“What we’re doing right now is not working.” That’s what Kent Scarrett, executive director of the Ohio Municipal League, said about why cities are asking state legislators to let revenue sharing—in the form of local government funding—flow as it used to before Gov. John Kasich took control and withheld billions, forcing them to do less or keep pace as before by asking locals to pay more in taxes.
Don’t expect Ohio’s term-limited governor to return to the days before he took over in 2011, when municipalities, big and small, could deliver programs and services their taxpayers had been assured of receiving, including fire and police and public schools a community could be proud of. From his first budget to his next and last one, Ohio’s 69th governor has kept true to his single-minded obsession to sequester funding meant for cities in the state’s emergency fund.
Gov. Kasich, spent millions of taxpayer dollars on security while running a campaign for president that flopped terribly when Donald Trump wiped him and more than a dozen other Republicans off the campaign trail. And now Kasich has bellowed of late that he thinks Ohio is entering another period of recession.
Kasich has offered no evidence of dire times coming other than pointing to big dips in revenue that call into question his budgeting more than it predicts another economic slowdown. In contrast to Kasich’s unfounded assertions about his state’s economic health, the national economy is heating up enough that the Federal Reserve raised interest rates Wednesday. The quarter-point uptick by the Fed is a sure sign that even though Ohio is lagging under Kasich, the nation has recovered sufficiently from the Great Recession of 2008 which born from many of the same policies Ohio’s governor believes in, like tax cuts for the wealthy and dangerous deregulation.
The unfortunate irony of Gov. Kasich’s claim went unnoticed by Ohio media except the Akron Beacon Journal, which penned its thoughts in an editorial titled “They cut taxes, and now a recession?” The ABJ dissected Kasich’s claim of “times are tough”, posting an analysis that probably didn’t sit well on the 38th floor of the Riffe Center, headquarters for the governor and his staff. Based on real numbers, the ABJ notes that Ohio has experienced three straight months of job losses, a labor force participation rate that’s declined, and revenues that missed the mark for two consecutive months, 2.8 percent and 5 percent, respectively.
How can this be, wondered the editors? Upon closer inspection, they hit a nerve. “For the past decade, Republicans at the Statehouse have been championing the potency of income tax cuts. They have reduced rates by roughly one-third. No one has been more ardent in his support of the reductions than the governor. He regularly makes the case that tax cuts generate jobs, that they are the centerpiece in energizing the state economy, providing the incentive for people to come and stay here.”
By that logic, the ABJ concluded, “these should be the glory days of the Kasich tenure, six years into the job, having engineered a huge dose of tax relief for small businesses, designed to trigger risk-taking, investment and hiring. And now an Ohio that has failed to keep pace with the national average in growth and job creation faces its own recession?”
Plunderbund has reported month in and month out on Ohio’s poor job creation performance under Gov. Kasich. In spite of his razzle dazzle style of governance, he has failed to even meet, let alone beat the national average for over three straight years. Even with the addition of JobsOhio, Kasich’s pet project to privatize public economic development services under a board and director he hand-picked, Ohio can’t produce enough good-paying jobs for workers in need of one. The tragic result is that tens of thousands of otherwise able bodied workers have stopped looking for work in Ohio. The drop in workforce participation can perversely lower the unemployment rate, making the lower number look good even though it’s grossly misleading.
It’s curious, especially for budget watchers that pay attention, that the size of the state’s rainy day fund is strikingly similar to the funds Gov. Kasich took from cities and schools in his first draconian budget, which he said was fashioned to fill a budget gap far smaller that he asserted it was. Ohio collects about $3 billion less per year now than before, ABJ analysis found. A fraction of that sum, it said, would cover the current shortfall in revenue Kasich is so worried about.
“Reduce the tax reductions by half, and the state would have more resources available to invest in the foundation of a strong economy — in early education, in more affordable college tuition rates, in local services and learning in poor rural and urban classrooms,” the newspaper wrote. “So, when the governor talks about a looming recession, is he really seeking divert attention from what is becoming clear? He and other Republicans in command have cut taxes too much.”
The Ohio Municipal League released a report Tuesday outlining a series of proposals to restore local government funding and help combat heroin and opioid abuse. Ohio’s newest black eye of national ill repute is that it ranks first in the nation in overdose deaths, a published report said.
Marion Mayor Scott Schertzer likely spoke for many members of the OML when he said about who rules in Columbus, “Sometimes I have to remind my legislators there is a difference between the legislative branch and the executive branch, and they don’t always have to do what the governor [Kasich] wants.”
Mayors across Ohio have complained throughout Kasich’s time in office that policies he pushes hard for, including big cuts in the local government fund, eliminating the tangible personal property tax and the estate tax, are bad for their cities and their residents, because it shifts the tax burden from the state to the local level. Kasich can bristle at any suggestion he’s a culprit in his state’s own undoing, but years of performance failures can masquerade only so long as successes until the cover-up is no longer tolerated.