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State's Next Budget Is Shovel Ready
It's no secret that the next State budget is going to test Ted Strickland's ability to lead during a fiscal crisis. The current budget has already been trimmed back by over $1.2 billion in the past six months. A real overhaul of the 2010 SFY budget (effective 7/1/2009) is going to be required in order to eradicate a monster $7 billion projected deficit.
Digging out of this mess is not going to be easy. How unassailable is that $7 billion chasm? Even employing theoretical 25% cuts across the board would only yield $4.7 billion of savings according to the State budget office. The impact of reductions that deep would be felt by all Ohioans.
Unlike the federal government the States can't print money or deficit spend to get by in tough times. The budget must be in balance when all is said and done and the Governor will have to bring the State's fiscal house in order one way or the other. To keep it in simple budgeting terms, one way is to cut stuff and the other way is to increase revenue. With this two part approach in mind here are three bits of advice for the Ted to consider whilst navigating this seemingly impossible challenge that lays ahead.
Steady Teddy
There are some tough choices ahead for the Gov. Cutting popular programs and laying off State employees are just some of the decisions that await him. Ted doesn't need me extolling the virtues of showing political courage in the face of uncertainty to make the right choices. Shed the ministerial nicety and get tough.
He exhibited some spine this week by vetoing three bills passed in the lame duck session at the end of 2008. The veto included popular but unaffordable items including the veterans bonuses and the film industry tax credits. These things would be nice in good times but there's a budget crisis in the works. The other item was the shady election "reforms" that had no business being brought up in the final session on a last minute basis. A no brainer for the veto pens wrath but still a good commendable move.
A Little Help From The Feds
Help is on the way in the form of sizable Federal stimulus package to the States. Strickland has been on point not just for Ohio but for all of the States facing budgetary melt downs. In an interview on C-SPAN he made the case for a large injection of Federal money to States for infrastructure projects and education programs to help ease the strain on State budgets. Keeping the push for aid to the States front and center will yield benefits. Ohioans need to understand how their interests will be served and The Gov' will come across as a key leader on getting the thing done the right way.
The Tax Reality
There is no way around it some taxes and fees will have to be increased. That would seem to be political suicide for a guy that will be running for re-election or for Senate in 2010. Too bad dude, the budget has to be balanced and there is no way that's happening with budget cuts alone.
He could start by entertaining a restoration of income tax rates to a more responsible level for the higher income brackets. That would make sense. The minions on the right will surely pounce on this move. Ohioans will have to be reminded that it was the failed tax polices of the GOP lead General Assembly that are partly responsible for the revenue shortfalls crippling State finances. Let John Kasich explain how completely phasing out the income tax is a sensible way forward.
Digging out of this mess is not going to be easy. How unassailable is that $7 billion chasm? Even employing theoretical 25% cuts across the board would only yield $4.7 billion of savings according to the State budget office. The impact of reductions that deep would be felt by all Ohioans.
Unlike the federal government the States can't print money or deficit spend to get by in tough times. The budget must be in balance when all is said and done and the Governor will have to bring the State's fiscal house in order one way or the other. To keep it in simple budgeting terms, one way is to cut stuff and the other way is to increase revenue. With this two part approach in mind here are three bits of advice for the Ted to consider whilst navigating this seemingly impossible challenge that lays ahead.
Steady Teddy
There are some tough choices ahead for the Gov. Cutting popular programs and laying off State employees are just some of the decisions that await him. Ted doesn't need me extolling the virtues of showing political courage in the face of uncertainty to make the right choices. Shed the ministerial nicety and get tough.
He exhibited some spine this week by vetoing three bills passed in the lame duck session at the end of 2008. The veto included popular but unaffordable items including the veterans bonuses and the film industry tax credits. These things would be nice in good times but there's a budget crisis in the works. The other item was the shady election "reforms" that had no business being brought up in the final session on a last minute basis. A no brainer for the veto pens wrath but still a good commendable move.
A Little Help From The Feds
Help is on the way in the form of sizable Federal stimulus package to the States. Strickland has been on point not just for Ohio but for all of the States facing budgetary melt downs. In an interview on C-SPAN he made the case for a large injection of Federal money to States for infrastructure projects and education programs to help ease the strain on State budgets. Keeping the push for aid to the States front and center will yield benefits. Ohioans need to understand how their interests will be served and The Gov' will come across as a key leader on getting the thing done the right way.
The Tax Reality
There is no way around it some taxes and fees will have to be increased. That would seem to be political suicide for a guy that will be running for re-election or for Senate in 2010. Too bad dude, the budget has to be balanced and there is no way that's happening with budget cuts alone.
He could start by entertaining a restoration of income tax rates to a more responsible level for the higher income brackets. That would make sense. The minions on the right will surely pounce on this move. Ohioans will have to be reminded that it was the failed tax polices of the GOP lead General Assembly that are partly responsible for the revenue shortfalls crippling State finances. Let John Kasich explain how completely phasing out the income tax is a sensible way forward.
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