1
The Storm Comes
“Here we go.” That was the subject line of an email I received early Tuesday morning, February 1, 2011, sent by Stephanie Spanja, one of the University of Cincinnati American Association of University Professors (UC-AAUP) staffers who had been monitoring Ohio legislative activity for the UC faculty. Senate Bill 5 had been introduced by Sen. Shannon Jones, a Republican legislator from the Cincinnati area. “As it stands,” Spanja wrote, “it is now a statement of intent, but far more sweeping in scope than what most Republicans have been talking about.” Senate Bill 5 was designed to repeal Senate Bill 133, passed in 1983, which had allowed for public employees’ collective bargaining.
This was the beginning of a long and difficult fight to defend workers’ rights in the face of ruthless attacks from right-wing political forces. However, the struggle really began with the Republican sweep of Ohio’s legislature and state offices in the November 2010 election. The GOP had been buoyed by the stagnant state economy and by loud and consistent attacks on Gov. Ted Strickland and other Democratic office holders by the Tea Party and other conservative extremists.
Despite Gov. Strickland’s largely positive record and initial popularity, his administration was undermined by the Great Recession that had engulfed the nation and Ohio. Job losses in the state had soared, and the unemployment rate in Ohio, which had been 5.4 percent in 2007, had topped out at 10.6 percent in late 2009. Although Strickland worked diligently on remedies, Ohio’s economy is so completely entwined with the national market that there is very little that a governor can do in the face of such a systemic crisis. Into this situation walked an opportunist by the name of John Kasich.1
Coming into the race with a close association with the failed Lehman Brothers investment bank, Kasich nevertheless portrayed himself as a kind of financial wizard, endowed with the know-how to solve Ohio’s economic problems. Kasich was born in McKee’s Rocks, Pennsylvania, a small Ohio River town not far from Pittsburgh, and his father was a U.S. Post Office employee, making his son’s animosity toward public unions a bit odd. Moving to Ohio in 1970 to attend Ohio State University, Kasich earned a bachelor’s degree in business administration in 1974. He served from 1975 to 1978 as an administrative assistant to then-senator Donald “Buz” Lukens.2
With his election to the Ohio Senate in 1978 at age 26, Kasich became the youngest person ever elected to that body. He won election to Congress in 1982 from Ohio’s Twelfth Congressional District. He rose to chair the House Budget Committee, where he was known as a chief architect behind the Balanced Budget Act of 1997. Like President Bill Clinton, Kasich has routinely claimed credit for the government surplus that developed in the 1990s. This claim, however, earned three “Pinocchios” from The Washington Post’s fact-check of the speech Kasich gave at the 2012 Republican National Convention. The Post pointed out that no Republicans voted for the 1993 budget bill, which included tax increases that provided the revenue for the surplus. Further, the Post noted, “two of the seven budgets Kasich helped craft as chair of the Budget Committee from January 1995 until January 2001 ended up running deficits, so the former congressman can’t claim to be so horrified by a growing national debt.”3
Kasich chose not to run for Congress in 2000; instead he opened an exploratory effort for the presidency. His campaign soon foundered on a lack of money and a lack of support from voters in Iowa and New Hampshire. Kasich abandoned his effort and announced his support for George W. Bush. Kasich then launched a brief career on Fox News, co-hosting Bill O’Reilly’s show as well as debuting his own, From the Heartland with John Kasich.
Gov. Kasich has authored a couple of books that give us a window into his thinking. In 1998, he published a series of essays entitled Courage Is Contagious: Ordinary People Doing Extraordinary Things to Change the Face of America. This seemed a rather heavy-handed attempt at modeling his book after John F. Kennedy’s Profiles in Courage, but in actuality, the book follows much more closely the ideas on volunteerism expressed by another president, Herbert Hoover.
In books and speeches, Hoover was an enthusiastic supporter of people volunteering to provide services individually, rather than having government resources used to provide necessary public services. Hoover, much like Kasich and other very conservative Republicans, was a great critic of Franklin D. Roosevelt and the New Deal. In a speech at Madison Square Garden in New York on October 21, 1932, Hoover argued that the New Deal threatened a change that had come to America. This change was widespread volunteerism.
