Allegrini: Get behind SB5Written by Scott Allegrini | | firstname.lastname@example.org
Ohio faces an estimated $8 billion deficit in the 2012-13 budget. That is a big hole! How does one climb out of a hole like this? That is what the Ohio legislature is trying to figure out. First, we should look back and figure out how did we get into this mess in the first place. Some will say it was because the state lowered the income tax; others will say that we spent too much. But what do the facts say? According to the Ohio Office of Budget and Management website, we know the following:
In Ohio, spending in 2000 was $19.243 billion. It increased to $26.783 billion in 2009, a 39.2 percent increase. That is a lot of money to spend, but if income kept up it would be no problem.
Ohio income tax receipts in 2000 were $15.617 billion, which increased to $17.093 billion in 2009, a 9.5 percent increase. With a decrease in the tax rate, Ohio tax receipts increased by almost 10 percent.
So the state increased spending by 39 percent but income increased by only 9.4 percent. You don’t have to be a economist to see the problem here. In simple English, expenses went up a lot more than income. Many of us are familiar with this scenario, as it has been happening to us for the past four years. We have a basic understanding of how we got into this mess, but how do we get out?
An important first step is Ohio Senate Bill 5 (SB5). This bill would end collective bargaining for most state employees, end salary schedules and steep increases and replace them with merit pay provisions. But more importantly, it would begin to restore sanity to the Ohio budget.
Take a quick look at the numbers and you will see that the current system has lost touch with reality. Look at the median wages of the private and public employees. These Lucas County numbers come from the Buckeye Institute website.
n Private sector wages in Lucas county went from $32,194 in 2000 to $37,769 in 2008, a 17 percent increase.
n State employees wages in Lucas county went from $36,796 in 2000 to $48,004 in 2008, a
30 percent increase.
nMunicipal worker wages in Lucas county went from $36,809 in 2000 to $46,381 in 2008, a 26 percent increase.
State employee wages increased by 30 percent, local government employee wages increased by 26 percent, and public sector employee pay increased by only 17 percent? There is a discrepancy here so large that even The Blade could not ignore it. On April 11, The Blade did an article about Toledo workers’ pay: “At $23.62, the average hourly wage of municipal employees … is 26 percent higher than the $18.69 average for all Toledo workers” and “Workers hired at Jeep or Powertrain today … will start at $14 an hour and top out at about $16- $17 an hour.”
The same article quoted UAW Local 14 President Ray Woods as saying, “we definitely saw the situation for what it was. … we realized we had to make sacrifices for GM to survive. If they don’t survive, we don’t survive.”
The State of Ohio can’t survive an $8 billion shortfall without changes being made. SB5 begins to make those changes. The private sector has had to make cuts and freeze wages, so the fair thing would be for the public sector to do so.
We need to get behind SB5 so we can climb out of this giant hole we have spent ourselves into.
Scott Allegrini is a co-founder of the Children of Liberty. E-mail him at email@example.com.