Kasich budget lacks a balanced approach
3/20/2011If any Ohio voters still didn't understand what they signed up for when they elected John Kasich last November, the governor's first budget removes all doubt.
In contrast to his vagueness on fiscal issues during the campaign — other than his no-tax pledge — the two-year budget Mr. Kasich proposed last week offers as clear a summary as you could want of his political ideology and outlook on governing.
The statement it makes isn't surprising. But it is unsettling in its reliance on slashing essential government services to the bone and selling off public assets, in lieu of a more-balanced approach.
"If you follow dogma to the point where you can't make a rational decision about whether something is working, where are you?" asks Brian Larson, a community organizer with One Ohio Now, a coalition of state advocacy groups. "You can't cut constantly — you need to invest for the future."
First, though, give the guv his props. He's right that public institutions across Ohio — state programs, local governments, school districts, universities — need to get more efficient. That's the only way they can limit the cost to taxpayers of providing services without fatally weakening the quality of, or access to, those services.
The governor's budget offers a shove in that direction. To cope with his cuts in state aid, local officials and their constituents — in our corner of the state and every other — will have to get over their us-against-them biases and work together more effectively to share public services and pool expenses.
Mr. Kasich is correct that school districts need to shed archaic work rules and rigid practices, such as the iron law of last-hired-first-fired for laying off teachers. His implicit argument is that school boards, including Toledo's, have been too intimidated by employee unions to make changes that would promote classroom choice, improvement, and accountability. So he's going to do that for them.
At the state level, the largest budget item — the Medicaid health-care program for poor, disabled, and infirm Ohioans — threatens to overwhelm all other areas of spending if it isn't reformed. If Mr. Kasich does what he says he can do to reward providers who focus on the quality and effectiveness of the medical care they offer rather than just its volume, more power to him.
The governor is just as right to look for alternatives to prison for nonviolent criminals and low-level drug offenders, and options other than nursing-home residence for people who truly could be cared for properly at home.
But such items form just part of the governor's budget package, and not the biggest part. There's a lot more to worry about in what he, with the assent of a compliant General Assembly, wants to do.
As in Washington, Mr. Kasich seeks to preserve tax cuts that disproportionately benefit Ohio's wealthiest taxpayers, while decimating services that primarily help less-advantaged citizens.
Delaying the final phase of the state income tax cut would be utterly reasonable, while public budgets remain so battered by Ohio's lousy economy. That step alone would solve 10 percent of the state's projected $8 billion revenue shortfall, within a general fund of $55.5 billion. Mr. Kasich won't hear of it.
Take it one step further: Jon Honeck, public policy director of the Center for Community Solutions in Cleveland, estimates that the state could close one-fourth of its budget gap by canceling the tax cut and restoring the state's top income-tax rate, paid by the richest households, to what it was in 2004.
The amount of money consumed each year by state tax exemptions, credits, and deductions nearly equals the size of the budget gap. Some of these breaks — such as the sales-tax exemption for prescription drugs — are vital. Others, such as one that benefits owners of time shares in private jets, aren't.
Closing loopholes and enabling the state's Commercial Activities Tax to do a better job of replacing the money collected by the business taxes it supplanted would also ease the need for spending reductions, Mr. Honeck says. But while the emphasis in the Statehouse is on cutting services, meaningful revenue solutions aren't on the radar screen.
The budget reflects Governor Kasich's other policy priorities. He wants to lift the supposedly oppressive hand of state regulation from private businesses — permitting energy companies to drill for oil and gas in state parks, for example, at the same time he cuts funding for environmental protection.
He wants to turn over wholesale liquor distribution to his shadowy, essentially private, economic-development corporation, JobsOhio. He wants to sell five prisons to private operators. Who's going to make sure that taxpayer and public-safety interests are properly balanced with profit motives?
And while the governor eases business regulation, he isn't shy about telling other public bodies how to do their jobs, even as he prepares to solve much of his own budget problem by dumping it on them.
Is it really the role of state government to dictate how much tuition colleges and universities can charge and how many classes professors must teach? Isn't each school in a better position to make such decisions for itself and its students?
When it comes time for local governments and schools to cut services, lay off workers, and raise taxes to help cope with their losses of state aid, Mr. Kasich evidently is betting that voters won't blame him, or at least will credit his appeals to reform and tough love. Nobody knows how that bet will turn out.
You surely can't fix a potential deficit that amounts to one-seventh of your budget without making big cuts in spending. But you can balance carefully targeted cuts and greater efficiencies in government operations with fair and reasonable revenue increases.
Governor Kasich's budget doesn't do that. It doesn't try.
One thing you can say about the governor: He has let all of us know what we can expect in Columbus for the next four years — and perhaps beyond, if White House ambitions or unforeseen circumstances don't intrude.
Buckle up.
David Kushma is editor of The Blade.
Contact him at: dkushma@theblade.com