BuckeyeBlog

According to Gongwer News Service, a bipartisan group of legislators has rejected Governor Strickland’s idea to help balance the budget by reducing the amount the state pays into the public employee retirement system:

A Strickland administration proposal to help balance the budget by reducing retirement contributions for state workers has been shelved, leading lawmakers said Wednesday.
 
Rep. Todd Book (D-Portsmouth) and Sen. Keith Faber (R-Celina) both said Gov. Ted Strickland’s plan to cut employer contributions from 14% to 8% over the biennium has been rejected by lawmakers.

The governor is right on this issue and the Republicans and Democrats in the General Assembly are wrong. The state is facing a huge deficit and this is a sensible idea to help curb it. In fact, it may be time for the state to begin looking at how generous its pension system is for retirees. Reform could end up saving the state’s taxpayers a significant amount of money in future years.

Jon Entine had a great article in Reason magazine earlier this year about the looming government pension fund crisis.

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.

The Findlay Courier has a good editorial cautioning the governor to be careful how he spends the federal “stimulus” money:

It seems unlikely that Ohio will pull out of the recession in only two years, so at this point, relying on economic growth to boost state revenues is unrealistic. Thus it makes sense for the state to be extremely careful in how any one-time money is used. Rationally, one-time money should be used for one-time projects, and in our current circumstances, projects that create jobs should be top priority. It also seems justifiable to use some one-time money to extend benefits for the unemployed.

What it should not be used for is projects that involve heavy long-term fiscal commitments, such as welfare and health care expansion, or the governor’s education reform plan. House Democrats are already crafting plans to limit proposed funding increases to schools and phase in the governor’s reforms over 10 years instead of eight. That’s at least a start.

Both political parties say they oppose both tax hikes and cuts in services. But something has to be done to avert catastrophe in the future as well as now.

There is one problem with their analysis — the unemployment funds from the federal government come with a mandate that the state expand benefits in such a way that once federal money runs out, the state will either be forced to pay more into the unemployment insurance system than they do now or cut benefits. This is exactly the sort of funding the state should reject as it sets up long-term problems.

The general theme of the piece is right on, though. This federal money is a one-time deal (more than likely). If it is used to fund programs that, once the money runs out, will be difficult to scale back, then that is a bad thing. If our leaders are short-sighted and merely look at all the goodies they can buy with this “free” money without considering the long-term consequences, then they are poor leaders.

This federal money isn’t free; it comes with a heavy price tag. It’s just that the cost of this money will come due in the future. Here’s hoping that there’s some long-term thinking going on in the governor’s office and the General Assembly.

Governor Strickland thinks you’re too fat. But don’t worry, the Healthy Ohio Plan is here to save you. All that’s needed is your tax money and your willingness to submit to social engineering. Among other things you’ll be paying for:

• Supporting farmers’ markets (don’t farmers get enough welfare already?)
• A social marketing campaign to tell you how to lose weight (funny, I thought that the variety of weight loss TV shows, magazines, and websites could do this. What’s next? A tax credit for joining Jenny Craig?)
• Creating the Ohio Community Wellness Alliance to coordinate weight-loss efforts across the state (how does funding more jobs for bureaucrats help Ohioans lose weight?
• Developing a comprehensive database to track obesity in the state (Big Brother is going to make sure you’re not so big)

It’s not that these goals (and the others proposed by the plan) are so bad. It’s just that we don’t need a government bureaucracy to implement them. If you want to lose weight, you can exercise more or eat healthier. You can enter a program. You can get gastric bypass surgery. You can do a variety of things. Even with all these options available, though, people are still overweight.

Governor Strickland and his health bureaucrats don’t like that some Ohioans have failed to live a thin lifestyle, though, and so tax dollars are going to be spent in what is almost certainly a vain effort to make Ohioans shape up. No aid to farmers’ markets or government help lines with weight loss tips will make people lose weight who do not have the desire to do so. Does the governor really think people are overweight because they can’t find a farmers’ market or don’t know that eating healthier and exercising more is good for them?

The governor should spend less time worrying about your bloated waistline and more time worrying about the state’s bloated budget.

The news that Governor Strickland’s education finance proposal is being modeled not by the analytical research resources of the Ohio Department of Education but by a private firm of Driscoll and Fleeter is worth noting on several levels.

First, the Akron Beacon Journal among others scores the move for its obvious obfuscation of the workings of government.  Observers can’t see how ’the sausage is being made’ as they could have when the ODE was doing such work.  We’ve long pointed out that one of the characteristics of a government worthy of a free people is that its inner workings are thoroughly transparent to citizens.  When the Governor hides from public scrutiny the development of the policy he has staked his incumbency on, he is, in effect, insulting the freedom of Ohioans.    

Second, the Governor has turned to a firm which has enjoyed a cozy relationship with a key vested interest in the school funding debate.  As the AP notes Driscoll and Fleeter are “….on the payroll of a private tax institute run by the Ohio School Boards Association…”.  That’s a pretty generous assessment as any examination of the public record would reveal that the OSBA, their so-called private tax institute (”Education Tax Policy Institute”) and Driscoll and Fleeter are a thoroughly integrated entity.  Just take a look at the ETPI’s tax filing submitted in August of last year (available through Guidestar service, free registration required) and you’ll see it was initially ’signed’ by Rich Levin, a former partner in Driscoll and Fleeter and now the state’s tax commissioner — some 18 months after Levin had left private practice for his current position. 

