The new budget for the State of Ohio for fiscal years 2016 and 2017 was signed into law by Gov. John Kasich (R), reducing the income tax rates on individuals by 6.3 percent across all income tax brackets and shifting the tax burden by raising consumption taxes, sin taxes, and business taxes for some small business owners.
Government spending will increase by 11 percent, compared to the previous biennial budget, most of which comes from Kasich’s continued support for increasing entitlement spending, such as Medicaid.
Kasich’s Medicaid expansion program is costing state taxpayers $1.4 billion per year—about $258.14 per taxpayer—more than budget projections predicted, causing the program to exceed its budget by about 63 percent.
Shift and Spend
Matt Mayer, president of Opportunity Ohio, says the ballooning of Ohio’s budget under Kasich was predictable.
“Unfortunately, I am not surprised by Gov. Kasich’s higher spending and tax-shifting approach to governing,” Mayer said. “Similar to the approach in balancing the federal budget during the technology boom in the 1990s, he is riding a post-Great Recession revenue wave to keep spending high. When the wave crashes, as they always do, taxpayers will face tax hikes and/or service cuts.”
Mayer says Kasich’s fiscal policies are a bad deal for taxpayers.
“Without a doubt, Medicaid expansion should never have happened,” Mayer said. “Along with instituting the state income tax and allowing public workers to collectively bargain, it will go down in Ohio history as one of the worst decisions made by a governor, I believe.”
‘Larger and Larger’ Budgets
Nicole Kaeding, a budget analyst for the Cato Institute, says Kasich has worked hard to expand the size and power of government.
“Since taking office, Gov. Kasich has pushed for larger and larger state budgets,” Kaeding said. “From fiscal year 2012 to fiscal year 2015, state spending grew by 18 percent in Ohio, well above the national average. He called for even higher spending in the state’s new budget. Kasich has a reputation for cutting spending, based on his time in Congress, but that penchant for lowering spending hasn’t continued.”
Kasich’s push for expanded entitlement spending is consuming increasingly large portions of the state’s budgets, crowding out revenue for other government programs.
“A large reason for Ohio’s growing spending is Kasich’s support for Medicaid expansion,” Kaeding said. “Kasich expanded Medicaid unilaterally in 2013 over strong legislative objections. Just 18 months into the program, expenditures are 63 percent over budget, and enrollment is double initial estimates.”
Matt Hurley ([email protected]) writes from Cincinnati, Ohio.