Columbus' fiscal follies

The state budget proposed by the Ohio Senate's Republican majority makes several improvements to previous versions offered by Gov. John Kasich and the GOP-controlled state House. It also includes a distressing amount of mischief and nonsense that needs to go before lawmakers approve the final two-year budget this month.

The Senate plan properly discards sweetheart provisions of the House budget that would have catered to operators of for-profit charter schools in Ohio who are major contributors to Republican campaigns, notably David Brennan of White Hat Management in Akron. That language would have grievously weakened state accountability, oversight, and performance standards for charter schools, at a time when Governor Kasich seeks a broad expansion of such schools.

But the Senate budget includes its own special-interest outrage, the Cleveland Plain Dealer reports: a proposal to privatize the Ohio Lottery essentially written by GTECH Corp., a former vendor for the lottery that wants to run its operations.

Advocates have made no case that the lottery should be privately operated, but if lawmakers want to examine that issue, they at least should do so without stacking the deck first. The Senate action is especially noxious given its demand for more say over Mr. Kasich's plan to privatize the Ohio Turnpike.

More positively, the $55.7 billion Senate budget takes advantage of improved state tax collections to moderate Mr. Kasich's proposed slash of $1.3 billion in state-administered aid to public schools. Yet much of the $115 million the Senate plan adds in school aid would go to wealthier suburban districts -- generally in Republican areas of the state -- that have greater local resources and fewer needs than struggling urban systems. That would aggravate, not diminish, the inequities in Ohio school funding.

The Senate plan also deletes a budget provision supported by the governor and House members that would create a system of merit pay for teachers. Creating a fair and effective model for linking teacher evaluations to objective measures of student performance will be much harder than advocates claim. But that is no reason for the Senate simply to abandon the effort, preserving the archaic seniority system that now largely governs teacher pay, layoffs, and assignments.

On the biggest-ticket item in the budget -- Medicaid health insurance for poor and disabled Ohioans -- the Senate plan would spend more on the PASSPORT program, which provides incentives for elderly and sick people to be cared for at home rather than in more-expensive nursing homes. Mr. Kasich's budget would cut PASSPORT funding.

The Senate's priority is proper. But the additional $15 million its budget would kick in would hardly begin to offset the $427 million the House budget would cut in state payments to nursing homes.

Governor Kasich is correct that the state should not subsidize nursing-home care for patients who don't truly need it. Yet the reductions he contemplates also would deny residence in skilled nursing facilities to many people who cannot be cared for at home or in community settings. A better balance is required.

Other deficiencies in the Senate's budget need to be addressed. The plan allocates no money to continue to enforce the state's voter-approved ban on smoking in Ohio workplaces, restaurants, and bars, despite the popularity of the law and the improvements it has brought in public health and air quality.

The Senate budget supports the wrongheaded elimination of the Ohio estate tax -- a solution in search of a problem. In the absence of persuasive evidence, not mere assertion, that the tax afflicts the owners of small businesses and family farms and encourages wealthy taxpayers to leave Ohio, its repeal would deprive the state of needed revenue with no corresponding benefit.

The Senate budget properly creates a committee to review tax expenditures -- the often wasteful credits, deductions, exemptions, and exclusions that cost the state more than $7 billion a year. But it does not set aside money for such a study or declare a target for reducing tax expenditures; Ohio think tanks propose cutting such spending by $300 million to $700 million a year. This default amounts to little more than empty grandstanding by the Senate.

The Senate proposal inexplicably would shift $10 million from the Ohio Housing Trust Fund, which provides housing for poor, elderly, and disabled people, to the offices of county recorders. However much the latter agencies are struggling during the recession, bailing them out with money aimed at helping the most vulnerable Ohioans and boosting the state's housing economy is a strange expression of Senate priorities.

Overall, the Senate spending plan has appealing features that deserve to be part of the final budget approved by the General Assembly and signed by the governor. It also has a lot of junk that deserves a quick trip to the legislative landfill.