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Chambers offer solutions to state budget crises

Chaaron Pearson on Friday, March 25, 2011 at 12:00:00 am

As states across the country battle to solve their budget deficits, a couple of states are receiving advice from their chambers.  Kentucky and Ohio are two states where chambers have taken the lead to offer recommendations to their governors and state legislatures.

Kentucky

In February 2010, the Kentucky Chamber released a Leaky Bucket white paper regarding the Kentucky State budget.  The Kentucky Chamber is concerned that the state’s budget is leaking tax dollars and thus taking millions away from Kentucky’s schools.

The first leak that they identify is corrections.  The chamber says that skyrocketing inmate costs hurt school funding.  The second leak is Medicaid.  The chamber found Medicaid costs are currently growing at twice the rate of the state budget.  The third leak is public employee health benefits.  The chamber suggests that reasonable changes in the public employee health benefits system could save $200 million.

The Kentucky is concerned that the state is spending more money on what happens to people when they fall out of the education system, an increased chance of jail or being on Medicaid instead of working to grow the workforce and strengthen the economy by focusing tax payer dollars on the education system.

Read more: Leaky Bucket report
Also mentioned in previous blog post: Kentucky passes landmark criminal justice reform

Ohio

Eight of the major metro chambers of commerce in Ohio (Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo and Youngstown/Warren) joined with the Ohio Chamber of Commerce to offer a series of budget recommendations, titled Redesigning Ohio, to Governor Kasich.   

Redesigning Ohio is not intended to be a proposed solution to the state’s budget deficit, but if implemented, these recommendations would save the state $1.4 billion and would help restructure Ohio’s budgeting inefficiencies so that they would not end up in another fiscal crisis in the future.

Redesigning Ohio’s recommendations target specific areas of the state government that are well suited to private sector solutions.  The areas selected for reform are: budgeting for outcomes, charter agencies, entrepreneurial management, government regulations, tax expenditures, civil service, pension benefits, health care, criminal justice and local governments.  The Ohio chambers see the current budget crisis as an opportunity to take bold actions that will result in a more sustainable future.

Read more: Redesigning Ohio – Full Proposal; Executive Summary
Also mentioned in previous blog post: Changing of the Guard - Ohio

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