Monday, December 28, 2009

Coming bloodbath in Ohio to test Strickland, Kasich as each defend, attack size, scope of government

COLUMBUS, Ohio -- Whether the General Election next November launches a second term for Democratic Gov. Ted Strickland or signals a first term for Republican challenger John Kasich, Ohio's next executive leader will face the uncomfortable task of finding politically workable solutions to the blood bath made all too real by tumbling revenues, disappearing dollars from Washington and conflicting political ideologies that argue government is the answer to and the problem of a brighter future.

As 2009 ended with a battle of political wills between Strickland and Republican leaders in the Senate over how to fill an approximately $850 million hole in the state's two year budget, the accumulation of billions upon billions from a combination of revenue shortfalls to the state or disappearing stimulus dollars from Washington, that may vanish as spending hawks in Congress pull back on deficit spending to help prop up states hit hard by the Great Recession, will require Ohioans -- and the leaders they elect to represent them in Columbus -- to rethink whether government is a friend or foe to their future.

The gauntlet Strickland, Kasich must run

Estimates from published reports show the state's structural deficit for the 2012-13 budget range from $4 billion to $9 billion. Ohio's next fiscal year, which begins July 1, is balanced with about $3.5 billion in one-time state and federal funding that includes $426 million from the latest budget fix, which delayed a 4.2 percent income-tax cut until Jan. 1, 2011.

What will intensify the drama of where and how much to cut spending on government or whether raising taxes is unavoidable despite declarations by both candidates that that option is off the table, is the fact that the state's so-called rainy-day fund was sucked dry to fill a previous budget gap, leaving the Buckeye State with no emergency parachute to deploy when it is falling the fastest.

Ohio facing billions in revenue shortfalls, loan paybacks

Added to this bitter brew will be the need in 2012 to repay Washington nearly $1.7 billion in funds borrowed to continue paying jobless benefits to the steadily rising number of Ohioans who have lost their jobs in the throes of a Great Recession that some economists say may stay weak for at least another year.

Exacerbating the state's worsening fiscal picture -- GRF tax revenues declined two years in a row and expected to do so again next year -- will be the need to fund its social safety net -- already tattered from billions in budget cuts -- at levels to protect Medicaid eligibility and services, MR/DD services, early care and education programs and disability financial assistance.

Republicans have generally opposed spending from Washington, but reports of new analysis based on Census data showing that the American Recovery and Reinvestment Act of 2009 (ARRA) is keeping large numbers of Americans out of poverty in states across the country have both challenged their ideological bent and kept many Ohioans from falling further into untenable situations.

In addition to boosting economic activity and preserving or creating jobs, the report from the Center on Budget and Policy Priorities shows the recovery act is softening the recession’s impact on poverty by directly lifting family incomes.

Kasich income tax elimination plan could add $7 to government spending cuts

If Ohio's future doesn't look bleak enough, consider what it will be like should an energized Gov. Kasich, who one national polling firm says is ahead of Strickland now, is emboldened to follow through on his campaign promise to eliminate the state's income tax -- 7.73 billion or about 44 percent of total GRF tax receipts -- with the help of a House of Representatives again controlled by GOP loyalists.

That stunning possibility, which would demand the virtual dismemberment of government as we know it, will truly be an ill wind of monumental proportions that will blow no good to anyone, not even the businesses Kasich hopes will flock to the state as the gears of government are dismantled, prepping his "new day, new way" plan for improving the state's business climate.

Factor in the imploding budgets of Ohio's six major cities and the landscape for delivering services of all kinds at the state and local level becomes a bleak and burnt nightmare of historic proportions.

A seasoned Republican legislator, who served in the House and who's now a senator and cognizant of what lies ahead, even went so far as to take a swipe at a fellow GOPer whose grand plan is to consolidate government. Bill Seitz of Cincinnati told one reporter that his lawmaker colleagues just "can't come waltzing in the day before a budget is passed and say: 'I know, let's cut state government from 24 agencies to 10 tomorrow.'"

Another budget watcher said that while downsizing government may sound good, as Rep. John Adams wants to do, reality shows that 85 percent of state spending goes directly to local services and schools.

Strickland to Kasich, GOP: Show me your budget plan

Strickland told Ohioans he is proud of his education reforms and said he hopes things will get better. Fit and ready to run what will be a no-holds-barred campaign, the man from Duck Run said is ready to talk with Republicans about future budgets. But he offered them a challenge too: He wants anyone opposed to his remedies to declare "what functions (of government) will be eliminated and how they're going to continue to carry out the essential services that people expect from government."

Of course, what people expect from government and what they are willing to pay for is the key question. For those who see government as an obstacle to progress, employing people who do little but who benefit from great benefit packages, the answer is simple: shrink it. For those who see government as critical to protecting those least able to fend for themselves or that checks abuses spawned by a marketplace unchecked, the answer is simple: defend it.

Follow me on Twitter @ohionewsbureau. Read more stories on people, politics and government here.


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