“There has thus grown within us, to gigantic importance, a new conception,” Hoover said. This new development was “voluntary cooperation within the community,” and it was sweeping and comprehensive. He enumerated the details: “Cooperation to perfect the social organizations; cooperation for the care of those in distress; cooperation for the advancement of knowledge, of scientific research, of education; for cooperative action in the advancement of many phases of economic life.” This was, he said, “self-government by the people outside of Government; it is the most powerful development of individual freedom and equal opportunity that has taken place in the century and a half since our fundamental institutions were founded.” So important was this “cooperation,” Hoover maintained, that it was the “greatest function of government” to “build up that cooperation, and its most resolute action should be to deny the extension of bureaucracy.” Similarly, Hoover told the Republican National Convention in 1936, “Government must either release the powers of the individual for honest achievement or the very forces it creates will drive it inexorably to lay its paralyzing hand more and more heavily upon individual effort.”4
Of course, an enormous amount of time and vast changes in American society separate Kasich and Hoover. And yet, one can hear Hoover in the pages of Courage Is Contagious:
My dad delivered mail and often told me how much the New Deal meant to working people in the 1930s. Later, in the 1960s, we needed civil rights legislation and Medicare. But now it is time for the pendulum to swing back. Government has an important role to play but it must be limited. Instead government has gotten too big, has become too intrusive into people’s lives. Too often now, it’s part of the problem instead of part of the solution. Too often, instead of helping the heroes I celebrated in this book, it hobbles them with heavy-handed regulations, red tape and boneheaded tax policies.5
All of this, even including Kasich’s actions in the early 1990s, reflects typical and familiar Tea Party perspectives and rhetoric. In the real world, problems do exist with the delivery of government services. But most of the heroes in Kasich’s book are driven to action because government services were crippled by being starved for resources. When the “government” acts on its responsibility to serve people in need, it is not some inanimate third party, as is so often portrayed in conservative circles. The government is the collective arm of the taxpayers, the people.
Furthermore, it should be recognized that Hoover’s ideology of volunteerism is manifestly inadequate for dealing with the problems of the modern United States. Hoover’s excuse may be that he spent a great deal of time out of the country building a fortune as an engineer, and it is possible that he failed to appreciate that the America of the 1930s was not the America of his small-town Iowa youth.6 Kasich, by contrast, has been not so much naïve as calculating. In being extraordinarily consistent with what Mitt Romney would call an “extremely conservative” approach that views government as an opponent and a threat to “freedom,” Kasich wants simple answers that will create simple solutions. In Ohio, Kasich thus adopted a governing strategy that vilified public servants and public institutions, including universities and schools, and suggested that the very paying of taxes was illegitimate, proposing even to do away with the state income tax, the only progressive tax left after continuous Republican tax “reform” strategies shifted the tax burden to the middle class. Rather than solving problems, Kasich’s approach of privatizing services would instead funnel taxpayers’ money directly to deep corporate pockets.7
Another prominent figure in the fight over SB 5 was state Sen. Shannon Jones. Her early political work began in Cincinnati with the Hamilton County Republican Party and the campaigns of conservative Congressman Steve Chabot. A graduate of the University of Cincinnati in Communications, Jones first ran for a House seat in 2006 in her heavily Republican district in Warren County to replace Tom Raga, who had been chosen to be Ken Blackwell’s lieutenant governor in that ill-fated gubernatorial campaign. Jones was reelected easily in 2008.8
The death of state Sen. Bob Schuler in June 2009 set up an intriguing situation. Both Jones and former House member Michelle Schneider were looking to replace him. But now they vied with each other to be appointed to fill the post until the 2010 election. Jones was able to work her connections better than Schneider and was named to fill out the term. Thus, in the 2010 primary battle against Schneider, Jones became the incumbent.
Jones revealed several aspects of her personal ambition in this race. Jones and Schneider had once been friends, even roommates, but that was no longer the case. “Tempted by the prospect of an open state Senate seat, Jones elbowed her way past her political mentor and Columbus roommate, former Rep. Michelle Schneider of Madeira,” The Cincinnati Enquirer reported, “despite what Schneider insists were Jones’ repeated assurances to ‘never, never run against’ her. ‘She stabbed me in the back,’ Schneider said. ‘Some friend.’”9
Jones had shown similar determination early in her political career. In her first race, in 1992, she ran against Rep. William Mallory, Sr., a member of a prominent African American political family in Cincinnati and, at the time, the Democrats’ majority leader in Columbus. Because Jones had once taken a state government and politics course from Mallory at the University of Cincinnati, the election was billed as “the professor versus the pupil.” And Mallory schooled Jones, defeating her by 68 percent to 32 percent. 10
Jones’s friends and allies said that what was memorable about her defeat was that Jones maintained her enthusiasm and commitment to staying in politics. Perhaps the genesis of her sponsorship of Senate Bill 5 can be found in the determination that she demonstrated to do whatever was necessary to further her own political career.
Two other important figures in the Senate Bill 5 battle were the Senate majority leader, Tom Niehaus, and the Speaker of the House, William Batchelder. Like Jones, they are both members of the American Legislative Exchange Council (ALEC), the radical conservative organization that has proposed many model bills that undermine the rights of ordinary Americans, including House Bill 194—a voter suppression bill—and the “stand-your-ground” laws that have proliferated around the country.
