Ron's Journal Archive
Spending Controls Proposed By Rep. Ron Amstutz
3/16/2010
Today, Rep. Amstutz gave the following speech during debate before the Ohio House of Representatives on the question of appropriating $3.2 Billion in capital improvement projects, the majority of which will have to be paid for from future state tax revenues:
The amendment before us takes the $3.2 Billion in project approvals and sets forth a process for slowing down a portion that are not top priority or already under construction. It goes forward with those that already have construction contracts in place; it goes forward with projects needed to protect public health and safety; it goes forward with projects that protect the integrity of our current infrastructure of state facilities. It continues the K-12 school facility program.
This is a very measured proposal.
But the most important one thing it does not go forward with is business as usual. Conditions have changed. Without this amendment this bill marches ahead with business as usual. I was a member of the Ohio Senate when the last several capital improvement bills were enacted. And I participated in negotiating and enacting them. Is it difficult to pull back on non-critical projects now? Absolutely.
But these appropriations were approved BEFORE our state tax revenues dropped more than 12 percent in one year last year and are now tracking to drop another eight percent in this current year, which will end in a little over three short months. That is a 20 percent drop in the tax revenues that are pledged to make payments on capital improvement debts and provide educational services, social services and the public safety prison system that together are 90 percent of our operating budget.
Minus 20 percent makes it obvious that conditions have changed. Business as usual is no longer a prudent option. I’m sorry to be the bearer of the news we all know to be true.
This amendment is modest, but it will pay forward to help balance the next biennial budget, which will be in front of the next General Assembly almost exactly 12 months from now. That’s when payments will come due on much of what is authorized here today. The piper will have to be paid. Not only this piper, but the payment deferrals on %735 million debt payments that will also come back on line in next year's budget-making. This is just one example of the unsustainable dynamics in our current budget.
It has been said that this amendment gives too much responsibility to the executive branch to change what we have appropriated. No, it is more measured than current law that requires the executive to trim spending when the operating budget falls out of balance from what we appropriate – and to trim spending without the review of the Controlling Board, which this amendment proposes for those projects that it may be determined need to go forward after being placed on hold under the criteria of this amendment.
I want to read the first seven sentences of an article that appeared Sunday in the Cleveland Plain Dealer:
The state of Ohio is steering straight toward a cliff. At the bottom of that cliff is a hole nearly $8 billion deep. Ohio leaders have less than a year to throw on the brakes and change course before it's time to draft another two-year state budget. And they will have to do it without federal stimulus dollars and other state nest eggs worth almost $8 billion that were used to prop up the current budget. How they handle the crisis could make or break the state's economic future, say nervous observers who think it's time to start tackling the issue now."It's the biggest issue that we've ever faced in terms of growing our state," said Joe Roman, executive director of the Greater Cleveland Partnership. Roman and other Cleveland business leaders fear that the looming budget imbalance is a recipe for a massive tax increase that would derail the region's recent economic development efforts, as well as having a catastrophic effect on development across the state. "I'm not sure what key economic development in Northeast Ohio won't be affected by a failure of all of us to deal with this issue," Roman said.We are faced today with a decision. If the decision is made to brush this amendment aside, it will be an opportunity lost. Once this train leaves this legislature, most of it’s cargo will never come through this station again. The opportunity will be lost.
Does it matter? Every month that goes by without beginning to stand up budget corrective actions – especially in the Medicaid cost containment area – things that takes many months of hard work to begin achieving savings – bringing our local government partners into the room to look at how we deliver services, since more than 80 percent of our operating budget is transferred into our local communities for service delivery --- every additional month of business as usual --ripens the similar situation and too little too late approach that set the stage for the 1983 90 percent increase in our state income tax, making Ohio one of the highest income tax states in the nation.
We cannot afford to back ourselves into that corner again. Federal dollars borrowed from foreign countries are not going to keep our budget afloat – at best they might offer a transition to wean us off them as we work toward fiscal recovery.
But only if we make a series of wise decisions ourselves – like this one offered here. Trust me. It is not going to get easier for quite awhile.
Our state’s economy will recover. But our state budget – and the services it enables – will only recover to the extent that we chart a reasonable course. We can manage our way out of this fiscal swamp, or we march deeper into the mire.
Waiting and hoping doesn’t get the real work done. Waiting will knaw away at the lifeline of better options that exist now and for a few more months. The list of options out of the swamp will get shorter and shorter. What remains will get more and more painful, expensive and damaging to this state’s recovery trajectory.
I am calling for us to take a deep breath. Let’s take a recess for 15 minutes, more or less, for the purpose of considering whether we can adjust the trajectory of this bill.
I am asking us to take a road less traveled. One that will make a positive impact if we come together to adopt this amendment and then go forward with this process.
Paid for by Citizens For Amstutz, Matthew Hochstetler Treasurer, 4456 Woodlake Trail, Wooster, OH 44691