As Kasich plots “moderate” run, Ohio’s budget gets extreme

John Kasich is closer to announcing his presidential ambitions than ever. Just last weekend he went on NBC’s Meet the Press and stopped just short of declaring his intention to run, touting, among other things, his “moderate” credentials. He may even attend a gay wedding! Then yesterday, the Washington Post and others reported that Team Kasich had officially set up a 527 organization, “New Day for America,” that will start raising funds for his campaign.

While Kasich prepares an impending announcement, the Ohio General Assembly is considering his two-year budget proposal for 2016-2017, making its own changes along the way. So if Kasich is indeed the moderate he plays on television, then a look at his ideas for Ohio’s two-year 2016-2017 budget would show that his policy priorities are in line those of most Americans. There’s nothing he’s more eager to tout on the campaign trail than his record, after all.

Kasich’s proposed budget

Before the state legislature got to tinker with the budget, Kasich outlined his policy priorities for the next two years in his State of the State speech late February. As far as speeches go, it certainly struck all the right moderate notes, stuffed to the brim with folksy overtones. Quite literally, in fact. He referred to his audience as “folks” eight times throughout the speech, and it was notable to say the least that he mentioned the “working poor” (three times) more than the “middle class” (just twice). For their part, “hard” and “work” appear together nine times throughout the speech.

However, the specific proposals Kasich outlined in his address were as radical as his rhetoric was moderate: Kasich’s new budget would include massive changes to Ohio’s tax structure and public school funding mechanism.

Kasich’s tax reform proposal is as ideological as it is extreme. In his State of the State, he repeatedly expressed Ohio’s need to rely more on consumption taxes and slash income taxes — going as far as to completely eliminate income taxes for small businesses. The logic behind this move is that consumption taxes “put you in control,”  whereas income taxes – since they’re deducted paycheck to paycheck – offer less control. Therefore, consumers can  save more money by making smart choices in a state that relies more on consumption taxes, and those savings can be invested back into the economy .

But that isn’t exactly true – as Matt Bruenig of Demos pointed out to me on Twitter – savings on consumption taxes won’t necessarily get invested back into Ohio’s economy:

Moreover, raising consumption taxes doesn’t make any sense if your stated goal is helping the poor, as Kasich was so adamant about in his address. There’s some debate over whether consumption taxes are regressive or not, but there’s real reason to believe that low and middle income groups, who can’t save as much and spend a greater share of their income, would subsequently take a hit from higher consumption taxes. There is no reason to believe that they shift the tax burden in a more progressive direction, and no reason to believe that they leave the working poor any better-off financially.

At the end of the day, this is an ideological debate over whether supply-side economics – better known as “trickle-down” – actually work. Multiple Republican presidencies have shown that Kasich is, at the very least, playing a dangerous game with the pocketbooks of low-income citizens across the state of Ohio. Moreover, a recent YouGov poll shows that 45% of Americans disagree with trickle-down policies, while only 29% of the public supports them. Even among Republicans, only about 50% take trickle-down seriously.

By contrast to his tax plan, however, Governor Kasich’s plan to reform Ohio’s school funding formula does appear to come from something of a compassionate place. Decades ago, the Ohio Supreme Court declared that the way the state allocates education funds is unconstitutional. His plan is an attempt to undo that by shifting resources from districts that can raise more money on their own to low-income districts that can’t.

Many of the wealthier districts would actually see cuts to their funding, however, so it’s no surprise that the plan elicited serious backlash – especially from his conservative colleagues in the legislature.

The legislature’s budget plans

School funding isn’t the only topic that the Republican dominated General Assembly has its own ideas about this budget season. State legislators have proposed big changes to Kasich’s tax plan. As with many budget negotiations, they’ve inserted in a host of extreme proposals in the hopes that even if they don’t all make it to the governor’s desk, at least some of them will.