Niehaus, a Republican from New Richmond, was first elected to the Ohio Senate in 2005 after having served two terms in the House. Upon his election to Senate president, he said that he looked forward to working with Gov. Kasich and Speaker Batchelder “to pass a balanced state budget, get our state economy back on track, and create an optimal environment to create good paying jobs in Ohio.” In retrospect, one can detect in that language the union-busting legislation that was in the future—an “optimal environment” for corporations being one where workers have no rights—but at the time Niehaus certainly did not claim that as his objective.11
Niehaus earned a bachelor’s degree in journalism from Ohio State University in 1973 and an MBA from Cincinnati’s Xavier University in 1986. He worked for 25 years with small newspaper companies in Ohio as an editor and publisher. Before the battle over Senate Bill 5, Niehaus was not viewed as a politician driven by ideology. “He is very pragmatic,” Clermont County Commissioner Bob Proud told Rory Ryan, publisher and editor of The Highland County Press, in January 2011. “Tom is very upfront with you . . . about whether something can be done.”12 Those statements would be called into doubt by Niehaus’s own actions in the SB 5 fight.
Jones was named majority whip. It did raise eyebrows among many in the Cincinnati labor community that Niehaus, who was no friend of labor, as well as Shannon Jones, who had been hostile to unions—particularly toward the public school teachers’ union, in earlier sessions—would both be in leadership positions. Ironically, as things would turn out, when he opened the Senate, Niehaus promised in his address that he would preside over a “deliberative body where all voices will be heard.”13
William Batchelder, who had a legal career focusing on corporate law and personal injury defense, was appointed by Republican Gov. Bob Taft to Ohio’s Ninth District Court of Appeals from 2000 to 2005. He then gained reelection to the Ohio House in 2006 (he had had a lengthy term in the House before becoming a judge). During Batchelder’s time in the House, he has been hostile to unions and, especially, to public schools. Under his tenure, the corporate school entrepreneur David Brennan, head of White Hat Management, Ohio’s largest operator of charter schools, and a major contributor to GOP candidates, had special access to the Legislative Service Commission (LSC) with no lawmakers present. The LSC, which offers assistance drafting bills, is supposed to be a service for the legislators, not corporate interests. According to The Columbus Dispatch, 10 of the 29 “concepts” proposed in private meetings with the LSC by White Hat to direct more public monies to private charter schools—like those operated by White Hat—were in the final House legislation. Not surprisingly, David Brennan and his wife, Ann, gave a combined $40,000 to Batchelder in 2008 and $33,000 in 2010, according to financial reports. In 2007, the Brennans gave a combined $733,000 to state candidates and Republican organizations, including $400,000 to the Republican Party. As a further window into the Speaker’s political attitudes, Batchelder made national news in February 2012 when, at a Summit County Lincoln Day Dinner, he joked that “The liberals are asking us to give Obama more time. I think 25 to life would be a good start.”14
While many others were involved in the conception, creation, and passage of Senate Bill 5, Kasich, Jones, Niehaus, and Batchelder were the very public proponents in the drama that unfolded in 2011 in Ohio. But had it not been for John Kasich’s election, it is unlikely that the fight over Senate Bill 5 would have happened, so it is useful to examine the political situation in Ohio prior to the 2010 election and Gov. Strickland’s place in it.
Gov. Strickland was born on August 4, 1941, in Lucasville, Ohio, where his father was a steelworker. He graduated from Asbury College in Kentucky in 1963 with a bachelor’s degree in history. Strickland earned a master’s degree in guidance counseling from the University of Kentucky in 1966 and a master’s degree in divinity from Asbury in 1967. Later, in 1980, Strickland completed his doctorate in counseling psychology at the University of Kentucky and in 1982 became a licensed psychologist. Strickland worked at the Southern Ohio Correctional Facility as a counselor and taught psychology at Shawnee State University. He served briefly as a minister at United Methodist Church in Portsmouth, Ohio.
After several unsuccessful attempts at running for Congress, Strickland defeated incumbent Bob McEwen in 1992 by a narrow margin. The Republican wave in 1994 swept Strickland out of office, but he won the seat again in 1996 and held it until he left Congress in 2006 to enter the Ohio gubernatorial race.
Strickland easily defeated the Republican nominee for governor, Ken Blackwell, winning 60 percent of the vote. Blackwell had been tainted by having served as Ohio’s secretary of state during the presidential election of 2004, when many “irregularities” in the voting process in Ohio contributed to George W. Bush winning the state and thus a second term in the Oval Office.15
As governor, Strickland introduced a series of important reforms, and those for higher education were particularly significant. Under Republican Gov. Taft and a conservative-dominated legislature, Ohio’s colleges and universities had often been targeted for cutbacks, despite the relatively prosperous times. Prior to Strickland’s election, Ohio’s state colleges and universities had seen funding reduced for five consecutive years. Strickland turned this around with a new vision for higher education as a driver for economic development in Ohio and as a key tool in making the state economically competitive with other regions of the country. Ohio’s universities were encouraged to freeze tuition in exchange for increased funding from the state, thereby making college more affordable to Ohioans. Strickland introduced an innovative concept known as the University System of Ohio, which was designed to create a more seamless transfer of students and credits among Ohio universities and increase cooperation while boosting enrollments and graduation rates. In 2007, Strickland’s approval rating was 61 percent according to Quinnipiac polling. A conservative Democrat, Strickland reduced government regulation of businesses and was a moderate on abortion issues. A defender of public education, he boosted funding, increased graduation rates, and blocked school vouchers. Strickland’s efforts brought Ohio’s public schools from a spot low on the ratings lists to a ranking of fifth-best school system in the country in Education Week’s widely respected Quality Counts report of 2010.16
An unprecedented cut to the state income tax created the context in which the battle for Ohio would take place. The destruction this tax cut inflicted on state priorities, while enriching the wealthiest Ohioans, is a story of immense importance because the reduction was such a central part of conservative strategy. The dull numbers and percentages of this story provide a rich resource for understanding the manufactured crisis that Republican policy makers attempted to take advantage of in 2011.
