Ohio’s rainy day fund now at $2.7B

Ohio made its second-largest-ever deposit to the state’s rainy day fund Wednesday as Gov. John Kasich offered no apologies for defending the savings against those who would spend it.

A fiscal year in which the state spent less than expected, and brought in more tax revenue than anticipated, led to a $657.5 million deposit to bring the state’s savings to $2.691 billion.

Kasich called the money an important hedge against an inevitable economic slowdown that will depress tax collections and state spending and provide a cushion against budget cuts to schools and social services.

Democrats long have lobbied for spending some of the rainy day fund on fighting the opioid addiction and overdose crisis and helping local governments and schools. Local officials have said state funding cuts, or lack of increases, have forced reductions in services and the need to ask for local tax levies.

In the current two-year budget, most school districts are seeing no state funding increase, or have been cut.

The second-term Republican Kasich responded: “It’s a disease among all politicians to just start spending money to those who scream the loudest, particularly their (local) political buddies. That’s the way it works.”

Kasich also took swat at local governmental officials who have criticized the cuts they have suffered in state aid on his watch, talking of the “unremitting whining of local governments which run surpluses and give pay raises and don’t manage their budgets too much of the time.”

“You know how many times politicians wanted us to spend this, this $2.7 billion? You know, how many times, ‘Come on! Give me more money?’ OK? That’s what I worry about in the future,” the governor said.

The board of the Ohio Mayors Alliance, a coalition of the CEOs of the state’s largest cities including Columbus Mayor Andrew Ginther, fired back at Kasich. “Reasonable people can disagree on the best use of Ohio’s rainy day fund. However, as a bipartisan coalition of mayors, we find it unfortunate that Gov. Kasich doesn’t see the value of Ohio’s cities and small towns. While we’re dismayed by this overly hostile rhetoric, we’re encouraged that both gubernatorial candidates have been signaling a much more cooperative tone.”

The rainy day fund held 89 cents as Kasich took office in January 2011 as the state was just beginning to emerge from the national recession that ravaged tax collections and led to spending cuts. By the end of Democrat Gov. Ted Strickland’s final budget in June 2011, total tax collections were up nearly $1.5 billion over the prior year and the rainy day fund was infused with $247 million.

At 8.3 percent of general revenue funds spending, the account now is approaching the maximum allowable amount of 8.5 percent.

To put the $2.7 billion in state savings in perspective, Budget Director Tim Keen said it was the equivalent of an Ohio family with $50,000 annual income having $4,151 in savings in the bank.

The state made no deposit to the Budget Stabilization Fund last fiscal year after only a $29.5 million deposit the year before.