.
Batchelder, House Republicans team up with NFIB to boost Ohio’s small businesses, create jobs
Today, Speaker of the Ohio House William G. Batchelder (R-Medina) and members of the House Economic and Small Business Development Committee joined representatives of the National Federation of Independent Business (NFIB) at a press conference for Small Business Day at the Capitol.
The legislators took the opportunity to discuss House Republican efforts to bolster small business growth and economic development in Ohio. Additionally, the caucus revealed plans to continue to reach out within their communities to gain further insight into the ways Ohio’s government can positively impact business growth.
“Seventy percent of all jobs are created by small businesses, which is why our caucus is committed to a job-creation agenda and legislation that will improve our small business climate,” Batchelder said. “This General Assembly has been a great opportunity to really put our heads together and move forward on legislation to help Ohio’s businesses and families. Ohio’s business climate should always be at the forefront of our minds in every decision we make and every bill we pass. I think our track record of pro-business bills shows the strength of that commitment.”
Representative Nan Baker (R-Westlake), chairwoman of the Economic and Small Business Development Committee, discussed pro-business bills that have passed from the committee or are currently being considered for passage by the committee. She also announced that the Republican committee members will be soliciting feedback throughout the summer from business owners within their districts. Members will seek input on what is working at the state level and what the government can do to help small business owners to create jobs.
“My colleagues and I have continued to reach out to the small business owners within our districts during our time in the House, and we will be intensifying the effort this summer,” said Baker. “As a business owner for 30 years, I understand how important it is for the government to allow businesses to grow, create jobs and make a profit. I am very pleased that we are able to partner with NFIB in the effort to help Ohio’s small businesses succeed.”
Since the beginning of the 129th General Assembly, the House Republican Caucus has diligently worked to encourage job creation and economic development within the state of Ohio. The first bill to pass from the House was House Bill 1, which created JobsOhio to function as a lean, responsive economic development entity that would aggressively seek out opportunities for growth and investment.
Since the passage of H.B. 1 from the Ohio House, Speaker Batchelder and the House Republicans have worked on additional pieces of legislation that aim to improve Ohio’s business climate and reduce the unnecessary regulations that often strangle small businesses. Among these bills are measures to:
• Save families and businesses approximately $48.5 million over the next three fiscal years and offer job-retention tax credits for businesses that have received offers to relocate in other states (H.B. 58)
• Reduce wasteful spending and hold down tax rates by conducting performance audits of certain state agencies (H.B. 2)
• Adopt the Common Sense Initiative Office to evaluate all regulations and whether a particular mandate has an adverse effect on businesses (H.B. 94/S.B. 2)
• Improve Ohio’s business climate by creating an online titling program for commercial vehicles and easing restrictions on the transportation of Ohio’s farm commodities and agricultural products (H.B. 114)
• Minimize local tax burdens by giving local government other options than tax hikes to balance their budgets (S.B. 5)
• Eliminate the death tax to support small business owners, farmers, homeowners and retirees (H.B. 153)
“I want to thank Speaker Batchelder and the many legislators who are working to make Ohio a stronger, safer and easier place to build a business and create jobs,” said Vice President/Executive Director of NFIB/Ohio Roger R. Geiger. “They made regulatory reform legislation a priority for this general assembly because they knew it was a priority for Ohio’s small businesses. Their budgeting plans hold small businesses harmless by maintaining the promised income tax reduction and providing an end-date for the harmful estate tax. Their attention to the needs of Ohio’s entrepreneurs will go a long way toward putting Ohio back on a path to prosperity.”
The House Republican Caucus will continue to support Ohio’s small business owners and ensure that the state government does not hinder local businesses.
To view the House Economic and Small Business Development Committee’s Facebook page, please follow the link: www.facebook.com/ohiohousegopmeansbusiness
Reps. Grossman, Hottinger applaud estate tax repeal provision as part of budget legislation
Assistant House Majority Whip Cheryl Grossman (R-Grove City) and State Representative Jay Hottinger (R-Newark) today announced their support of a provision in Substitute House Bill 153—the state budget bill—to eliminate the Ohio estate tax, also known as the “death tax.” If passed, it will take effect on January 1, 2013 to give local governments time to adjust to this change in state law. Grossman and Hottinger were the original sponsors of legislation—House Bill 3—during the current General Assembly that was aimed at abolishing the tax.
This change to the budget legislation, which was put in place through a larger package of amendments accepted by the House Finance Committee today, will allow small business owners, farmers and homeowners to rightfully pass on their assets to their heirs without fear of being taxed twice on their life’s savings, which will make Ohio more competitive for entrepreneurial growth and investment.
“The elimination of the estate tax is just one of the many ways we are looking to improve Ohio’s economic outlook through the state operating budget,” said Rep. Grossman. “This change will lead to a more competitive Ohio, and I think it is a very welcoming sign for those who are looking to do business and enjoy retirement within our state’s borders. It is unfortunate the number of great Ohioans who have left our state in the past because of this unfair tax.”
Ohio currently has the lowest estate tax exemption in the United States. Only $338,333 of the taxable estate is exempt from the estate tax, compared to an average exemption amount of approximately $1.7 million for other states that have an estate tax.
