Budget Details Emerge

As the long-awaited 2010-2011 Ohio budget finally makes its way out of conference committee today, details continue to emerge on the budget's contents including further information on the impact of the reduced budget on various programs and the shape and scope of video slots gambling provisions.

It remains unlikely that the final budget will reach Gov. Strickland's desk before the current temporary budget expires on Tuesday (meaning that $14M cost associated with the delay is likely to go up a few hundred thousand dollars while the House and Senate debate and vote on the compromise bill). Still, we will have a state budget (which is good news for all Ohioans), which will look very similar in its final form to this version.

As they say, however, the devil is in the details, and this budget's horns seem to grow by the day. A look at positives and negatives (with comments):

Full disclosure: As an advocate of Legal Aid programs, I am saddened to see the state budget contains no provision to support legal services for the state's poor. I understand that cuts must come, but taking monies away from protecting Ohio's poorest citizens from exploitation to me seems the wrong place for a trim. I'll leave my commentary on the legal services count at that, and move on to general positives and negatives of the compromise bill.

Positives.

Institutes all day kindergarten. This is a cornerstone of the Governor's education proposal, and will go a long way toward addressing the state's education shortfalls. Still need to figure out a long-term solution to Ohio's unconstitutional funding model, but focusing on the front end of education (where changes have the most impact) is a start.

Eliminates proposal to lease state land for oil and gas drilling and coal extraction. It's bad for ANWR, and it's bad for Old Man's Cave.

Makes permanent earlier laws on continuation of health benefits. As this fall's election demonstrates, health care reform (and greater access across the board to affordable health care) is a huge priority for voters in Ohio and across the nation. Allowing the continuation of health benefits is, again, a good first step. As the federal health care proposal hits some rocky ground, however, it is important that the Governor and legislature look hard at how Ohio can bridge the gap on this critical policy issue. Gov. Strickland speaks often of being a leader in education and energy, and as Ohio plays home to many of the nation's premiere health care facilities and largest insurers, this blogger believes health care should be at the top of that list, as well.

Minimizes cuts to libraries. Perhaps no issue got so much press as the proposed deep cuts to library funding. Apparently, the Governor and Legislature agree that ignorance is expensive, as the cuts have been reduced to a more manageable $84M over two years. That's not ideal, but it's much better than what we were looking at.

Increases funding for mental health services. From the outset, it appeared very likely that the first cuts in a reduced state budget would come in mental health services. Perhaps noting that these kinds of cuts can have drastic impacts on the social health and well-being of the state, the conference committee voted to increase funding by $65M over the proposed framework levels. Win-win.

Negatives.

Allows Sunday liquor sales starting at 11am. I'm no prude, and I do love a good glass of Woodford Reserve or Four Roses Bourbon on occassion, but c'mon...does drinking earlier really solve any of those problems? Maybe this provision is in there to allow state legislators to pretend there isn't a fiscal crisis, at least for a little while...or, maybe it's for recovering from this hellish budget process.

Allows furloughs at public colleges and universities. I'll need to read up on this further, but if this provision is along the lines of California's recent mandatory furloughs for state employees (amounting to an average loss of up to $14,000 per person), then I'm not on board.

Cuts higher education funding. I've said it many, many times before, and I'll say it again: any comprehensive education plan must contain provisions investing in education on the front end in early childhood, and on the back end in higher education. As our economy moves further away from our manufacturing roots and into the "knowledge" economy, we'll need to encourage the pursuit of higher education wherever possible. Cuts in this area (and to programs providing Choice Grants to Ohio high schoolers choosing an Ohio college) hurt our ability to attract and retain college educated folks to the state. Those same college educated citizens have higher earning potential and pay higher taxes across the board. Long term, we should be doing everything to encourage the pursuit of higher education in Ohio, and cutting funding is no way to do that.

Doesn't address long-term revenue stream issues. The higher education piece is just one part of the puzzle. Even with the cuts provided here and revenue from gambling (more on that below), this budget does not yet show me that there is a real plan for identifying stable new revenue streams and balancing state spending responsibly based on those new revenue sources. Modern Esquire has beaten this issue to death on BSB, and his analysis of the political realities preventing a tax increase are spot-on. And yet...does anyone see a long-term solution to Ohio's budget woes that doesn't include some kind of tax increase? I recognize that a magical tax on the upper 1% of wage earners that solves Ohio's problems doesn't exist. What about passing a smaller, short-term tax on income on the top 50% (which probably includes a slice of the middle class)? What about a tax on real estate transactions (slowing home foreclosure rates), or an increase in estate taxes on large transfers at death (focused on estates worth over $1M)? There are ways to skin the tax cat that don't involve huge political risks if they're handled correctly, and sooner or later we're going to have to come up with a creative solution along these lines or deal with another protracted fight like this one that leaves many gaps in government services to Ohioans.

The gambling stuff is still there. Which brings us to the gambling issue. Gov. Strickland and his team get my respect for thinking creatively and taking a political risk on this issue with an eye toward solving a problem. Still, gambling is at its core a regressive form of taxation, and preys upon addiction (not unlike tobacco taxes, which I find equally troubling). Video terminal gambling is "victimless" in the sense that the terminals are going it at racetracks, and presumably being used by people who would already be gambling anyway. But, is this really behavior we want to encourage? Government at its best provides an atmosphere that allows citizens to excel in a safe and supportive environment, and at its worst preys on the weaknesses of those citizens to support itself. The gambling proposal is a hybrid, using exploitative means to provide what I think most of us will concede are needed services. This proposal, like so many other parts of this budget, can only be chewing gum on a radiator leak: it might work for a little while, but sooner or later it's going to explode, with disastrous results for the engines of state.

So, in a not-so-concise nutshell, that's this man's view of the budget proposal. Do your thoughts differ? What should be we considering to get to fulfill Ted's promise and turn around Ohio? As always, I welcome your ideas and thoughts.