Tin Cup Governors
Will Alms from Washington Be Enough?
Ohio Asks for Funding for Road, Bridge, Rail Projects
Columbus, Ohio: Governors and mayors from across the nation, especially from the 44 or so states that have widening budget deficits with no shovel-ready sources of money to close those gaping gaps, are rattling their tin cups, hoping soon-to-be President-elect Barack Obama will shower them with tens of billions of federal dollars so they don't have to choose between shedding services, raising taxes or both.
The closer Obama comes to his inauguration day, the more intense will be the call for stimulus funds -- wasteful bailout funding to some, especially fiscal conservatives -- to flow like flash-flood waters to thirsty states whose budget cups are leaky and dry.
Republicans, who never batted an eye when President George W. Bush ran up record deficits to pay for expensive wars and who defined not spending massive amounts on supporting the troops as un-American and un-patriotic, have switched back to traditional anti-tax arguments.
They are warning that Obama's proposed stimulus package, designed to produce millions of jobs to replace the millions lost just this and over the course of the two terms of out-going President Bush and his tribe of fiscal and social conservatives, shouldn't be too big because it will necessarily shift the burden of repayment to future generations.
But as the debate escalates over how big the economic recovery package should be, governors of states like New York, New Jersey, Massachusetts, Wisconsin and Ohio, among others, are indeed the Chicken Little's of our time. Only in their version of this classic children's tale, the sky really is falling.
In Ohio, for example, a Republican-controlled state since 1992 that elected Democrats in 2006 and went for Obama last year, the projected budget deficit so far is about $7.1 billion, the greatest budget gap in history.
Strickland, Ohio's first Democratic governor since the early 1990s, said in early January that the situation facing the state of Ohio is so dire that in order to balance his state’s budget, he would have to fund every state program at 75 percent of its current level, according to Politico.com. “If I were simply to flat fund the operations of this government, I’d end up with $7.3 billion in deficit,” he said, adding, "We’re just trying to keep afloat.”
The governors have collectively requested Obama and a new expanded Democratic-led Congress for $1 trillion. Hard hit by jobs losses across the board, manna from Washington would be spent to prevent cuts in social services and education, as well as “shovel ready” infrastructure projects that could begin with 18 months, according to published reports.
In the Buckeye State, jobs numbers are grim. Numbers from the Department of Job and Family Services show that employment decreased by 26,600 jobs, while goods-producing industries were down 29,330; manufacturing was down 22,100; and construction lost 7,500 jobs. For a state that never recovered from the Bush recession of 2001, losing 95,000 in the past 12 months, pushing the unemployment rate to 7.3 percent, is shock and awe of a different kind. In some areas of the state, like Lucas County, home to Toledo, the unemployment rate is 9.5 percent. In nearby Ottawa County, it is 10.3 percent.
As dire as conditions are, Republicans are being taken to the wood shed on the efficacy of tax cuts versus direct government spending. Obama's economic team says alms for poor states pack a bigger bang when spent directly than through tax cuts, which recipients might save instead of spending.
For a state like Ohio, which experienced $1.2 billion in state budget cuts in 2008, the hundreds of millions can't arrive soon enough.
In one region, Cuyahoga County and four other northeastern Ohio counties, the cost of their proposed projects are at $197 million, published reports say. County leaders, the report says, have added tens of millions of dollars more to the list.
Howard Maier, executive director of the Northeast Ohio Areawide Coordinating Agency, which funnels federal money to local transportation projects says, explaining the sum to a central Ohio newspaper, said: "We have to be ready the moment a stimulus package is approved." He added, "It's not just the direct jobs; suppliers are involved. There's a multiplier effect of the construction."
Columbus Mayor Michael Coleman is using the opportunity to get his push for light rail back on track. Coleman wants $200 million to build a 13-mile transit system. Cleveland Mayor Frank Jackson wants $730 million to fund road and bridge projects.
But as this page has reported before, so-called "shovel-ready" projects may not be "future-ready" projects.
Which alms flow in what amounts to which states will be a fierce contest for sure. With consumer confidence just one point above an all-time low, doors will be open for the greenback cavalry when ever it arrives.
John Michael Spinelli is an economic development professional, business and travel writer and former Ohio Statehouse political reporter. He is also Director of Ohio Operations for Tubular Rail Inc. To send a tip or comment, email ohionewsbureau@gmail.com
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