Prepare to be surprised. 

Today the free-market/conservative think tank Buckeye Institute released their analysis of Kasich’s budget.  And while it had the praise you’d expect, it also unflinchingly refused to whistle past the graveyard that Kasich is hoping the Tea Party activists don’t realize:  Kasich’s budget doesn’t lower the “cost of government,”  like he claimed all week.  In fact, State government spending will never be higher (except for local governments, K-12, and higher education.)

When it comes to keeping government spending in line with changes in population and inflation, Governor Ted Strickland is the only Governor to present a fiscally conservative budget.

As detailed in Six Principles, from 1990 to 2009, state general revenue expenditures increased by 131 percent and 41 percent after adjusting for
inflation. After a brief respite in 2010 and 2011 (kudos to Governor Strickland), Governor Kasich’s proposed General Revenue Fund budget continues that nineteen-­?year pattern of spending increases greater than inflation. In fact, his two-­?year increase of almost 12 percent would be the second largest increase from 1990 to 2013. How can spending increase with an $8 billion deficit and Ohio’s weak economy?

The answer: the 2012-­?2013 budget forecasts revenues to exceed expenses by $8.58 billion. This approach continues the failed practice that got Ohio into the fiscal mess it is in today.

More after the jump

On agency consolidation as a means to save money:

We would, however, caution Governor Kasich on over-­relying on savings achieved by programmatic consolidation and other “streamlining” efforts.

Many a politician has sought such savings only to find them illusory or stymied by the bureaucracy. Vigilance will be required to make these savings happen.

On the hit to local government and the tax implications:

Because of this total [State/local]  tax burden, we had encouraged Governor Kasich to hold a tax reform summit with representatives from local governments to come up with a solution to Ohio’s tax burden.  ur belief is that eliminating a tax “here” that pops up again over “there” simply rearranges the chairs on the deck of the Titanic. We need a thoughtful discussion on how to restructure our governmental units and
taxes in Ohio to make us competitive with other states.

Instead, Governor Kasich’s budget makes deep cuts in funding to local governments and keeps revenues projected to go to local governments. Because of a few solid reforms in procurements and other areas, as well as the projected savings from passage of Senate Bill 5, Governor Kasich’s budget presumes that local governments will have the flexibility to adjust their budgets accordingly.

We are not as hopeful.

On privatization/securitization:

Finally, not surprisingly, we remain strong advocates of privatization. That said, we caution Governor Kasich not to rush headlong into privatizing Ohio’s assets when capital markets are weak.  Ohio taxpayers have made billion dollar investments in those assets and deserve to see a strong return on their investments.

As events unfold in Japan and the Middle East creating greater instability and market turmoil, Governor Kasich may need to delay his privatization plans so Ohioans can get a better return for their assets.

Sounds like the Buckeye Institute is signaling that this may not be the right time to consider leasing the turnpike (the budget will contain language giving Kasich authority to enter into a lease), securitizing liquor profits to create a funding source for JobOhio, or privatizing the Ohio Lottery Commission.

The Buckeye Institute also chides Kasich for balancing his budget on anticipated estate tax revenues, a signal that Kasich has abandoned his campaign pledge to repeal the estate tax.  The Buckeye Institute concludes that because Kasich’s budget “solves” the projected $8 billion deficit by apparently relying on the magic revenue fairy to allow the State’s revenues to grow through economic growth enough without raising taxes to balance the budget, it does not, as the Administration claims put the State on a path to a fiscally sound and restrained government.

Told ya so?

Buckeye Institute Analysis of Governor John Kasich’s 2012-2013 Budget

  • buckeyekelly

    Not for nothing, but do you think they’re coming out with this “analysis” (which to me is kind of a DUH) to attempt to be a more legitimate source in debates and analysis? Like the token editorial from the Dispatch that smacks a Republican’s knuckles while simultaneously kissing their ass?

  • Real Get Real

    Rumor floating around that Kasich and his wife just inherited tens of millions. Any confirmation? That might certainly play on voters’ minds on the SB5 referendum.

  • Anonymous

    Hadn’t heard anything like that, no.

  • Anonymous

    If you read the whole analysis, it’s still a very conservative orthodox thing. But the Buckeye Institute also praised Strickland’s first budget, calling it the most fiscally conservative budget in modern Ohio history. Let’s not fool ourselves. They’re putting this out in the hopes of getting the conservative House to bend the budget further to the right. Also, they’re worried that if some of things Kasich does doesn’t work because of “timing,” well, their ideology takes a credibility hit, too.

  • buckeyekelly

    I’ve met my limit of reading analysis and politics based on shitfilled hate today. Your exerpts were all I needed to get the information without having my second stroke of the day.

  • Annekarima

    Screen Behind the Mirror video, Enigma, sometime in the 80s, early 90s,I think. Perhaps that is where Kasich thinks he is.

  • Mvblair

    I heard that

  • Mvblair

    I heard that Kasich is going to open up Ohio to private oil exploration. While this is clearly a political move aimed at the “drill, baby, drill” crowd, I am curious to know if he is going to make companies pay concessions for land or if he’s just going to give it away.

  • Middle Class Independant

    I wrote Al Duncan when I meant Al Dunlap. Big difference. My apologies to Al Duncan.

    Some people thought Al Dunlap was just the guy to cut the fat out of Sunbeam. By the time they figured him out, it was too late. There can’t be a “too late” for Ohio.

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