With the Kasich budget beginning on July 1st, let’s not forget that means the Strickland budget ended on June 30th.  So, according to John Kasich’s own OBM director, what did the State end up with at the end of the last Strickland budget:

$973 million surplus.

Wait, shouldn’t that be $8 billion in the red?  We kept hearing about what a horrible fiscal shape the Strickland Administration left Ohio in, but when it’s all said and done, the Strickland Administration left such a large surplus that the State came in with revenues 5.8% larger than projected when it was passed the last Strickland budget back in June of 2009.  At the time, Republicans called Strickland’s budget director’s projections too optimistic and unreliable.  If anything, the Strickland Administration underestimated the recovery that began in earnest in early 2010.

In fact, Gongwer reports that the Strickland surplus even exceeded Mr. Keen’s projections when he started working on Kasich’s first budget.  On tax receipts alone, the State took in nearly $1.5 billion more than it expected… during the height of the recession and the first year thereafter.

You might recall that the GOP legislative leadership near the end of the budget debate suggested that the State would have as much as $187 million into the Budget Stabilization Fund (commonly known as the “rainy day fund” that was essentially drained, like all other States’ were that have such funds, during the height of the Great Recession.)  Guess where the money comes from that allows the State to do that?  The Strickland surplus.

The problem for Kasich and his OBM Director Tim Keen is that their own math doesn’t match their rhetoric.  The general rule of thumb is that the true measure of a State’s spending is to compare its General Revenue Fund (GRF) spending from one year to the next because the “All Funds” spending is just the GRF plus mostly “pass through” revenue that goes from the federal government and directly to the local level, and ordinarily the State has little control over the non-GRF “all funds” spending.  The final version of the Kasich budget increases GRF funding from $26.6 billion in FY ‘11 (the final year of the Strickland budget) to $28.7 billion in FY ‘13 (the final fiscal year of the first Kasich budget) [Source: Legislative Service Commission “Budget in Detail—As Enacted”  GRF—Main Operations Appropriations at p. 8].  And when you compare the State spending in GRF to the federal, you realize that the entire additional $2 billion in GRF spending can be attributed to State government (i.e. Kasich), not the federal.

But, c’mon, Modern what’s the math with the All Funds?  Well, that does show overall State spending being cut nearly $2.4 billion.  So Kasich gets “credit” for cutting overall State spending, right?

Wrong.

Remember, that the Strickland Administration was accused of balancing the last budget with nearly $6 billion in “one-time” money.  Of that, the Strickland Administration said the federal stimulus accounted for … $2.2 billion in “one-time” GRF funding (most of the rest of the stimulus money was transferred through the All Funds fund).

So, with supposedly $6 billion in “one time money” in the 2010-2011 FY budgets, isn’t it odd that the total All Funds spending only went down $2.4 billion?  Did Kasich really cut spending, or did spending stopped when the one-time money was gone?  Again, if there had truly been an $8 billion structural deficit, and Kasich didn’t raise taxes, but only cut spending, how is the budget balanced when the State is only cutting its total spending by  less than $2.4 billion? 

What happened to the other 70% of this supposed $8 billion figure?  Well, first, we have the nearly $1 billion Strickland surplus.  Then, we’ve got roughly over a billion in new “one time money” in Kasich’s budget (all of his privatization schemes.)  The economy is projected to do better.  In fact, according to Keen, Kasich’s budget director, the State is projected to see a gain in revenues in 5.1% and then 9.2% the following year.  The Strickland surplus and additional revenues created by economic growth account for substantially more money than the $2.4 funding being cut in overall “all funds” spending under the Kasich budget.  The rest can be attributed to… who said it existed in the first place?  Kasich’s future running mate and OBM Director, that’s who… and they’ve been proven to be disastrously wrong in predicting Ohio’s fiscal future (too bad that for one of them that’s their actual job now.)

Strickland Miss Me Yet Ted Strickland did what John Kasich wishes he could claim he ever did.  Working in the midst of the biggest economic challenges this State has faced since the Great Depression and with an election around the corner and Kasich already running with the entire GOP establishment’s support, Ted Strickland was able to work in a bipartisan manner to pass a budget that ended with a nearly billion dollar surplus.

John Kasich likes to brag about how the federal government in the late 1990s ran “surpluses” when he was the House Budget Chairman.  But that achievement was done during one of the biggest economic booms in U.S. history… and one that was built off of the IT and housing market bubbles… and the deficit was being reduced before he was Chairman and over his opposition to Clinton’s budgets that reduced the deficit.  It’s no surprise then when those bubbles burst the federal government went back to running deficits again (the Bush tax cuts, which Kasich endorsed, also didn’t help, either.)

It’s easy to get a government to run a surplus during a recession.  Ted Strickland positioned the State to run a surplus after the federal stimulus money was gone before the State was truly on the path to a steady economic recovery. 

John Kasich would count himself lucky to leave Ohio in half as good of shape when he leaves office as Ted Strickland did.  There was a surplus, not a deficit.  Told ya so.  The Strickland surplus turned out to be more than DOUBLE what the Strickland Administration itself predicted it would be at the beginning of the year before Kasich took office.

