Ohio's new tax commissioner charts course for Ohio.

• Author: Spieker, Sandra L.
• Position: Q&A - Interview

Stepping up to the post of Ohio Tax Commissioner is Richard Levin, a man who started his career with the Ohio Department of Taxation (ODT) in 1971. He faces challenges in maintaining the momentum of tax reform enacted in 2005, along with following stringent spending priorities and restrictions. Top that with a department using more than two dozen different computer programs, and you have a man steering into choppy waters.

Catalyst editorial staff sat down with Levin to discuss what he sees as the major issues facing Ohio and the Department of Taxation over the next few years.

Q: What do you see as Ohio's strengths, both in terms of our tax structure and the state's overall business climate?

Ohio's tax structure is in a transition phase right now that will result in a stronger tax system and improved business climate. The tax reform enacted in the 2005 budget bill (H.B. 66) had four major elements to be phased in over 4-5 years:

1. Gradual repeal of the tangible personal property tax (TPPT) on inventories and machinery.

2. Gradual repeal of the corporation franchise tax on corporate profits.

3. A 21% reduction across the board in the state personal income tax.

4. Gradual phase-in of the commercial activities tax (CAT) to replace some of the revenue lost from the other reductions.

When Governor Strickland took office midway through this tax reform process, he made a clear and conscious decision to follow through with the tax reduction and reform package. The goal is to improve the tax system and Ohio's economy. Also, taxpayers, especially business taxpayers, are looking for predictably and stability in the tax system. By continuing and building on the most sweeping tax reform in three decades, we hope to deliver that stable and predictable tax system.

Although these sweeping tax reforms and reductions are expected to bolster economic growth in the long-term, their short-term impact will be costly to the pending state bi-annual budget. It means there will be almost no revenue growth; revenue will be virtually flat So the state government will have to tighten its belt and constrain spending programs.

Q: What are your reactions to the recent Tax Foundation study which ranked Ohio as third worst in tax rates?

I agree with Gov. Taft's tax commissioner, who said the results are bogus. I'm quite familiar with that study because my background is in tax research. The study doesn't represent impartial research in that the Tax Foundation will not explain...