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Kasich warns of economic slowdown

BY MARC KOVAC Capital Bureau Chief Published: December 16, 2016 12:04 PM

COLUMBUS -- Gov. John Kasich voiced concern Dec. 15 about the economic slowdown affecting Ohio and other states and continued to warn that the next biennial will be tight.

"There's a lot of people now beginning to talk about the fact that they think the economy's going to perk up," he said. "But we can't budget on the basis of rosy scenarios. That's what Washington always does, and we're not going to do that here here."

He added, "I don't want to be crying wolf. I just want to say we have to be careful."

Kasich offered the comments to reporters after giving opening comments during a JobsOhio meeting in Columbus. (The private nonprofit spearheads the state's economic development efforts.)

Earlier this month, Kasich told the Ohio House that he was worried the state was on the verge of a recession, and he and others in his administration have made it clear that there won't be funding for big spending increases over the next two years. On the contrary -- tax revenues have been softer than earlier projected.

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The governor said Ohio isn't alone in those results. He cited a study by the National Association of State Budget Officers, which found that half of states had collections below projections.

According to the group, "Revenue growth slowed considerably in fiscal 2016, and many states are below revenue targets for fiscal 2017 All three of the largest sources of general fund revenue had a lackluster performance in fiscal 2016. Personal income tax collections were negatively affected by the weak stock market gains in calendar year 2015, and corporate income tax collections outright declined. Sales tax growth was also weak, tempered by low inflation and slower growth in consumption of taxable goods and services. The continued decline in oil and gas prices and coal production and the negative impact on energy-producing states has also contributed to the general fund revenue slowdown."

Kasich told the JobsOhio board that private job creation in the state has slowed, and revenues have fallen off.

"We'll manage our way through this fiscal year, we're very hopeful," he said. "And in the next budget, it's going to be tough But we're going to have a balanced budget. I am not going to leave the next governor in a position of where they inherit what I inherited, and we're going to stay ahead of it. We're going to make tough decisions along the way."

Kasich said many state have made "massive cuts" to budgets; Ohio, he said, has not been among them.

"We've been very, very fortunate for six years, and we'll keep plugging on it, but we're not going to be in a position of where we're going to ignore things or have a rosy scenario," he said.

Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapital Bureau.


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