From 2009-2010, John Kasich the Candidate loved to attack Governor Strickland over the use of “one time” money to balance the State’s budget, whether it was the securitization of the State’s tobacco settlement or the federal stimulus.
Kasich and his Republican allies claimed that any reliance on so-called “one time” money was wrong as it kicked the can down the road to avoid dealing with structural deficits.
Kasich’s budget tomorrow will propose something Kasich barely hinted at in his rambling State of the State address last week: he’s going to consolidate a number of State agencies together along the lines that House Republicans discussed during the transition. Many of Kasich’s Cabinet officers will be tucked into lower level positions in newly constituted “mega-agencies.” (For a primer on what State consolidation may look like and what agencies will be involved, see our prior post “Meet the State agencies that Republicans have pledged to relegate to the ashbin of history.”) House conservatives believe that such consolidation could save the State $1 billion a year, but history (such as the consolidation that lead to the creation of the Ohio Department of Jobs and Family Services) indicates that such savings are highly unlikely and will require a significant outflow of capital just to handle to the transitional costs of consolidating services, labor, facilities, and equipment.
This, along with SB 5, is what Kasich is going to call “reform.” However, as our Budget Watch site has already noted, Kasich’s budget is going to be “balanced” on the backs of a ton of “one time” money. Today, the Cleveland Plain Dealer confirms with an anonymous Administration source that Kasich’s budget tomorrow will call for the State to sell as many as five correctional facilities to private parties. Only one of them is a closed facility.
The five prisons that would be privatized include two that are publicly-owned, two privately-run facilities and one that is vacant. The facilities — which would be sold for an estimated $200 million — are the Lake Erie Correctional Institute in Conneaut, the North Coast Correctional Treatment facility in Grafton, the Grafton Correctional Institution, the North Central Correctional Institution in Marion and the Marion Juvenile Correctional facility, according to the administration source. The Marion juvenile facility is currently vacant.
That’s $200 million in one-time money right there.
Then Kasich is expected to do that which he downplayed during the election, but then began talking up during the transition: leasing the Ohio Turnpike to a private company. Kasich has said he’s looking to generate around $2.5 billion from such a lease as recently as February. . . all of it, every penny, is in “one-time money.”
But as our Budget Watch reports there appear to be significant constitutional restrictions on how that money could be spent. It does not appear, from the people we’ve talked to, that proceeds from leasing the Turnpike can be spent on anything but the State’s infrastructure. However, the privatization of the Turnpike was not included in the Governor’s transportation budget. Also, a Quinnipiac Poll in January found the idea of leasing the Ohio Turnpike to balance the budget incredibly unpopular:
“Someone” has asked the nonpartisan Legislative Service Commission to draft language about privatizing the Ohio Lottery Commission by selling its functions off to a private entity. The Cleveland Plain Dealer reported it as a likely proposal by Kasich given Mary Taylor’s suggestion, while serving as both State Auditor and Kasich’s running mate, that the Commission should be privatized in her performance audit, despite finding that the Commission was incredible well-managed as a public entity and performing better than similar private entities.
Again, nothing in these recent stories is news. We discussed back in January, Kasich’s plan to pawn Ohio for one-time money. But Kasich folks want to package off both the consolidation and the one-time money under the guise of reform.
Let’s be perfectly clear here. Looking at our State parks as nothing more than uncut timber and undrilled oil and gas lands is not reform, nor is auctioning off entire sectors of State government to the only corporate bidder in an entirely non-transparent process.
Let’s make sure the media doesn’t miss that most of what Kasich is doing under the guise of “reform” and “streamlining” is really nothing more than efforts to generate one-time money to balance his budget without raising taxes.
Kasich’s folks are now talking about how well K-12 education is really going to come out in this budget. The Plain Dealer says on education:
The administration source also said it appeared Kasich would spare primary and secondary education from the chopping block. The Republican governor has been privately telling his inner circle that education funding for Ohio’s 1.8 million schoolchildren is going to fare much better than the public is expecting, the source said.
Well, that depends on what the public is expecting and how one defines as a cut. The expectation of a 20% cut was created and spread by Kasich’s own allies. So, if that’s the expectation Kasich beats, given his own partisan allies went out of their way to create it, is that really an achievement? That’s like having people go around and telling folks this guy is coming into town to rape and murder your family and then burn your house down. When the guy only rapes your wife, are you supposed to feel relieved?
Second, as Budget Watch has already indicated, the Administration may be playing a word game on education funding. The rumor as reported by outlets such as Gongwer is that the Administration plans on not replacing a dime of federal stimulus money that was used to pay for education. The House Republicans took the last budget, which used federal stimulus money to replace some of the state’s level of funding, but still increased total funding, and called it a “cut” in last year’s campaigns. A claim the Ohio Elections Commission refused to declare as recklessly untrue.
Yet now, these same Republicans might be thinking of not replace any of the stimulus funding with State funding, but suggesting that’s not a cut?
According to figures released by today’s Dispatch, just eliminating the $875 million in federal stimulus money of the $13 billion in the State’s current K-12 funding would result in nearly a 7% reduction in funding alone. Granted that’s less than the 20% or 15% we’ve heard bandied about, but even if Kasich’s education budget is limited to only not replacing federal stimulus money, that’s a sizeable cut in funding. We’re still looking at the steepest cut in total federal/state funding for K-12 in Ohio that I can recall. Also, keep in mind that wealthiest districts get little state funding to begin with, so as Budget Watch as warned “cuts will likely be concentrated in poor districts.”
Tomorrow, we’ll finally see what Kasich’s budget portends. But let’s not forget that very guy who ran against kicking the can is going to balance his money with conservative orthodoxy to generate billions in one-time money by hocking the State’s assets, and let’s not allow people to hide that fact by misappropriating the word “reform.”
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