As noted below, Ohio Governor John Kasich signed a budget into law yesterday that is revolutionary in many ways. Kasich joined me on Friday’s program to discuss it, and his comment on the golf game with the president at the end of the interview was a bonus. Enjoy:
HH: I am so pleased right to bring back Governor John Kasich of Ohio, who yesterday signed into law a sweeping budget that changes a lot of the way that the Buckeye state does business. And Governor, congratulations, it’s not often that elected officials deliver on what they promised to do, and you did.
JK: Well, I’ll tell you what, Hugh, this is very exciting. You know, when I took office, we were $8 billion in the hole. People said there was no way we could get this thing done without taxes. Well, not only did we preserve an income tax cut, but we killed the death tax, and at the same time, we’ve created a targeted program, a tax credit program, for people to invest in small business. We have, I think, the most aggressive agenda of reform for K-12, doubled vouchers in the state all the way up to $60,000, taking the lid off of charter schools. We have for profits, not-for-profit charter schools, we have teacher evaluation. We reformed higher education by eliminating what’s called multiple prime, and we go to a single prime contractor, which should save the universities, according to the president of Ohio State, billions. We fixed Medicaid to, we slowed the growth of Medicaid, and have a program where we let mom and dad actually stay at home if they’re able to instead of being put into a nursing home. We privatized our development agency so we can be faster on our feet, and moved the liquor program that has existed in the state since the 1930s, and put it into our job creation program. We have sentencing reforms so that we’re not locking 12,000 people up a year who are going to be released in less than a year, and put them into prison next to murderers and rapists and think we’re doing a good job. So we’ll have more community correction, and be able to make sure that the ones who are violent are secured, but the ones that want a second chance who are non-violent get that second chance. We’ve also, Hugh, created a voucher program to train workers, 20 million in the first year, 30 million in the second, because the federal program is too confused and too mixed up. So we’ve got that as well. We’ve listed some of the provisions on prevailing wage, the first time that that level has been raised since 1994, and before that, 1934. And I just heard the other day from CNBC that the state of Ohio has jumped over 11 other states in terms of business-friendly since January. [# More #]
HH: This is, it’s astonishing. I want to walk through some of these in turn, Governor. I want to start with, when I closed my dad’s estate six years ago, and I sent Ohio a death tax, I thought it’s just immoral to have a death tax. Not only have you gotten rid of that, you did it when people thought you had to raise taxes. It’s like an example to the rest of the union.
JK: You know, and Hugh, not only did we kill the death tax, which is an immoral tax, which causes farmers to sell, families to sell the family farm, and small businesses to shut down their businesses, but we also preserved an income tax cut that takes us under 6% here in the Buckeye state. And then our other program, which gives you a 10% credit for investing in small business, we think can spur, you know, economic growth. I mean, these are three tax cut provisions that we think makes Ohio more competitive, and they said we couldn’t do it.
HH: I like the 10% tax cut for small businesses, because you don’t need anyone’s permission. If you go in and invest, what’s it up to, $10 million bucks, you get…
JK: That’s exactly right.
HH: 10% of it right back on your tax form…
HH: That’s a great thing.
JK: But you know, Hugh, you know Ohio…
JK: …because you come out here a lot, and one of our problems has been a lack of capital investment. So we believe this is going to put us in a position to give people a reason to invest in Ohio, rather than taking their capital and going somewhere else.
HH: I also want to point to, I think it’s going to be a trend, not just the liquor business or the Ohio turnpike, but at five prison facilities across the state, including Ashtabula, where all four of my grandparents are from, you’re going to sell a prison, and you vetoed what would have killed the market value of that sale, saying no, we’re really going down this road. That must have been pretty interesting to get through the legislature.
JK: No, well, and first of all, to be able to sell these prisons is unprecedented, of course, in Ohio. But what we intend to do is to put the public prisons up next to the private prisons, and practice best practices.
JK: We have too much violence in our prisons, and the private system has reduced costs and reduced violence. But the reason it worked is that we have a guy running prisons who’s been a warden in four separate prisons, and he also worked in the private sector. Hugh, you’ve really done your homework. I’m just blown away that you know this. Look, we vetoed this provision that would have reduced the attractiveness of these prisons, and we can’t afford to do that. The other thing is moving the liquor business, which one-third of which was used to do economic development, and two-thirds used to grow government, and to be able to put the revenue from the liquor business into our not-for-profit organization, is going to get everybody’s attention in the country, because now, this not-for-profit organization can hire better people, they’re not stuck with all the government rules. I mean, they’ll be accountable, and held accountable, but it is moving towards the private sector with real power and real powder to get things done.
HH: The other key thing, and I think it’ll probably impact lives by the thousands going forward, is you doubled this year the number of ed choice scholarships for charter schools from 14,000 to 30,000. It’s going to go to 60,000 the following year. That’s extraordinary, as are the ed reforms. I’m sure the teachers unions don’t like removing seniority as the be all and end all, but this is going to really set the standard for national education reform.
JK: Well you know, what’s funny, Hugh, is we found out in Race To The Top, I’ve got to give Obama and Arne Duncan real credit for that. I mean, this is a program that is driving innovation and accountability. And we have, of the 600 plus school districts, only 300 of them have embraced change, innovation. You wonder what the heck the other 300 are thinking. So we’re moving forward with teacher evaluation. Now we’ll have another fight this fall on the issue of total collective bargaining reform, but that’s separated from what we’ve done in this budget. So we feel very good about where we are, and we’re going to make a big effort to educate the public when it comes to the fall campaign as well.
HH: You also tackled Medicaid, and Medicaid reform is on the agenda of every state in the union. What did you in Ohio?
JK: Well, we know that Hugh, 6% of the Medicaid population drives over 50% of the costs. So rather than just willy-nilly cut dental care for poor kids, which would get you nowhere over time, we’ve decided to coordinate care. So we get the poor in the settings where they’re managed, but they don’t end up in the emergency room, and we give them a scope here, a roadmap as to how we can treat them and keep our costs down. At the same time, we also had a big battle with the nursing home industry, which is powerful in every state, and what we felt is allowing mothers and fathers to stay at home and to get help, if they qualify for a nursing home, instead of having to go in there, they can actually stay in their own homes is, I think, trend setting as well. So we have really embraced home health care community settings, and as a result, the AARP strongly supports our Medicaid plan, believe it or not.
HH: I’m going to have to get AMAC as well to go look at it. Governor, I’ve got about a minute left. And I want people to go to Hughhewitt.com. I’ve linked all the stories on the Ohio budget, but I’ve got to ask you before you get away. Did you take the opportunity when you were playing golf with the President to give him some pointers on how to actually grow jobs and the economy?
JK: Well, you know, Hugh, it was four guys hacking it around, but I will tell you just one thing, and that was after we had finished, we were around the table, and I said to these guys, I said you know, the four of us sitting here, the President, the Vice President, the Speaker of the House, the governor, none of us really belonged at that table except for some reason, the good Lord gave us the blessings to sit there. And I looked at them all and said you know, guys, we just have to take advantage of this opportunity to really do good.
HH: And you have been doing that in Ohio. My hat is off to you and your colleagues in the Ohio legislature. The Buckeye state is back. John Kasich, always a pleasure, Governor, talk to you again soon.
End of interview.