And, of course, my wife, Karen Kasich. Sweetie, would you stand and say hi?
I believe that jobs are our greatest moral purpose. And when I say it, I have a couple of thoughts in my head, a couple of videos that run through my mind. Think of a dad who goes home one day. Mom's at the dinner table. Maybe she just got home from work. Kids are gathered around. Dad says to the family, "I've got some news for you. I lost my job today."
Maybe the kids don't all understand it. Maybe one of them begins to cry. Think about the mom. Single mom, dad ran out on her, two or three kids, struggling every day, she hears word of layoffs. She says, "How am I going to make it?" She doesn't tell the kids.
Let's switch that picture just for a moment.
Put that same family at that table, and dad comes home, and he sits with his family. Says, "Honey, kids, I got a job today." And the kids start to squeal and clap.
Or the single mom who gets the oldest daughter and takes her up to her bedroom and said, "You know, honey, I thought it looked pretty bad for us, but I got a promotion. We're going to make more money. Things are going to be better for our family."
That's what I think about every day when I get up, and my mission has been to create a growing economy that allows people to realize their hopes and their dreams and their purposes. Because it's through our work that some of our life has meaning.
It's about our mission. It's about the purposes that the Lord set out for us.
And my mission is not just to give some people work. My mission is to make sure that everybody in our state has the chance to realize their hopes and dreams and that their families can do much better. Because it's not good enough for some to do well while we leave others behind. And so we must work every day to make sure that everyone has a chance in Ohio.
When I came into office, I came in and built a team of really great people, including members of the Assembly that would put Ohio to work and reclaim our rightful place in the United States of America as one of the great states. Ladies and gentlemen, tonight I can tell you with great confidence we are succeeding here in Ohio in turning our state around, and it is fantastic.
Today we are up 120,400 jobs — 120,400 families that have a better life. We're No. 1 — No. 1 — in job creation in the Midwest and No. 6 in job creation in the United States of America.
Our budget is balanced. In two and a half years at the end of this fiscal year — this is pretty breathtaking — we have gone from 89 cents in our rainy-day fund to a $1.9 billion surplus.
And our credit outlook has improved. When they downgraded countries all over the world — in fact, even downgraded the United States of America — Ohio's credit outlook has improved.
And as you know, Lima and Allen County, right where we are tonight, of course, are shining examples of a community that is coming back strong. Thanks to the hard work of the people here, thanks to their creativity, and you've learned about it today from manufacturing to advance manufacturing to the ability to move things through this area because of their strategic location. We're doing better here in Allen County. The unemployment rate has fallen from 10.8 percent to 7 percent in the past two years, and right here in Lima, 2,200 new private-sector jobs have been created.
Lima is winning, and Ohio is winning.
This took a lot of effort; it took a special partnership with you, the General Assembly. The first thing we had to do was restore confidence and respect in our state. I mean, we had to balance the budget. No more smoke and mirrors. No more moving things around. We needed to have a structural balance, and it had to be done for no other reason than common sense.
Hey, folks, I know many people have lost their way in Washington, D.C., but you can never spend more than what you take in. Overtime, it makes no sense. If a state can't manage its money — if it can't balance its budget — what can it manage? How can people have confidence in it if we can't get the common sense things right?
Well, in the process of balancing this budget, I hope you all note, we didn't just cut, we reengineered many of our programs. Thanks to the great work of Greg Moody and John McCarthy, we reformed Medicaid.
For 25 years, this state wanted Mom and Dad to have the resources to stay in their own homes if they were able and not be forced into a nursing home, where they could stay in their own homes, where they could be more independent, more healthy, more independent at a much lower cost. For 25 years, this was, this effort was made to fix this. We did it, didn't we? We got it done. And now Mom and Dad can stay in their own homes, and they can be healthier and more independent. We won that battle.
We moved to coordinate care. You know, 4 percent of Medicaid recipients drive over 50 percent of the cost. Their care was not coordinated. It didn't make much sense to them. And you know how complicated it is for all of us to be in a position to be able to understand health care and the ins and outs. We're now coordinating the health care of that 4 percent so their care is not just coordinated but logical and where they are healthier. And the whole country now is looking at our program.
