Ohio Gov. Strickland says local taxes to rise to fund programs, services if state budget falters

COLUMBUS, Ohio — A recent report that local government job losses in the current and next fiscal years will approach 500,000, with public safety, public works, public health, social services and parks and recreation hardest hit by the cutbacks, prompted Ohio Gov. Ted Strickland to say that the next Governor and General Assembly will have to "choose from a list of priorities of those things that are of greatest importance" and that "some worthy programs and activities would be at least temporarily curtailed."

Gov. Strickland, who attended the induction ceremonies for eight new members to the Ohio State Fair Hall of Fame Thursday, responded to the report from the National League of Cities, The National Association of Counties, and the The U.S. Conference of Mayors that said that the effects of the Great Recession on local budgets will be felt most deeply from 2010 to 2012, and that local governments will be forced to cut services and personnel.

Ohio is currently girding for the bloodbath that virtually all statehouse watchers expect to happen next year, when Ohio leaders, facing what could be an $8 billion or more budget deficit, try to come to terms with the next biennial budget.

In May and June of 2010 NLC, NACo and USCM conducted a survey of cities and counties across the country for the purpose of gaging the extent of job losses. The survey was emailed and faxed to all cities over 25,000 in population and to all counties over 100,000 in population. The survey results are based on 270 responses, 214 responses from cities and 56 responses from counties.

According to the report, the surveyed local governments say they will cut 8.6 percent of total full-time equivalent positions over the previous fiscal year to the next fiscal year (roughly 2009-2011).

If applied to total local government employment nationwide, an 8.6 percent cut in the workforce would mean that 481,000 local government workers were, or will be, laid off over the two-year period. Projected cuts for the next fiscal year will likely increase as many of the nation’s local governments draft new budgets, deliberate about how to balance shortfalls and adopt new budgets.

Gov. Strickland, running for a second term against his GOP challenger John Kasich, whose campaign mantra has been that Ohio needs to reduce the cost of government, lower taxes and regulation on business and unleash the power of entrepreneurs, especially those who want to start small businesses to make Ohio great again, has seen the Buckeye State's unemployment rate double from where it was at 5.6 percent when Strickland took the oath of office in January of 2007 to where it is today at 10.5 percent.

But taking the reigns of a state already in decline in many important areas, combined with the ravages of a recession that has hit Ohio hard, Strickland became captain of a ship of state that took on water as the Great Recession, the worst since the The Great Depression of the 1930s, took its toll on Ohio's weakened economy. Although his critics said his bad management decisions and poor hiring practices have worsened Ohio's situation, others would argue that he has been at the mercy of forces beyond his control. Strickland, over his three years in office, has been forced to make significant cuts in state operating funds and the state workforce, reducing the first by about $2 billion and the later by about 5,000 employees.

With fewer than 100 days until the November 2nd General Elections, Strickland is engaged in a toss-up race with Kasich, a former congressman from Central Ohio, who subsequent to his time in office hosted a political talk show on Fox News and worked as a managing director for the now-failed Wall Street investment banking firm Lehman Brothers.

During his administration, Strickland has had to reduce the state workforce by about 5000 workers. "We did not do that joyfully. It was a serious matter because all those individuals and families need to work," he told me Thursday at the Fairgrounds in Columbus. "We are facing in Ohio and across America incredibly difficult financial and budget circumstances. I do believe that we have reached the bottom of the recession and we are in a time of recovery, but that recovery is occurring very slowly, and so, depending on several factors, for example, whether or not we receive additional, significant federal support, depending on whether the economy does in fact improve substantially in the next few months, all of those things, depending on whether or not we can find substantial efficiencies and savings. But I am not surprised about what you've shared with me. I think every sector of nation, every state within our nation is facing, perhaps, unprecedented budget challenges and it's going to require an unprecedented response from us, and that could very well lead to significant reductions in employment across all sectors, including the public sector," Strickland said.

Strickland said many citizens do not understand that most of Ohio's budget goes to maintain Medicaid services or to pay for education at every level or to help local governments, and that a relatively small percentage of it is used to operate state government itself.

"We could get rid of every state employee and it would only have a modest impact on the total budget," he said, adding, "So, what we're doing right now, we are asking the council of state governments to look at our criminal justice system because a lot of our tax dollars go to institutional programs like prisons, jails and youth services and developmental develop centers, and another chunk of money goes to education at every level, higher education well as primary and secondary, and then another big chunk goes to pay for Medicaid. If we do not impact that significantly, in those three areas with significant expenditures, we really aren't going to have much of an effect on the total budget. There are some who try to pretend that by doing some painless things, you can find a balanced budget even under these circumstances. I think that's impossible."

Asked if he would recommend policies to reduce Ohio's approximately 20,000 elected public officials, Strickland didn't respond directly, but said not everything can be taken care of and that some services or programs may have to be cut or curtailed at least temporarily.

But he said that what the state cannot provide might have to be found at the local level through additional taxes if the level of services or scope of programs taxpayers expect from their governments are to be maintained. Strickland said local taxes may have to rise significantly because "People in Ohio want a certain level of public services available to them."

"They want public safety, they want our parks maintained," he said. "we've already reduced so significantly, so further significant reductions would be very difficult and would impact the quality of services that people expect to receive. The conversation you and I are having is the kind of conversation that should be occurring between my office and the House and the Senate, the business community, the human service folks and Ohio citizens. We need a serious discussion about how we're going to move forward. We are going, obviously, to have to choose from a list of priorities of those things that are of greatest importance. We may not be able to do everything; in fact, we cannot do everything given the current circumstances. So that requires us to do what is most essential and to use our resources to carry out those functions. That may mean that some worthy programs and activities would be at least temporarily curtailed."

Link: National League of Cities report

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