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Health of Ohio rainy day fund very important

July 13, 2012
Salem News

When Gov. John R. Kasich took office, Ohio's Budget Stabilization Fund, or rainy day fund, had a balance of 89 cents. As of June 30, the end of the most recent fiscal year, which was the first full year under Kasich, Ohio's rainy day fund contained a $482 million balance.

That makes it rather surprising that former Gov. Ted Strickland, who left that 89-cent balance and an $8 billion projected deficit, would consider running again for governor.

But Strickland has done everything possible to remain in the spotlight.

He has spoken out against Kasich and Republican presidential candidate Mitt Romney. He led a Statehouse protest of Senate Bill 5. He has spent time traveling Ohio campaigning with and for President Obama and Vice President Joe Biden. He delivers up to four speeches a day. As co-chair of Obama's re-election campaign, Strickland has put himself in a position to get the Democratic nomination for governor.

And he has left open that very possibility saying he has not ruled out running in the 2014 Democratic primary for governor, despite the budget baggage and having the distinction of Ohio being ranked 48th in nation in job creation with a loss of about 403,000 jobs during his term (in fairness, The Great Recession hit during that time). Since Strickland left office, Ohio has added 94,000 jobs and the Youngstown-Warren area leads the state in unemployment decline.

There is a substantial difference in how state government works now and that's having a positive impact locally. A shining example is how the Local Government Innovation Fund has local leaders, who once expressed open hostility toward "regionalization," now embrace that concept under its more trendy moniker "collaboration."

Next at the state level is deciding what to do with the surplus. A good idea would be nothing. Ohio law requires budget surpluses to go into the rainy day fund until it reaches $1.36 billion. Then the money begins going into the Income Tax Reduction Fund. The law, as it stands, works just fine.

Democrats, though, want to change the law to increase spending to school districts and local governments. And Kasich wants to change the law to reduce taxes sooner. Neither idea has merit considering how the national economy continues in a state of uncertainty. A healthy rainy day fund is important.

If the state does anything different, it should increase the Local Government Innovation Fund. In this way, instead of short-term help to school districts, local governments and taxpayer, a long-term improvement or culture change can take place.

The $45 million spread over 88 counties doesn't leave much. Government sharing has begun, but it still has a long way to go and financial incentives would speed it up.

 
 

 

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