On Saturday (note, not Sunday), the Columbus Dispatch did a story trying to outline how the Kasich Administration “solved” the $8 billion deficit that Mary Taylor predicted over a year ago.
The Dispatch even gave a nice little graphic to show their work:
During their public unveiling of the budget last week, the Kasich-Taylor Administration seemed to go at great lengths to give Mary Taylor her “I told you so moment” by framing the budget as proving her predictions about a $8 billion budget deficit as being vindicated even though the Strickland Administration conceded at the time that the budget would have to be adjusted by several billion, but not as high as $8 billion, to adjust for the loss of federal stimulus money.
But if that were the case, why has it taken nearly a week for anyone, ANYONE, to give an explanation of where the evidence of that budget deficit being resolved can be found in this budget?
This Dispatch graphic is the most detail we’ve seen so far. And we all know that the Dispatch is a media outlet that is incredibly friendly to the Administration. If anyone could get a straight answer from the Administration as to what happened to the supposed $8 billion deficit, you’d expect it to be the Columbus Dispatch.
And yet, after pouring over the details of what Kasich has released regarding his budget so far, the Dispatch’s own math comes out nearly $1 BILLION short of showing $8 billion in savings. And that’s after the Administration “solves” the deficit by projecting that the supposed deficit would be 1/8th fixed by economic growth alone.
The Administration is claiming $1.4 billion in Medicaid savings, but it’s important to note that Medicaid spending is still increasing substantially. It’s not going down. The Administration’s claims of “savings” is based on a questionable basis of what Medicaid spending growth would be if the Administration “did nothing at all” about the growth in Medicaid spending, a virtually unlikely, if not impossible economic scenario. Governor Strickland reduced Medicaid spending by promoting seniors’ ability to live at home by boosting funding of the PASSPORT program to eliminate the waiting list there. (Sound familiar?)
But there’s another major flaw in the Dispatch’s math: it fails to take into consideration the areas where Kasich is increasing State spending such as the Ohio Department of Development, which is getting a MASSIVE increase in funding, funding for charter and school vouchers, and the Ohio Environmental Reviews Appeals. While these increases aren’t all huge, they do grow the deficit on the supposed $8 billion deficit even larger than the Dispatch indicated on Saturday.
The Dispatch indicated that Taylor’s prediction of an $8 billion deficit was in the general refund fund portion of the budget (where the State has the most control over spending as opposed to the rest of the budget where the State serves mostly as a pass-thru entity to schools and local governments.) So how does a budget that increases general revenue spending by $5 billion solve a projected $8 billion budget deficit?
"I fully realize that it’s kind of counter-intuitive that we’ve closed an $8 billion shortfall and yet spending is growing," said state Budget Director Tim Keen.
Counter-intuitive is too charitable of a word.
Does Kasich’s budget contain no new taxes? No, says the Columbus Dispatch:
In Medicaid, for example, spending is still rising even though Kasich is taking a variety of steps, including $470 million in nursing-home rate cuts, $478 million in reduced hospital payments and an increase to the hospital-franchise tax, to reduce what would have been an even larger increase by $1.4 billion.
That on top of what Kasich admits will be an increase on some “user fees.” Something Kasich and his political allies BLASTED Governor Strickland for doing in the last budget saying it was akin to a “tax increase.”
But beyond Kasich’s apparently string of broken promises, what happened to the M.I.A. $8 billion budget deficit? Allow me to propose a radical view of thought:
Despite all the pontificating last week and self-congratulations for Mary Taylor, there never WAS an $8 billion deficit because Taylor’s figure was based on the projection: a) that the State would do nothing about the growth in Medicaid; b) there would be no economic growth in Ohio in the first two years of the new Administration.
Instead of pouring over budget documents like we’re Diogenes with his lantern, maybe we should just realize that the “solving of the $8 billion budget deficit” is just another political claim that the Administration’s own budget does not confirm.
For the record, here’s what I’ve identified as other claims Kasich made about the budget at one time or another that his budget has disproven:
1) “The budge will be balanced without tax increases or relying on “one-time money.” Wrong on both counts. The budget relies on billions of one-time money and increases taxes on hospitals and will likely lead to higher property and local taxes.
2) “Kasich will cut income taxes beyond that called for 2005.” Nope. It’s funny how the Ohio media developed collective amnesia over this one, but Kasich promised that his first budget would CUT income taxes beyond what was called upon by the 2005 tax reforms. Kasich now says his budget “preserves” the 2005 tax cuts. But those cuts were already preserved in Governor Strickland’s budget. All Kasich did was not increase taxes after the final phase went into place before Kasich took office.
3) “There was an $8 billion structural budget deficit and Kasich’s budget solves this.” Nope and nope. See all of the above.
4) “This budget resolves the State on a path to a sustainable budget.” No more so than any prior budget. Kasich leaves unanswered what happens when the money from securitizing the Lottery, turnpike, and liquor proceeds runs out. Will Ohio in twenty years just renew these leases in perpetuity to generate such funds? As far as I can tell, the Administration has done NOTHING to deal with Ohio’s unemployment compensation fund, which has had to borrow billions from the federal government to cover its obligations because the business community opposes an increase in unemployment insurance premiums.
5) “This is a jobs budget.” Nope. This budget actually will result in direct losses in the public sector. 99 Ohio Tax Department employees have already been told that they will be terminated in relation to Kasich’s budget. Others are likely. As for the private sector, We’ve gained over 73k jobs over the past twelve months, this budget does nothing to accelerate that jobs growth.
For all their back slapping over Mary Taylor last week, at some point someone should just say, if there really had been an $8 billion deficit, then it would be a heck of a lot easier for the Administration to explain how they solved that than they have so far.
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