Budget Bonanza

So, a lot of people are in a tizzy over Governor Kasich’s proposed budget, and I can understand why. The proposed budget guides Ohio away from the status quo, which President Ronald Reagan summed up best when he said, “status quo, you know, is Latin for ‘the mess we’re in.’” Specifically, Governor Kasich’s “$55.5 billion budget, which covers the next two fiscal years and fills an $8.6 billion shortfall, cuts $1.4 billion from Medicaid funding, sells five prisons to private operators, and slashes the money sent to local governments by 25 percent next year and an additional 25 percent in the following year.” Citation. For more general information read this article.

Here’s a quick breakdown of WHAT the budget proposes and their possible effects. I’m leaving it up to you, the reader, to determine your own opinion on each issue. Feel free to send comments to blog@eriecountyyoungrepublicans.com; note, your comment may be posted anonymously as food for thought for your fellow readers.

1. Cost Threshold in Public Construction – Undoubtedly the sexiest issue of all time is the proposed increase in the cost threshold for public construction projects from $78,258 to $5 million. In layman’s terms, this means local governments and the state do not have to pay the average wage for construction workers until the cost of the project reaches $5 million. The average wage for construction workers on public construction projects is determined by the Department of Commerce and is based on existing union agreements and the locality (e.g. the average wages may be different in Cincinnati and Sandusky). This proposal is to help keep the cost of government construction down. For more information, read this article.

2. Sharing Services – This proposal encourages local governments to share services in order to cut down on the overall cost for said services. An example given by Randy Cole, president of the State Controlling Board, was regional health insurance funds to compete with or replace current programs offered by local governments. For more information, read this article.

3. Medicaid – Currently the state’s biggest budget eater, totaling approximately 40% of the state’s annual budget. Governor Kasich’s budget challenges the state to reform Medicaid by switching to outcome-based medicine where medical providers are paid for outcomes rather than services. The budget also encourages Medicaid recipients to stay home and receive care there rather than in nursing homes, which could potentially save the state millions of dollars. For more information read this article and/or this article.

4. Mental Health – Tracy Plouk, the Director of the Ohio Department of Mental Health, said this about changes to funding for local and state mental health programs: “next year, the state of Ohio will be responsible for funding community mental health Medicaid services rather than requiring the local alcohol, drug addiction and mental health boards to do so. This provides more financial predictability for the local boards and enables them to focus local resources on local priorities such as housing and services for children.” For more information, read this article.

5. Privatization of Prisons – The budget also proposes to sell 5 of Ohio’s prisons. The sale of these prisons to private firms would gross the state between $50 million to $200 million in profits. Several lawmakers recently said these 5 prisons might have been closed soon if they were not sold to private firms, as the state did not have the funds to keep them open. If that had occurred, prisoners would have been shipped to out-of-state facilities to serve their prison terms. By selling the prisons, inmates no longer face the prospect of serving time in another state several hundred miles away from their families and the prison staff face a better chance of keeping their jobs. For more information read this article and/or this article.

6. Transportation – (Signed into law 03/30/2011) Allows private companies who want to increase traffic to their business to agree to pay for construction of a road. The state would then pay the company back with interest or through tolls. The Transportation Budget also allows commercial truck drivers to register their trucks online. Finally, the budget increases the cost threshold for law enforcement officers to investigate motor vehicle accidents from $400 in damages to $1,000 in damages. For more information, read this article.

7. For discussion on SB5, JobsOhio and cuts to the Local Government Fund, please see the blog titled “Running At Sacred Budget Cows” from March 17, 2011.

Tune in next Thursday for another blog entry! Also, keep your eyes peeled for new additions to the ECYR blog. If you want to write a blog, please email blog@eriecountyyoungrepublicans.com!