The Columbus Dispatch
Editorial: Fiscal
prudence, please
Additional state revenues should be used to pay debt, rebuild rainy-day
fund
Sunday, June 19, 2011
Remember when Ohio had a rainy-day fund of more than $1 billion?
A lot has changed since then - mostly for the worse, in terms of the
state’s economy and financial management. After the debacle of the
2010-11 state budget, the fund stands at $1.78 - as in, less than two
dollar bills - and former Gov. Ted Strickland and the politically
divided legislature still couldn’t produce that budget without relying
on $8 billion in one-time funds and accounting tricks, including
deferring payment of some bills to a later date.
Now, however, the budget proposals put forth by Gov. John Kasich and
the legislature offer the opportunity to put the state on the path back
to fiscal sustainability. But with tax revenues coming in higher than
expected, some legislators and plenty of special interests want to
start expanding state spending again. This is a bad idea. Any
unexpected additional revenue should be used to pay overdue bills and
replenish the rainy-day fund.
Fortunately, all indications point that way; Budget Director Tim Keen
already has said his first priority for “extra” revenue is to pay the
debts that the Strickland administration left behind, and that Kasich’s
next priority is to replenish the fund. Senate President Tom Niehaus,
R-New Richmond, and House Speaker William G. Batchelder, R-Medina, also
have said they favor rebuilding the fund.
The budget proposals being hashed out by a House-Senate conference
committee aren’t perfect; the Senate version unwisely omits Kasich’s
proposals for merit pay for teachers and meaningful reform of rules
governing public construction, for example. The Dispatch has urged
lawmakers to address these and other issues in a final version.
But the budget work overall is a significant accomplishment: Kasich and
both legislative chambers have produced budgets that make up the
massive deficit Strickland left behind, without tax increases that
could strangle economic progress in Ohio.
Just as important, fundamental reforms, such as changes to
public-employee compensation and government consolidation promise a
permanent shift toward leaner, more-sustainable state and local
government.
Resetting state spending priorities sets the table for a better Ohio
future. That work shouldn’t be undermined at the first sign of
unexpected revenue. Especially since there is no way to know if this
additional revenue is the sign of a recovery with legs or merely a
temporary blip.
Read it at the Columbus Dispatch
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