With the Kasich budget beginning on July 1st, let’s not forget that means the Strickland budget ended on June 30th. So, according to John Kasich’s own OBM director, what did the State end up with at the end of the last Strickland budget:
$973 million surplus.
Wait, shouldn’t that be $8 billion in the red? We kept hearing about what a horrible fiscal shape the Strickland Administration left Ohio in, but when it’s all said and done, the Strickland Administration left such a large surplus that the State came in with revenues 5.8% larger than projected when it was passed the last Strickland budget back in June of 2009. At the time, Republicans called Strickland’s budget director’s projections too optimistic and unreliable. If anything, the Strickland Administration underestimated the recovery that began in earnest in early 2010.
In fact, Gongwer reports that the Strickland surplus even exceeded Mr. Keen’s projections when he started working on Kasich’s first budget. On tax receipts alone, the State took in nearly $1.5 billion more than it expected… during the height of the recession and the first year thereafter.
You might recall that the GOP legislative leadership near the end of the budget debate suggested that the State would have as much as $187 million into the Budget Stabilization Fund (commonly known as the “rainy day fund” that was essentially drained, like all other States’ were that have such funds, during the height of the Great Recession.) Guess where the money comes from that allows the State to do that? The Strickland surplus.
The problem for Kasich and his OBM Director Tim Keen is that their own math doesn’t match their rhetoric. The general rule of thumb is that the true measure of a State’s spending is to compare its General Revenue Fund (GRF) spending from one year to the next because the “All Funds” spending is just the GRF plus mostly “pass through” revenue that goes from the federal government and directly to the local level, and ordinarily the State has little control over the non-GRF “all funds” spending. The final version of the Kasich budget increases GRF funding from $26.6 billion in FY ‘11 (the final year of the Strickland budget) to $28.7 billion in FY ‘13 (the final fiscal year of the first Kasich budget) [Source: Legislative Service Commission “Budget in Detail—As Enacted” GRF—Main Operations Appropriations at p. 8]. And when you compare the State spending in GRF to the federal, you realize that the entire additional $2 billion in GRF spending can be attributed to State government (i.e. Kasich), not the federal.
But, c’mon, Modern what’s the math with the All Funds? Well, that does show overall State spending being cut nearly $2.4 billion. So Kasich gets “credit” for cutting overall State spending, right?
Remember, that the Strickland Administration was accused of balancing the last budget with nearly $6 billion in “one-time” money. Of that, the Strickland Administration said the federal stimulus accounted for … $2.2 billion in “one-time” GRF funding (most of the rest of the stimulus money was transferred through the All Funds fund).
So, with supposedly $6 billion in “one time money” in the 2010-2011 FY budgets, isn’t it odd that the total All Funds spending only went down $2.4 billion? Did Kasich really cut spending, or did spending stopped when the one-time money was gone? Again, if there had truly been an $8 billion structural deficit, and Kasich didn’t raise taxes, but only cut spending, how is the budget balanced when the State is only cutting its total spending by less than $2.4 billion?
What happened to the other 70% of this supposed $8 billion figure? Well, first, we have the nearly $1 billion Strickland surplus. Then, we’ve got roughly over a billion in new “one time money” in Kasich’s budget (all of his privatization schemes.) The economy is projected to do better. In fact, according to Keen, Kasich’s budget director, the State is projected to see a gain in revenues in 5.1% and then 9.2% the following year. The Strickland surplus and additional revenues created by economic growth account for substantially more money than the $2.4 funding being cut in overall “all funds” spending under the Kasich budget. The rest can be attributed to… who said it existed in the first place? Kasich’s future running mate and OBM Director, that’s who… and they’ve been proven to be disastrously wrong in predicting Ohio’s fiscal future (too bad that for one of them that’s their actual job now.)
Ted Strickland did what John Kasich wishes he could claim he ever did. Working in the midst of the biggest economic challenges this State has faced since the Great Depression and with an election around the corner and Kasich already running with the entire GOP establishment’s support, Ted Strickland was able to work in a bipartisan manner to pass a budget that ended with a nearly billion dollar surplus.
John Kasich likes to brag about how the federal government in the late 1990s ran “surpluses” when he was the House Budget Chairman. But that achievement was done during one of the biggest economic booms in U.S. history… and one that was built off of the IT and housing market bubbles… and the deficit was being reduced before he was Chairman and over his opposition to Clinton’s budgets that reduced the deficit. It’s no surprise then when those bubbles burst the federal government went back to running deficits again (the Bush tax cuts, which Kasich endorsed, also didn’t help, either.)
It’s easy to get a government to run a surplus during a recession. Ted Strickland positioned the State to run a surplus after the federal stimulus money was gone before the State was truly on the path to a steady economic recovery.
John Kasich would count himself lucky to leave Ohio in half as good of shape when he leaves office as Ted Strickland did. There was a surplus, not a deficit. Told ya so. The Strickland surplus turned out to be more than DOUBLE what the Strickland Administration itself predicted it would be at the beginning of the year before Kasich took office.