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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2011 > May > 24 > Entry
Editorial: Revenue growth is especially meaningful stat
The news that tax revenues are up for local and state governments provides a particularly clear measure of the general direction of things. The unemployment rate has some meaning when looked at over the long term. But it is a hinky kind of stat, looking good sometimes because people are getting out of the job market in frustration, or bad because they are entering it because they think the economy’s up.
The measurement that competes hardest for attention with the unemployment rate is job growth. Again, the long-term trend offers real insight. But the stat doesn’t have information about pay, among other flaws.
But when income tax revenues go up — when nobody is raising taxes — that’s an indication that more money is being made as the result of some combination of new jobs and more hours. It’s a hard stat to spin, at least if the trend is lasting and widespread.
So the news is important that six Miami Valley communities saw double-digit increases in their tax revenue in the first third of this year, compared to the same months last year. (The six are Troy, Huber Heights, Tipp City, Vandalia, Miamisburg and Xenia.)
Eleven of the 15 biggest municipalities had a better 2010 than 2009, and 13 have had surges in 2011, generally much stronger than last year’s.
Similar improvements are apparent at the state level. In April, Gov. John Kasich got a report that state tax receipts had been better than expected for eight consecutive months. In March alone, the figure was 13 percent higher than expected.
Meanwhile, of course, when an economy improves, that typically reduces some government expenses, such as for Medicaid.
Nothing that happens to the economy is going to eliminate the need for serious state budget cuts; but just how serious is open to question. As the Senate takes up a budget passed by the House, it needs to get up-to-date on the revenue figures and see if some of the cuts being planned can be themselves cut.
After all, the Kasich administration has generally defended its cuts as necessary, not as options to be undertaken just on general conservative principle.
The upturn in tax revenues suggests that economic development policy is not what drives the state economy. The new Kasich approach isn’t in effect.
A better national economy is doing a lot. And Ohio is, by some measures, running ahead of the national economy. Its unemployment rate has dipped below the national average after years in which the state has been one of the hardest hit in the nation.
Ohio’s stats appear to reflect the fact that the state’s single biggest problem (and certainly the Dayton area’s) — the decline of the American auto industry — is in the past. The Dayton-area plant of auto parts maker Tenneco is actually growing.
And with help from some mess-ups at Toyota and an earthquake, General Motors has reclaimed its spot as the seller of the most cars in the world.
The recovery is spotty, perhaps fragile and certainly modest compared to the harm done by the recession. But it’s clearly affecting a lot of people, and, finally, a lot of governments.
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