Tag Archives: spending

Gov. Kaisch’s State Budget: The Ugly, the Bad, and the Good

In my opinion, Gov. Kaisch is not the handsomest dude on the planet. I suspect his wife may have a different opinion.

What the governor lacks in appearance he makes up in statesmanship. His speech to the legislators on the budget was downright inspirational. Not only that but he even dared to praise the members of the opposing party for their work and accomplishments on a number of issues.

It almost made me cry.

I did say–almost!

Seriously, the budget itself is a mixed bag of missed opportunities (the bad) and a number of advancements for Ohioans and their economy (the good). Of course, it all depends on who you talk to, or, in this case, whose report you read.

According to the report by Matt Mayer, President of the Buckeye Institute, the governor’s budget missed some important opportunities. The bad news is the general revenue fund will be $1.26 billion greater for 2012 than in 2011 and $1.73 billion for 2013. That is a biennium increase of 12 percent. This is the second highest increase since 1990.

So how can the Governor increase spending with an $8 billion deficit? According to Mayer, the governor’s budget shows total revenues exceeding the deficit by $8 billion, which causes Mayer a lot of concern. It shows Gov. Kaisch has chosen to continue the same old policies of the past that eventually resulted in the present fiscal crisis.

Equally disturbing is the governor’s cuts to local governments. Instead of innovating new strategy to fund both state and local governance, the governor chose the slash-and-burn approach. This easy money strategy doesn’t reduce the size of state government and thus return local tax dollars back to local governments who must continue or fund new programs. Gov. Kaisch simply cuts funding to local governments to increase spending and balance the budget.

The $5 million budget deficit proposed by Xenia city and school officials may be nothing more than advanced notice of the state budget cuts. On the other hand, the budget deficit could be the typical 10% inflation budget estimates for contingency purposes; all institutions increase budget estimates for unforeseen costs. Budgets are based on previous year revenues, expenditures, known issues that will increase costs, plus 10% for unknown costs usually in addition to a contingency fund for emergencies.

Be that as it may, Mayer wishes Gov. Kaisch would have made the difficult choice of cut government employee compensation a little as well as cut the executive and legislative branch budgets. If he had cut the death tax, the bill making away through both houses, he would have as much money to spend, and many others will wish he had less money to throw at his program agendas.

Mayer did find some good in the Gov. Kaisch’s budget. The governor made noteworthy strides in such areas as prison reform, healthcare cost containment, and education funding. He included alternative sentencing approaches to non-violent offender that along with reforms nursing home service costs to Medicare will save taxpayers millions of dollars.

Some think his nursing home reforms are ugly and bad too.

Gov. Kaisch chalked up a few more good points with a number of his educational reforms. For example, his “support for Teach for America and doubling of EdChoice scholarships are vital lifelines to the most vulnerable and will inject more competition into our broken K-12 system.” Scraping the previous governor’s unfunded, evidenceless, one-size-fits-all Evidence Based School-Improvement Model will end the veiled attempt to increase dues-paying membership for unions. At the college level, the governor calls for professors to use fewer assistants for classroom instruction and a three-year degree. (Here, it is assumed that also means high schools will be required to ensure college-bound student meet the once first year prerequisites whether through coursework in high schools, college campuses, or virtual schools. That in itself would not only save a lot of money but would also be a systemic great achievement.)

Many of us may like Governor’s enthusiasm and business acumen, but analysts like Mayer give us reason to doubt his ability to help Ohio innovate its way to a better future and greater prosperity. If he cannot find innovative ways to fund government, can we expect he will achieve his inspiring goals for Ohio? Unless his goals are primary for big corporate concerns, maybe not.

To read Matt Mayer’s report on Governor Kaisch’s budget, visit the Buckeye Institute website: http://www.buckeyeinstitute.org/reports.

Rep. Austria On Economic Policies of Lame Duck Congress

By Rep. Steve Austria

Last Thursday, the House approved an agreement reached between President Obama and Congressional Republican leadership to extend the Bush-era tax cuts. The tax package ensures that those tax rates will not increase on January 1, 2011 and is extended for two years. It also includes a cut in the pay roll tax, establishes an estate tax rate of 35 percent and provides for a 13 month extension of unemployment benefits.

