Saturday, February 28, 2015

Ohio Notes: By the Numbers

From the Buckeye Institute

The latest Ohio by the Numbers report (now available on The Buckeye Institute's website) shows that while Ohio's labor market did not see any remarkable changes in December, it did continue a healthy growth trend. Private companies added another 6,300 Ohioans to their payrolls, while governments lost 1,200 employees.  Ohio's unemployment rate continued to drop, falling from 5 percent to 4.8 percent. Ohio's unemployment rate has now fallen by more than twice as much as the national rate over the past year……Unfortunately, the decline in the unemployment rate was not again concurrent with a rise in the labor force -- Ohio gained 6,300 private sector and shed 1,200 total government jobs in December; Ohio's unemployment rate dipped markedly to 4.8 percent; Ohio ranked 28th nationally in private sector job growth since January 2010, increasing 8.4 percent (11th-ranked Michigan increased 8.9 percent); Ohio currently ranks 47th nationally for private sector job growth since January of 1990, increasing only 10.9 percent (top-ranked North Dakota grew 102.6 percent during the same time span). 

For the full report, please click here. For the full labor force update, click here.

 On February 10, The Buckeye Institute released a report reviewing the initial budget blueprint released by Governor Kasich on February 2, 2015.   The budget contains some positive, and long overdue, pro-growth reforms such as large reductions in the personal income tax. It also has many elements that will not boost Ohio's growth as envisioned but will instead limit prosperity. These elements include a doubling down by the Governor on previously rejected tax increases such as on cigarettes, the oil and gas industry and the Commercial Activities Tax. They also are violations of principles of sound tax policy as The Buckeye Institute outlined in a recent report.  The following are several initial observations:………Overall state spending is increasing faster than can be justified through either inflation or population growth. The largest increase comes from moving the Medicaid expansion costs back onto the General Revenue Fund (GRF) books. However, state-only GRF spending also eclipses inflation. 

To view the entire report, click here.

On Monday, February 23, The Buckeye Institute released a new report that explains how a change to federal Medicaid funding rules may cause the Medicaid expansion program to become even more costly to Ohio taxpayers. In 2013, The Buckeye Institute warned that the Centers for Medicare and Medicaid Services (CMS) could disallow a tax scheme on which Ohio depends to fund the expansion. A more recent federal investigation of that same scheme in Pennsylvania has brought renewed scrutiny to the system and raised the likelihood of a ban.  Buckeye's report finds that if CMS issues such a rule change in 2016, Ohio's state budget will cumulatively lose up to $1.3 billion in anticipated revenue by 2022. Worse, the expansion program will become a cumulative net loss by 2026, and continue to impose annual losses thereafter.

The report's author, Joe Nichols, stated, "As previously warned, the decision to expand Medicaid was a risky move given so much federal funding uncertainty. Unfortunately, our latest findings confirm that Medicaid expansion remains an ill-advised policy decision and a bad deal for Ohio taxpayers."

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