Much research has documented that school finance in Ohio is a largely a political exercise distributing tax dollars among and according to the interests of adults who work in the system and the bureaucracies they control, all according to their relative political power.  The interests of children and their parents, relatively powerless in the universe of school politics, come in a distant second in this exercise.  (See for example, this report by our Matt Carr.)  

By outsourcing the design of his proposed system to the OSBA, the Governor continues to put the interests of education bureaucrats over that of children and parents. 

Finally, we just have to ask why the Governor allows himself the freedom to choose a for-profit provider in the vital task of designing a new school finance system when he won’t permit the same choice to Ohio children and their parents seeking to get the best possible education?   Clearly Strickland’s objections to for-profit schools are not based on consistently applied principles.  And our research shows that they aren’t based on fact, either.  The reality is the Governor just continues to serve up special interest politics when it comes to school finance reform.

Governor Ted Strickland has proposed funding for a passenger rail between Cincinnati, Columbus, and Cleveland. As the Toledo Blade reports, lawmakers are skeptical of it. They certainly should be. While politicians usually love rail projects and claim they have a variety of benefits, they are usually extremely expensive and extremely underused.

As the Reason Foundation wrote back in 2005:

Intercity passenger rail clearly will not have any significant impact on long-distance travel since “rail travel is not time-competitive with air travel.” The only possible congestion relief would be on shorter-distance travel in certain densely populated areas of the country, and even then the impact is likely to be minuscule. According to a GAO report, “[I]n 1995, we reported that each passenger train along the busy Los Angeles-San Diego corridor kept about 129 cars off the highway (about 2,240 cars each day)—a small number relative to the total volume.”

And while the following quote pertains to Amtrak, if you replace “Amtrak” with “Governor Strickland’s rail proposal,” it is just as accurate:

…intercity passenger rail travel declined substantially after World War II and has remained relatively constant since the creation of Amtrak. The development of the Interstate Highway System beginning in 1956 significantly reduced the cost of automobile travel, which also contributed to the growth of suburbs and increased reliance on the automobile for transportation. Technological innovations such as improvements in fuel economy reduced the relative price of automobile travel even further. Air travel also became cheaper, and the reduction in travel time it offered (though you might not know it from the security lines at airports these days) made it a more convenient option for long-distance travel. So, generally speaking, automobiles have become more attractive than rail for short-distance travel and airplanes have become more attractive for long-distance travel. Where does this leave Amtrak? The answer is “nowhere.”

With the state facing a huge deficit, killing this proposal seems like an easy way of saving some money.

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.

Ohio’s Superintendent of Public Education Deborah L. Delisle had this to say about Gov. Strickland’s education plan announced (in part) today.

“There is so much there you could almost ‘gasp’,” said state Superintendent Deborah L. Delisle.

Let’s see, by the Governor’s proposal:  teacher union power grows, top-heavy bureaucracies grow, parental authority is diminished, schools continue to be run primarily for the benefit of adults rather than kids, and there’s no relief or even mention of messes such as communities where dropouts outnumber graduates.

While Superintendent Delisle gasps, the rest of us parents and taxpayers just moan.

Republicans in the General Assembly have a plan that is a good beginning on a much-needed overhaul of state government:

Ohio legislative Republicans yesterday urged Gov. Ted Strickland to embrace a massive downsizing of state government that they said could go a long way toward solving the budgetary crisis.

The plan calls for consolidating 24 cabinet-level departments into 10 or 11 and eliminating 11,448 state jobs, nearly a fifth of the state work force, through attrition, for a projected saving of about $1 billion a year.

Consolidation is good; elimination is better. While they are at it, they can also work on repealing the state income tax. Cutting government and letting Ohioans keep more of the money they earn — the best stimulus plan the state could have.

Gongwer News Service($) reports that Senate President Bill Harris is cautioning Governor Strickland not to count on federal aid when putting together his budget proposal. As Senator Harris puts it, the budget should be based on the “realities of the state economic situation” not on hypothetical federal aid. Imagine that — basing a budget on economic reality. It’s sad that this type of thinking makes the news. The idea that the blueprint for state funding should be based in reality should be the norm, not something that is noteworthy.

Given that Governor Strickland is one of the most vocal cheerleaders for federal “emergency” aid to the states, it would make perfect sense if his budget tried to take that into account. But the size of that aid is unknown. The conditions put on that aid are unknown, as Senator Harris points out. Heck, we don’t even know if the aid will be passed by Congress. It looks likely that the feds will bail out the states, but maybe fiscal sanity will prevail in Washington and Congress will shoot it down.

Senator Harris should be commended for sounding the trumpet of caution on this issue. I hope that when the state Senate begins considering the budget that Senator Harris will continue to be fiscally prudent. As we saw last year, when recessions hit revenues decline. The projected $7 billion deficit will likely deepen. It’s time for Ohio to start looking at the variety of wasteful spending contained in the budget and begin cutting out the fat.