Ryan Scott Ottney
PDT Staff Writer
NEW BOSTON — Ohio Treasurer Josh Mandel met with community business and economic development leaders at OSCO in New Boston Thursday afternoon to discuss the state's financial condition and how it will affect local business and government.
Delivering the Fiscal Year 2013 report to attendees — which included representatives from local businesses, and officials from Scioto County, the Southern Ohio Port Authority, Village of New Boston, and the City of Portsmouth — Mandel said the state of Ohio had an $8 billion operating budget deficit and only 89-cents in its Rainy Day Fund when he came into office in 2011. Today, he said, those numbers have changed to a $1 billion budget surplus and $1.5 billion in the Rainy Day Fund.
“I believe we are operating with a high sense of fiscal responsibility and the way I treat tax dollars is the way you would treat your own dollars at your kitchen table, or at your conference room table, in your family or in your small business. My feeling is, if families and small business are going to be tightening their belts then we should do the same in government,” Mandel said.
The treasurer also presented a list of economic development programs handled by his office, such as GrowNOW, ReEnergize Ohio, Ag-LINK, ECO-Link, and SaveNOW.
When Mandel opened the table to questions, the topic quickly turned to House Bill 5, which Mandel said would simplify the tax code in Ohio by creating a single system between municipalities, rather than using different forms to collect taxes at different rates between communities. He told the story of one electrician who had to file 39 different forms and said sometimes the tax preparation is more expensive the actual tax bill. Mandel said the idea is to simplify the tax process for businesses doing business across municipalities, to pay one one tax collection instead of many. He said that simplifying the process for businesses allows them to keep more money, to use to create more jobs in expand their business.
The bill is supported by the Ohio Society of CPAs and the Chambers of Commerce. The bill is opposed by many mayors in Ohio, and the Ohio Municipal League, and local governments have passed resolutions opposing the bill.
“If I had a crystal ball, I think they'll pass something that's a lot more mild than what was introduced. That's usually our experience in the legislative process, in such people introduce bills that look like this [Mandel made a wide gesture with his hands] and they end up looking like this [narrowing his hands] after the negotiation ends. I think they'll end up passing a much more mild form of the bill. If I had to guess, I think it will include a uniformed form so that every city had the same form. I don't think it's going to include centralized collection, and I don't think it's going to include centralized rates. Those were two very strong points of opposition from the mayors' vantage point. They don't want the state telling them what rates to charge, and they want the state government being the centralized collection point. I think those are off the table now,” Mandel said.
The question was also raised about pension unfunded liabilities in Ohio.
“No state is in good shape. Every state in the country, to my knowledge, is a pension unfunded liability. Ours is not nearly as bad as other states. This is a national problem, and I would submit to you it's a national crisis,” Mandel said. “What you just saw happen in Detroit … Detroit is just the tip of the iceberg. This is a a serious, serious problem and for many, many years the can's been kicked down the road and now it's coming home to roost.”
Mandel said the combined pension liabilities in the United States is larger than even the $16.7 trillion national debt.
“I don't blame so much the people who are taking advantage of it, as much as I do the policymakers for not changing the rules. People are just playing within the system. We've got to change the rules. We've got to get rid of double-dipping. We've got a school superintendent who, quote-unquote, retires on Friday and then goes back to work on Monday getting paid the full salary and their benefits. I just — I don't think it's right,” Mandel said.
He predicts the Baby Boomer generation will be fine, but said people of his generation (age 35) and younger will have problems with their state pensions. In Ohio, he said, there are five state pension funds managing about $180 billion.
Mandel said ultimately it is best that the problem is being handled by elected officials, because they can be held accountable by voters if the public isn't pleased with their results.
Ryan Scott Ottney can be reached at 740-353-3101, ext. 287, or email@example.com. For breaking news, follow Ryan on Twitter @PDTwriter.