Evangelize!
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  • Joe Metz

    I said this last November, the election came about a half year too early.   Sadly, I think all the hard work that was put in to stabilize our economy will all be for naught by the time Kasich & his Kronies are done with everything.

  • Anonymous

    I firmly believe that the republicans have no intention of leaving anything in better shape when they are gone.  Their plan, I believe, is to leave such a mess that it takes their predecessor 4 years to dig out and by then they can scream that democrats don’t know how to get things done, the republicans get re-elected and the merry-g0-round  starts again.

  • http://twitter.com/blueohioblog Blue Ohio Blog

    Make sure you tell the Dispatch, their staff editorial repeated the $8 billion myth twice in their staff editorial on the budget.

  • Anonymous

    Oh, no!  Can it truly be that the Gang Of Pirates would exaggerate the financial situations for their private gain?  Would they really do that?  Would they really sell off the prisons, the turnpike, Lake Erie just to make a quick buck?  Would they trample on citizen’s rights, their futures, and those of their children in the name of profit?
     
    The answer to all of the above is YES, they are really that deceitful.  When this is over, there will be no way to undo what they have done, will do and are thinking of doing.  This won’t be over in 4, 8, or 12 years.  The damage will last longer than our lifetimes

  • Anastasjoy

    I’m replying because your post is deficient of coherence. I am not sure what you are asking.

  • Frederick F. Davis

    Had Kasich not cut $8 billion we would have had a $7 billion shortfall.  What don’t you understand about math?  Strickland was going to make up for the shortfall by raising taxes.  You are mentally deficient if you believe otherwise.

  • gmild

    Damn, I hate being mentally deficient.  

    I think what I don’t understand about this “new” math is how the current budget has increased spending to its highest level ever and we have still erased a (less than) $8 billion deficit.  And how is Kasich doing this and still refusing to use one-time money while simultaneously using one-time money?  And how did the fiscally irresponsible Strickland alter the numbers for it to appear as though he had already begun to fix Ohio’s economy by decreasing unemployment and ending his two year budget with $973 million left over?  All while NOT being in office to be able to force people to fix the balance sheets?

    Please educate me.  I would like to learn this concept you call “math” so that I, too, can have a rainy day fund instead of paying for daily living expenses.

  • http://www.facebook.com/profile.php?id=711120472 Domenica Iacovone

    Did you snap you neck on that fuzzy math of  yours? Because I pretty much got whiplash from that bunch of bull when reading it.

  • http://plunderbund.com Joseph

    I think your example over simplifies a very complicated situation.  And ultimately, your conclusion is wrong.  Kasich didn’t cut spending.  State spending is actually up.

    Strickland DID make cuts.  Big cuts.  Cuts that may have actually cost him the election, actually.  Libraries were pissed off as Ted.  A lot of teachers and other public employees too.  Ted froze pay raises and made them all take 10 unpaid ‘cost-savings’ days.

    And Strickland and his staff took the same cost savings days.  The same pay freezes as everyone else.  Ted paid his own health care costs out of his pocket.  Ted froze state spending on meals.
    And yes, he brought in a lot of one-time money to help keep those cuts from impacting education.  But he didn’t have to sell off state assets to do it.

    Kasich came in and turned everything around.  He gave his staff big raises then – to use your example – he sold off the family’s car and boat and house to his pals, and then agreed to rent everything back from him for next 75 years.   He pulled his kids out of the better school and kept the extra money for himself.  Kasich stole his kids allowance and lunch money and went out and bought himself a lobster dinner.

    Let’s be honest here: Kasich did NOT cut spending.  His $56 Billion budget spends MORE than Strickland.   And his one time money comes at a much higher cost to the state since he’s selling off all of our assets.  

  • Anonymous

    “Had Kasich not cut $8 billion we would have had a $7 billion shortfall.”  Well, since Kasich DIDN’T cut $8 billion, then I guess Kasich’s budget has that $7 billion shortfall.  General Revenue spending under Kasich is going up. 

    Regardless, there’s no question there was a Strickland surplus.  Even Kasich’s OBM said there was.  It’s where EVERY PENNY of the money they just put into the rainy day fund came from this month.

    You can’t say Strickland violated the constitution and left us with this horrible deficit one month, then put a QUARTER OF A BILLION into the reserve fund from the surplus left from that budget and square the two facts together.

    Ted Strickland left the State of Ohio in the position that its revenues went up with better than projected economic performance enough that the State was able to end the year with a surplus and able to put a quarter of a billion into its rainy day fund.

    That’s what actually happened.  I know it is beyond your narrow, tunnel vision ideological brain to handle, but that’s what happened. 

  • gmild

    Fred,
    Cool, thanks.  So, basically, instead of SB5 resulting in a pay cut of $6,800, I’m actually getting a $1,361 raise.  That is awesome.

    Follow-up question.  How much will that adjustment in salary be saving the state?

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