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Proposed bill that would allow open containers in certain areas has detractors — P. 5 SPECIAL SECTION: Crain’s Cleveland honors some of the region’s top CIOs — Pages 15-22
Many small biz owners say plan’s positives are negated by hikes that would be costly By JAY MILLER jmiller@crain.com
You’d think small business owners would be jumping on the bandwagon to support a tax reform plan that broadly cuts the income tax and even exempts the owners of the smallest of businesses from paying any Ohio income tax. It hasn’t happened since Gov. John Kasich rolled out his budget proposal in February. The reason? While Kasich’s office says the plan would save the owners of 971,000 small businesses about $696 million in income taxes over two years, it asks for large chunks of that back in other tax increases that businesses would end up paying for. Broadly, Kasich’s two-year, $72.3 billion general revenue budget proposed a cut in the income tax for all taxpayers by an average of 23% over the two years. Beyond that, it exempts from the income tax all income for small business owners with gross receipts of less than $2 million annually. Those income tax reductions would reduce tax collections by $5.7 billion. But those cuts would be offset by nearly $5.2 billion in tax increases, producing net tax cuts of only $523 million. While a number of business owners and trade association representatives are offering support of the
governor’s plan, a large segment of the small business community, judging from interviews and from testimony before the Ohio House Ways and Means committee, sees the increases in other taxes as negating the income tax cut. Kasich spokesman Rob Nichols did not respond by presstime last Friday, April 3, to requests for comment. Even the Ohio chapter of the National Federation of Independent Businesses, generally a supporter of business tax cuts, isn’t supporting this bill. Instead, it’s neutral. Roger Geiger, vice president and executive director of the 25,000-member NFIB/Ohio, said the group has supported Kasich’s past income tax cuts and might have supported this most recent cut had it been a standalone cut. “If that were it, we’d be ecstatic with what he’s doing,” Geiger said. “The problem is he raises about 13 different taxes, and those are taxes many small businesses pay.” In particular, Geiger referred to the increase in the commercial activity tax, or CAT, which is levied against gross receipts regardless of whether a business is profitable. The Kasich plan increases the CAT to 0.32% from 0.26%. Those increases affect retailers the hardest. “We are a high sales, low margin See TAX, page 26
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Vol. 36, No. 14, Entire contents © 2015 by Crain Communications Inc.
Hotels digging local landscape Once-slow market has been booming in region By STAN BULLARD sbullard@crain.com
ADDING IT UP:
Suburban hotel development in Northeast Ohio, typically measured in one or two a year, is kicking into a much higher gear. More than 10 hotels are under construction or scheduled to start this spring in the region. Four of those are rising or are scheduled to go up this year in western Cleveland suburbs and Lorain County. Along with the just-completed Cambria Inn in Avon, they are the first new West Side hotels since the 1990s. Capturing resurgent business travel and growing leisure travel is the objective for this batch of inns, but the looming Republican National Convention in 2016 is giving developers an extra reason to push their projects through. Next to I-77 immediately north of Rockside Road in Independence, a line of trees
1,078 Rooms/suites proposed or under construction
$135M Investment*
See HOTELS, page 24 MAP: GOOGLE MAPS, FACTBOX: *USING INDUSTRY ESTIMATES (COST PER KEY), CRAIN’S RESEARCH
Governor’s tax cuts are painful in other areas