In 2005, in House Bill 66, the GOP enacted a sweeping tax reduction plan that has since cut the state’s income tax by 21 percent. The final 4.2 percent of the reduction was put in place by Senate Bill 5 proponents in early 2011. Each year, the tax reduction plan cost Ohio more than $2 billion in annual revenue; the accumulated deficit was roughly equal to Ohio’s budget deficit in 2011 (about $6 billion, not the exaggerated $8 billion the Kasich administration claimed). In 2005, a number of groups and legislators tried to convince Gov. Taft and his Republican allies that gutting the state budget in such a way was a very flawed approach.
The think tank Policy Matters Ohio issued a series of reports about the impact of this kind of regressive tax policy, and their economists testified before the legislature.17 Policy Matters reports argued accurately that the income tax cuts would create more budget problems, rather than solve them. The income tax cut would reduce state revenues by nearly $1 billion during the fiscal year 2006–2007 biennium, and by $2 billion a year when fully implemented in 2010. Policy Matters correctly predicted that this would make it difficult for Ohio to pay for crucial services and investments and would increase the chances of another state budget shortfall in the future. Policy Matters also accurately pointed out that the tax cut would lead to higher local taxes as local governments attempted to make up for reduced state support.18 Policy Matters also warned that about one-seventh of the tax cut would leave Ohio because taxpayers who itemize would have lower state income tax to deduct on their federal taxes, probably totaling about $280 million a year by the time the cuts are fully implemented.19
Further, while the Republicans were elected in 2010 largely on a platform of creating jobs, Policy Matters pointed out that there is no evidence that cutting income tax creates jobs. California and North Carolina have among the highest individual income tax rates in the country (top rates of 9.3 percent and 8.25 percent, respectively), and yet Silicon Valley and the Research Triangle area are two of the world’s leading high-technology centers. States with lower taxes, like the southern states, also have lower average incomes than those with higher taxes, according to the Center for Community Solutions. Further, the extreme tax cut was unnecessary because Ohio already had a mechanism in place, the Income Tax Reduction Fund, which automatically reduces income tax rates when the state has enough of a surplus and can afford it.
According to a study conducted by the Institute on Taxation and Economic Policy (ITEP), Ohio residents who made more than $274,000 would be part of the 1 percent of Ohioans who, on average, would see their tax bill decline by more than $8,000 each from the reduction. This small wealthy group would receive almost a quarter of the benefit from the income tax rate cut. On the other hand, the 60 percent who made less than $43,000 a year would get just 14 percent of the reduction. Ohioans making less than $16,000 a year—a fifth of all taxpayers, on average—would see a reduction of just $19 a year.20 The cumulative effect of cutting income tax rates and raising regressive taxes, such as the sales tax, was a shift in the tax burden from wealthy individuals to the poor and middle class. Policy Matters correctly argued that keeping the top rate of 7.5 percent would have been important for future state revenue growth because much of Ohio’s income growth in recent decades, like the growing inequality that has occurred nationwide, has been concentrated in the uppermost income strata. The bottom 60 percent of Ohio workers have seen little or no increase in real hourly pay over the past 25 years, paralleling the decline of union membership. In contrast, the top 10 percent experienced a 19 percent increase in real hourly pay from 1979 to 2003.21
On March 16, 2005, Jon Honeck, a research analyst at Policy Matters, testified before the Ohio Senate Ways and Means Committee. “The proponents of this bill,” Honeck said, “promote it as an economic development package because of the cuts in the income tax rate and the elimination of most of the tangible personal property tax.” But, Honeck explained, this was not true: “Our tax code is not a major factor in explaining Ohio’s relative economic decline over the last several decades, or the recent precipitous decline in manufacturing employment. In fact, the business share of Ohio’s state and local tax burden has declined from nearly 40 percent in 1976 to 30 percent in 2002.” And, Honeck argued, neither was it “likely that cuts to income tax rates will affect our employment situation.” He pointed out that federal personal and corporate income tax cuts over the last four years had “returned $24.4 billion to Ohio, yet Ohio had lost nearly 200,000 jobs over that time period.”22
Bluntly put, the challenges facing Ohio’s economy were national and global, and they could not be put right by simply giving tax breaks to rich Ohioans. Again, the cumulative effect of cutting income tax rates and raising regressive taxes was a shift in the tax burden from wealthy individuals to the poor and middle class. In addition to sharply reducing the personal income tax, the Republican tax plan called for phasing out the corporate franchise tax, Ohio’s corporate income tax. Conservative arguments to the contrary, as analysts repeatedly pointed out, it is widely acknowledged that cuts to income taxes have little impact on job creation. It is, frankly, just an ideologically driven handout to the wealthy. This probably explains why, as Ohio Republicans drove ahead, the Columbus-based newspaper Business First published a poll of central Ohio executives who showed little support for the Republican tax cutting plan.23 Ordinary business people, unlike political ideologues, seemed to recognize that the need for good schools, good roads, and dependable public services was greater than the need to transfer state revenue to those who least needed it.
