Ohio’s budget: Is bigger better?

Posted by Jason Hart / @Ohio Watchdog  March 11, 2015

As introduced, Ohio Gov. John Kasich’s budget for the next two years would accelerate the growth of government in the state.

With Republican supermajorities in both the Ohio House of Representatives and Ohio Senate, Kasich’s first budget continued a Republican tradition of increasing spending faster than inflation and population growth — combined.

Kasich’s second budget, which runs through June 30, is expected to do the same but at an even faster clip. Spending growth in Kasich’s proposed budget for fiscal years 2016-17 is faster still, propelled by a huge increase in Medicaid spending.

The portion of Ohio’s General Revenue Fund expenditures paid by the federal government is expected to reach 36 percent next year; before fiscal 2009, federal expenditures never exceeded 25 percent of the GRF.

Governors and state legislators often have little influence over federal spending, but Ohio’s latest federal spending surge results from Kasich expanding Medicaid to childless, able-bodied adults under Obamacare.

After he was elected in 2010 as a foe of big government, Kasich increased GRF spending by 20 percent during his first term, dwarfing a net 4 percent increase in Democrat Ted Strickland’s two biennial budgets.

Strickland’s predecessor, Republican Bob Taft, increased spending by 26 percent in his first term and 11 percent in his second. Taft succeeded Republican George Voinovich, who increased spending by 20 percent during each of his two terms in office.

Ohio Legislative Service Commission records dating to the mid-70s show state and federal GRF expenditures far exceeding Consumer Price Index and population growth under Democrat Dick Celeste and Republican Jim Rhodes, as well.

Based on data from LSC, the U.S. Department of Labor and the U.S. Census Bureau, spending grew faster than inflation and Ohio’s population in 24 of the 30 fiscal years from 1985 through 2014.

LSC estimates total GRF spending of $31.4 billion for fiscal 2015, $5 billion more than was spent in 2011. Spending growth for fiscal 2015 year will likely exceed inflation plus population growth by at least five percent.

If Kasich had kept GRF spending growth at the rate of inflation plus population growth during fiscal years 2012-14, he would have saved state and federal taxpayers $1 billion.

How does Kasich’s 2016-17 budget plan stack up? Kasich’s $36.9 billion in state and federal GRF spending proposed for fiscal 2017 would be nearly triple the $9.6 billion spent in 1987, the second year of Celeste’s second budget.

If the Ohio General Assembly were to pass Kasich’s budget as introduced in House Bill 64, fiscal 2017 spending would be $10.7 billion greater than the $26.2 billion spent in 2011.

Contacted for comment on the state’s spending trend, Matt Mayer, president of free-market think tank Opportunity Ohio, directed Ohio Watchdog to an analysis he released last month.

“Unless spending slows and/or revenues exceed the average growth since 2001, Ohio will begin running deficits in 2016,” Mayer wrote. He projected Ohio will have a $2.8 billion deficit next year and a $3.6 billion deficit in 2017.

Mayer noted the nation is in the midst of its fourth-longest economic recovery since 1929, and it’s unlikely to remain in a recovery until 2017.

“To his good fortune, Governor Kasich entered office shortly after the recovery began,” Mayer explained. “He won’t be so fortunate when he leaves office unless the Ohio General Assembly saves him from his penchant for higher spending supported by the hope of ever-increasing higher revenues.”

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