OUR VIEW: Potential Ohio budget surplus looms as test of Kasich's leadership

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With his campaign for re-election looming, Gov. John Kasich has been touting a budget surplus, with as much as $1 billion slated for the state's rainy day fund. There's no question a windfall of that magnitude would be great news, especially for Kasich, because there was virtually nothing in the emergency fund when he took office two years ago.

Whether the surplus should be stashed away entirely in the rainy day fund is matter of debate, however.

Democrats are calling for the money to be used for local governments and schools, which have taken a serious hit in state funding in the wake of the fiscal meltdown in 2008. They say any "windfall" would be better used that way rather than putting it aside for the proverbial rainy day.

Another point of contention is Kasich's plan to boost taxes on oil and gas production, targeting the booming industry that has arisen in eastern Ohio because of energy exploration, and using the additional revenue to support a cut in the state's income tax.

State Rep. Bob Hagan, an outspoken Democrat from Youngstown, questions Kasich's budget numbers -- he used a term we won't print to demonstrate his skepticism -- and adds that the governor should "substantially" increase the severance tax paid by the oil and gas industry, "quit playing games with it, and make sure that it goes to local governments and education."

If there is, in fact, a substantial budget surplus, the solution might be a compromise between what Hagan is proposing and what Kasich and the Republican leadership want: Squirrel away part of it in the rainy day fund and use the rest to help shore up schools and local government operations.

While cutting taxes is a politically popular move, using the windfall to help support schools and local governments might be a better course of action if that would lessen the need for those institutions to turn to the voters for local support. Doing the same with additional revenue from an increased tax on oil and gas production also makes sense. The resulting funds could help eastern Ohio communities dealing with increased drilling activities, as Hagan points out.

Kasich's plans for the surplus are expected to be part of a larger tax reform package to be unveiled soon. How the money ultimately ends up being used could be a test of leadership in Columbus.

Sometimes what's politically popular isn't the best course of action.

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