And small business people certainly realized this was not going to help ordinary people buy their products and services.
Policy Matters contradicted the distorted notion that people leave Ohio because of high taxes. A study produced in June 2005 analyzed IRS tax returns for 13 years, ending in 2003. Over that time, Policy Matters found no evidence that people left Ohio because of any changes to the state’s tax system. Those who left went to states with a variety of tax systems, some with higher income tax and some with no income tax. Florida was the top destination state, but weather and age would likely be the determining factors there. Florida also was the state that sent the most people to Ohio, perhaps in search of better jobs and pay.
In 2007, nearly two years after the imposition of the series of tax cuts, Policy Matters Ohio reported again on their impact:
Ohio’s total non-farm payroll employment [stood] at 5.43 million, barely higher than in the summer of 2005. The manufacturing sector, which was supposed to be the main beneficiary of tax reduction, lost nearly 29,000 jobs since June 2005. House Bill 119 reflects continuation of anemic revenue growth from previous years: Aid to local governments is barely increased after years of being frozen, higher education continues to be squeezed, and it is a struggle to find revenue even to restore parents’ coverage under Medicaid to 100 percent of the poverty level.24
Policy Matters Ohio went further by asking legislators to halt the income tax cuts and reverse the cuts for the most affluent. It also called on legislators to stop the handouts to the large corporations by not continuing to phase out the corporate income tax. But the Republican-dominated legislature stayed the course.
As the economic tsunami hit in 2008, Policy Matters Ohio, not surprisingly, weighed in once again. “Key economic trends continued to go in the wrong direction after the tax overhaul,” Honeck wrote in a new report released January 15, 2009. “The report finds unmistakable evidence that the state’s relative economic decline accelerated since H.B. 66 [the tax cut] was passed.” The report suggested that hard questions should be asked of those who had argued that this experiment at supply-side economics was going to boost the economy. Now that the recession was upon the state, the think tank called for pushing the tax breaks back, at least to 2007 levels, to avoid the looming budget deficit the tax cuts were creating. “Structural changes in our economy . . . are the primary causes of Ohio’s economic problems and for the decline in Ohio’s economy. Starving the state of revenue will not address these problems, but it will add to human distress and prohibit Ohio from making the public investments it badly needs.”25 Once again, and it bears repetition, there is a powerful section in the report where the researchers argue convincingly that there is no evidence that cutting state and local taxes, particularly taxes on the wealthy, boosts economic growth. For many economists this is old news, but it is a fact that has yet to penetrate Republican Party circles where supply-side economics continues to have true believers. 26
In the 1980s, David Stockman, Ronald Reagan’s first director of the Office of Management and Budget was a moderate advocate for supply-side economics. Stockman confessed to reporter William Grieder that the supply-side theory was not a new economic theory. Instead, Grieder writes, Stockman pointed out that it was “only new language and argument to conceal a hoary old Republican doctrine: give the tax cuts to the top brackets, the wealthiest individuals and largest enterprises, and let the good effects ‘trickle down’ through the economy to reach everyone else.” According to Grieder, Stockman conceded that without the new rhetoric that emphasized budget cuts, the theory was just the old Republican orthodoxy of tax cuts for the wealthy. “It’s kind of hard to sell ‘trickle down,’” he explained to Grieder, without the argument that it is necessary to impose cuts as well.27
Newt Gingrich was John Kasich’s early chief ideological ally and perhaps the most powerful influence on him. In reading through the news reports of budget cutting efforts after the Republican takeover of Congress in 1994, one is struck by the fact that Gingrich and Kasich were joined at the hip. Gingrich was the figure with stature as a leader of the movement, but Kasich was the enforcer on the House budget committee, working hand-in-glove with Gingrich.
“For months before the House took up the balanced-budget constitutional amendment,” Jackie Calmes reported in The Wall Street Journal in 1995, “Newt Gingrich had a one-word answer when pressed about the cuts Republicans have in mind: ‘Kasich.’” Rep. Kasich himself told Calmes that it was “a chance for us to rewrite and re-route the government . . . This is a precious opportunity.”28
In the story headlined “Point Man: John Kasich Wields the Mighty Budget Axe Granted by Gingrich,” Calmes wrote that Kasich’s most potent weapon was Gingrich’s support. “I don’t need Newt to understand all the details of this,” Calmes quoted Kasich saying about the partnership, “and he doesn’t want to understand all the details of it. But what he has to do—and he has—is just put his confidence in the Budget Committee.”29
The implications of the Kasich–Gingrich partnership were clear: “This is the New Deal and the Great Society in reverse. Rep. Kasich and his budget allies are considering killing, consolidating or privatizing numerous federal offices, among them the departments of Energy, Education, Transportation, Commerce, Human Services, and Housing,” Calmes reported almost breathlessly.