“I’m thrilled to finally be ending this unnecessary tax that takes direct aim at our state’s middle class,” said Rep. Hottinger. “The budget bill is not only about controlling our state spending, but it is about restoring fairness to hard-working Ohioans who want to live and work in a fair and competitive environment. Ending this tax will have a tremendous effect on job creation and chart a sustainable path forward in the state of Ohio.”
Substitute House Bill 153 will continue to receive testimony and debate within the House Finance and Appropriations Committee
In today’s fast-paced world, the most successful businesses are those that take advantage of every available resource. To achieve a competitive edge, Ohio’s small businesses need to be aware of the resources available to them through their state government. Ohio is at a crossroads when it comes to business growth and job creation, and our economic prosperity largely hinges on the success of our small businesses.Here in the state legislature, my colleagues and I are actively looking for ways to foster business development and expansion. Sometimes, this can be as simple as consolidating and organizing existing government resources. To this end, in the previous General Assembly, Representative Peter Stautberg and I introduced legislation that would create a small business resource center on the Ohio Department of Development’s website.
Voices from the small business community came to us with this idea, citing the difficulty they had in finding information relevant to their field of work. As a small business owner for more than 30 years, I know first-hand the frustration that comes with trying to understand government requirements, permits and licenses. In addition, many small business owners are not even aware of the many government opportunities and incentives open to them. There is a clear need for a simple, user-friendly resource that addresses these queries.
The small business community stands to benefit immensely from the suggestions made on the Ohio Small Business Resource Center. Recognizing the unfilled need, Representative Mike Dovilla and I re-introduced the legislation as House Bill 144 in the current Legislature. Specifically, the website will function as a location to furnish small businesses with the tools and information they need to grow and prosper. The site will feature information on a variety of business-related topics, including steps to starting a small business, loan and financing opportunities, advocacy opportunities, and required licenses and permits.
With House Bill 144, small business resources will be designed to navigate easily and efficiently access the information they need to grow and develop. Business growth does not only signal success for business owners, but also for their employees and Ohio’s economy at large. Economic development, in turn, boosts job creation, and Ohio needs to take advantage of any opportunity to induce this sort of positive growth in the business sector.
During this General Assembly, one of my primary concerns is growing Ohio’s job market and strengthening our economic base. I will continue to be an advocate for small businesses because I know that they are the key to revitalizing our state economy and ushering in a future of economic innovation and financial stability. Legislation like House Bill 144, which nourishes our small business sector, will be central in this effort.
Your input is invaluable to me as I move forward in this legislative session. If you have any questions or concerns about Ohio’s small businesses, please do not hesitate to contact my office. As I continue to say, “It’s all about jobs!”
Local business is a cornerstone to the economy of our community. Without its proliferation, the delicate economic recovery we have been witnessing would come to a standstill. That makes it absolutely vital to the well being of Ohio’s economy that the state legislature takes every step necessary to help Ohio businesses flourish. Unnecessary, cumbersome regulations must not halt, hinder, or interfere with the growth of private sector businesses. This is why I have chosen to stand behind Senate Bill 2 and House Bill 94, which will together ensure that local businesses have every opportunity to grow and thrive in our community by revising and removing any regulations that have stopped this progress in the past.
For years Ohio has had in place stringent, inhibiting regulations that have put unnecessary strain on local business, small and large. Too often, these regulations were applied arbitrarily and inconsistently, making it excessively difficult to start and maintain a business in a reasonable amount of time. Senate Bill 2 and House Bill 94 assure that these cumbersome, excessive regulations that hindered the growth of our local economy for so many years will finally be removed and local businesses can begin to grow with unprecedented speed and efficiency.
The passage of this legislation has created the Common Sense Initiative Office under the office of the governor. The CSI Office’s main goal is to review any regulatory practices within the realm of local business that may have an adverse effect on the procedure of a particular business or the conception and foundation of a new one. Funded with existing revenue and no new taxes, the CSI Office will be responsible for weighing the value of any existing regulation or proposed regulation against its potential harm on local business, changing them as needed to help foster the growth of businesses in our community. This process guarantees that the state legislature will continue to uphold regulations that are necessary and practical, while weeding out any that hinder private sector business operations.
Within the CSI Office, there will be a Small Business Advisory Council established to cater to the needs of small businesses in dealing with government regulations. Since small businesses often do not have access to the same legal resources as larger corporations, it is usually much harder for them to have their voices heard on the legislative forum. Senate Bill 2 and House Bill 94 will give small businesses unprecedented access to the legislature, effectively helping them blossom and thrive in the competitive business arena and providing a much-needed boost to our local economy.
Furthermore, the passage of the Common Sense Initiative will allow more access to the state legislature for public input. This ensures that the most pertinent, pressing issues are dealt with and any particularly concerning business regulations are handled quickly and effectively.
Passing House Bill 94 has created a massive wealth of new opportunities for businesses in Ohio to start, grow, and succeed in bringing newfound jobs and prosperity to our state. Without the inhibiting, ineffective business regulations of the past, new businesses will surely begin to form in Ohio, boosting our economic recovery and giving us a promising future for generations to come.
