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· February 6, 2013

Who is really served by latest Kasich budget?

served If Gov. John Kasich’s latest two-year state budget proposal proves one thing, it is this: Most Ohioans don’t have a friend in Columbus. If you’re a high income earner, the governor is on your side. If you’re a bigwig at a Big Oil & Gas firm, the governor is your humble servant. If you are a charter school cheat, looting public education – John Kasich is your wheelman. If you’re looking for relief or a leveling of the playing field – you’re out of luck. There are still bills to be dropped, hearings to be held and a months-long political process to watch and to participate in on Capitol Square. Innovation Ohio will be unpacking the issues below in greater detail in the coming days and weeks. The state budget is about taxing and spending, but it’s also a huge collection of public policy changes. It’s a document that can be forward looking and which offers a plan to put public money into to the public’s interest. What we’re seeing so far is ideological dogma, little that speaks to the future and lots of your money flowing in the wrong directions.


Remember Supply Side? How about Trickle Down? Despite evidence repudiating this sort of economics and tax policy, conservatives in this country just can’t let go. Kasich is grabbing on tighter and we are the lab rats in this latest GOP socioeconomic experiment. Kasich’s proposal boils down to this: cut income taxes across the board, throw a bit of severance tax money into the hole and backfill by “broadening” the state sales tax. Terms like “across the board” and “broadening” sound fair, but they’re not. Income taxes are based on one’s ability to pay. You do well, you pay more. Sales taxes are the opposite; they are regressive. Sales taxes, fees and the like take a bigger bite out of middle and lower class wallets than the pocketbooks of the wealthy. The last time a GOP governor pushed an income tax cut similar to Kasich’s began in 2005 and unwound over five years. At the end of the cycle, a family earning $48,000 per year got an annual tax cut of less than $200. Ohioans earning around $330,000 per year received an annual tax cut just under $10,000.

Public Education

Public education in Ohio used to be the great leveler. Politicians in Columbus have turned it into a political football and the GOP have turned Ohio’s state aid to public schools into a profit center for the charter school industry which funds their campaigns. We’ve already begun our analysis of Kasich’s education funding plan and we’ll know more when the administration releases detailed numbers and explains exactly how proposals such as the Straight A Fund will work. What we do know is:
  • The $1.8 billion cut from education in the last budget will not be replaced.
  • Most of the dollars Kasich wants to “add” to schools is one-time money.
  • Kasich does not plan to hold the mostly underperforming charter schools accountable to the same standards as public schools.
  • Vouchers for private schools (many of them religious) will grow and the rationale behind them is being turned on its head. Once touted as necessary to “let poor kids escape failing schools”, private school vouchers are now said to be a matter of parental “choice.” Forty-five percent of Ohio’s 1.8 million school-age children will financially qualify – and Kasich wants to make them available even to children attending public schools rated as “excellent.”

Local Governments

Along with public schools, Ohio’s local governments were the biggest losers in Kasich’s last budget and the tax burden will continue to shift from the state onto the backs of local taxpayers with this plan. Local governments lost $1 billion through the last budget process. The rug was pulled out from under our local governments with no rational plan for maintaining valuable public services. This time around, a further $200 million will be cut from local governments and they will be under a three-year moratorium prohibiting the raising of local sales taxes.

Fracking and Severance Taxes

What is the one corporate interest doing better in this budget than charter schools? Big Oil and Gas. Kasich pledged to fix Ohio’s broken severance tax system. Severance taxes are what are levied on natural resources like gas and oil. Last year, Kasich protested loudly Ohio’s rank among the 50 states as second-lowest in terms of nat gas severance tax rates. His budget will take us to – second-lowest. Publicly they will protest our increase, but privately the oil and gas barons are fist-bumping in Houston and Oklahoma City. How will that money be used? To partially offset that income tax cut which will net the wealthy hefty sums to send to their broker and might buy the rest of us a pizza or send the family out for one night at the movies. No money for the environmental effects of fracking. No money for shale counties’ roads. No money for schools or local governments. No money or policy to deliver on another bit of the gubernatorial bluster, a “Hire Ohio” policy for Ohio’s gas patch. Under the category of ‘insult to injury,’ Ohio taxpayers will be footing a $7.5 million per year bill under this budget to help regulate the oil and gas industry. Normally, regulatory oversight is paid for by the industry being regulated. This is $7.5 million that could be going into schools or vital services.

The Ohio Turnpike

The governor’s plan for the Ohio Turnpike – essentially putting future toll revenue on the credit card by borrowing $1 billion to fund highway projects – came with several promises made in December. We now know that claims of “more than 90 percent” or “virtually all” of Turnpike bond revenue staying in northern Ohio will not be written into law. We do know that written into the transportation budget is language allowing for toll collection to be done entirely by machine. What do you think that means for the promise that there will be no layoffs among Turnpike workers?

Medicaid Expansion

Thank you, governor for doing the right thing. Sorry you have to deal with the burn the village caucus on the Right, but there’s no hope for them. Your decision – in spite of the ideological protests at your press conference – is what we used to call governing in the public’s interest. That may have been the B-2 Bomber moment of your term. These are some initial observations – stay tuned.  

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Tagged in these Policy Areas: K-12 Education | Ohio State Budget