Return to the 2010 race for governor, John Kasich asserting that if he were leading Ohio, “we wouldn’t be where we are” (no 400,000 jobs lost, the state somehow miraculously dodging a national recession).
The Republican challenger also famously knocked Ted Strickland, the Democratic incumbent, “for going to Washington on your knees with a tin cup begging for someone else to bail us out.” Put aside the consensus of economists and the clear evidence that the stimulus provided a necessary cushion against the blow of the harsh downturn.
Kasich made much of his disdain for federal money. Once in the governor’s office, he rejected $400 million to lay the groundwork for an improved train system in the state. He declared that no dollar of expiring stimulus money would be replaced, even though the federal funds helped to address a sharp drop in state revenues and avoid deep spending cuts, for public schools, in particular.
At one point, the governor declined $176 million to update the state’s unemployment compensation program. It didn’t matter that the federal money would ease the interest the state owed on the $2.6 billion it had borrowed from Washington to keep the program afloat.
Now let’s leap forward to the new two-year state budget plan the governor unveiled last week. What is the percentage of federal money in the $63 billion proposal? Try 32 percent, more than the share fueled by the individual income tax (24 percent).
How does that compare with state budgets of the recent past? In the 2004-2005 plan, the share was 23 percent, and two years later, roughly the same. The percentage dropped slightly in 2008-2009. In that often maligned stimulus budget? The share climbed to 29.7 percent.
To be fair, the big increase in federal money reflects the governor’s decision to embrace the expansion of Medicaid. That was the smart, pragmatic and humane choice. According to an Urban Institute analysis, more than 680,000 Ohioans currently uninsured will gain health coverage.
That will cost the state money. Yet recent assessments have concluded Ohio will come out ahead, one citing a gain of $1.4 billion by 2022.
At the budget unveiling, the governor highlighted the many benefits, for example, expanding the reach of services for those with mental illness, easing the burden of uncompensated care for many hospitals, diminishing the cost-shifting that distorts the market and drives up premiums.
The governor shared the persuasive arguments of health-care and business leaders. He pointed to the “financial chaos” that would visit rural hospitals. Without the Medicaid expansion, they soon would lack sufficient money to cover the expense of treating the uninsured.
No surprise that Kasich heard cutting words from the right. The editors at the National Review Online charged that he “allowed himself to be bought off by the false promise of ‘free money’ from the federal government,” adding that he “is marching in the Obamacare parade.”
That helps explain Kasich straining to argue that his decision had little, if anything, to do with Obamacare. More inventive were the words of Scott Milburn, the governor’s communications director. He returned to first instincts, telling the Washington Post that the governor really was delivering “another no,” in line with his rejection of a state-run insurance exchange and other elements of the new health-care regime.
Milburn described the decision as preventing “a $13 billion grab by Uncle Sam of Ohioans’ federal tax dollars.” That’s right: It isn’t really federal money. The governor wants to keep Ohio dollars at home!
Don’t dismiss the angle. Kasich likely will need to play many others to bring on board resistant Republicans at the Statehouse.
One surely involves all that federal money helping to hold together a budget plan featuring the governor’s promised reduction in individual income tax rates. Two years ago, the governor followed his predecessor in collecting “franchise fees” from hospitals to leverage additional federal Medicaid money, providing a big assist in balancing the budget.
Early in his term, Kasich even went to Washington asking for a slower winding down of Medicaid money in the stimulus package.
The governor hasn’t been shy about touting his achievements. An appearance on Meet the Press last April was typical, citing advances, real, exaggerated and imaginary, concluding that a dysfunctional Congress and “rudderless” White House would do well to follow in the path of Ohio.
“They should learn from this in Washington,” he contended.
And what might Washington do?
Recall that a key aspect of balancing the state budget was reducing state money routed to local governments by $1 billion, leaving public schools with $1.6 billion less, shoving many hard decisions down the government ladder. Now imagine Washington taking the same approach, claiming a substantial share of Medicaid and other money, leaving states to fend more for themselves.
Putting Ohio’s budget in order, let alone cutting taxes, would become magnitudes more difficult — that federal money coming in handy.
Douglas is the Beacon Journal editorial page editor. He can be reached at 330-996-3514, or emailed at mdouglas@thebeaconjournal.com.
