According to the Cleveland Plain Dealer, Speaker Batchelder is annoyed that school superintendents are presenting the Governor’s budget as what the State is likely to do regarding school funding:
House Speaker Batchelder said the anger at recent community meetings is being fueled by school superintendents who are “misrepresenting the legislative process and getting away with it.”
Batchelder said Kasich’s budget proposal will be altered by his caucus, but school chiefs aren’t explaining that to the community.
In defense of the school chiefs, until the Republican majority reveals how they’re planning to change the Governor’s budget, the school districts have no other alternative to consider but the information put out by the Kasich Administration. Also, assuming that the Republican House is nothing more than Kasich’s rubber stamp factory is hardly an unfounded assumption in Columbus today.
One proposal offered by State Representative Nan Baker (R-Westlake) would put a cap on the amount schools can lose in State funding, take the modest gains in funding a handful of poorer districts were seeing, and then using that money to blunt the drop in funding wealthier districts are seeing. To the extent that Kasich’s budget proposes the very kind of “Robin Hood” scheme the Ohio Supreme Court prohibited in DeRolph, the prevailing GOP plan is to institute a “reverse Robin Hood” amendment that takes money out of the poorer districts to blunt the cuts being made in richer, suburban districts that the Kasich Administration believes should become self-funding.
Of course, this is as House Republicans find themselves facing considerable and unprecedented heat back in their districts over the school funding budget. On Friday, the Plain Dealer reported that even Speaker Batchelder, who serves a reliably conservative Republican district, is feeling the heat back home over Kasich’s education budget in town hall meeting reminiscent of the health care themed town hall meetings Congressional Democrats saw in 2009 (minus the astroturfing this time.) And that’s because, as the Cleveland Plain Dealer reported this morning, Kasich’s budget cuts are sharpest in the school districts in Cuyahoga County that actually Kasich carried. In other words, Kasich’s budget isn’t selling with the Republican base back home who thought austerity measures were to be targeted onto the “other side of the aisle.”
As a result, both Republicans and Democrats have introduced roughly 1,000 amendments to the budget. Some dealing with the education cuts. Others, as our BudgetWatch site reported over the weekend, deal with restoring most of the cuts Kasich proposed to the Ohio Consumers Counsel.
This as nervous House Republicans, many of them who won in races in which the Democratic incumbent was attacked in ads paid for by the GOP Caucus over a drop in state funding for education, are watching the State’s revenues with increased hope that better than expected revenues will allow them to loosen the belt more than Kasich’s budget demands. As we’ve discussed, Ohio is on pace to end the fiscal year at the end of June with over $1 billion more in revenues than projected.
Many lawmakers want to tap into that better than expected revenue to blunt many of Kasich’s funding cuts. However, $600 million of that money will go to pay costs that Governor Strickland’s budget shifted into the next biennium. But that still will leave roughly half a billion dollars in a projected surplus. Will that go to blunt some of these education and local government cuts? Depends on who wins the political debate on this very issue going on right now in Columbus.
We know that Governor Kasich is really looking to improve Ohio’s bond ratings from the negative outlook they recently gave his new budget. One way that the State of Ohio could please the bond raters is to start replenishing Ohio’s rainy-day fund that Governor Strickland’s FY 2009 budget depleted due to to recession.
But is it too soon to talk about returning half the $1 billion that was in Ohio’s “rainy day” fund before the recession just to please Wall Street? After all, typically States contribute to their rainy day funds during “feast” times, not immediately after famine times. While Ohio’s economic recovery gains steam and is impressive (we have an downward trend in unemployment we haven’t seen in this State since 1983), we are not so far along that contributing to the “rainy day” right now makes sense.
First, there’s the politics. Contributing to the “rainy day fund” is never politically popular as taxpayers believe it is silly (until the government needs to use one) for the State government to collect tax money to bank in the event of a “rainy day.” Second, the opportunity costs is we contribute $500 million to the “rainy day” fund now, or we use that money to blunt the Governor’s job killing budget cut, which multiple think tanks have concluded as introduced would lead to Ohio losing tens of thousands of jobs (47k to 51k, depending on the methodology.) Which choice do you think the voters back home would rather see? The one that generates more tax levies on the ballot?
From an economic perspective, using that money to retain jobs at this point in the recovery is more important than rebuilding the “rainy day fund.” The recovery is shaky, and highly reliant on consumer confidence. Anything that would create a sense of job security, such as avoiding cuts tens of thousands of jobs, would be more of a positive economic impact than Ohio replenishing half of its pre-recession rainy day fund in the first biennium budget since the recession ended.
When you take a step back, it’s kind of insane that we’re even having this debate with the Kasich Administration. He’s asking school districts and local governments to make massive spending cuts without raising local property taxes as the State slashing BILLIONS in state funding to them while considering to contribute half a billion dollars to the State’s “rainy day” fund?
While Ohio isn’t so flush with cash that the legislature can’t avoid making some tough choices, the reality is that the State is far from broke as Kasich and his supporters pretend. The tougher choices were actually made in the last budget. Yes, even though this budget loses the stimulus money that was in the last budget, the State will enter it’s next fiscal year in July with more than enough of a surplus to replace every penny the schools received in federal stimulus money in the last budget, even after the Administration pays off every bill the current budget delayed into the next budget.
Using the State’s surplus to avoid widespread layoffs in local government and in education is far more important for the overall health of Ohio’s economy because it reduces the pressure on those governmental entities to layoff employees and/or seeking higher local taxes and avoids even more pressure on our already tapped out unemployment compensation system. That has far more positive economic utility for Ohio’s economic health than immediately pleasing the whims of Wall Street’s bond raters who we can easily satisfy the next biennium as our State revenues continue to grow.
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