One Time Revenue Ain't The Problem

Mary Taylor has unveiled her latest check on the Strickland administration's budget plan.   Auditor Taylor has stepped out of the normal role of the elected position she holds to evaluate what she thinks is the true deficiency in the governor's plan.  

The resulting opinion includes another admonishment of using one time revenues to to balance the budget. It seem the State Auditor doesn't believe the State  budget should depend on any one time revenue to cover an operating deficit.  Perhaps in an effort to lend some of her officialdom to the Tea Party movement Taylor criticizes the use of Federal Stimulus dollars in the budget as well.  This is becoming a frequent theme emanating from the AOS offices.

I have a news flash for Auditor Taylor, those one time revenues are not the real problem.  If she were to probe her memory she may recall one change she helped enact back in 2005 that preordained the need to depend on one time revenues. 

I am referring to the tax reforms enacted in HB66.  The reforms that Taylor and others supported included a sizable 21% decrease in income tax rates over a five year period. The last phase of cuts occurs this year barring any last minute acts of common sense from the General Assembly. The alteration of the tax regime has contributed significantly to Ohio's revenue woes.  A politically motivated rush to tamp down income tax rates has left the State with a insufficient level of tax revenue.  So much for the Laffer curve inspired myth of increasing tax revenue via tax cuts.

The revenue numbers themselves speak to the short sighted nature of the changes enacted in HB66. Until the change was made the State had never had consecutive years of revenue declines in the last fifty years of experience.  The loss trend started as soon as the income tax reforms began to phase in.  Can that be coincidental . 

Yes, the down turn in the economy is a factor in the revenue decline but, the tax reforms have contributed to the shortfalls that have placed Ohio in perilous budget territory.  Consider this, in the fifty years prior to the tax reforms, there were eight  recessions. In those eight periods of economic decline Ohio's tax revenue had never experienced two consecutive years of decreasing collections.

Taylor's memory is either suppressed or she would rather not admit that the actions taken several years ago by her and her Assembly colleagues and Governor Taft have contributed to Ohio's fiscal woes.  Instead Taylor has opted to be the Ohio GOP's factotum on all things critical of Strickland.  From her lofty perch as Auditor of State she can direct her staff to pop out reports focusing on the perceived shortfalls of the adminstrations handling of the budget and finances. 

In order to take on this role it is conceivable that resources have been redirected on churning out Strickland critiques in lieu of focusing on auditing local governments.  County governments alone could use a good deal of oversight, just look at what's transpiring in Cuyahoga County. In fact large entities like Cuyahoga have to pay a few million dollars a year to contract with a large accounting firm though the State to have the annual audit completed.  The AOS claims they don't have the staff to do the largest audits. 

Unfortunately Taylor has decided to provide lip service to local governments that need more audit and performance oversight analysis and go full bore on hunting down the weaknesses in Stickland's budget plan. Why not through in a few invectives about the use of federal ARRA dollars while your at it?  

We shouldn't expect politicking not to be force in shaping the way policy is sculpted by state office holders. The Auditor's role is much more prescient at overseeing local government finances where the lions share of State dollars actually get spent.  The technocrat veneer once imbued by Taylor is wearing thin.  When a candidate runs for office on her finance acumen and CPA credentials that she possesses it's dissappointing to see them cast aside in favor of the tea party antics currently on display.  I guess we can assume she is running for governor .