Governor’s Budget Ignores Troubled Past

Gov. John Kasich released a more moderate budget proposal for the 2014 and 2015 fiscal years, but it fails to make up for the governor’s history of massive spending cuts and the state’s faulty social welfare programs.

Feb 6, 2013 at 10:33 am

Facing an election in 2014, Gov. John Kasich released a more moderate budget proposal for the 2014 and 2015 fiscal years, but the budget fails to make up for the governor’s history of massive spending cuts and the state’s faulty social welfare programs.

The Kasich administration proudly touted its budget to the media on Feb. 4, pointing to the Medicaid expansion, income tax cuts, education reform and Ohio Turnpike plan. Without much context, Kasich’s approach seems moderate — a surprisingly levelheaded approach from a Republican governor who’s fiercely criticized Democrats and Obamacare in the past.

But with context, the budget leaves a lot to be desired. City Council member P.G. Sittenfeld was one of the first to point out the biggest flaw in the budget in a released statement: “At a time when local governments around the state are being forced to slash basic services, lay off safety personnel, raise taxes and sell off assets just to stay afloat, it’s out of touch for Gov. Kasich not to reverse his raid on our local government fund.”

Kasich’s 2012-2013 budget slashed funding for education and local governments. Policy Matters Ohio and Innovation Ohio estimate the cuts added up to $2.8 billion statewide, with $222 million of those cuts affecting Hamilton County. In their defense, Kasich and his allies usually say the state had to close an $8 billion deficit, but that’s little comfort to cities and schools.

City Manager Milton Dohoney’s 2013 budget plan highlighted the huge cuts to explain Cincinnati’s deficit. According to the city manager’s numbers, the big cuts resulted in $22.2 million less revenue for the city — nearly two-thirds of the estimated $34 million deficit.

These are the kind of big cuts that lead to parking privatization, smaller police forces and weakened city services. As Dohoney pointed out in a Nov. 26 press conference, balancing the 2013 city budget would have been considerably easier if it wasn’t for state budget cuts.

The Local Government Fund isn’t the only state program facing serious financial concerns. A Nov. 7 report from Policy Matters found Ohio is one of the worst states for unemployment insurance. Since 2001, Ohio’s unemployed have received fewer benefits than the national average. In 2011, 63 percent of Ohioans who filed unemployment claims received payments, while 71 percent of claimants around the country got benefits.

As Zach Schiller of Policy Matters explained to CityBeat in November, these are minimal benefits that help people stay afloat during tough times: “Three-hundred dollars a week, you’re not going to take a jet to Tahiti and spend time on the beach with that kind of money. So, in fact, what people do with their $300 a week is spend it on necessities and in their communities.”

The benefits also act as automatic stabilizers — programs that automatically stimulate the economy during a slump. By ensuring the unemployed have some cash in hand while looking for a job, unemployment insurance minimizes any decreases in spending — establishing a softer landing for a falling economy.

The importance of a solid unemployment insurance program was highlighted by 2012’s “fiscal cliff” discussion. In a May 2012 report, the Congressional Budget Office (CBO), the nonpartisan agency that measures the effect of federal policy, said the repeal of extended emergency unemployment benefits would have lowered spending by $26 billion in the 2013 fiscal year. 

Taken in context, Kasich’s budget programs aren’t impressive progressive strides; they’re small steps forward that fail to make up for the many steps backward in the last state budget.

Other News and Stuff

More bad news came out of the state’s recently privatized prison last week. A bout of violence on Feb. 1 forced Corrections Corporation of America, which owns the prison, to call in Ohio’s special response team, according to Plunderbund. Two teams from the Ohio Department of Correction and Rehabilitation were dispatched. Privatizing prisons was a big part of Kasich’s 2012-2013 budget.

Court challenges or not, Kasich is moving ahead with funding JobsOhio. On Feb. 1, the state announced it had completed a transfer of $500 million in state liquor funds to the private, nonprofit agency. The agency was established by Kasich to encourage job creation, but the Ohio Supreme Court recently agreed to take up ProgressOhio’s constitutional challenge of JobsOhio.

CONTACT GERMAN LOPEZ: [email protected] or @germanrlopez