Op-ed: Budget stability is Ohio’s biggest job creation asset
Gov. John Kasich recently authored a column on economic responsibility:
States – like families and corporations – have assets, those economic and physical resources that add value to financial balance sheets and assure that bills get paid, needs are met and future plans succeed. Perhaps most important, a rainy day savings account with a solid reserve can also protect against unforeseen downturns and the inevitable ups and downs of life.
For a government at any level, essential assets are more than dollars and cents. It’s also a matter of reputation. One of the most important assets for any government is its good name, the high regard it’s earned for financial stewardship and the careful way it budgets, spends and accounts for the taxpayers’ money. Just as a corporation’s financial reputation can move markets and affect stockholder value, a government’s fiscal track record impacts the quality of life for all its citizens by encouraging – or discouraging – investment that creates and retains jobs.
We’re at that sweet spot now in Ohio, having just ended the fiscal year with our budget in balance and a healthy surplus. And thanks to our careful budgeting we just added more than $650 billion to the Budget Stabilization Fund – our rainy day reserves – giving us a record balance of $2.69 billion.
But while things may look good for us now, I can tell you it wasn’t always that way. When I took office as governor seven-plus years ago, I inherited a state in freefall. Our rainy day fund, today rebuilt with a record-high balance, held a measly 89 cents. The state budget was billions of dollars in the hole, we had lost 350,000 jobs and the people who might have created new jobs wanted nothing to do with us.
Worst of all, Ohioans were afraid things would never get better. It was so bad that the top credit rating agencies in New York had severe doubts that we could turn things around and we had to assure them that Ohio’s irresponsible budget practices were past us. It was a tough job to convince them to improve the state’s credit outlook. But we did just that.
We got our fiscal house in order with a conservative approach to managing Ohio taxpayers’ money, a tight rein on government spending and a commitment to being prepared for unexpected challenges. Keeping our budget strong was a key part of our formula to improve Ohio’s business climate, which also included $5 billion in tax cuts and the pursuit of common-sense business regulations.
As a result, world-class corporations and small business operators alike came to realize that our strengthened economy, stable state finances and improved fiscal outlook set Ohio apart. They found in Ohio the one quality they value most: balance.
They found a fiscally strong state that’s a safe and welcoming place to do business and to have that business succeed. And this has helped us create nearly 550,000 new private sector jobs over the past seven and a half years.
Now, with Ohio’s tough times behind us, I see our greatest challenge going forward will be to stick with the fiscal principles that made this turnaround possible. After all, I know something about the importance of budget discipline and I know what can happen if we take our eye off the ball.
In my congressional days, when I was chairman of the House Budget Committee, I was quarterback for a bipartisan team that in 1997 balanced the federal budget for the first time in a generation. The result was a new wave of economic renewal, lower taxes and a projected federal surplus of $5 trillion. But only three more years of balanced budgets followed, and things fell apart again. The federal budget has never been balanced since. When the temptation to spend became too great, Washington returned to deficit spending and America now finds itself $21 trillion in debt.
A nation so much in debt and so far from achieving budget stability is forsaking its fiscal reputation and risking the future of our children’s generation and beyond. America has tremendous assets, but we may be squandering one that may mean the most: our good name as a wise and caring steward of the taxpayer’s money.