Kasich’s ‘tool box’ holds broken tools

By Janetta King

Special to The Vindicator

Last November, 49 percent of Ohio voters elected John Kasich governor primarily to create jobs. Instead, Gov. Kasich has interpreted his razor-thin victory as a mandate to propose extremist policies and budget cuts so draconian (especially for education and local governments) that Innovation Ohio calculates they could destroy 51,000 existing jobs — more than double the number that has been created since he took office (see the study at www.innovationohio.org). And now House Republicans — cheered on by the governor — are proposing to eliminate Ohio’s estate tax, 80 percent of which goes to local governments. More job losses and service cuts are inevitable, unless Ohioans raise taxes at the local level to offset the cuts.

Of course, that would reveal Gov. Kasich’s budget to be a shell game in which the state simply passes the buck to local jurisdictions and taxpayers.

So Gov. Kasich adamantly insists that higher local taxes won’t be necessary because he’s providing school and local officials with a number of “tools” to help control costs and manage their budgets.

Unfortunately, Gov. Kasich’s tool box is mostly empty.

Pension reform

The first “tool” is reducing local government contributions to employee pensions — and increasing worker contributions — by 2 percent. While this might produce substantial savings in the long run, it wouldn’t offset Kasich’s budget cuts in the short run.

Indeed, pension “reform” now might not happen at all since the House eliminated it from the budget last week after newspapers reported the damage it would cause to the long-term solvency of the state’s five pension plans.

Yet even if pension reform is somehow restored to the budget, hundreds of municipalities and school districts have existing contracts in place that go well into the next biennium. Since those contracts can’t be broken, near-term pension savings would not be realized.

Senate Bill 5

Gov. Kasich touts SB 5 as another important tool since it would ban automatic “step” increases in public employee wages and because it would prohibit collective bargaining for benefits. But this too is a chimera. Since municipalities don’t fall under the state’s civil service laws, “step” increases there are not automatic; they are part of contract negotiations. Chartered villages and cities are also treated differently under Ohio law, so while they would still get the funding cuts, they would get no additional means with which to manage their budgets. In short, SB 5 would save many local governments little or nothing.

Equally important, SB 5 may well be rejected by the voters themselves in November.

Casino Money

Gov. Kasich says another “tool” for local governments is the tax money that will be derived from casino gambling. But because of the distribution formula written into the constitutional amendment approved by Ohio voters, most Ohio cities, villages and townships won’t see a penny. In any event, voters were promised that casino revenue would be new money that “supplements” not “supplants” the state’s funding to local governments.

“Shared” Services

The governor’s final “tool” is making it easier for smaller governmental units to contract with larger ones for public safety and utility services, as well as health insurance coverage.

But numerous local governments are already sharing services. The city of Columbus, for example, already provides water and sewer service to 20 suburban communities. At least 40 other cities, towns and local governments — including Mahoning County — are now sharing or planning to share various public safety functions like police, fire, and emergency response services.

Though many local governments do want to join the state’s health insurance pool, the Kasich budget instead proposes a duplicative system that would take years to implement.

In sum, the “tools” Gov. Kasich touts are either unlikely to be enacted or, if enacted, wholly insufficient to offset the governor’s proposed cuts.

To be sure, innovative policies that realistically reform public employee benefits or lead to true savings through shared services are both necessary and worth pursuing. But that’s quite different from the state simply shifting budgetary costs and burdens to the local level, trying to shove an extremist, anti-worker bill down the throats of Ohioans who don’t want it.

Gov. Kasich’s tool box holds a chainsaw for cutting local services; a hammer for beating public employees; and a screwdriver to use on local taxpayers. Those just aren’t the tools Ohioans were expecting — or promised.

Janetta King is president of Innovation Ohio, a Columbus-based progressive think tank.