Wednesday, October 28, 2009

The Budget Mess: A Window of Opportunity

As the Ohio State Senate debates the final aspect of the biennial budget, Ted Strickland's billion dollar shortfall and how to fund it, the state's leaders need to consider what will be the greatest challenge to Ohio in the coming years.

The impending massive budget deficit. How massive? More than eight times the size of the current mess. From this past May's Crain's Cleveland Business:
The warning came from Ohio Auditor Mary Taylor, who recently estimated that the state could face an $8 billion deficit when it tackles a 2012-2013 budget that wouldn’t be supplemented by the $6 billion in one-time state and federal money the governor is using to balance the 2010-2011 budget, which begins July 1.

Ms. Taylor is a Republican, and the GOP’s sole statewide officeholder. Gov. Strickland attempts to dismiss Ms. Taylor’s analysis as a politically motivated potshot at his budget. But just because Ms. Taylor isn’t of the same party as the governor doesn’t make her analysis invalid.

Shortly after the governor unveiled his budget in early February, we noted that his reliance on billions of dollars of federal stimulus money to tide over the state’s finances until better times return was fraught with danger. The question we posed then, and ask again now, is how bad off will Ohio’s finances be at the end of the 2010-2011 budget cycle...
Without question, this will be the greatest challenge for whomever wins the Governor's race next November.

Unfortunately, and smartly played from a political perspective, Governor Strickland has failed to acknowledge the issue or presented any options for paying for it.

He has kicked the can down the road.

Perhaps he could learn a little something from our neighbor next door, Governor Mitch Daniels of Indiana:
Mr. Daniels continues to play Cassandra with his warnings about the continuing financial crunch states will face in coming years. As he recently wrote in the Wall Street Journal, "We're facing a near permanent reduction in state revenues that will require us to reduce the size and scope of our state governments."

Mr. Daniels says sales-tax revenues will not increase nearly as fast as in previous recoveries and that states will not be able to count on huge revenue increases from high-income earners to finance ever-higher government expenditures. Always the reformer, though, he notes, "This gives us another opportunity to show Americans the virtues of smaller, more effective government."
Because of the massive shortfall Ohio will face, the state won't have a choice but to shrink and become more efficient.

So why not get the ball rolling now, right? That would be the responsible thing to do.

Ohio Rep. John Adams of Ohio has done just that.

By introducing legislation earlier this year to restructure state government, he has forced the debate into the open. While details are sparse on the current plan, it has provided an opportunity for the state to begin studying what specifically can be reorganized. And with hearings in the State Senate this past week, we're well on our way...
As the largest state employee union blasted his plan to consolidate state government from 24 agencies to 11, Sen. Timothy J. Grendell even drew praise from some Democrats for saying yesterday that he is willing to move forward with a study commission instead.

With the state budget headed for a potential multibillion-dollar shortfall in two years because of the use of billions in one-time federal money to balance the current budget, the Chesterland Republican says there is no better time to look at ways to make state government more efficient.

Yes, a "study commission" being initiated isn't the action many like to see from the legislators, but it is a major step in the right direction. Republicans in the Ohio General Assembly must find a way over the next few months to keep this commission under scrutiny and in the public eye.

Come November 2nd, 2010, Ohioans will be given a choice to choose who they want to implement reorganization and manage the massive budget deficit left unaddressed by the current Governor.

Do they choose the man who sacrificed his principles and flip-flopped on an inevitably doomed gamble on slots, just to keep up with the massive spending increase he proposed....

...or do they choose the man most responsible for crafting the first balanced budget the United States has seen since man walked on the moon?

The choice is clear.


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