BuckeyeBlog

Even as Columbus city officials moan and groan about budget crises and their need to increase the city’s income tax, the Columbus Department of Recreation and Parks has decided to take on a whole new project. An article in today’s Columbus Dispatch states that the city may be forced to close its parks department if Issue 1’s tax increase does not pass on August 4. However, the Department of Recreation and Parks has decided to build an entirely new two-acre park and make improvements to another. The department claims that the projects will draw from “charitable grants and special funds” rather than the city’s operating budget.

Right. But parks require maintenance, equipment, personnel and other overhead costs after that. Where will the department, supposedly at risk of getting shut down, obtain these funds? It doesn’t really matter. After all, spending money unsustainably seems to be Columbus’ modus operandi these days. And more than likely, it will use those budgetary shortfalls to advocate another tax increase in a few years.

The vote on Issue 1’s tax hike is fast approaching, and the city continues its rhetoric and threats about shutting down major government services. But the City of Columbus really does not help its case when, instead of streamlining its spending, decides to pile it on. Columbus taxpayers should be asking hard questions. Why build new parks, when we can’t even afford the exorbitant services and spending the city involves itself in? If city officials cannot recognize misplaced priorities when everyone else can, do they deserve a tax increase?

First, the good news: Although it’s not ideal that legislators have advanced a bill to impose a foreclosure mortorium, they did remove the egregious (and unconstitutional) “cramdown” provision that would allow judges to modify home loan contracts. As the Buckeye Institute’s Maurice Thompson said in his testimony about this bill: “House Bill 3, as currently written, would clearly raise interest rates for prospective homeowners, thus harming more Ohioans than it would help, and enhancing the likelihood of increased delinquencies.” The removal of the “cramdown” provision lessens the harm to Ohioans but does not eliminate it.

Now, the bad: Get ready for your taxes to go up. As the Toledo Blade reports, “Gov. Ted Strickland yesterday said he won’t take the possibility of a tax increase off the table as he negotiates with legislative leaders over how to deal with the state’s budget woes.” It does go on to say that the governor doesn’t think such a hike is a good idea. At least he’s paying lip service to keeping taxes in line, but the amount of spending he supports makes it a virtual necessity, unfortunately. As I pointed out a couple months ago:

When there were rumbles in the air of an impending recession in 2007, the governor and legislators could have done the prudent thing: limit spending growth, refrain from creating new programs, and planned for the future. Instead, with only one dissenting vote, the Republican General Assembly sent a big-spending budget to the Democratic governor that, among other things, created a new middle class entitlement to government health care.

Now taxes will need to be raised to pay for this fiscal recklessness. In the past the governor has denied the need to do this and, in an attempt to avoid making the hard decisions, got the federal government to pony up billions of “stimlus” dollars to cover the state deficit. Now it appears he can no longer avoid the issue. Too bad it’s the taxpayers who will, literally, be paying for the bad decisions in Columbus.

There is a mini-furor over what appears to be a cozy relationship between the mayor of Parma (who happens to be the state Democratic Party treasurer), the chairman of the state Democratic Party, and the chairman’s wife (a lobbyist for the city of Parma). Some are wondering if there isn’t something improper with a state Democratic Party official using taxpayer dollars to employ the wife of another state Democratic Party official.

While this certainly has the appearance of impropriety, to me it’s not the real scandal. What the Dispatch should be focusing on is touched on in its story:

Hiring the lobbyists has been a good investment for the city, [Mayor Dean] DePiero said.

“They were able to help us with some capital bill stuff and some of the (federal) stimulus stuff.”

What Parma is doing (and what many other government entities do) is use the city residents’ tax money to hire a lobbyist whose job is to get other politicians to send taxpayer money to that city. In essence, it’s using your money to convince politicians to take even more of your money.

Taxpayer-financed lobbying is a major reason why government spending is so high. Local organizations and businesses that receive tax dollars hire lobbyists to get more of these dollars. Local governments hire lobbyists to get more state and federal tax dollars. States hire lobbyists to get more federal dollars. Politicians at all levels are hearing from these lobbyists that they need to tax more and spend more. The interests of taxpayers are not being represented by these taxpayer-funded lobbyists; instead, the it is the interests of tax-consumers that is being rewarded.

That is a much bigger scandal than any conflict of interest these three people may have.

In late February Senator Bill Harris made the observation that Governor Strickland shouldn’t base his budget on hypothetical federal aid. Of course, Governor Strickland disregarded that and factored in a huge chunk of federal money when he presented his budget to the General Assembly. Now, with the legislative wrangling in the U.S. Senate, it seems that all that federal money may not materialize. The governor is saying this would have a “devastating impact” on the state.

The changing nature of the stimulus bill should illustrate the wisdom of Senator Harris’s approach. Congress is still putting together the details of the stimulus bill. No one should cout on a certain amount of money from it since the spending allocations are still in flux.

