State Budgets Overcome Deficits through Major Cuts, But Have No Plans for Reinvestment?

May 02, 2013  |   CDVCA Ventures Blog,Industry News,Public Policy,Research   |     |   Comments Off on State Budgets Overcome Deficits through Major Cuts, But Have No Plans for Reinvestment?

A National Public Radio Broadcast by Greg Allen highlights the bait-and-switch technique of massive budget cuts used only for further tax cuts (Michigan, Ohio), though some states (e.g. Florida) with upcoming gubernatorial elections plan politically strategic investments.

Paul Beck, a professor emeritus of political science at Ohio State University, says that meant less money for schools and local government.

“They were pretty massive cuts,” Beck says. “Local governments and school districts were basically having to tighten their belts considerably. There was a substantial downturn in government jobs in Ohio, particularly at the local level.”

Now that Ohio has a budget surplus, the discussions between Kasich and lawmakers aren’t about restoring spending to schools and local governments. Most of the money is earmarked for tax cuts.

Florida — like many states — is putting much of the surplus into education. After cutting education spending by more than a billion dollars in his first year, Gov. Scott is proposing a $2,500 across-the-board raise for teachers. Scott, by the way, is running for re-election next year.

To read or hear the full article: http://www.npr.org/2013/04/29/179762891/after-belt-tightening-some-states-are-back-in-the-black?ft=3&f=127088100&sc=nl&cc=ph-20130501