Imitation is the sincerest form of flattery, I guess.
This morning, the Cleveland Plain Dealer’s Aaron Marshall becomes the first Ohio media journalist (outside of Plunderbund) who FINALLY reports what we’ve been saying for months now: there was no $8 billion deficit.
Here’s Marshall today:
Tucked away in the details of Kasich’s massive state spending blueprint released on March 15 was a projection that tax revenues will actually grow by about $800 million as the economy comes back from the recession of 2008.
That makes the $7.7 billion gap between spending and revenues actually about $6.9 billion once you factor in tax revenue growth in 2012 and 2013.
The second assumption, about tax revenues in the current budget, is also turning out to be faulty. Revenues for this fiscal year are actually about $840 million higher than expected — and on pace to be about $1.03 billion higher than expected when the books for fiscal 2011 close June 30.
Add up all the extra revenue and you get $1.6 billion to $1.8 billion. So the real deficit is actually turning out to be about $5.9 billion to $6.1 billion.
Us just a few weeks ago:
The Kasich Administration and the House Republicans have projected that over the next two years, Ohio’s economy will grow enough that it will be able to collect nearly a billion more in tax revenues. In other words, through no act of their own, the economy alone will reduce the deficit by 1/8th of the figure the Administration claims to roughly $6.8 billion, which is actually smaller than the deficit Strickland faced in his last budget. The nonpartisan Legislative Service Commission has forecast that Ohio’s economic recovery is actually even stronger. It suggests the State will like generate $125 million more in GRF tax revenues than the House GOP and Kasich Administration projects.
But that’s not all. When it’s all said and done, the State is on pace to end the current biennium with roughly $500 million surplus after all FY11 bills are paid. Factor that in, and Kasich’s deficit is down to $6.2 billion. For those keeping score, that means that nearly a quarter of the so-called $8 billion deficit was already resolved without Kasich having to do a thing because some of it only existed due to rounding and the rest never came into being because of the economy and the Strickland surplus.
We even both concluded that once all deferred bills are paid by the Strickland surplus, the deficit was closer to $6 billion, putting it below the ranges that Strickland, Taft, and Voinovich faced as Governors due changes in the kind of “one time” money available to them. (Kasich’s own budget relies on over a billion dollars in “one-time” money his privatization schemes, he predicts, will generate.)
Look, we’ve known since Kasich introduced his budget in mid-March, that Kasich’s own OBM was saying, in buried budgetary bureaucratese, that there’s no real $8 billion deficit. These numbers about the economic growth over the biennium was a fundamental assumption of the Kasich budget, and his OBM office has been noting the “Strickland surplus” monthly. Nothing in today’s Plain Dealer story is new information we haven’t had available since at least mid-March. So what does OBM Director Tim Keen have to say for himself?
In an interview Thursday, Kasich’s budget director, Tim Keen, acknowledged that "conceptually, I agree" that the so-called "structural imbalance" is turning out to be something in the $6 billion range. But, he said, "I don’t know if I would apply the numbers the way you are here."
Mainly, Keen noted that the $1 billion or so in higher-than-expected revenues for this year "isn’t helping us balance the budget in 2012 and 2013" because of unpaid bills left over from the administration of Democratic Gov. Ted Strickland and other expenditures the state will likely have to make to balance the 2011 books.
Keen lies. The Administration’s insistence that you can’t count on the Strickland surplus to help them balance the budget this next biennium because of “unpaid bills” ignores a simple fact that, again, we’ve gotten from OBM itself: the Strickland surplus is estimated to be somewhere between 2.5 to 3 times larger than the total amount of debts the last Strickland budget deferred into the next biennium. There will be at least half a BILLION left in the Strickland surplus for the Kasich Administration to use to balance their first budget.
Both Marshall and I came up with the $6 billion figure by subtracting from the Strickland surplus any debts that budget deferred into the next one. In other words, there are no “unpaid bills,” either. The question is that now that at least the Cleveland Plain Dealer has acknowledged that it has been misleading its readers all year by reporting the totally false $8 billion unchallenged, will they challenge any Republican politician who continues to use the false number in the future in their reporting from now on? And will other media outlets follow suit?
Or are we forced to continue to see the major traditional media outlets continue to report the entirely false, discredited $8 billion figure simply because it has been repeated so often that the media isn’t willing to acknowledge in their reporting that they’ve been bamboozled by this Administration in overstating the State’s fiscal challenges?