What to do with a surplus? Kasich says local governments should not expect any of it


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Our Governor went to Jeni’s Ice Cream yesterday. For those not familiar, Jeni’s Ice Cream is catnip for people who live in Columbus. They can’t get enough of it.

Of course, Governor Kasich wasn’t making a trip simply to pick up some pints of delicious ice cream. He was holding an event in Dublin with small business owners where he discussed jobs, the economy, and the proposed state budget. Statements made by Gov. Kasich once again make it clear  that there is large difference between what Governor Kasich thinks the state should do with the projected $1 billion in extra revenue and what Senate and House Republicans think should be done with the surplus.

Speaker Batchhelder is already on the record saying the extra money should go to either schools or nursing homes. While the Senate seems to think any extra money should be directed toward nursing homes. Either way both of these opinions stand in clear contrast to Governor Kasich who stated, again, that any extra money should go into the state’s rainy day fund or should be given back in the form of a tax cut.

“Particularly at the end of this (fiscal) year, I’d like to see more money in the rainy day fund, but ultimately I’ve always been a tax cut advocate,” Kasich said.

The Governor’s stance is nothing new.  This is consistent with other comments he has made about what the state should do with extra revenue.  What is interesting about yesterday’s comments is that Kasich talks about giving a tax cut based on a surplus while the deep cuts made to local governments, that he is unwilling to fill with the same surplus, will only lead to greater harm over the short to medium term future.

This morning the Akron Beacon Journal quoted the Governor as saying that, “First of all, we have to be careful, because this economy is shaky.” Which is very true, the economy is improving but slowly and it still would not take much to erase the gains we have made so far.

With that said though, the reforms that the Governor speaks about helping local governments goes against the very logic he is using. The drastic cuts to local governments and school districts are going to result in people losing their jobs. That is a fact and we are already starting to see this with school districts announcing pending layoffs due to cuts in state funding. Those teachers and civil servants who will lose their jobs will no longer have the income to put back into the local economy and create the demand that businesses need to continue to hire and produce products. It doesn’t really take an economics professor to figure this out.

Even yesterday, during the Governor’s event in Dublin, a Republican small business owner stood up and questioned the Governor’s logic. She correctly point out that a lot of businesses want to be located in places like Dublin because of their great public schools (GASP!).

“What I do know is businesses rely on excellent education, which is one of the reasons Dublin is doing really well,” the Republican said after the group discussion with the governor. “We have a top educational system for our students. When you take a well-supported school district and make one of the largest cuts, then it becomes a concern for me.”

When you have Republicans in Dublin publicly questioning the underlining economic logic of your budget I would think you would want to take notice. If the Governor doesn’t start to change his message and start to realize that his “Jobs Budget” isn’t resonating with the rest of Ohioans, arguments over what to do with an extra billion dollars are going to be the least of his worries in the coming election cycle.

 

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  1. Kasich’s $1 billion dilemma: save for a rainy day or cut taxes? | Ohio Budget Watch
  2. Senate Budget Amendments, Round 1, Part 1 | Ohio Budget Watch

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