Such measures were legion in this budget. There was one that would make it possible for counties to privatize jails if they end up in a fiscal crisis. Another proposal would have blocked the State Auditor from issuing citations to any public entity that does not comply or selectively complies with open records laws. The legislature considered defunding absentee voting. They mulled over controversial changes to the way the state deals with the developmentally disabled. A pair of anti-union measures would have negatively affected adjuncts and charter school teachers. And of course, there were plans to cut off hundreds of thousands of Ohioans from the Medicaid expansion Governor Kasich begrudgingly accepted. None of these ideas, fortunately, made it out of committee in the House.

Unfortunately, others did, like a provision that would stop any state-funded projects from using project labor agreements — another attack on unions. The fact is, Ohio General Assembly is so full of bad ideas that it’s hard to keep track. And they have plenty of time and another round in the Senate before the June 30 deadline when the governor must sign the budget.

How’s that for a moderate?

To further discuss the impact these policies might have on Ohio families, I spoke with Zach Schiller, research director at Policy Matters Ohio, a progressive think tank focusing on statewide issues.

Asked about the Kasich budget and the legislature’s budget, Schiller was upfront: “We don’t think that either plan would be very beneficial to Ohioans.” In terms of tax policy, he more than skeptical that cutting income taxes would create the growth the legislature had projected. As Schiller said, “the whole idea… has been discredited.”

Schiller walked through some recent events in Ohio’s tax history and elsewhere. Back in 2005, the state government – again under full Republican control – significantly cut income taxes and projected that this would generate massive growth. There was some growth in the years after, until the financial crisis. And in 2011, when the state faced an $8 billion budget shortfall, the actual cost of those tax cuts became much more obvious — the revenue predictions they had originally used to estimate their cost didn’t pan out. The whole situation, he noted, was not dissimilar to what we’ve seen in Kansas, where Governor Sam Brownback’s tax experiments have led to fiscal chaos.

But where Sam Brownback gets painted as a red-state ideologue, Kasich dons the mantle of a moderate. Schiller gave him credit for things like trying to pay for the tax cuts he proposed by raising revenues in other places. Although, many of those proposals, such as a hike on oil and gas severance taxes, got cut out of the House budget. And of course, allowing the Medicaid expansion to go through, granting half a million more Ohioans health coverage, has boosted his aisle-crossing bona fides.

A “Compassionate” Conservative?

A few cases of moderation do not erase certain other aspects of his record, as Schiller then explained.

When Kasich came into office in 2011, the state was facing a crisis in assisting its poorest families. Between December 2007 and February 2010, the state lost 406,800 jobs, and it only just formally recovered those losses a month ago. But during the recession, the state saw a 45% drop in caseloads for its cash assistance program, “Ohio Works First,” even as unemployment remained high. Various factors including onerous work participation requirements under the program made it simply impossible for many to stay enrolled because they weren’t any jobs in the near-depression, which hit rural areas especially hard.

Fixing Ohio’s cash assistance program would have required bold reforms and, among other things, changes to how the state allocates federal Temporary Assistance for Needy Families (TANF) funds. A truly compassionate conservative would have made an effort. Instead, Kasich did nearly the exact opposite thing.

In 2013, Kasich refused to accept a federal waiver for the majority of counties in the state that would have lifted work requirements to receive Supplemental Nutrition Assistance Program (SNAP) benefits during the recession, effectively cutting off families from food stamps when many had already been cut off from cash assistance. Conceivably, a family of four making up to 11775 dollars of income a year and living in the wrong county could have found itself cut off from both SNAP and TANF. Being a fully funded federal program that participants can only use to buy food for their families, refusing the SNAP waiver was an utterly baffling move. Researchers at Policy Matters Ohio interviewed over 2500 adults in just one county who had lost access to SNAP benefits and found that about a third of them “suffer from poor physical or mental health.”

Schiller pointed out to me how especially disturbing he thought the decision was: “for someone to say that they’re compassionate and take that kind of step… showed the exact opposite impulse.”

Considering that the measure was already fully paid for, it’s hard to disagree. It would be wrong, of course, to say that John Kasich doesn’t have a bipartisan bone in his body. He does because he is a smart, practiced politician. But to look past the reality that his track record hasn’t always been so compassionate would be to miss at least half the story.


James Neimeister is a freelance writer from Ohio. His interests include: Russia, Ukraine, education, technology, and "cyberspace."

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