We have slowed the growth of Medicaid to 3.2 percent — unthinkable in many places in this country — and we're now one of the great leaders in the country for Medicaid reform. Other states are looking at what we have done in Ohio to not cut people off, not to reduce their benefits, but to make the system work better. And that's the way you move to balance a budget.
We've also reengineered state government. We've used the private-sector techniques of Six Sigma, Kaizen and many other reforms.
Joe Testa, over at the tax department, Joe figured out folks here in Allen County and across the state who are watching, that many businesses have been over paying their tax bill. And you know what the government did? Never told them. Kept their money in a drawer somewhere. Kept the secret from them because after four years, that money became the property of the state of Ohio.
Well, Joe figured it out through his team's efforts, and we have returned millions of dollars to over 3,500 businesses who had overpaid their taxes, and Joe is just getting started. It is time that the government treat the taxpayers with respect and help businesses when they pay their bills.
We've reduced the number of state employees to the lowest level in 30 years, and you know how we've done it? Teamwork. We don't need to fill all the positions. We can get people to think differently. We have a way to go on all that, but we're making progress.
And we needed to lower taxes, and we needed to make our state more competitive. Ladies and gentlemen, this is not ideology; this is just the way the world works. You know, it is necessary to grow an economy and to create jobs by reducing that income tax. I just want you to know, I talk to these CEOs all the time — I talk to them through in the state, and I talk to them around the country, and not long ago, I talked to them in other parts of the world — and when you tell them that you are reducing taxes and reducing the taxes on income, they get it. It sends a message and a signal that Ohio's open for business.
And at the same time we killed the death tax. The driver behind that: Bill Batchelder. And you know why? The heirs of our entrepreneurs — the owners of these small businesses and our great small farmers — they shouldn't have to sell the farm and sell the small businesses to pay the death tax for their parents who built something. They should be able to pass this on to next generation.
We also created JobsOhio because the government agency that was created 50 years ago for the purpose of business development, it became antiquated and it became slow. You know, in the 21st century you must move at the speed of business. You cannot move at the speed of the statute. You must be out there every day understanding what the job creators are saying, and JobsOhio has allowed us to think about defining our economy, and, in fact, we are.
Think about Ohio. When you leave Ohio, you say to people, "What do they do in Ohio?" Well, you know, they're all manufacturing. Well, we love manufacturing or agriculture, we love farming, but JobsOhio has led us begin to think about things like bio-health, automotive, advanced manufacturing, polymers and chemicals, financial services — No. 2 in property and casualty in the country. IT — there's nothing that's happening more exciting than in the area of IT. Aerospace, where we're now beginning to work in the Dayton area thinking about being able to fly unmanned vehicles. In the area of agribusiness and, of course, energy, which has us all excited, and logistics.
You see, if you have many different areas that you target, when one part of the economy goes down, it doesn't mean it sinks your state. And so JobsOhio has been able to work to diversify us, and it's clearly working. And now that we're funded, we think we're even going to get more out of Jobs Ohio than we've seen so far.
We also moved directly in the direction of common sense regulations. Mary Taylor — Mary, stand up — our lieutenant governor of the state of Ohio.
Mary's husband, Mary's husband is a small businessman. He knows about the regulations and how they can kill small businesses, particularly the smallest businesses that are really fragile. Mary runs the Common Sense Initiative.
And let's just talk about our philosophy in one area — oil and gas. We believe in having an environment where we can prosper the oil and gas industry, but we also believe that in the process of doing it, we cannot endanger people and we cannot endanger the environment. And if you use common sense, you, in fact, can protect the public safety. You, in fact, can protect the environment and you can create jobs, and we are doing it in Ohio. Thank you, Mary, for your efforts at bringing common sense.
For me, there was always something unique about Ohio, something special. I can't help but smile when I think about coming to Ohio as a kid, as a little boy, seeing Cleveland. Cleveland rocks. Literally.
Been to the Hall? Lake Erie. Every time I fly up there, I look at that lake and I say, boy, are we lucky to have that Lake Erie right here in Ohio. We've got to take better care of it and we have to tell people more about it.
