There really are two Ohios: Metro Columbus and everyone else.
This column went up at Watchdog.org earlier this afternoon.
Ohio’s government is spending money as if it believes that happy days are here to stay.
They’re not — at least virtually everywhere else in the state other than Metro Columbus.
There are two economic recovery sagas in the Buckeye State. The story out of Columbus — the one which most of the leaders in state government experience on a daily basis — is one of fairly robust employment growth, especially given the headwinds out of Washington relating to failed Keynesian stimulus, overaggressive regulation, fossil fuel-hostile energy policy, and frightening levels of waste, fraud and abuse.
The story from the rest of the state outside the I-270 beltway and its immediate surrounding area is mostly one of prolonged misery.
Taken as a whole, Ohio’s recovery since the recession officially ended in June 2009, especially as seen in the federal government’s more comprehensive Household Survey, which includes the self-employed and contract workers, has been among the worst in the U.S. When compared to its neighbors and other Midwestern states, it comes perilously close to scraping the bottom:
(Note: Not seasonally adjusted figures were used to eliminate inconsistencies which may be present in seasonal calculations.)
Ohio’s post-recession job growth is third worst on the list, ahead of only Illinois, which has been seriously hurt by horrible debt problems and the drag of huge, ill-advised tax increases enacted in early 2011, and West Virginia, which has been the primary victim of the Obama administration’s war on coal.
The Buckeye State’s performance in the past two years is fifth-best on the list, ahead of Indiana but still significantly trailing Michigan, Pennsylvania, Kentucky and Wisconsin.
As bad as this is, when one separates Columbus from the rest of the state, it gets far worse — for the rest of the state:
If Columbus were a separate Midwestern state, it would have the best job growth during both the past two and past four years among all of the actual states under review.
The rest of Ohio has fewer Household Survey jobs than when the recession ended. Its performance during that time has been far worse than any other state above. Its Household Survey employment growth during the past two years has been barely better than tax-heavy Illinois.
Residents of many areas of the Buckeye State feel as if the recession never ended. Now we see why. Seen from the vantage point of employment, it never really has.
Perhaps Metro Columbus’s strong economic performance explains why state officials, from Republican Governor John Kasich on down, seem to believe that they can open up the state spending spigots without suffering negative consequences.
A week ago, I pointed to a Buckeye State think tank’s projection indicating that if Ohio’s General Fund spending continues on its current course, it will outpace related tax and other collections by fiscal 2015, leading to a budget deficit of over $500 million. In four more years, if the unsustainable could somehow be sustained — and it can’t — the General Fund deficit would be over $6 billion.
The situation doesn’t look much better when seen on an “all funds” basis:
- Actual spending, Fiscal 2012: $52.854 billion
- Estimated spending, Fiscal 2013: $56.140 billion (6.2 percent increase over fiscal 2012)
- Fiscal 2014 appropriation: $59.485 billion (5.4 percent increase over fiscal 2013)
- Fiscal 2015 appropriation: $61.637 billion (3.6 percent increase over fiscal 2014)
The cumulative three-year spending increase, following closely on the heels of a decade when state spending growth per capita was seventh-highest in the nation, is 16.6 percent, or 5.3 percent compounded annually.
That degree of increase wouldn’t be justified even if the entire state were doing as well as Columbus. And it’s not.
Sadly, Governor Kasich still clings to the idea of quadrupling severance taxes on the state’s budding oil and gas industry. This tax would hurt areas which are already suffering badly. But the tax would likely create more bureaucracy and jobs in Columbus. Is that what he really wants?