Innovation Ohio

What you need to know about Ohio Politics and Policy

“Jobs Budget” to cost Ohio more jobs

Across the nation conservative Governors and their extreme agenda are taking a toll on states’ fragile recovery.  Dayton Daily News outlines this in a recent article, noting that as state and local governments react to budget cuts that were enacted in many states, including Ohio, large layoffs are expected. An IHS Global Insights report, forecasts the loss of 110,000 government jobs nationwide in the third quarter and notes that this would be the “first time more than 100,000 government jobs were cut in a single quarter.” One Ohio government worker noted the personal toll that these layoffs are having: “After a 15-year career working for the state, I never expected this,’’ said Davis, 43, who was laid off from his job as a police officer for the Montgomery Developmental Center, a Huber Heights care facility for the mentally disabled. “I left a job in Columbus working for the Department of Developmental Disabilities to be closer to my family. Now, me and my family are devastated.” With such large cuts to state and local government the economy is going to have difficulty in creating jobs.  One has to ask John Kasich, where are the jobs? Read the whole article here: New round of layoffs threaten economic growth

“It’s either public safety cuts or 639 others.”

The impacts of Kasich’s budget continues to be felt by cities and towns as they struggle to deal with deep cuts and are faced with deciding where to make cuts to their budgets.  What is becoming clear is that Kasich’s budget will jeopardize the public safety of our communities. Noting that potential layoffs are due mainly to cuts at the state level, the city of Cincinnati is faced with the decision to eliminate police officers and firefighters, surely impacting public safety, or cut 639 jobs of clerks, engineers and sanitation workers.  This number is nearly half of all non-public safety personnel employed by the city. Cuts to either area will certainly impact the services the city offers to its residents and result in more citizens in the unemployment lines. Read the article here: Dohoney: It’s either public safety cuts or 639 others

State prison system announces largest mass layoff of 2011

On Friday, it was learned that in the wake of state budget cuts and in anticipation of the Governor’s plan to privatize five prisons, the Ohio Department of Rehabilitation and Correction plans to eliminate 1,135 jobs by the end of the year. In all, approximately 950 workers will lose their jobs, including hundreds of prison guards, nurses, teachers, administrative staff, and even five chaplains. Some of these workers will be able to reapply for their jobs with the private prison operators, but continued employment is far from guaranteed. The cuts are needed, officials say, to make up for a $188 million reduction in state funding over the biennium. Rather than use the proceeds gained from selling the prisons to private companies, estimated to net $200 million for the state, that money was instead used as a one-time source of funds to prop up the state budget. By federal law, private employers who plan to terminate 50 or more workers are required to notify the state, who tracks these mass layoff events on its website. The state’s action to reduce the ranks of prison guards, parole officers and other personnel represents the largest mass layoff in the state of Ohio so far in 2011. As we predicted in April, cuts in the current state budget could have the effect of putting up to 51,000 Ohioans out of work.

Ohio’s Unemployment Increases: Kasich’s ‘Jobs Budget’ Killing Jobs

The Ohio Department of Job and Family Services released Ohio’s unemployment numbers for June today. These numbers show the earliest impacts of Governor Kasich’s policy agenda, including his recently passed budget. The unemployment rate was 8.8 percent in June, an increase from 8.6 percent in May. This is the first time that the unemployment rate has increased since August of 2009, breaking a 22-month streak of unemployment holding steady or decreasing. The industry with the most significant job losses from the previous month was government, with local governments seeing the biggest losses of 8900 jobs. This likely reflects the first impact of Governor Kasich’s “Jobs Budget,” which contained severe cuts to local governments. Unfortunately as IO warned earlier this year, we are now well on our way to an anticipated loss of 51,000 jobs as a result of Kasich’s budget. Other items of note from the ODJFS release are as follows:
  • The number of workers unemployed in Ohio in June increased to 517,000, up from 508,000 in May.
  • Ohio saw an increase in nonfarm wage and salary employment, with an increase of 10,600 over the month, from the revised 5,095,000 in May to 5,105,600 in June. This includes an increase of 10,900 jobs in the leisure and hospitality industry, an industry that traditionally sees increases in the summer months.
  • Local governments saw a loss of 8,900 jobs.
  • The manufacturing sector saw a loss of 3,000 jobs.
  • The construction industry saw an increase of 2,800 jobs, likely due to summer construction.
  • The U.S. unemployment rate for June was 9.2 percent, up from 9.1 percent in May.

This data is seasonally adjusted.

You can download a copy of this report here.

State Budget Recap

You may recall that prior to the start of the House-Senate Conference Committee on the state budget, we released a summary of the key provisions we would be watching. As a service to our readers, we’ve revisited that document, providing updates indicating those changes that were included in the final version of HB 153, signed into law by Governor Kasich on June 30. You can download a copy here. And check out our June 30 press release in which we explain that the budget is a “job-killer that rewards the rich and hikes local taxes.”

Kasich’s “Jobs Budget” continues to cost people their jobs.

