The new two-year $62 billion budget Ohio Gov. John Kasich became a co-sponsor of when he signed it into law in June has its health and education pluses, according to one economic analysis out Thursday.
But its negatives—including harsh restrictions on women's health rights, elimination four decades of property tax support for seniors, and expansion of tax loopholes but no expansion Medicaid—isn't the right recipe for a state whose economic recovery is slack and could falter more as gridlock in Washington trickles down in the form of more job losses, more uncertainty and fewer people able to balance their family budgets.
Policy Matters Ohio, a progressive economic think tank based in Cleveland, released an analysis of Ohio's General Fund budget—the most expensive in state history—that shows that while it will grow by $4.5 billion over two years, it does not restore key investments to 2010-11 levels.
The budget cuts taxes by $1.9 billion by shifting taxes from the affluent to those with less income and making it harder to adequately fund critical services.
"This budget includes some important investments in health and education," said Wendy Patton, senior project director of Policy Matters and a report author. "But the ongoing cuts to local communities will hurt Ohio." Gov. Kasich's first biennial budget, which withheld a billion dollars in revenue sharing to local governments in order to help balance the state budget, shortchanges Ohioans by $95 million less state aid in this budget while simultaneously rolling back more than 40 years of property tax relief on seniors for new and replacement levies.
Elected in 2010 by a slim margin made possible by low voter turnout and help from angry Ohio Tea Party activists who have now turned against him in his re-election effort next year, Gov. Kasich's budget got a full body scan by PMO. While the budget increases spending on health care, the legislature’s refusal to include an expansion of Medicaid, as the Affordable Health Care Act provides and Gov. Kasich has said he wants despite his opposition to so-called Obamacare on every other level, will likely translate into more Ohioans being denied coverage as billions of federal dollars flow to other states.
The budget increased funding for education, but leaves schools $607 million short of 2010-11 levels and diverts a larger share of state money to charters and vouchers, Patton wrote.
On the positive side of the state's spending plan, other areas that will get an increase include services for the elderly and disabled, natural resources, economic development and community services within corrections. Patton observed that the budget also directs new money in areas such as the Ohio College Opportunity Grant, vocational rehabilitation, and mental health, but doesn’t make up for erosion of these services by years of recession, cuts and inflation.
"Some initiatives, like the new state Earned Income Tax Credit and means testing of the homestead exemption, were a step in the right direction," Zach Schiller, research director and report co-author, said. "But the budget invests too little in education, the safety net and local communities."
PMO took an ax to the popular notion pushed by Kasich, a career supporter of Reagan/Kemp supply side economics, that tax cuts create jobs. Since June 2005, when major Ohio tax cuts were approved, PMO's analysis shows that Ohio lost more than 214,000 jobs, or nearly 4 percent of its total. Over the same time period, the nation as a whole has gained 2.48 million.
"Ohio needs comprehensive health care for all. We must restore the fiscal partnership between state and local government to stabilize our communities. We have to provide early education for more children, and need-based aid that helps all students get through college," Patton said, adding, "Most of all, Ohio needs a tax structure that is fair and adequate to meet the needs of the state."
As the incumbent, Gov. Kasich has come under fierce fire from Democrats and Tea Party Republicans, who say they won't work for election next year as they did in 2010, the height of the anti-Obama storm that swept Republicans into governorships and retained the U.S. House of Representatives—where he served for 18 years—despite losing half the seats last year they picked up in 2010.
With Libertarian candidate Charlie Earl in the race, Ohioans upset with Kasich have three ways to not vote for him: Vote for Earl, vote for the Democratic candidate Ed FitzGerald or stay home. Kasich's slim win—77,127 votes statewide out of a 49-percent voter turnout—is evidence that while next year's election is his to lose, that loss isn't just a fantasy.
Kasich is using his budget to proclaim the always popular but evidence poor notion that tax cuts for the wealthy create jobs and prosperity for everyone else. Kasich critics look at the same document and say it represents decades of failed Republican hopes that catering to the rich at the expense of the middle class, poor and seniors is a good deal for the all.
With the federal government now in its third day of shutdown, Kasich's role in shutting down the government in 1995 during the presidency of Bill Clinton is being resurrected. Kasich has said that shutdown was one of his greatest political accomplishments. He has avoided reporters who want to ask him whether he supports what Republicans in DC are doing if what they are doing hurts the state and its economy.
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