May 10, 2012
May 10, 2012
"The Mid-Biennium Review neither looks back in review of the sweeping changes in public services caused by the current state budget nor forward in preparation for the loss of hundreds of millions in federal funds as a result of the Budget Control Act of 2011. Instead, more services are cut; tax breaks continue to go unscrutinized; unfunded or underfunded mandates are imposed; and more privatization is authorized."Download testimony Letter to Chairman Widener
Testimony on the Mid-Biennium Review and the corrections bill to the Senate Finance CommitteeWendy Patton, senior project director
The Mid-Biennium Review includes components of legislation that go beyond the corrections bill, and our testimony considers themes evident in House Bill 487 as well as the others spun out of the Kasich administration’s initial legislation or included as part of the MBR as posted on the Budget and Management website.
As a whole, the Mid-Biennium Review neither looks back in review of the sweeping changes in public services caused by House Bill 153, the current state budget, nor forward in preparation for the loss of hundreds of millions in federal funds as a result of the Budget Control Act of 2011. Instead, across the many bills under consideration in the MBR process, more services are cut; tax breaks continue to go unscrutinized; unfunded or underfunded mandates are imposed; and more privatization is authorized.
Last year’s $1.8 billion cut to K-12 education has been portrayed as a fight with teachers about jobs and pay. It’s a much bigger story than that. Education funding in Ohio had expanded under court order to increase equity of opportunity, and graduation rates soared from Toledo to Steubenville, Bucyrus to Ironton. The current state budget wiped out the investment that fueled those gains, returning funding to the level of a decade ago.
Last year’s budget bill also cut a billion dollars from community services through the local government fund and property tax replacements. Firehouses have closed, potholes gone unrepaired, playgrounds unsupervised and streetlights dimmed in places around the state. An essential way working families build wealth is through home ownership. The services we need to restore property values in many Ohio neighborhoods are eviscerated in many places by the huge cut in aid.
The changes of the corrections bill you consider this spring – the $72 million squeezed out through debt management and deeper cuts to agencies and services – tinkers around the edges of last year’s unprecedented reduction in public services to Ohio’s children and families. Some of the policies in the legislation have no immediate recognized budgetary impact, but lay the groundwork for future costs. We are concerned about unfunded or underfunded mandates, loss of oversight by citizen boards, broadened powers of privatization, many new cuts to services and a new round of tax changes that continues to leave Ohio with inadequate revenue to make the necessary investments in our future.
Unfunded or underfunded mandates – In the context of last year’s cuts to schools and communities, all requirements that impose new costs burden overstrained systems. Some included in the MBR legislation include:
Weakening of oversight – Transparency and oversight protect public expenditures and ensure accountability.
Expanded privatization – Leasing public assets and contracting with private companies to provide public services may seem thrifty, but can be more costly in the long run. Just ask Chicagoans about their parking meters. It can reduce transparency: Will the public be able to find out how well services are being delivered and keep tabs on the private monopolies that will be providing these services?
The budget hole Governor Kasich references when justifying the billions of dollars of cuts to our schools and communities, the half-billion reduction in higher education instruction, and the additional, new cuts of House Bill 487 – that budget hole was due more than anything to the generous tax cuts of 2005, which knocked $5 billion out of the state budget every biennium. Those tax cuts have not helped Ohio’s economy. We have lost 285,000 jobs since 2005 – a rate of job loss more than eight times that of the nation as a whole.
Tax cuts eliminate the revenue we need to provide schools with uniform quality across the state that helps kids graduate and community services that keep families’ assets intact. The Mid-Biennium Review fails to review what’s really wrong with the biennial budget and the corrections bill doesn’t correct the problem.
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