All of this background about Kasich was not prominent in the minds of Ohioans during the 2010 campaign. They had little conception that his goal was to undermine the social supports and institutions that they depended on. He talked about jobs. When Kasich finally came out of the shadows in the days after his electoral victory, Ohioans were in for a terrible surprise.
Instead of examining Kasich’s history, Ohioans during the election were focused on the deep shadow that had fallen over the state’s economy: the Great Recession of 2008. This broad national recession had taken with it more than 238,000 jobs in Ohio. Despite the many political issues surrounding the 2010 election, it was primarily this economic slump that undermined Strickland’s ability to win a second term. Importantly, of course, the recession was a national economic disaster, and there was little that Strickland actually had power to do about it. The Ohio economy began recovering in the last year of the Strickland administration, but the governor got little credit, as the overwhelming impact of the recession was so negative.
Central accomplishments during Strickland’s term as governor were in the areas of energy, health care, and education. Strickland made progress on a number of issues where energy was concerned, but Senate Bill 221 stands out for two reasons. First, its Energy, Jobs, and Progress section encouraged energy efficiency by allowing utilities to recover costs for their investment in energy-efficient equipment and practices. It also gave manufacturers the ability to reduce their utility costs and rates by making upgrades to their own systems. One of the primary objectives of Strickland’s energy legislation was the creation of a large solar energy project in southeastern Ohio. The project to build a $200 million facility had been making progress until recently and was close to breaking ground on 850 acres of reclaimed coal mining property. The Turning Point Solar project has been expected to produce enough electricity to power 28,000 homes. The solar panels themselves would be built by a Spanish-owned company in Toledo, Ohio, illustrating the multiplier effect of such economic development.30
In January 2013, the Kasich administration dealt a blow to the Turning Point project. Since his election, Gov. Kasich has appointed three of the four members of the Public Utilities Commission of Ohio (PUCO). Staunch Republicans in the Kasich camp, they voted 3–1, against the recommendation of PUCO staff, to block American Electric Power (AEP) from using power from Turning Point to meet the state mandate that Ohio utilities generate a portion of their electricity through alternative sources. Democrats pointed out that the decision greatly aids American Electric’s competitor, FirstEnergy Corp., whose executives have made significant donations to the GOP. And just to make certain the project is crippled, the Republican majority also ruled that AEP cannot recover its investment in Turning Point by adding the cost to its rate base. “Obviously we’re disappointed with the commission’s decision,” AEP spokesperson Terri Flora told Business First, saying it went against an agreement AEP had negotiated with the PUCO staff. “We saw this as an opportunity to leverage Ohio jobs with an environmentally friendly project.”
“It’s deeply disappointing,” Ohio Democratic Party Chair Chris Redfern told The Columbus Dispatch, “that Gov. Kasich has given the appearance his administration is more interested in rewarding his campaign donors than supporting a project that would create more than 600 jobs, including many for veterans.” As evidence of the ideologically driven objectives—the same blind ideology that drove SB 5—several business groups had argued against the project because they believed it would go against the ideas of free markets.31
With regard to health care, using federal funds Gov. Strickland created a high-risk pool that allowed private Ohio insurers to offer coverage to Ohioans with pre-existing conditions. In his budget, Strickland expanded eligibility for the State Children’s Health Insurance Program, but the attempt was later blocked by the George W. Bush administration.
But it was in education that Strickland made his most potent advances. In primary and secondary schools, Strickland had planned to direct significantly more funding to education than had been committed during the Taft administration. He had also designed a strategy focused on “evidence-based” funding, which would have required that the state select and fund only educational methods that are supported by research on best practices. This was, in part, an effort to overcome Ohio’s long-term problem: its schools are funded on an unconstitutional basis. The Ohio Supreme Court has ruled repeatedly that Ohio’s system of funding its schools is unconstitutional because it relies too heavily on the property tax—which means that children in rich school districts (mainly suburban) get advantages denied to students in poor school districts (mainly rural and urban).32
The goal of Strickland’s evidence-based funding plan was twofold. First, by advocating funding for proven education solutions developed by professional educators, he implicitly opposed the frequent right-wing solutions that are based on the nonprofessional conclusions of lawyers, accountants, and ideologues, who simply oppose public education or fair taxation. Second, it aimed, over the course of ten years, to replace the current system’s emphasis on property levies by increasing state funding for public schools.33
Candidate Kasich pounced on the evidence-based strategy, saying he would scrap it immediately because, he incorrectly argued, it had only unfunded mandates. Supporters spread the word that this was simply “more spending” by the Democrats. Strickland called Kasich’s stance “irresponsible and reckless” and noted that Kasich himself had not outlined any plan for addressing school funding.34
Knowing now what would happen after the election, one can see in retrospect where the education issue was heading. Strickland was taking a real-world approach about how Ohio could put public schools on a fair and firm financial footing. The way to do that was clearly to increase state contributions to offset the dependence on the property tax so that all Ohio children would have an opportunity for an equal education. Kasich, on the other hand, during the campaign offered no solution and only criticized the cost of the Strickland plan. Since taking office, Kasich has dramatically cut funding to local schools—some $780 million so far, with plans for more cuts. Far from addressing the unconstitutional overreliance on local property taxes, Kasich is making the problem much worse and moving in the opposite direction than Strickland had envisioned.
