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Kasich seeking glory at Ohio’s expense

By   /   February 21, 2013  /   6 Comments

DENIAL: Gov. John Kasich is unwilling to tackle Ohio’s spending problem. (AP photo)

By Jon Cassidy | Watchdog.org

John Kasich is building a resume.

The Ohio governor needs impressive bullet points to sell himself, and he’s willing to mortgage the state’s future to get them.

His policies aren’t meant to work. They just need to sound good.

When he’s on the on the campaign trail, whether it’s his re-election next year or a rumored run at the presidency down the road, he needs a clear story.

He’ll be the guy who created jobs, slashed taxes and provided health insurance to hundreds of thousands, all while balancing the budget.

But the greater glory of Kasich has a cost. He’s siphoning money from future budgets to pay for his bullet points, tying the hands of any successor who would the tackle the reforms that Kasich has ignored.

Call it an opportunity cost. Columbus is run by Republicans. They could take a machete to the enormous bureaucracy and welfare state that has Ohio drowning in mediocrity. They could take a nap, and let the energy sector ignite the economy. Or they could take credit, bragging about the golden egg they took off some stupid goose.

So let’s take a look at the golden eggs and other shiny objects Kasich is waving in the electorate’s face.

All Kasich needs you to know about JobsOhiois the name. Maybe you’ll catch a news story where the quasi-private development corporation gets credit for 82,000 jobs created in a year or whatever sounds plausible.

IS IT really creating jobs?

All you really need to know about JobsOhio is that a more accurate name would be OhioLoopholes or CorporateWelfareOhio. The state’s tools for so-called economic development are tax credits, subsidies and grants. In other words, your tax dollars given to give one company and denied to its competitor. It’s called cronyism.

Ohio spends at least $3.24 billion a year, or 11 cents per dollar in the state budget, on these giveaways, according to a recent investigation by The New York Times. The money goes to corporations such as General Electric ($120 million), General Motors ($80.8 million), or Bob Evans Restaurants, which got $17.4 million to stop pretending it might move its headquarters to Texas, where it doesn’t even have any restaurants.

No serious free-market conservative or sensible liberal supports this sort of cronyism. There’s no principle unifying Kasich’s politics — if it puts money in his hands, it’s good. From the state’s liquor franchise to its turnpike, Kasich wants to siphon off years of future revenue and cash in now to spend on his pet economic bubble.

In that context, it’s easy to understand why Kasich ditched his anti-Obamacare rhetoric to accept federal cash for a Medicaid expansion. It’s $13 billion in the first seven years. The longer term costs are someone else’s problem. Kasich gets his free bullet point.

Ohio has the most bloated state and local government in the country because of politics like this. A recent study by the Fraser Institute found that it’s not direct government expenditures but endless redistribution that’s weighing the state down. Nobody outdoes Ohio in spending on unemployment insurance, workers compensation and government pensions, measured as a percentage of the economy, according to the study. And only five states spend a bigger slice on transfers and subsidies. Yet this is what Kasich offers: more of what we already have too much of.

Kasich’s tendency to mortgage the future is even clearer in his big plan to extend the sales tax to services, cut income and small business taxes and hit oil and gas production with a severance tax. There’s little to be gained by extending the sales tax to services that can easily be provided tax-free from out-of-state. Cutting tax on small business polls well, but makes no economic sense. It will just be a huge loophole for personal income up to $750,000.

But Kasich gets to be the guy who cut income taxes by 20 percent — OK, it’s actually around 1 percentage point, but you’ll never hear him describe it that way.

Does it matter if his tax chases energy investment off to other states — if it stifles Ohio’s one great chance at a turnaround? Does he really think Ohio needs a bigger government more than a vibrant new industry?

That’s not really the question, though. Credit is what matters to a true politician, and that means taking some sort of action, however pointless. That’s why we have a governor whose two signature initiatives contradict each other: the severance tax, to take money from some businesses, and JobsOhio, to give it to some other ones.

President Ronald Reagan knew the type. As he once told a White House conference, “government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Contact Jon Cassidy at jon@ohiowatchdog.org.

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Jon Cassidy

  • http://www.facebook.com/carl.wineland Carl Wineland

    Jon he is doing what HE can in a battle ground state,. YOU know as well as I do if he goes too far to the right the liberal media will rip him to shreds like they always do with Republicans. This will the OPEN the DOOR for dumb as Strickland to get elected.

  • http://www.facebook.com/jonathan.cassidy2 Jonathan Cassidy

    ‘If our political leaders are to be always a lot of political merchants,
    they will supply any demand we may create. All we have to do is to
    establish a steady demand for good government. The bosses have us split
    up into parties. To him parties are nothing but means to his corrupt
    ends. He “bolts” his party, but we must not; the bribe-giver changes his
    party, from one election to another, from one county to another, from
    one city to another, but the honest voter must not. Why? Because if the
    honest voter cared no more for his party than the politician and the
    grafter, then the honest vote would govern, and that would be bad—for
    graft. It is idiotic, this devotion to a machine that is used to take
    our sovereignty from us. If we would leave parties to the politicians,
    and would vote not for the party, not even for men, but for the city,
    and the State, and the nation, we should rule parties, and cities, and
    States, and nation’

    - Lincoln Steffens

  • sanfordandsons

    There’s not a whit’s difference between donkey’s and elephant’s at this point in history. They both operate to protect their positions in politics and in society. Progressives are an anathema to our political system. I frankly don’t know what we are going to do unless we revolutionize the way the legislative system works by requiring any spending bills pass with a super majority instead of a simple majority. It’s both party’s progressive demi-gods like Kasich that have ruined the political system in the US–and it seems that no one learns from their mistakes. The elephants are going down in 2014 and it will be from their own stupidity.

  • Bill Archer

    And all you have to do is change “Kasich” to “Obama” in every single one of your points – complaining about Ohio getting in bed with GE when that company might as well live in Obama’s Blue Room – and everything you write is true by a factor of ten with regard to the administration in Washington.

    Every Single. Thing.

    But somehow or other I doubt you’ll be writing THAT any time soon. The One can do this stuff and it’s because he’s fixing the economy or investing in something or other or, well, just because he’s so gosh darn wonderful. Borrow 40% of every dollar he spends? Why, that’s just GREAT!

    But let Kasich do it and he’s a low down sneak thief, mortgaging the future for political gain.

    I love your blindness, sir. Gave me a much needed laugh today. Keep up the obtuse blather.

  • http://www.facebook.com/jonathan.cassidy2 Jonathan Cassidy

    Actually, I wrote a lot about the Obama administration’s bailout of GM and all the nonsense Sherrod Brown and the local press spread about it last fall. Most references in the big dailies here still get it wrong, calling the bailout a loan at this late date. Venture socialism is awful policy, regardless of the party pushing it.

  • http://www.facebook.com/mike.burkons Mike Burkons

    Bill,
    You should read all of the posts. I am impressed that it is equally as critical regardless of party. The only reason I am commenting is it is rare in the media today that someone doesn’t have a party/ideology they are trying to protect.
    Just my thoughts.
    Mike