But Governor Strickland is a pretty canny politician. He can see the angles here and he decided to game the system to make himself look good. Governor Strickland based part of his budget on, essentially, numbers he pulled out of thin air. Now that this imaginary money  may not show up, he’s trying to shift the blame to others. A lot of his desired spending was based on imaginary federal money. Governor Strickland could look like something of a hero by proposing a budget including that spending. But if the federal government doesn’t come through with the money, Governor Strickland has positioned himself perfectly to blame someone else for any cuts. After all, his budget included funding for these programs, right? He can blame those horrible politicans in DC for taking away your favorite government program. In reality, the governor knew the money wasn’t settled. He knew the actual budget would be different from what he proposed. He’s just playing politics. It’s too bad that voices like Senator Harris’s — which stand up for a realistic budget proposal — aren’t to be found in the governor’s office.

From the Wall Street Journal:

Lobbyists for industry and labor are gearing up to add costly proposals Tuesday to the Senate’s nearly $890 billion economic stimulus plan.

Florida citrus growers, California wine growers and a range of agricultural interests are pushing a tiny change that would allow farmers to more quickly depreciate new fields. High-tech and pharmaceutical companies want to save billions in taxes by including a plan that would allow them to bring overseas profits back home at lower tax rates. Labor unions are pressing Congress to make sure that new government funding for green technology results in jobs with good pay and benefits for workers.

And, of course, Ohio is getting national attention for its elected officials who are just salivating at the prospect of all kinds of new money pouring into their hands. Can anyone really say this is a stimulus bill any more? Why don’t Congressional leaders just come out and call it the spending bill that it really is. As I mentioned here, these projects and tax breaks may be worthwhile, but they aren’t stimulus.

At a time when many local governments are complaining that they don’t have enough funds (i.e., you need to pay higher taxes), state audits reveal that some local government officials are making some pretty questionable purchases with your tax money:

[Valley Township Auditor Bonnie Turner] voided a township check for $7,645, reissued herself a new check and cashed it; she accepted cash payments totaling $3,700 for the purchase of several township cemetery plots and didn’t deposit the money with a bank; she illegally used $2,353 in township funds to pay her personal home telephone bills for two years; and she owes the township $171 for a cell phone and accessories that she failed to return after she resigned.

The audit found that her husband, Larry Turner, the former township fire department safety officer, must repay $1,237 in township funds that he spent illegally on his personal cell phone in 2006 and 2007 after his position was terminated Jan. 10, 2006.

The audit also found that their son, current township worker Jonathan Turner, owes the township $106 for a cell phone and accessories that he failed to return following a reassignment to other job duties.

The best part?

Mrs. Turner said neither she nor her family did anything wrong, and that it is the trustees’ responsibility to sign off on spending decisions. 

“I never took anything that didn’t belong to me,” she said.

As the editors of the Cleveland Plain Dealer point out here, Medicaid’s burden on Ohio’s taxpayers is growing:

Medicaid enrollment by Ohioans has risen by 27,488 people since July 1, with roughly 16 percent of the new patients in the most expensive category (elderly, blind or disabled).

Thus, overall Medicaid spending is up sharply. From July 1 through Oct. 31, Ohio spent $3.97 billion on Medicaid. For the 2007 period, the tab was $3.62 billion. That’s a 9.7 percent increase — and a cold welcome for spenders’ letters to Santa Claus, care of Strickland’s Statehouse workshop.

This shouldn’t come as a surprise to anyone. I predicted as much here:

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.

That “next recession” is now. Of course, the expansion pushed by the governor and approved by the General Assembly last year has been stalled by the federal government. Imagine what Medicaid would be costing if it actually took effect. We may not have to imagine, as Governor Strickland is pushing the feds to approve the expansion. When Senator Obama assumes the Presidency, it’s likely that Strickland will get his wish. That means even higher Medicaid spending next year.

For those of us who want our politicians to be responsible with our tax money, this Forbes article can hardly be more depressing:

Call it a Washington pile-on.

A normal taxpayer might think that since the Treasury Department has just committed the government to spending an unknown (but possibly very large) amount taking over Fannie Mae and Freddie Mac, Congress would be in a tightfisted mood.

But that’s not the way some Washington lobbyists and politicians think. Instead, they’re viewing the bailout as an invitation to push through other taxpayer-financed bailouts and aid in the few weeks that Congress will work before members break to campaign full time for the November elections.

Among the things that your tax money may get spent on: low-interest loans to the auto industry, more money to food stamps, bridge and road construction, state Medicaid programs (many states, like Ohio, passed an expansion in benefits without having the money to pay for them), local law enforcement, and aid for heating bills.

So we have a deficit and tax revenues are less than robust, so we should spend even more money to bail out irresponsible corporations and state governments and give money to projects that benefit politically-connected special interest groups?  The logic escapes me. I guess that’s why I no longer work on Capitol Hill.

“To save, you must spend some time analyzing spending”

Some excerpts:

Saving money is a mindset, a way of life. It takes a plan, a budget, discipline and a look toward the future. Instead of instant satisfaction, it’s about delayed gratification.

“Debt for mere consumption used to be a taboo,”

But behavior can be changed. The first thing to do is look deep within and ask a simple question: Do I have a spending problem?

This is not an easy concept to teach adults, let alone children. [ed. - how about legislators?]

“How do you compete with all that Hannah Montana marketing when you have a 7-year-old daughter?” Fox said. [Ugh. It's the corporations' fault.]

One way is to try to explain the concept of tradeoffs. Tell your child she can have the Hannah Montana outfit she wants, but not the second item on her wish list if there isn’t money for both.