December 28, 2008

Ted Strickland’s ‘Turnaround Ohio’ Plan Revealed: Beg Uncle Sam to Solve Ohio’s Problems (Update: Crazy CAT Accounting)

Filed under: Economy,Taxes & Government — Tom @ 8:49 am

In February 2007, Ted Strickland told Ohioans that their hearing was bad.

Hearing-impaired Ohioans thought that they heard Strickland tell Buckeye State voters during the 2006 gubernatorial campaign that he was going to work on his “Turnaround Ohio” plan as soon as he became governor.

But three months after the election, he did a big Emily Litella “never mind”, and put off what he had said was the most important component of “Turnaround Ohio” — education. He said that dealing with that could wait until the state’s next biennial budget, i.e., 2-1/2 years. Within hours (roughly two) of this and another site’s comparison of Ted’s put-off to his campaign rhetoric, the Strickland campaign web site disappeared. Fortunately, it was mostly preserved by yours truly (the linked page is one of very many) for fair use and accountability purposes.

Yesterday morning, almost two years later, we learned that Ted has now given up on turning around Ohio on his own, and has instead decided that it’s Uncle Sam’s job:

….. In Ohio, which has shed 100,000 jobs in the past year, Gov. Ted Strickland (D) and his budget team spend a lot of time delivering bad news to constituents and plotting ways to wring money from the federal government. He announced $640 million in cuts for the budget year ending June 30, for a total of $1.9 billion since the economic crisis began.

“We’re not crying wolf. This is real,” Strickland said in an interview in his statehouse office, pointing to charts that project the most serious erosion of state income in 40 years and a two-year budget deficit of $7.3 billion. Revenue shortfalls in the upcoming two-year budget could amount to about 25 percent of the state’s discretionary spending.

Strickland recently picked up the telephone and called Rahm Emanuel, the incoming White House chief of staff. When he heard the recorded voice of his former congressional colleague, he left a message: “Rahm, it’s Ted. You’ve never failed me and I need $5 billion.”

Assuming the bolded quote is accurate, it’s quite revealing. You see, it’s TED who needs to “wring money from the federal government” to the tune of $5 billion to “turn around Ohio” as HE sees fit. This is much more about Ted Strickland’s electoral viability that it is about fixing the state’s budget or its economy.

Let’s see how Ted and fellow governors want to use their booty:

(Strickland) is angling for a (nationwide) $250 billion increase in federal payments for food stamps and Medicaid, the government health program for impoverished Americans and, increasingly, the working poor. Second, he favors a $250 billion national investment in infrastructure projects. Ohio has a list of “shovel-ready” projects, including roads, water and sewer improvements and “green economy” investments.

Third, in search of a palatable pitch to a Congress and nation numbed by the parade of rescue packages, Strickland is teaming with a handful of other Democratic governors to seek a $250 billion infusion for education.

As I have noted several times previously several times (the latest is here), Food Stamp funding is presumptively adequate until advocates tell us what is specifically wrong with the benefit formulas instead of constantly sponsoring inane and intellectually dishonest “Food Stamp Challenges.” That’s because benefits before adjustments relating to income and assets are in sync with the USDA’s Thrifty Meal Plan cost estimates. Benefits were increased by 8.5% just this past year so they would stay in sync.

The Medicaid payment increases wouldn’t be “necessary,” or as “necessary,” if Ted and his team had implemented cost-saving recommendations made in 2006 that could have saved $150 million annually.

If Ted wants infrastructure money, he should sell the Ohio Turnpike. Ask Mitch Daniels how selling the Indiana Toll Road has worked out. Answer: Very well, thank you — “The money from the lease will pay for a 10-year road-building program that requires no new taxes or borrowing. Construction has begun on projects originally planned two decades ago.”

Education? This is merely cost-shifting, has nothing to do with “stimulus,” and raises the specter of even more federal control over education — unless anyone really believes that extra federal money for education won’t come with strings attached.

Note that the three items Ted and fellow Democratic governors are calling for add up to $750 billion, which is only $100 billion short of the $850 billion Barack Obama wants to spend in total. By the time they’re done spending us into oblivion in Washington, don’t be surprised if the grand total is more like $2 trillion. The total of all bailouts already executed or in the works is already a multiple of that. I for one don’t find any of them stimulating.

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UPDATE: If the state actually wants businesses to grow here, the Legislature is going to have to kill the CAT (the Commercial Activities Tax, which is really a gross receipts tax that businesses must pay even if they are not earning a profit) before it turns into a complete menace.

Even based on what little the state is willing to tell us without forcing us to dig deeper than should be necessary, it’s not that far from it. This is from Page 12 of the Ohio Office of Budget and Management’s December 10 Monthly Financial Report for state finances through November (a PDF found here):

In FY 2009, receipts from the commercial activity tax (CAT) are distributed to non-GRF funds to reimburse school districts and local governments as the tangible personal property tax is phased out.  Reversing the trend for the year to date, CAT receipts during the month of November totaled $273.0 million, an amount that was $17.0 million short of the estimate of $290.0 million estimates (6.0%).  As a result of the shortfall in November, the year to date performance of the tax was reduced to $16.1 million above estimates.

