After allowing every House Republican to go on record supporting an education policy that House Democratic ads next fall will say would have turned Ohio’s education system into “a national laughingstock,” Governor Kasich’s lead education policy czar announces that the Administration does not support the changes and wishes to see them removed from the budget. The Columbus Dispatch reporting this morning that the Senate seems poised to follow the Governor’s request.
The Dispatch also reporting this morning that Governor Kasich has set conditions in which he push next year for tax cuts… the Senate must “hold the line” on spending:
"All I’m saying is that if we are in a position where we have significant revenue that is not necessary to fund the government, we should give that back to the taxpayers," Kasich said.
In other words, if you continue to hue to my conservative forecasts for economic growth (the House has already moved the needle to show more economic growth that the Kasich Administration projected to generate another half a billion for the State), then we’ll pass the “surplus” revenues on as tax cuts before the 2012 elections.
It’s the “you can have ice cream you eat your vegetables” method of governing. We’ve seen the Kasich Administration scream holy hell anytime anyone points out the roughly $500 million “Strickland surplus” the Administration is likely to inherit when the current budget ends at the end of June. They’ve publicly chafed when Speaker Batchelder told the press that he expects to restore some funding for nursing homes and public schools by the time the budget heads to a conference committee (assuming the budget goes to a conference committee, which is not a foregone conclusion.)
And here’s why. So far, there’s been virtually nothing in the Kasich agenda that a) doesn’t cause Republicans who support it problems at home; and b) causes Democrats who oppose it problems at home. So far, there’s been very little Kasich has done that is politically popular. Therefore, they know they’ve got to delivery something that the rubber stamp Republicans can easily sell that’s a political winner before the 2012 election. The Administration is betting heavily on tax cuts reversing the trend. Republicans have something fresh in the voters mind to talk about after the budget and SB 5 fights are old news, and it’s something that might put the Democrats on the spot for opposing.
They know that Republicans in swing districts aren’t going to be able to sell a winning re-election message by touting their support of SB 5 or a state budget that cuts billions in education. But tax cuts… that sells themselves. So instead of worrying about replenishing the State’s rainy day fund, which is empty after the Great Recession, or restoring the draconian cuts in the budget, Kasich is telling the General Assembly Republicans to trust that the economy will do better than his budget projects and by next year, they’ll be able to have money they can pass off in tax cuts.
It’s entirely a political calculation to try to give the GOP a winning message by next November. That’s all. That’s why Kasich won’t even say what taxes he’ll cut or how much he expects it to be. He’s basically declaring any revenues that come in above his budget’s economic surplus as fair game for tax cuts and nothing else. And he’s begging the legislators to go along with it instead of caving and giving the money to schools, cities, or nursing homes.
The problem is that tax cuts aren’t always a political winner. No Governor ushered in more in tax relief over his tenure than Governor Strickland, but most Ohioans never noticed the income tax cuts his budgets implemented despite reducing them by nearly a quarter.
Republicans united behind Governor Bob Taft in 2005 to pass the comprehensive tax reform they left to Strickland to actually implement. Taft left office with the lowest ratings of any Governor ever, the Republicans got thumped in the 2006 elections, and the Republicans lost control of the Ohio House of Representatives by 2008.
And tax cuts work politically best when voters can see and appreciate the lower tax burden without seeing or appreciate the cost in government spending in popular programs. Kasich’s tax cut gamble could actually be used to confirm one of the most popular criticisms of his budget, that all he did was shift more of the cost of governing to the local levels. What good is a state tax cut if it results in higher local taxes?
Kasich’s priorities are completely bass ackwards. The reason conservative groups like the Tax Foundation rate Ohio so “poorly” on taxes, they’ll tell you, is because of the high local taxes in the State. It’s basic economics. State government has a much broader tax base than local governments do. Therefore, it’s able generate the same amount of revenues to fulfill basic government needs at a lower effective tax rate than local governments can.
But it’s the plan they’re apparently going with.