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Keeping the state budget balanced

The budget proposal unveiled by Gov. John Kasich Monday is a balancing act.

Yes, that is required, because the state must have a balanced budget. That’s an equilibrium the governor attempts to seek with a combination of tax increases — and expansions — and cuts in spending.

But Kasich’s plan also seeks to bolster revenues while minimizing the impact of tax hikes on the state’s economy.

Kasich wants to raise the state sales tax a half-percent.  The governor also would have more services, such as cable TV, be subject to that tax.

Plus, taxes would go up for smokers and those who drink alcohol. And a new premium plan for Medicaid would add $200 million to the budget.

Meanwhile, Ohioans would get a 17-percent cut in income tax, and college students (and/or their parents) would see a two-year freeze on tuition and fees.

Kasich has good reason to be cautious. State tax revenues were $88 million below projections in November, and lagged predictions by $99 million in December. Meanwhile, Ohio had three straight months of job losses.

Thus, the $66.9 billion spending plan doesn’t just seek to balance the budget, but to react to economic conditions without making them worse.

The economic impact is a difficult force to harmonize, as is the influence of state legislators, who may begin weighing the plan this week.

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