By the way, CAT’s receipts and disbursements are NOT included in the state’s actual financial reports. Instead, the report just shows a big fat $0 every month (picture is from Page 14 of the November report):

OBMnoCatDollars1108

Additionally, I could not find what year-to-date CAT collections have been in the report. So I’ll have to get to that later after looking through all five months of the fiscal year thus far. This should NOT be necessary.

This looks like an “off-budget” trick designed to make the state’s budget look over $3 billion a year smaller than it really is ($273 mil times 12, if November’s collections are typical). I don’t see how this deficient reporting and lack of transparency are defensible. It should end now.

Things I’d Like To Post About Today ….. (122808, Morning)

Filed under: TILTpatBIDHAT — Tom @ 8:40 am

….. But I Don’t Have Any Time For:

  • Thomas Sowell has a great column (actually, that’s a redundant statement) at IBDeditorials.com — “Postponing Reality At Detroit’s Big Three.” The mindset of the whole bunch of them reminds me of a certain 16 year-old.
  • Lisa Goldman at Pajamas Media — “Hamas Goads Israel Into War; Israel has no good options left: they can either look weak or look brutal.” (Gee, I wonder what happened in the past 54 days to inspire the goading?)
  • OMG Alert (HT Michelle Malkin) — California wants $15-$20 billion of our dollars for high-speed rail from San Fran to LA that no one will use and that will create annual bottomless pit operating deficits. This is just one project in the bidding for a piece of the supposedly $850 billion wish list. I’ll bet they can get it to $2 billion in no time.
  • Another brilliant assertion by IBDeditorials.com about journalists — “Their contempt for the capitalism and free markets that have made so many of them comfortable is strong enough to make them wish for economic conditions not in their best interests — and it comes through loud and clear almost every time they report.” I don’t think they’ve even figured out that a print newspaper is now luxury good for people who want to stay informed instead of the near-necessity it was 20 or so years ago. People will ditch their print newspaper way before they’ll give up Starbucks.
  • State Auditor Mary Taylor is doing her job, suggesting remedies for Medicaid that could have saved $300 million in the past year. As expected, the bureaucrats don’t like it. Note that the recommendations were made in 2006 before she was elected.
  • Here’s a suggestion — no, make that a demand — US taxpayers need to submit to California’s Arnold Schwarzenegger, the Begginator — his state gets no bailout until they “Drill Baby Drill.” The state can pay the rest of us back with royalties collected.
  • Ted Strickland’s comment last week that the Congressional GM-Chrysler bailout vote was about “settling old scores” shows that he thinks he’s the governor of those two companies (not headquartered in Ohio) and not Honda USA (which is). Ted, how about going to the part of the stadium where the Maize and Blue fans are at next year’s Ohio State-Michigan game?

Positivity: Researchers See Adult Stem Cell Progress; They Self-Renew, Repair Tissue

Filed under: Life-Based News,Positivity — Tom @ 6:59 am

From Stanford, California, via Life News:

Two groups of researchers have made more progress with the use of adult stem cells — showing they are both more ethical and more effective than their embryonic counterparts. In this latest find, they demonstrated that adult stem cells can self renew and repair tissue damage.

Stanford University scientists issued a report at the 48th annual meeting of the American Society for Cell Biology (ASCB) on Sunday.

They transplanted the skeletal adult muscle stem cells into special immune-suppressed mice whose muscle satellite cells had been wiped out in a hind limb by irradiation. The stem cells restored lost function to mice with hind limb muscle tissue damage.

The team used luminescent imaging as well as quantitative and kinetic analyses to track each transplanted stem cell as it rapidly proliferated and engrafted its progeny into the irradiated muscle tissue.

The scientists then injured the regenerated tissue, setting off muscle cell growth and repair, and subsequently showed that the muscle stem cells and descendents rescued the second animal’s lost muscle healing function.

After isolating the luciferase-glowing muscle stem cells from the transplanted animal, the scientists cloned the cells in the lab. Like the original muscle cells, the cloned copies were intact and capable of self renewal.

After demonstrating that the transplanted stem cells proliferated and fully restored the animal’s lost function, the scientists recovered new stem cells from the transplant with full stem cell potency.

Dr. David Prentice, a former Indiana State University biology professor who is a leading pro-life bioethicist, told LifeNews.com he is excited about the news.

“The work by the Stanford group is exciting, because it shows with very definitive experiments that even a single muscle adult stem cell can grow and repair muscle damage, while still maintaining a pool of muscle stem cells for future repair, or as in these experiments, for transplant,” he explained. …..

Go here for the rest of the story.