The news is out - we may have a new budget by the constitutionally mandated June 30th deadline!  While that could be good news, the fact that legislators are hoping to complete negotiations on Saturday, expect the bill to be written on Sunday and have a vote on Monday - well, that’s not so good.

Candidate Barack Obama campaigned on the need for openness, especially with funding bills.  He’s completely ignored that campaign promise.  Ohio legislators can and should do better.  While House Bill 420 from last session was a beginning, members and the public need more than a day or less to read 1,000+ pages.  The Governor is talking about changes like increasing gaming to pay the bills and eliminating entire programs (many of which never should have been created at taxpayer expense) to cut the pork.  The need for openness is even more urgent under these circumstances.

Missing the June 30th deadline and having to put a temporary budget in place is a small price to pay for transparent and accountable government.

Ohio’s politicians tell us that government involvement will help pull us out of the recession, but real world results seem to indicate otherwise. A report just released by the Brookings Institution ranks the Columbus economy 40th in the nation in a study of 100 cities. The study, which examines economic indicators such as employment rates, wages, Gross Metropolitan Product, housing prices and real estate-owned properties, determines how the economies of the nation’s largest metropolitan areas have improved or declined over the past year. Columbus is doing comparatively well economically, but the city shouldn’t get complacent, or it could end up like Cincinnati (61st place), Cleveland (64th), Dayton (79th), Youngstown (87th) and Toledo (89th).

That’s five of six of Ohio’s largest metropolitan economies in the bottom 50, even though a majority of other Midwestern cities are doing fine, if not excellent. What’s more telling is that not all cities are being hit equally by the recession, with some showing only modest losses. In fact, some are seeing promising improvements in unemployment rates and wages. But the report singles out Dayton and Youngstown as cities that began losing jobs two to three years before the national economy took a dive. Ohio’s Gross Metropolitan Product suffered one of the largest declines in the nation. Ohio’s economic performance is disproportionately poor, indicating that it’s not just an effect of the national recession alone.

It’s probably not shocking to people who live in these cities, but it certainly confirms that Ohio’s economy and the policies behind it are stunningly uncompetitive on the national scale. It also shows that Ohio politicians cannot continue to blame the faltering economy on externalities. We will need some real economic stimulus very soon–in the form of lower taxes and freer markets to attract and keep businesses in Ohio. More government clearly isn’t translating into more growth, and, according to this study, it’s likely having the opposite effect.

There will be a new report coming out this summer that shows how well for-profit colleges do in educating at-risk students. In fact, from preliminary reports, this study will show these for-profit colleges do better than other types of institutions for this at-risk group.

This research bolsters two studies the Buckeye Institute released earlier this year. The first, Which Way for Higher Education in Ohio, is a critique of the Board of Regents plan to expand higher education institutions in Ohio. Specifically, there is a desire to locate a new community college in Youngstown. As the report discusses, there is little need for a community college in that town due to its shrinking student base as well as the presence in Youngstown of for-profit education institutions. As the new research shows, these for-profit institutions may actually be better for the area than a new community college.

The second report, Higher Education Vouchers in Ohio: Towards a CollegeChoice Program, outlines a new way to fund higher education in the state. Ohio students would receive a voucher they can spend at any Ohio higher education institution, including for-profit schools. This would be especially beneficial for at-risk students in Ohio.

The Ohio State Supreme Court yesterday helped save taxpayers a little money when it limited the scope of the state’s prevailing wage law. The prevailing wage law mandates higher-than-market wages for work on most state construction projects, which leads to the government (i.e., you, the taxpayer) paying 5% to 15% more for these projects. It can also lead to reduced competition for government construction contracts, which hits nonunion contractors especially hard. For a detailed look at the pernicious effects of prevailing wage laws, it’s hard to find a better source than the Mackinac Center’s booklet on Michigan’s law. Most of what author Paul Kersey says about our neighbor to the north also applies to Ohio.

The Buckeye Institute has done some work on Ohio’s prevailing wage law in Ohio’s Prevailing Wage Law a Costly Burden, Prevailing Wage Law Costs Ohio Millions, Prevailing Wage Exemption Provides Schools with Lower Costs, Higher Quality Construction, and Hamilton County Jail Needs to Escape Prevailing Wage.

As you may have noticed on our website, the Buckeye Institute today released a report authored by former Congressional Budget Office Director Douglas Holtz-Eakin and Cameron Smith. It discusses the effect of the estate tax on small businesses and finds that permanently eliminating the estate tax could create roughly 1.5 million jobs. In Ohio, over 58,000 jobs would be created. President Obama’s “stimulus” plans will ostensibly create 3 million jobs. An estate tax repeal would be a far cheaper alternative.

This study does not discuss state estate taxes. Ohio’s estate tax was the subject of a 2001 Buckeye Institute report which, while somewhat dated, still offers a grat analysis of the tax and recommendations for reform. The tax is also mentioned in the policy brief Ohio’s Dumb Taxes. Needless to say, the research suggests that if Ohio were to eliminate its estate tax, it would be better off economically.

Looks like Governor Strickland is supporting Medicaid cuts and re-thinking his Medicaid expansion because the state isn’t receiving enough tax revenue.  Two years ago, when policymakers in the General Assembly almost unanimously (there was only one dissenting vote) expanded Medicaid at the request of the governor, I wrote this:

Expanding Medicaid can lead to large increases in Medicaid spending when states can least afford it –during recessions. Ohio saw this earlier this decade when Medicaid spending increased dramatically during the recent recession. Spending grew at 11 percent annually during 2001 and 2004, squeezing other budget priorities at a time when the state was seeing reduced revenue. Expanding Medicaid now will only repeat this cycle during the next recession.

