Following up on the developing Ohio fiscal surplus situation reported here and here in mid-June, here are the final results for the state’s fiscal year that just ended in June (PDF from the Ohio Office of Budget and Management can be found by going here and clicking on the link for July 10, 2007):

• State revenues came in $256 million below budget. The main components were personal income taxes ($235 mil more than expected, despite/because of the income-tax rate reduction at the end of last fiscal year); corporate franchise taxes ($182 mil more than expected); sales/use tax ($186 mil less); and federal grants, principally Medicaid reimbursements ($477 mil less). The Strickland Administration’s claim that the state was hurt by last year’s income-tax cut is clearly incorrect.
• State expenses came in $945 million lower than budgeted. $668 million of that was lower spending on Medicaid (which explains the lower level of reimbursement cited earlier). Most other areas came in with relatively smaller favorable results (less spending IS a favorable results) that collectived added up to $277 million.
• After considering net transfers to and from other funds of about $32 million, the state’s general fund ended up $721 million ahead of budget ($945 - $256 + $32).

So how was that $700-plus million handled? Apparently only one Ohio Old Media outlet has cared; at least that’s what a Google News search on “Ohio surplus fiscal state” (not in quotes) shows (the Akron link listed later is to an article that pre-dates the budget report). The one currently relevant listing, a Cleveland Plain Dealer editorial, claims that the surplus is $1 billion (perhaps it is after taking all other funds into account), and notes that “State officials already have committed those dollars to the next two years’ budgets.”

At least half of the general fund surplus should have been earmarked for tax relief in the new budget. The $257 million in property-tax reductions achieved by making the senior-citizen homestead exemption, which had been means-tested, available to all seniors, is being separately covered by tobacco-settlement money (4th para at link). Ohio’s economy will grow more slowly than it should have because of this failure to let taxpayers keep, and mostly spend, more of their own money.

How Now, Thou Dow at 14 Thou? — This may be the week that the Dow Jones Industrial Average (DJIA) breaks 14K and stays there. Yesterday’s post-close announcement by Dow component IBM had that stock up over $3 in after-hours trading.

Though as discussed previously, it’s not the best of benchmarks, it’s surely worth noting that the DJIA has nearly doubled since its post-dotcom bubble, post-9/11 trough of 7181 on October 10, 2002. More importantly, the S&P 500 is with a percentage point of its all-time high.

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Paul Weyrich warns in his Townhall column today that a massive, market-distorting tax increase is winding its way through Congress:

H.R. 2834 is sponsored by Rep. Sander M. Levin (D-MI) and would reclassify carried interest as ordinary income. That represents a 133% (tax increase) on so-called flow-through investment partnerships. Retirees and anyone on a pension would be especially hard hit by this approach. The proposal would tax carried interest at 35% instead of the capital gains rate of 15%. Pension funds are some of the biggest investors in flow-through investment partnerships. Raising taxes on the partners will hurt the investors.

This measure does the opposite of what good public policy should. Good public policy creates capital. It does not discourage one from taking risks. Carried interest represents the sweat equity which general partners put into the deal. It is, in fact, capital and should be treated as such, which means taxing it at capital gains rates.

Weyrich calculated the 133% tax-rate increase by dividing the top ordinary-income rate by the cap gains rate (35% divided by 15% = 2.33 — a 133% increase).

Weyrich is right that what is involved is risk capital, and that the cap gains rate is what should be applied to these types of gains.

If Congressional tax-and-spenders want to treat cap gains as ordinary income, it should be attempting to pass legislation that would do so across the board. But proponents know that this would be hugely unpopular and would never fly.

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The presidential candidate affectionately known around here as BHOO (Barack Hussein “Obambi” Obama) is “absolutely convinced that culture Wars are just so ’90s” (first item at link).

Pretty odd, coming from a guy reported as saying the following things just two months ago:

Sen. Barack Obama (D-Ill.) is delivering pointed critiques of the African American community as he campaigns for its votes, lamenting that many of his generation are “disenfranchising” themselves because they don’t vote, taking rappers to task for their language, and decrying “anti-intellectualism” in the black community, including black children telling peers who get good grades that they are “acting white.”

The answer, of course, is that BHOO changes his message depending on his audience, and relies on Old Media to ignore the inconsistencies. He talks of the Culture Wars being over when he’s at Planned Parenthood, while invoking Culture War-related themes in front of African-American audiences. It’s legitimate to ask if he really believes in anything besides getting elected.

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The Cincinnati Post is putting itself to sleep at the end of this year. In almost 2-1/2 years of blogging, I think I’ve only referred to it once, in this entry (first numbered item cited) during the the summer 2005 Schmidt-Hackett race — and I had to go to the library’s database to get the text. I don’t think the paper has broken a really important story since the early 1990s Hamco Auditor’s Office scandal Bill Sloat cited Tuesday at The Daily Bellwether.

The Post’s demise is more a result of disinterest in afternoon newspapers than anything else. This two-year-old Top Ten List of afternoon papers has Number One’s circulation at a measly 138,000.

The disappearance of the Post could have been, and conceivably still could be, a unique opportunity to create a local Internet daily to fill the (sort of) void, but apparently Scripps Howard will not even entertain the idea. It should have. Since it won’t, maybe someone who sees potential value could buy the brand from Scripps and use it as an online springboard. It would require deep pockets and a lot of patience, which is why I don’t see it happening.

From Aliquippa, Pennsylvania:

07/14/2007

As Donald Leroy Brown watched the murky rainwater surge down Baker Street on July 5, the Aliquippa man said he couldn’t believe some of his neighbors were standing in the midst of the deluge, retrieving belongings from their cars or trying to push them out of the fierce current.

“What’s wrong with these people? Don’t they know it’s a flood?” Brown recalled thinking.

Brown knows firsthand the power of unbridled waters. On Jan. 9, 2005, he was one of four crewmembers of the Rocket towboat who rushed to the rescue of their mates aboard the Elizabeth M, which was swamped at the Montgomery Locks and Dam in Industry.

For his efforts in rescuing two crewmembers, Brown and the others earlier this year were awarded the Carnegie Hero Fund Commission Medal, which honors civilians who have risked or given their lives while trying to save others.

Now, Brown is being called a hero once again, having plucked one of his neighbors from the floodwaters in Aliquippa as she was swept down Baker Street little more than a week ago.

rown said that in both cases, he was simply doing the right thing, hoping that someday, if he was in the same position, someone would try to help him.

“I just did what I had to do. You don’t do stuff like that to be a hero,” Brown said Thursday.

But for those in the community who now know of both rescues, they are amazed by Brown’s bravery and selflessness.

“God has a plan for this man, put him in the right place at the right time for a reason,” said Aliquippa Assistant Police Chief Andre Davis. …..

Go here for the rest of the story.