But a rainy day fund is a rough measure of how a state manages its finances. And anyone who thinks managing a state budget is just another boring afternoon in a public administration class must not have heard about the rickety finances of Illinois — or Puerto Rico.
Somebody (Gov. James A. Rhodes? Republican State Chair Ray C. Bliss?) said that when Ohioans pick officeholders, what voters really aim to do is hire capable managers. If so, Kasich and his budget team have been good hires: On Thursday, state Budget Director Timothy S. Keen deposited $526.6 million in the rainy day fund, boosting its balance to $2.005 billion.
As with Kasich’s income-tax cuts, which, demonstrably, favor upper-income Ohioans, there are several reasonable arguments for spending a state surplus rather than banking it in the rainy day fund. The first is that Ohio’s public schools need more money. (One sure way for the General Assembly to give public schools more money, without shaving the surplus, would be to crack down on bad charter schools, something Ohio’s House is now blocking.) But as noted here before, Ohio doesn’t so much have a school-funding problem as it has a parenting problem.
The second argument for spending a state surplus rather than banking it is that Kasich and the General Assembly could use the money to replace cuts they’ve made in state aid to local governments – counties, cities, villages, and townships. Cuts in state aid have undoubtedly made it tougher for some local governments to provide legally required services (“mandates”). So have state legislators’ attacks on home rule powers the Ohio Constitution promises cities and villages.
State-aid gripes of local officials are surely sincere. And, arguably, Kasich has been able to cut Ohio’s income tax, yet bank state surpluses, because local governments are being forced to raise taxes to make up for state aid Kasich’s budgets have cut.
But before a voter gets riled, he or she should attend for, say, six months (in person, not by cable TV or online) meetings of his or her city or village council or township trustees and county commissioners. Ohioans’ awareness of local governments spending is, practically speaking, non-existent. And that’s too bad, because local government spending can be a revelation — in every sense. As for state aid cuts, local officials are likelier to be thrifty with locally raised dollars, because they come from local taxpayers, than with state money. So, however political the Kasich-Keen stance on local government aid may be, it can boost accountability, because it forces local officials to confront decisions state aid may let them duck.
Have tax-cuts and budgeting help build Kasich’s resume as a prospective GOP presidential candidate? Answer: Did the sun rise this morning? Still, state finances are in far better shape than they were. And unless that’s the result of, say, astrology, budget management at the Statehouse got Ohio’s finances where they are.
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