Kasich's plans include overhauling Ohio's tax code to reduce rates for sales, income and small-business taxes; broadening the sale tax base to include a laundry list of new services; and raising the severance tax on high-volume oil and gas drillers swarming the eastern half of the state.
Kasich also encouraged lawmakers to support his decision to expand Medicaid. The state would see $2.4 billion from Washington to cover those newly eligible for Medicaid over the next two years beginning in July. Kasich said the action is vital to help Ohio's safety net for the poor, and particularly for the mentally ill.
"Some of them live under bridges, some of them live on streets, some of them are in our jails tonight," he said in a moment that hushed the crowd.
He pleaded with lawmakers, some from his own party who opposed the federal health care mandate and oppose expanded government, to examine their consciences and keep an open mind.
The governor's pitch to expand Medicaid has split members.
House Democratic Leader Armond Budish said the state needed to make the move to extend coverage, and Democrats were open to working with the administration on the proposal.
State Rep. Brian Hill, a Zanesville Republican, said he hasn't made up his mind on the idea.
"I think it's something we need to evaluate," he said after the speech. "The governor made some compelling arguments."
Kasich also used the speech to defend the merits of his new school-funding formula, which delivers $1.2 billion more to K-12 education by first raising base funding, then providing add-ons for the poor, disabled, gifted and other categories of students. He called it an objective plan that applies equally to all districts based on their property tax wealth, residents' income and individual characteristics of students they serve.
All these policies are intended to create jobs, Kasich said — something he characterized as "our greatest moral purpose." In Lima, a city with drastically reduced unemployment and 3,200 new private-sector jobs, Kasich found a "shining example" for the state.
Despite the protests of a handful of demonstrators outside the speech, he said his tax and spending changes aren't about political leanings — they're practical.
"This is not ideology. This is just the way the world works," he said.