Kasich and Strickland also locked horns over an ambitious plan for a light-rail system. Strickland and other Democrats developed a plan to connect Cincinnati, Columbus, and Cleveland with a high-speed rail line. Strickland argued that it would be a great economic development lever, and that even its construction would create thousands of new jobs. The Obama administration had, early on, targeted the plan for a large portion of federal funds, about $400 million, as part of the stimulus plan. Kasich and the Republicans attacked the plan relentlessly: it was a worthless boondoggle, not a fast train but a slow train, no one would ride it, and on and on. Far from benefitting Ohio, Republicans argued, the state would be left holding the bag for huge amounts of maintenance. While any of those points could be debated, the central problem Kasich seemed to have with the plan was that the federal government would be funding it.35
In the end, after Kasich was elected, he, like Gov. Walker in Wisconsin, refused for ideological reasons to accept the $400 million, despite Ohio’s high unemployment rate and crippled economy. The money was later sent to other states, including nearby rival Michigan, whose political leaders took a more reasonable view of passenger rail. Work is currently progressing on track improvements between Detroit and Chicago to allow 100-mile-per-hour passenger trains.36
Another significant rift between Strickland and Kasich developed over the issue of privatization. Kasich clearly embraced the cult of privatization that has been so popular among conservatives. Working from the premise that the private sector and the market can always do things better than the government, Kasich talked about privatization in several areas: economic development, the Ohio Turnpike, prisons, and schools. Reflecting his heavy funding from the corporate school sector, Kasich was very supportive of the idea of increasing the scale of the charter school movement in Ohio—another way he clashed with Strickland on education. While Kasich would be reducing state funding for public education, he also hoped to off-load more of that responsibility onto the private sector. During the campaign he also proposed to sell the state’s prisons and the turnpike in northern Ohio. In both cases, he argued that these plans would bring an influx of cash and divest the state of expenses.37
While the failure of charter schools to perform as well as public schools is clear, studies of whether privatized prisons are less expensive and more effective have reached mixed conclusions. Those studies performed by the prison industry have tended to paint a rosy picture. Those performed by organizations representing the workers who actually know the prisons show the national prison privatization effort as a failure, except with regard to funneling public money into private corporations. In Arizona, which is well down the road of privatization, a study by a Quaker group found that Arizona’s private prisons are not cost-effective for taxpayers and are more difficult to monitor than state prisons. The study also found that much violence and even riots that had occurred in private prisons had not been reported. And an earlier study of the controversial prison industry by Arizona Republic staff raised real questions about whether the state could hold the corporate managers of private prisons accountable. Further, it had become obvious that the private prisons, driven by the profit motive, were more expensive than the state-owned and -managed prisons.38 In contrast to Kasich’s devotion to privatization, Gov. Strickland’s plans for prison reform did not include privatization but focused on reducing costs through sentencing reform with the aim of reducing the numbers of nonviolent offenders imprisoned.
Finally, Kasich’s most radical plan, spoken of only sketchily in the campaign, has been to turn over Ohio’s economic development efforts to a private organization made up primarily of CEOs and other leaders in the business community. In the early twentieth century, of course, such an idea would have been seen as obvious graft and corruption but not among the new breed of conservatives who won power in the 2010 election in Ohio. When the concept was first introduced in the campaign during August 2010, Kasich promised to do away with the state Department of Development, replacing it with a new private board called JobsOhio that would, as Kasich has been fond of saying, “move at the speed of business.” This plan immediately created opposition, some of it from those who believed it was unconstitutional to turn over that much government funding to a group of private individuals. To provide funding for JobsOhio, now dubbed “RobsOhio” by its critics, the state would lease, and thus privatize, the state’s lucrative wholesale liquor profits. Further controversy ensued over the shadowy operation of JobsOhio in early 2013. State Auditor David Yost had insisted on his right to audit JobsOhio because it is funded with taxpayer money. Gov. Kasich and JobsOhio officials had resisted the audit, fighting to preserve the secrecy of their operation, before finally agreeing to pay back to the state at least $7.5 million in grants the organization had received from Kasich administration officials. This revelation of the largely unknown taxpayer funding stream to the privatized agency raised doubts about the ability of JobsOhio to adequately administer public funds. Of course, the timing of this decision to pay back the funds was linked with JobsOhio finally gaining access to Ohio retail liquor tax revenues totaling about $100 million a year. The Cleveland Plain Dealer editorial board criticized the secrecy surrounding JobsOhio in March 2013: “The rule in Ohio should be that public funds are the people’s funds, and that the officials in whose custody that money happens to be are merely trustees for the people.”39 Shockingly, in June 2013, the Republican legislature passed and Gov. Kasich signed legislation that specifically prevents JobsOhio from being audited, thereby protecting what many see as the obvious misuse of taxpayer money.
