In The News: How would YOU find $8 billion to balance Ohio’s budget?
Today, as part of its state budget coverage, the Dispatch has an interactive game that allows you to choose among options for raising revenue and cutting costs. I recommend everyone play around with it:
In my attempts, I raised what I thought were a reasonable amount of taxes across the board, did some cuts (exempting prisons and mental health hospitals from closure, for instance), and still came up with a $450 million deficit. Anyone who tells you this is going to be an easy process is lying.
There are a few major flaws in this tool worth noting.
First, there are hundreds of ways that could and should be considered to raise new revenue. Only a dozen or so are listed here and most hit ordinary Ohioans the hardest. Why not consider extending the sales tax to services – just for a start, you could raise $12 million from taxing lobbyists, and eliminate the ridiculous cap on sales taxes paid by the wealthy when they buy shares of private jets. Discussions like these are necessary, and we’ll be revisiting them in the coming months, but they are easy to gloss over in putting together an online budget game. We hope policymakers will do more than play with this game to come up with their budget plans.
Second, the article starts with a $8 billion hole to fill. This number is based on calculations of the amount of one-time money that were used to balance the last state budget. The assumption is, since this was money only available for fiscal years 2010 and 2011, you have to go without it this time around. This is true, but every state budget includes some one-time money. 2012 and 2013 will be no different. And the game doesn’t give you options that are normally employed, such as further restructuring state debt or transferring excess money in certain agency-controlled funds – each could generate $100s of millions.
Lastly, the authors also allow you to raise a $4 billion one-time lump sum by opting to privatize the Ohio Turnpike. What they fail to note and a warning to anyone looking at this option: the Ohio Constitution is not on your side. Revenues derived from our highways must be spent on our highways or on enforcement of highway safety, according to § 12.05a. Unfortunately, neither ODOT or the Highway Patrol receive funding of any significance from the general fund, so an infusion of $4 billion doesn’t take any pressure off the state’s general funds budget, as this calculator game would suggest.
But even noting those flaws, it’s a useful and educational exercise for everyone to better understand the tough decisions ahead. We recommend that John Kasich might want to play around with it (hint to John: despite your promises to “fix” it, the final reduction in the income taxes went into effect yesterday, thanks to your predecessor)
We’ll all need to be watching as this budget is put together, as it is the most significant demonstration of the state’s policy priorities that will occur before the next election. We highly suspect that many of you will disagree with the Republicans on exactly what those priorities will be, so we’ll do our best to highlight those choices before they are final and encourage you to weigh in with your representatives before it’s too late.