You know, I loved Ohio then, but then my father took me to Columbus to visit Ohio State University. A lot of dads, a lot of moms took their kids to visit Ohio State. I fell in love. You know, I sensed Ohio's excitement then, I felt its opportunity. I knew Ohio was going to be my home, and nobody was going to drag me away from this place because it's just so, so awesome.
But, folks, we have all seen our state drift over time. We've seen it get old. We've seen it begin to misfire and fall behind. But like a great old home, I knew Ohio could be restored to its grandeur, to its greatness. You see, Ohio is a land of hope and opportunity — realize dreams for our families. We're safe, we're friendly, we're filled with the potential to pursue our passions. We take care of our neighbors. You know, Ohio is a place where we can work, contribute, build a better community. We can be a shining example of how when people get together, they can get it right. And not just for ourselves, but for our children, of course, most especially.
But, folks, the rebuilding has to continue. We can't rest on our gains. We haven't tapped all of our potential. There are too many challenges that haven't been met and we move forward with this vision in mind and therefore, we must continue to build our economy, continue to build the new and exciting 21st-century jobs, and we must rebuild our roads, and our highways, and our bridges. We must provide for our children the opportunities that we all had. We need to lift, we need to lift the poor, we need to lift the beleaguered, and we need to have America follow us because I think they're beginning to, and perhaps one day they may even join us here in the great state of Ohio.
This is our vision, and our budget is the next step in that vision, but I would ask all of you to keep your eyes focused on the mountaintop. Don't get distracted or discouraged by the twists or the turns or the detours along the road. I really believe our legacy depends on what we do.
You know, Ohio is getting it right and it's being noticed. As most of you know here and some that are watching may not know, I recently traveled to Davos, Switzerland, for the World Economic Forum. I really wasn't that excited about going until I got there because I had the chance to meet with scores of job creators, CEOs. You know, they all wanted to meet with me. And you know why? Because they couldn't figure out why we were figuring it out.
All over the world, things aren't working. There's so much dysfunction. There's so much falling apart, and they asked me one simple thing: How are you getting these jobs created? What are you folks doing in Ohio? And not only that, they're saying, "How can you go from 89 cents to a $2 billion surplus, from $8 billion in the hole to a surplus? How is it happening? Because this is something we have to pay attention to because we may want to come to Ohio."
It was so fantastic to be there and to be a person that could represent everyone here. I wish you were all there. Because we think some of them are going to come to Ohio. We think we do have them excited because of the work that all of us have done.
Well, what do we do now? Should we rest on our laurels? That's what most people think when you pull out of the depths of where we were — just, you know, kind of relax. Should we put the state on cruise control? Oh, I got another one for you — why don't we just spend the surplus? Things are good, just go ahead and, you know, take your foot off the gas. Well, we're going to keep our foot on the gas here in this administration, and we hope you will join us.
And when we look at the great companies around the world, companies that continue to innovate, continue to embrace change, companies that have leaders with vision — think about this, folks — the ones that are the most exciting in the world today: Apple, Cardinal Health, Amazon, Google, the Cleveland Clinic, IBM, and right here in Northwest Ohio, Marathon. These companies strive for change every day and the State of Ohio must do it as well.
We cannot rest on our laurels. These companies, the companies don't fear big ideas. We must not fear big ideas. We must embrace them. Oh, yeah, let's debate them. And that's the fun part of being in the government, debate them without the personal attack, debate them on the merits, but embrace them, because at the end of the day, big ideas, it will renew us, it will restore our youth, it will give us excitement.
We will have a spring in our step because big ideas renew people. The only thing that can stop us, ladies and gentlemen, is the fear of change, the fear of big ideas. Let's not go there. We're starting to hit on all cylinders.
Our program of innovation and common sense policies, we believe, does create success. Just like the first budget helped us to dig out of the hole and set the stage for growth, this allows us to shift into higher gear. Our budget is designed to come together and create jobs and let's not forget, to provide help for the most vulnerable.
First and foremost, Ohio's taxes are too high, and they are particularly punishing to our small businesses. We punish our small businesses with too high of taxes in our state.
Flat out, end of story. They are the engines of job creation in our state. And let me be clear, this is a comprehensive program to cut taxes by $1.4 billion, and I'll talk about a few of the specifics. We propose lowering the sales tax from 5 1/2 to 5 percent.