Hagan Is in the Details

He might not have Gov. Bob Taft's political pedigree, but Democratic gubernatorial candidate Timothy Hagan, a former Cuyahoga County commissioner, has one thing Taft seems to lack -- a substantive p

He might not have Gov. Bob Taft's political pedigree, but Democratic gubernatorial candidate Timothy Hagan, a former Cuyahoga County commissioner, has one thing Taft seems to lack — a substantive plan for handling the challenges that confront Ohio.

These ideas are compiled into two separate but related plans: a 180-day attack on the state's current fiscal crisis and a four-year plan for returning Ohio to its former economic strength.

The first step of Hagan's 180-day plan, which begins Election Day, requires all department heads to use targeted reductions, not the across-the-board cuts favored by Taft, to create budgets that are 85 percent of 2003 appropriations, thereby saving $1 billion.

"Across-the-board cutting is the wrong way to look at these reductions," says Dennis Morgan, policy director for Hagan's campaign. "There are some programs that need to be cut and some that need to be protected."

Reforms to Ohio's Medicaid program would yield an additional $450 million. To save this hefty amount, state Medicaid rules would require the use of generic drugs whenever possible and the state would wield its buying power to negotiate lower prices, a tactic successfully adopted by several states.

Hagan has also targeted the skyrocketing long-term care costs paid by Medicaid.

"We pay for 12,000 empty nursing home beds every year," he says.

A state law reimburses nursing homes based on the number of beds, not patients.

His administration would propose changing payment procedures to reflect the number of patients served.

Hagan would also expand PASSPORT, a program that subsidizes the costs of in-home care for the elderly.

"It costs $1000 a month to keep a person at home, which is usually better for the person," Hagan says. "But it costs more than $4,000 a month to keep them in a nursing home."

Hagan plans to cut another $50 million from the budget by using state employees instead of external contractors when possible. Spending on the outsourcing of administrative tasks has nearly tripled in 10 years, from just over $200 million in 1991 to $609 million in 2001, with much of this increase occurring under Taft's administration, according to Policy Matters Ohio, a non-profit fiscal watchdog.

The installation of video lottery terminals at state racetracks will bring in a projected $500 million, while changes in cash management and the elimination of low priority programs would save another $168 million, according to Hagan. An additional $500 million reduction in the deficit would come from closing loopholes in the corporate tax structure.

"Corporations have been paying a progressively smaller share of the tax burden over the last 20 to 30 years," Morgan says. "In 1995, the corporate franchise tax was 9.8 percent of the general revenue fund. Last year it was 4.6 percent."

In late April 2003, Hagan would assess lawmakers' acceptance of his plan and announce to Ohioans any resulting deficit. He would then allow the public to decide, in a special election, between two revenue-raising packages.

With the budget balanced, Hagan would focus on education, the economy, taxes, healthcare, governmental ethics and the environment. When asked which of these is the most important, he answers without hesitation.

"Education ­ from kindergarten to graduate school," Hagan says. "We are 41st in the percentage of college graduates and 39th in the percentage of people with graduate degrees. And what does Taft do? He raises tuition."

In response to the recent budget catastrophe, Taft cut state support of higher education by hundreds of millions of dollars, forcing many state universities to hike tuition significantly. Hagan's first step to raise Ohio ranking would be to undo these cuts. He would also copy a successful Georgia program that promises scholarships to all high school students who graduate with at least a 3.0 grade average.

"That kind of program changes the dynamics of the high schools, and you keep kids in the state, which fuels the economy," Hagan says.

Hagan is also quick to decry the state's abysmal economic ranking.

"We're 48 out of 50 states in the number of new businesses," he says. "This year we beat Iowa and Kansas. Last year it was Louisiana and Mississippi. Can you imagine? We were once the industrial engine of the country."

Hagan plans to brighten the state's fiscal outlook by improving the preparedness of the workforce and providing resources to attract high-tech businesses.

To develop a skilled workforce, he would offer higher reimbursement rates to universities for students majoring in science, technology and engineering. Hagan would also reward universities for creating businesses from their research and would develop a network of university-based technology liaisons to promote their school's research.

Hagan would increase the size and scope of the state's existing technology development programs and support the creation of an agency charged with encouraging venture capital investment.

Another of the principles in Hagan's plan addresses the state's taxation system and, in doing so, responds to the Ohio Supreme Court's rulings that the state relies too heavily on property taxes to fund education.

When property taxes exceed a certain percentage of a household's income, Hagan's plan would give the household an income tax credit equal to the excess.

Hagan would also work to accomplish revenue stability by restoring and expanding the state's rainy day fund.

His health care principle would focus on primary care, preventive measures and wellness. Through changes in the way HMOs and the state reimburse practitioners, Hagan's plan establishes a "medical home," a primary care provider that a family could see consistently, regardless of their HMO provider.

The state's share of such measures would be funded by long-term savings reaped from the 180-day plan's Medicaid reforms, and the measure could cut Ohio's overall health costs, according to Morgan.

Hagan also supports mental health parity, which would require insurance companies to provide coverage for mental illnesses on par with that provided for physical illnesses.

The last of the five principles in Hagan's plan released as of this writing deals with governmental ethics. As an answer to the ethical problems that have plagued the Taft administration, Hagan supports full disclosure of all political donations. He would also ensure that all members of the administration file complete financial disclosure forms and would not allow the awarding of unbid contracts.

According to Morgan, Hagan's plan comes with one important caveat.

"Everything that's in our plan has to be done in the context of a balanced budget," Morgan says. "We're not going to propose major spending programs that are going to require us to come back for additional taxes, and we are not going to create another burden on the budget."

If Hagan is elected, his plan will face the double-barrels of a Republican general assembly and a massive budget deficit. But his is a viable plan that could accomplish much, even if it is only partially implemented. Hagan's ideas and Taft's complete lack of ideas should make for three interesting debates.

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