There is quite a bit of political posturing going on in Ohio concerning the April drop in unemployment to 5.7%. But the reality is that in one year, Ohio unemployment has dropped from 7.5% to 5.7%. Yes, too much of the gain has come from those leaving the workforce and too many people are unemployed but still counted as employed. But we are seeing improvement and that improvement should be encouraged.
At 12,600 new jobs added in April, the state ranks seventh in the country in April in the number of jobs added. Ohio is making tax changes which are intended to boost employment even higher. A number of years ago the state dropped its personal property taxes and corporate income tax in favor of a Commercial Activity Tax. The Commercial Activity Tax (CAT) is a broad-based tax on revenue at a low rate (currently 0.26% on gross receipts for most firms.) In addition, the state has been on a multiple year program to reduce the personal income tax rate, the state Senate just passed a bill reducing personal income tax rates by 10% in 2014 while increasing earned income tax credits for lower income workers. That bill will now go to committee with the House to work out differences, but the tone of both groups of legislators is pro-business and pro-job creation.
Small business owners will also benefit from the pending legislation. Under the Senate bill, small business owners would not be taxed on 75% of their business income up to $250,000.
Making Ohio a business-friendly state is part of the job growth strategy. For too many years Ohio has been an exporter of well-educated college graduates. The goal of this long-term tax strategy is to improve the employment situation for all Ohioans by encouraging business growth in the state. Business growth builds jobs and helps to retain our young well-educated talent.