Kasich’s Budget Director: $1.1 BILLION more to spend in conference

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Kasich’s OBM Director, Tim Keen, testified in Conference Committee Wednesday to provide updated revenue projections for the Conference Committee to use as they work toward a month-end deadline to pass a balanced state budget. And he brought what sounds like good news: tax collections are better than forecast and there will be $837 million extra at the end of fiscal 2011, which ends June 30th). On top of that, the next two years, the state will bring in $425 million more than was previously planned. $837 million + $425 million? Wow, that’s a lot of money!

Happy days are here again, ba da da da ... <sound of record scratching> Not so fast, says Keen. Apparently Keen and Kasich would prefer that the Conference Committee does not spend any of this windfall, for reasons he explained, but we will show do not add up.

First, Keen told the Conference Committee yesterday that the state deferred $650 million in bills from June to July, moving them into the FY2012-2013 budget to take pressure off of 2011. Now that we have the extra $837 million, he’d like to pay those bills now, leaving “only” $187 million in the current fiscal year.

And of that $425 million in 2012 and 2013? Keen argues that the legislature has already “spent” $129 million of that thanks to policy changes that will make the Medicaid program more expensive. But wait, that leaves $303 million. Hardly chump change.

And, finally, there’s another important point the reporters and committee members seem to be missing. And that is that by paying $650 million in bills early, that amount is no longer needed in the next budget. Therefore, $650 million has just been freed up in the NEXT budget to spend elsewhere.

Folks, this adds up to real money. $187 million + $303 million + 650 million? That’s $1.14 BILLION. That much money could wipe out cuts to local governments and nursing homes; it could bring the schools back to approaching pre-Kasich levels. It could pay to undo a lot of the draconian cuts in Kasich’s budget. But he is going around downplaying how much money there is and urging the Conference Committee not to spend it. Don’t buy it. They have two motives at work.

First, the GOP thrives on the illusion that there is a huge budget deficit to get local governments to scale way back, school districts to consolidate and to justify union-busting. But it isn’t true.

And second, the administration clearly knows their budget is not balanced. They are banking on a federal bailout on unemployment compensation loan interest that’s not coming, they have ridiculously optimistic forecasts for Medicaid savings they will never realize, and lots of other savings proposed from privatization that will never pan out. And they know it, which is why they want to keep some money in the back pocket, just in case.

Legislators should demand to see a full accounting of new revenue and spending projections, and do their constitutional duty and appropriate the funds rather than leave it to the Governor to spend as he pleases.

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