Many in Congress, like myself, would have preferred a permanent extension bringing more certainty to the financial and business markets but this may be the best opportunity we had to ensure that there would not be a tax increase. If we hadn’t taken action before the end of the year we would have seen significant tax hikes on small businesses and hard-working families.

This bill will help bring some certainty to the markets, which is needed now to grow the economy and create new jobs. When Speaker Boehner and House Republicans take over in January, our immediate focus will be to eliminate wasteful Washington spending and reduce the debt.

Appropriations

This year, Congress failed to enact any of the 12 appropriations measures or pass a budget to set spending levels. Instead, Congress has relied on short-term funding bills to keep the government running as they debated whether to punt the issue to the next Congress or consider a comprehensive appropriations measure, or omnibus. Late last week, Senate Democrats attempted to push a massive, $1.1 trillion omnibus spending bill that included additional funding for a controversial health care bill and funding for more than 6,000 earmarks. The bill was pulled from consideration due to strong opposition to its cost.

Last night, the House agreed to a continuing resolution measure to keep the government operating until March of next year.

Blogger Note: As U.S. Representative Austria mentioned above, a Pelosi-Reid led Congress hasn’t passed a national budget since entering office. They seemed more interested in ramming their special interest projects like socialist health care policy and gay rights through the legislative process than mundane national interests like national budget. Socialist and humanist agendas cannot be funded by something as restrictive as a budget or a balanced budget.

More important for us “little stinky people,” whose odor liberals like Sen. Reed cannot stand, was their failure to make tax cuts permanent. The only reason this is important is the fact that all previous temporary tax cuts have failed to stimulate the economy as claimed. During economic downturns (not to mention great recessions), people hold on to the extra cash while waiting for the economy to rebound. Surely the snooty liberals like Pelosi and Reid known this. According to some economists, Americans only spend the extra cash gained from tax cuts when those cuts are permanent. Now that millions are out of work, out of their homes, and out of cash thanks in part to ACORN supporting Democrats, I suspect the economists may see a slight exception to the rule.

Cost of Government Day Finally Arrives on August 19, 2010

Every year, the Americans for Tax Reform Foundation and the Center for Fiscal Accountability calculate Cost of Government Day. This is the day on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government on the federal, state, and local levels.

In 2010, Cost of Government Day falls on August 19. That means working people must toil 231 days out of the year just to meet all costs imposed by government. In other words, the cost of government consumes 63.41 percent of national income.

“Two years ago Americans worked until July 16 to pay for the cost of government: all federal, state and local government spending and regulatory costs. That government was too expensive and wasteful. Two years later, we work until August 19 for the same bloated government. We have lost an additional full month of our income to pay the cost of government in just the last two years,” said Grover Norquist, president of Americans for Tax Reform.

Key findings of the Cost of Government Day report include:

  • Cost of Government Day (COGD) falls 8 days later in 2010 than last year’s revised date of August 11.
  • Workers will have to labor 104 days just to pay for federal spending, which consumes 28.6 percent of national income.
  • Taxpayers will have to work 52 days just to pay for state and local government expenditures.
  • The average American worker must labor 74 days to cover the costs of government regulations. A breakdown of the COGD components can be found here.
  • The report also includes a state breakdown. The earliest Cost of Government Day occurs in Alaska, on July 28. Connecticut has the latest COGD, on September 17.
  • One of the contributing factors to increased spending is the growth in government payrolls. The federal workforce totaled 4.4 million employees this year, while the addition of state and local workers brings the total government workforce to 24.315 million employees.
  • The report also tracks taxpayer migration, showing taxes are a driving component behind interstate movement. In 2008, the ten states with no income tax gained over 80,000 new residents who brought with them over $900 million in net adjusted income. In contrast, the states with the highest tax burden lost 129,445 residents and $10.2 billion in wealth.

To read more, go to the Americans for Tax Reform webiste.