Kasich’s plan would seriously undermine “oversight and transparency for job creation efforts in Ohio,” then–Atty. Gen. Richard Cordray predicted in 2011, perhaps foreseeing the problems JobsOhio would generate. Cordray went on to call the plan “murky” and “unclear” and expressed doubts about its constitutionality. Criticism of the plan was not limited to Democratic politicians. Columbus-based Business First carried a detailed article about the failure of such plans elsewhere. In Michigan in 1999, the paper reported, then-Gov. John Engler, also a Republican, tried a similar approach. In the years since, Michigan’s economy has slipped so precipitously that there have been calls to abolish the organization and arguments that a more effective use of its funding would be to simply pay down the state deficit.40
In Indiana, Republican Gov. Mitch Daniels has worked diligently to portray his privatized Indiana Economic Development Corp. as a success. But when the news media began to look beneath the claims, they found more costly failures. In March 2010, an investigative story by Indianapolis television station WTHR found that in reality Indiana’s job creation numbers “just don’t add up” because of numerous fabrications. “In fact,” the station found, “as many as 40% of statewide jobs listed as so-called economic successes have not happened—and most of them never will.”41
Nevertheless, on November 2, John Kasich won election by a tiny margin: 1,889,180 to 1,812,047, a mere 77,000 votes—49 percent to 47 percent. Kasich’s strongest support came from the suburban Cincinnati counties of Butler, Clermont, and Warren, while Strickland ran strongest in northeast Ohio in the Cleveland region and Cuyahoga County. Kasich could not know it at the time, but in November 2011 more Ohioans would vote against his signature piece of legislation, Senate Bill 5, than had voted for him in 2010.
Gov. Kasich immediately began to behave as though his narrow win was a mandate. Flush with victory, he announced that Ohio’s public school teachers should take out a full-page ad in the state’s newspapers to apologize for what they had said about him during the campaign. And a few days after the election, he gathered important stakeholders in the statehouse in Columbus to hear his governing strategy: “Please leave the cynicism and the political maneuvering at the door. Because we need you on the bus, and if you’re not on the bus, we will run over you with the bus. And I’m not kidding . . . If you think you’re going to stop us, you’re crazy. You will not stop us. We will beat you.”42
Remembering that it was a very narrow victory, there are a few explanations for the election results. First, as the collapse of the national economy hit Ohio, throwing hundreds of thousands of people out of work, the typical voter was shell-shocked and looking for answers. Largely because of Barack Obama’s popularity, the Democrats in 2008 had won several state offices and the Ohio House. The downside of this was that as the economy collapsed, desperate voters looked to throw out the party then in power—the Democrats.
Second, the GOP at the time, and even since then, has been able to turn attention away from Republican Party responsibility for policies that led to the Great Recession by focusing instead on the budget deficit, both nationally and in Ohio. The constant refrain from both state and national GOP figures about the perceived need to cut the deficit (despite the fact that it has largely been generated by Republican state and federal tax cuts) has inaccurately supported their claims that “excessive spending” is the culprit. And their answer to the problem is to make drastic cuts in public services.
Third, Gov. Ted Strickland clearly understood the threat Ohio faced from a Kasich administration. But he was largely unsuccessful in connecting Kasich with the investment bankers who brought on the Great Recession and the destructive ideology that connection represented. Certainly, Strickland’s response to many of Kasich’s sketchy plans was understandable indignation, and he frequently pointed out the inherent irresponsibility of Kasich’s proposals. But once again, Ohioans needed to hear more often and more clearly exactly how Kasich’s policies would damage the lives of ordinary citizens.
Finally, after a number of defeats over the years, the Ohio labor movement was not energized. Leaders of the labor movement warned their members about a Kasich administration. For example, Joe Rugola, president of the Ohio AFL-CIO in 2010, told a Youngstown audience at the time: “The forces that are arrayed against us today, their voices of intolerance that we hear on the airwaves and their moneyed allies on Wall Street, have one motivation and one plan in mind only. And that is to destroy and wreck the American middle class.”43 Still, caught up on that old canard that there was little difference between the parties, too many union members, especially police officers and firefighters, voted Republican. Further, it is no secret that divisions run in various directions through the labor movement, and unity in recent decades has not been a strong point.
Only a direct attack on the labor movement and the middle class through extremist legislation would create unity. As it happened, Kasich and his right-wing allies targeted the unions with just such an attack with the introduction of Senate Bill 5.