Oh, so now Governor Strickland gets it, huh? I guess I was just two years too early.

I’m not a prophet, folks, I’m just someone who actually remembers the events of 2001 through 2004. State policymakers who are grappling with the state’s current deficit chose to ignore the lessons of the recession earlier this decade and expanded spending in a variety of areas, not just Medicaid. Now they are reaping the consequences of their bad decisions. I’ll wager (based on past experience) that soon Ohio’s taxpayers will be reaping the consequences of these bad decisions when these same policymakers raise taxes.

Once upon a time, success was rewarded in America. Now, success often meets with punishment. It’s a common misunderstanding that taxing the wealthy at higher rates will bring greater revenue to our federal government, but Dan Mitchell of the Cato Institute sets the record straight in this enlightening video, showing that such action is actually detrimental to the health of the American economy.

That would certainly be a first!  On their website, the Ohio Education Association is declaring the need to “put our kids ahead of politics”.  Oh the irony!

I can still hear Albert Shanker’s famous words ringing in my ears.  It’s burned in my memory, because it’s the most honest statement I’ve ever heard from the teachers’ unions:  ”I’ll start representing kids when kids start paying union dues.” 

Most teachers support their students, but teachers’ unions do not.  They support the Strickland/Democrat House plan because it’s tens of thousands of more dollars in their pockets from the $1 billion increase in education funding focused on increasing the number of teachers!  All the research proving that throwing more money at education doesn’t improve academics is irrelevant to them.  All the evidence that we’re in a severe economic slump, and Ohio is hurting more than most, does not concern the OEA.  The fact that more and more Ohio taxpayers are finding themselves out of work, over 10% now, doesn’t change the union’s tune one bit.  They want more taxpayer dollars to pay for more teachers to get more dues to support more pro-union politicians.  How is that “putting kids before politics”? 

The whole lack-of-evidence funding scheme is about payback to the unions who heavily supported Strickland and House Democrats in the last election.  And all Ohioans get what the majority of voters asked for - more spending, bigger government, higher unemployment, and loads of new TEMPORARY union jobs.  The jobs and spending will be unsustainable, but that’s irrelevant to those oinkers feeding at the government trough.  And that, my friends, is putting politics before kids.

Governor Ted Strickland returned to Washington, D.C., to beg federal officials to spend more money in Ohio. You can’t really blame him, since his begging earlier this year helped result in the federal “stimulus” bill that allowed him and the General Assembly to (largely) escape dealing with Ohio’s budget problems. Of course, this trip’s begging was to try and convince the feds to allow a passenger rail system to be built in the state, something which would likely exacerbate Ohio’s spending mess.

The governor says it’s “intolerable” that Ohio doesn’t have much passenger rail service. That’s like saying it’s intolerable that Ohio doesn’t have a vacuum tube industry or that there aren’t enough Calecovisions being played in the state. The fact is that people have chosen through how they spend their money not to take passenger rail, whether in Ohio or around the nation. Passenger rail is a relic of days when there wasn’t low-cost and reliable air transportation, many people lived in cities instead of suburbs, and cars were more scarce. Today, though, passenger rail makes little economic sense. Those who do use it are heavily subsidized by those who don’t. But politicians love it because there is a romantic notion in our nation about “taking the train” (even though most of us never do so).

The Buckeye Institute will be releasing a report soon about the folly of high-speed rail plans. Keep checking back for a detailed analysis of why this infatuation with passenger rail is just a waste of taxpayer dollars.

When even Russia can recognize our steamrolling national trend toward Marxism, you know there is a problem! In an article entitled “American capitalism gone with a whimper” in the Russian newspaper, Pravda, the American people (or “sheeple” as the author refers to us) are criticized on several fronts and rightly so, to be quite frank.

On the education front (where to begin?) we are labeled as a populace “dumbed down” by a “substandard education system based on pop culture” where we “know more about [our] favorite TV dramas than the drama in DC that directly affects [our] lives.” And what accompanies this lack of value in education? The disappearance of our faith in God where “Even [Russia’s] Holy Orthodox churches are scandalously liberalized in America.” And this trend culminates (not surprisingly) in the grand event of – you guessed it – the election of Barack Obama, whose “spending and money printing has been record setting.”

But are these criticisms true? A study done by USAToday in 2008 reveals that the graduation rate for Columbus Public Schools is a dismal 40.9%. And what about the rate for the Cleveland Municipal City School District? Even worse – 34.1%. Our education system may be failing, but surely our faith in God isn’t wavering, right? Well sadly, yes. According to NBC News, for President Obama’s recent speech at Georgetown University, a Catholic university, the White House asked the university to cover the “IHS”, a symbol for Jesus’ name, in front of which the President would be speaking. In God we don’t trust? And the spending? Well, that needs no explanation after the recent passage of the $787 billion stimulus package. And I’m not even going to get into the accompanying control over private enterprise by our beloved federal government, as shown in the auto industry.

It is frightening how similarly reality corresponds to these criticisms of Marxism that come from a nation who should know Marxism better than anyone. Our response to this sad transition of our nation thus far has not been one of active concern but rather one of blind compliance, like “sheeple” instead of the freedom-craving American people we are supposed to be. If we are to retain the America we have always known and loved, we must be resolute in defending our freedoms instead of so willingly surrendering them.