Year in Review: Biggest budget stories of 2011

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[Cross-posted, with modifications, from Plunderbund]

Ohio Budget Watch launched in early 2011 as a companion to our sister site, Plunderbund, with a mission to track the state budget. The site, primarily active during the spring, focused on the GOP-controlled legislature and Governor’s office as they drafted what constitutes the single-biggest piece of legislation that gets written in a two-year period. The budget is full of policy changes that affect every day Ohioans. In over 4,000 pages, it would be easy for the party in power to sneak through some fairly horrible new policies, so our reporting was aimed at calling attention to these things before the bill passed.

Our most-visited story of the year (“Hidden in Plain Sight: Massive Privatization Power Grab”) highlighted six pages, buried within thousands in Kasich’s budget, that gave a single unelected member of the Governor’s cabinet far-reaching powers to privatize any state service to any firm he selected, with no legislative oversight. Bold, even by Kasich standards, the move was an ultimate failure on the Governor’s part. The General Assembly, who apparently still like their power, eventually removed the language, leaving the budget director only a limited authority to privatize the Turnpike, but only if they sign off first.

Which brings us to another story you only read on Ohio Budget Watch (“Turnpike Lease is a Budget Red Herring”). Lost in the discussion of potentially selling the Turnpike to a private operator is the fact that the Ohio Constitution prohibits using the money to balance the state budget, as Kasich hinted for months he might do. We like to think that, thanks to our post, Kasich’s advisors finally read the Constitution and scrapped he plan. More recently he’s proposed using the proceeds to repair the state’s roads and bridges—something the Constitution would allow. But we still think he won’t be able to do it without a fight, given that lawmakers – many of whom represent those who pay the tolls on the road – must sign off.

Still on the topic of privatization (a big theme in the budget), Ohio Budget Watch did the math and concluded that in his bid to fund JobsOhio, the Governor planned to hand over the state’s liquor monopoly – capable of generating $7 billion in revenue – to the private sector for just $1.5 billion, demonstrating that he’d learned his negotiating skills from his former employer, collapsed investment bank, Lehman Brothers (“Wall Street Math: Jobs Ohio funding ‘resolved’). The story was so big, it went national – with our analysis gaining coverage on ThinkProgress and MSNBC.

Another Budget Watch exclusive was the revelation that despite self-congratulatory claims of the Kasich administration that they had balanced the budget, it was actually out of balance by nearly $200 million (“Could ODJFS Need An Additional $194 Million to balance their Budget?”). Almost comically, Kasich’s budget had counted on the federal government bailing it out on a require interest payment for loans to the state’s unemployment compensation system – something GOP members of Congress weren’t in any hurry to do. But hey, John Kasich got to play golf with John Boehner, so it all worked out.

In the spring, Governor Kasich made a big fuss to show he would take a hard line in order to get additional revenue from casino operators, who he claimed he voters had given too good of a deal in 2009. The trouble is, Kasich is a terrible negotiator. In the end, the state secured an additional $110 million over 10 years, while giving up over half a billion in commercial activity tax and lottery slots revenue compared to what had been negotiated with racetracks by Governor Strickland (“Kasich Casino Deal A Huge Loss to State and Education”).  And, in exchange for delivering such a crappy deal, Kasich’s hand-selected consulting firm got a $15 million taxpayer-funded bonus (“Kasich’s Casino consultants to get $15 million from public education”). To make matters worse, most of this lost revenue comes from the Lottery, which means it’s not available for public education, already suffering steep budget cuts under Kasich.

We did a lot of original reporting on how the GOP used the tax code to reward corporate contributors. Thanks to a reader, we discovered and reported on a brazen move by the Ohio Senate to give away millions to tax cheats in a budget amendment (“Massive tax giveaway hidden in senate amendments”). We also reported on a new multi-million dollar tax break for oil companies contained in the transportation budget (“Tax break for petroleum passes House, despite urging of other industry groups”, “ODOT budget update: tax break for petroleum industry and other amendments”). And we revealed that the budget actually lowered the standards and expanded the Governor’s checkbook for giving away tax dollars to companies who threaten to leave the state (“More corporate welfare: job-retention tax credit expanded”).

On Education, we reported on House and Senate amendments that actually made Kasich’s school funding proposal even worse, each Chamber taking a turn to tweak the district allocations and in the process sending yet more money to wealthy school districts at the expense of the poor  (“More fun with math: the horrible GOP school funding amendment” and “Surprise! GOP targets new money to rich school districts”).

What’s next for Ohio Budget Watch? In 2012, the administration is promising a Budget “Corrections” bill, which means more potential policy changes that could affect local governments and schools. And the state is also set to roll out the first capital construction budget in three years, with some dramatic process changes in store. The year almost certainly won’t be as busy as 2011 (and, we anticipate 2013) when the two-year budget was debated, but there will still be plenty to watch.


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