The Office of Consumers’ Counsel (OCC), which represents residential utility customers, has announced that budget cuts have already forced the agency to lay off 30 employees, according to the Columbus Dispatch. Ohio’s new state budget calls for spending $5.6 million on the OCC in the fiscal year that began July 1 and $4.1 million the following year. Those amounts are down from $8.5 million each year of the previous budget. Gov. Kasich used a projected deficit to justify many budget cuts, but the Consumers’ Counsel does not affect the deficit since it is funded by fees that utilities pay. A spokesman for the OCC predicted the deep cuts would lead to higher utility bills because the agency will lack the resources needed to battle the politically potent, well-financed utilities. Higher rates could hurt Ohio’s business climate. A 2010 study by Deloitte, lists “energy costs and policies” among the top drivers of global manufacturing competitiveness. Today, energy costs in Ohio are about 10 percent below the national average. When the Kasich budget debuted, spokesman Rob Nichols said the cut was necessary because the agency  duplicates services provided by the Public Utilities Commission of Ohio – a justification The Plain Dealer of Cleveland said, “reflects a fundamental lack of knowledge about utility regulation in Ohio that Kasich’s team had better correct, forthwith. ‘’ The PUCO has a reputation for being too deferential to utilities. Earlier this year, the PUCO rejected a compromise agreed to by a central Ohio utility and its customers – then issued a ruling even more generous to the utility.

Innovation Ohio Says Budget Shortfall is $5 billion, not $8 billion

Research Overview

In April 2009, then-Auditor of State (now Lt. Governor) Mary Taylor and her Senior Policy Advisor (now OBM Director) Tim Keen called a news conference to grimly warn Ohioans that an historic $8 billion dollar deficit loomed in the FY2012-13 budget. Thanks to constant repetition in the Capitol Square echo chamber, the $8 billion deficit figure has now, two years later, become conventional wisdom throughout the state. The need to close this alleged $8 billion deficit was used by newly-inaugurated Governor John Kasich to justify his proposed two-year budget (HB 153) containing unprecedented and draconian cuts to Ohio’s schools and local governments. Likewise, the “$8 billion deficit” has been repeatedly cited by Gov. Kasich and his legislative allies as a primary rationale behind their all-out assault on the collective bargaining rights of public workers (Senate Bill 5). Recently, however, grave doubts have begun to crop up over the validity of the $8 billion figure. Innovation Ohio looked at three key assumptions in Taylor’s and Keen’s analysis and found that they no longer hold up. As a result, the shortfall the state faces is roughly $5.1 billion, not the $8 billion that is claimed. Read the analysis. Read the press release.

Innovation Ohio’s “Taxpayer Rip-Off of the Week” Award: Big Oil Giveaway

For Immediate Release:  May 5, 2011 Contact: Dale Butland, 614-783-5833

Innovation Ohio’s “Taxpayer Rip-Off of the Week” Award

Ohio’s “Marathon Man”

Kasich Gives Oil Companies Multimillion Tax Break;

Rakes in Nearly $150,000 in Contributions

  Columbus…..Innovation Ohio, a progressive think tank headquartered in Columbus, today presented its coveted “Tax Payer Rip-Off of the Week Award” to Gov. John Kasich for giving oil companies a tax break worth between $5 million and $10 million per year – a giveaway that was opposed by the Ohio business community and even Kasich’s own Tax Commissioner. Marathon Oil lobbied heavily for the tax break, which exempts exchanges or “transfers” of gasoline from the Commercial Activity Tax (CAT).  It was added to Gov. Kasich’s Transportation Budget (HB 114), which he signed into law on March 30. Campaign finance records show petroleum interests gave Kasich $116,782 for his gubernatorial campaign, and kicked in an additional $30,000 to the Governor’s “transition fund” after the election. In a March 4 letter to the Governor, Tax Commissioner Joe Testa warned that “once the state begins to allow exemptions from the CAT…every industry…may ask for a similar exemption or credit.”  Testa also pointed out that lost revenue would have to be replaced by taxpayers. On March 8, the Department of Taxation’s Deputy Director of Tax Policy and Budget also opposed the giveaway in testimony before the Ohio House, saying that state law specifically identifies such transfers as subject to the CAT, and that allowing this exemption could “start Ohio down a slippery slope” that threatens the CAT’s “integrity and foundation.”  Like Testa, he estimated the cost at between $5-10 million per year, but also noted that making the giveaway retroactive to 2005 could mean far bigger losses for taxpayers.  Retroactivity was included in the bill Kasich signed. Said IO Communications Director Dale Butland: “At a time when Ohio consumers are paying over $4 per gallon to fill their tanks-and Marathon Oil made net profits of $2.6 billion in 2010 and nearly $1 billion more in the first quarter of 2011-this giveaway to Big Oil is especially outrageous. Why Gov. Kasich would ignore and disregard his own Tax Commissioner on this issue is a mystery.  An even bigger one is why he thinks Ohio taxpayers can afford to fork over another $10 million a year to the oil companies.”

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