BuckeyeBlog

It’s a pleasure to see Mike Curtin writing. He says, in general, Ohio is showing good fiscal restraint. He includes a nice gem that one might expect from the author of the Ohio Politics Almanac: That what we widely call today “House Bill 920″, by which we refer to the idea that property tax collections are fixed, so that, on average, rates are adjusted downward (or upward) as values increase (or decrease), began in 1878. That’s good stuff.

I’m not too sure about his case, though. He argues that Ohio has been “highly responsible” in managing its finances and cites several good bond ratings of various entities. (I can’t help but wonder if they’re the same rating agencies that handled all the banks and insurance companies that are electing Barack Obama?)

It’s not at all clear that relying upon citations to local tax votes is good grounds for arguing budget responsibility. We already know that people spend their own money more carefully than they do other people’s money, and given the chance to vote on their own taxes, they are slow to say yes. The real problem lies where the legislators can spend money by legerdemain, which is in the Rube Goldberg world of state and federal finance (to which Curtin does allude) and the world of court orders.

Certainly it’s true that Ohio has managed, moderately responsibly, its past two state budget cycles, one under a Republican governor and one under a Democrat governor. But before that? From 1998 to 2007 the state averaged a 6 percent annual increase in total spending, according to data in the 2007 Comprehensive Annual Financial Report. Exclude the most recent year, 2007, as being the responsible period, and a zero year due to a recession, and the average increase has been more than 7 percent per year.

How about growth in Ohioans’ per capita personal income? For 1997 to 2007, according to the Bureau of Economic Analysis, it averages 3 percent–half the growth in state spending.

Twice the rate of state spending growth as per capita income growth? That’s not responsible. That’s irresponsible. It’s spending beyond our means.

This entry was posted on Monday, October 27th, 2008 at 7:50 am and is filed under Transparent Government. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.