How big is Ohio’s budget hole, anyway?


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This seems to be the $8 billion question. Or $6 billion; or less. Really it depends on whom you ask.

Governor Kasich’s budget director, Tim Keen, came into both the House and the Senate explaining that he solved for a $7.7 billion shortfall when comparing spending from the last state budget and revenue that was forecast to be available this time around. This involved the following measures:

  • $1.8 billion in spending cuts
  • $1.3 billion in Medicaid reforms
  • $0.8 billion in higher revenue
  • $2.2 billion in local tax revenue the state is now keeping
  • $1.5 billion in one-time measures such as debt restructuring and selling off liquor profits

However, legislators and newspapers are now questioning whether there ever was a hole that big. Better revenue projections and Medicaid caseload forecasts have been coming in, and many argue that gap has been whittled away to $6 billion or less before the budget is even passed. So what is Keen saying now?

To Gannett: “I don’t know what the right number is,” Keen said. “But what’s irrefutable is that it was $7.7 billion when I began.”

or, to the Plain Dealer, ‘Keen, acknowledged that “conceptually, I agree” that the so-called “structural imbalance” is turning out to be something in the $6 billion range’

In other words: “it’s probably wrong, but who the hell knows. But by all means, let’s still cut services to the bone, privatize everything in sight and hold back tax revenue the locals were expecting because we’re having a hard time pinning down a number.” If the hole is $2 billion smaller, you might ask, why not cut back on some of the drastic elements of this budget by $2 billion and lessen the pain? The Kasich team says no.

No really, they’re saying that — as my colleague pointed out, Kasich warned that even if revenue from the remainder of this fiscal year comes in ahead of estimates (thanks, Ted), the House and Senate shouldn’t get too excited about spending it.

Does the Governor think the economy will take another dip (possibly a self-fulfilling prophecy given all his cuts), or would he like to keep a little in his pocket for a tax cut as his re-election in 2014 inches closer? In the meantime, many Senate and all House Republicans are up for election in 2012 and might want to avoid the wrath of voters as a result of budget cuts and aren’t interested in waiting for a hypothetical tax cut in a year or two. This should be an interesting intra-party dynamic to watch going into conference negotiations.

Back to the fact that Team Kasich appears unable to pin down a number representing the size of the budget hole. Gannett did a great analysis of the budget hole and reminded us of now-Speaker Batchelder’s urging two years ago that Strickland’s budget director, Pari Sabety be fired for  “not [being] transparent in the construction or the explanation of the budget and […]  how all the pieces of the puzzle fit together.”  Despite questions from his own members and headlines like: Ohio’s $8 billion budget hole: Was it really that big? and New budget deficit projection requires independent review, he sure is silent now about whether Keen should stay or go.

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