Last week, Fanatics, an online sports merchandise company, announced it would be creating hundreds of new jobs in its Frazeysburg facility, located about a half-hour north of Zanesville. I was happy to join Governor John Kasich and State Senator Troy Balderson in welcoming this news. The announcement was another positive sign for our area, and for the state at large, which has experienced the creation of more than 174,000 private sector jobs in the past couple of years.
The policies that have been put in place during that timeframe are working to help Ohio become more competitive nationally in attracting job-creators to come to our state. Earlier this summer, I believe the state legislature took another step forward in putting in place tax reforms that will further encourage business growth.
On September 1st, the tax changes included in the two-year state operating budget officially went into effect. Over the course of the next three years, Ohio’s businesses and individuals will experience tax relief totaling about $2.7 billion. Starting this year, individuals will see an 8.5-percent reduction in income tax, which will move up to 10 percent by 2016. Businesses will have their income taxes cut by half on their first $250,000 of annual income.
What is important to keep in mind is that, not only do these tax changes help businesses already located in Ohio, but they also make Ohio’s overall tax structure more attractive to businesses from other states that might be looking to relocate. Just like the free market, our state is in competition with 49 other states, all with different things to offer but all looking to better their states’ economies. Competition among businesses is good for consumers, and competition among states is good for businesses.
Additionally, you have by now heard that the state sales tax has increased from 5.5 percent to 5.75 percent, which equates to an additional $2.50 of tax on top of every $1,000 spent. While I would have preferred to have no increase in the sales tax in exchange for less overall spending, Ohio’s sales tax is still lower than half of all other states. In addition, the sales tax is not assessed to items like groceries or medicine.
The recent job creation in Frazeysburg is great news for the people of Muskingum County, and I am confident that the net $2.7 billion in tax relief will add to Ohio’s momentum in creating more jobs in the future.