Ohio has a problem.
As we learned from the Governor’s budget:
Counting state dollars, federal aid, and increased borrowing, Ohio will spend nearly 44 percent more in 2011 than it did a decade earlier if spending levels in the two-year budget that Gov. Ted Strickland has placed before lawmakers are adopted.
Why is that important? Well, it turns out this decision to drastically increase spending is going to end up costing Ohioans much more than they bargained for when they put Strickland into office.
How do we know?
Well, today Ohio Auditor Mary Taylor announced that Ohio will face an $8 billion shortfall in 2012-2013.
Using tax and spending figures in Strickland’s proposed 2010-11 budget, along with “modest” projections of growth in education, Medicaid and other high-priority areas, Taylor said the state will need $3.9 billion more in 2012 and $4 billion more in 2013 to balance the budget.
Unless the governor and lawmakers curb spending in the two-year budget that takes effect July 1, the options two years hence will be limited to even deeper spending cuts or big tax increases, Taylor said.
An important note before we continue, remember the Ohio Constitution requires a balanced budget. That means Ohio absolutely must pay for this shortfall of $8 billion. If we don’t get control of this crisis quickly, there will be only two ways to pay for it — drastic cuts in spending or drastic increases in taxes.
If that doesn’t shock you, this will.
Strickland’s budget chief agrees there is a massive shortfall.
Sabety conceded under questioning that despite the nearly $7 billion in one-time money in this budget, state tax revenues are only expected to increase by about $1 billion in 2012-13.
But does the Governor see this as an issue? Apparently not.
You may want to make sure you’re sitting down for this one.
[Gov. Strickland said], “we’re dealing with the budget for 2010 and 2011, and the standard that I’m being held to is, ‘How are you going to balance the budget in 2012 and 2013?’ It’s still 2009. I just don’t get it.
He doesn’t get why it’s important to consider the future economic standing of the State of Ohio?
Mr. Strickland, you do understand that you’re the Governor, right? It’s your job to strive for the longstanding financial well-being of the great state of Ohio.
How is this as a reason to consider the long-term future of the state?
[In order to pay for the California’s budget shortfall], the California Budget Project estimates the [state ordered] tax hikes will disproportionately hurt working-class earners. A couple with $40,000 in taxable income will see a 12.9 percent increase in taxes, while a couple making $750,000 would get a 2.9 percent increase.
Gov. Strickland, are you sure you don’t want to consider the long-term effects of a massive budget shortfall? Clearly, you don’t get it.
But I know someone that does.
John Kasich has a record of fixing budget boondoggles at a national level.
Recharge Ohio. Support John Kasich.
h/t: Y-Town Buck