‘Stay the course’ is bad for the rest of us

The Toledo Blade - July 8, 2012
by Wendy Patton for the Toledo Blade

Ohio has been on a self-imposed austerity plan for years. The state’s tax overhaul in 2005 cut taxes in a big way for business and top earners, but in a small way for the rest of us. As a result, the state has $5 billion less than it otherwise would have had during the current two-year budget cycle.

Along with expiration of the federal stimulus, which supported services during the recession, this loss of revenue accounted for the bulk of the state budget shortfall. Polls showed most Ohioans favored closing the budget gap with a balanced approach of curtailing spending and raising taxes.

But Republican Gov. John Kasich and the General Assembly pushed the fiscal crisis down to local schools and communities. They cut billions of dollars in state aid, mostly tax reimbursements and revenue sharing.

This year, these elected leaders looked back over their work in what they called the “mid-biennium review.” This legislation dealt not only with the budget, but also with education policy, energy regulation, and privatization of economic development. The measures that survived included good things and bad things.

Good timing and favorable terms have generated savings in debt service. The governor proposed a higher severance tax on extraction of oil and natural gas through hydraulic fracturing, or fracking. Mental-health funding was boosted, including money for gambling addiction. These are positive changes.

But Republican leaders in the state House stripped out the governor’s severance tax proposal. Money for health and human services was cut, even though state revenues are growing and there is a budget surplus.

This year’s legislation placed efficiency over accountability, created unfunded or underfunded mandates, and boosted spending through the back door — through the state tax code, in the form of tax credits.

Several bills reduced public accountability by eliminating or curtailing the power of stakeholder boards in the areas of public health, rehabilitation services, and economic development. Reporting requirements were reduced or relaxed within the state Department of Job and Family Services.

A new education law allows individuals to serve on five charter school boards rather than two, increasing the likelihood that charter management companies will further undermine proper oversight by appointing interlocking boards. The measure also continues the march to privatization, and adds mandates.

The law expands subsidies for charter and privatized schools. It authorizes outsourcing of teacher evaluation. Ohio’s standing in national rankings of early education has fallen; lawmakers addressed this concern by tying future state funding to new quality standards, but provided no money for improvements.

The third-grade reading guarantee requires “intensive, explicit, and systemic instruction” to make sure children learn to read, yet provides just $13 million to fund that effort statewide. Florida has supported a similar initiative with significant investment in intensive early-education programs.

Lawmakers approved new energy regulations — some shaped in ways that industry sought — but missed the corresponding opportunity to boost the severance tax. Needs in communities that are affected by oil and gas drilling are growing, yet fees to support local infrastructure also were rejected.

Governor Kasich’s severance-tax proposal is flawed in that it would shift the revenues mostly to affluent families through an income tax cut. But his proposal to impose the tax is a step in the right direction. We should not allow this one-time resource to be depleted without benefiting Ohioans.

The strategies of the mid-biennium review are consistent with the strategies we’ve seen state government pursue over the past 18 months: Invest less in the future, reduce public jobs and services, sell assets, cut taxes.

The governor and lawmakers are staying the course.

How’s that working for you?

‘Stay the course’ is bad for the rest of us
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