I took the state of Ohio from an $8 billion hole … to a $2 billion surplus.
During the Republican presidential debate on his home turf of Cleveland, Ohio Gov. John Kasich touted his economic record in the state. Repeating a claim he has often made -- including on his campaign website -- Kasich said, "I took the state of Ohio from an $8 billion hole … to a $2 billion surplus." We decided to take a closer look. An $8 billion hole? There’s an argument for $8 billion, but there’s also an argument for something closer to $6 billion, according to a deep dive by the Cleveland Plain Dealer in 2011. The $8 billion figure is rounded up from a $7.7 billion gap between spending and expected revenues. It was an initial estimate from January 2011, based on the assumption made several months earlier that there would be no new revenue growth. However, revenues did grow as the economy rebounded that year, reducing the gap to between $5.9 billion to $6.1 billion -- a calculation that Kasich’s budget director, Tim Keen, agreed with "conceptually" in a 2011 interview with the newspaper, though he took issue with some of the methodological details. Whatever the number, Kasich avoided a potential misstep when he spoke of this in the debate as a "hole" rather than a deficit, since Ohio, like most states, cannot run an actual budget deficit. The $8 billion gap is more accurately described as a projected shortfall rather than a deficit. A $2 billion surplus? This figure is clearer. The state’s Office of Budget and Management reported in July 2015 that the state’s "rainy day fund" had a little more than $2 billion in it, up from effectively zero when Kasich took office in 2011. Does Kasich deserve credit? It’s not unreasonable to give Kasich some credit for the state’s improving economic fortunes -- he is a governor, after all, and he forged the state’s fiscal policy in concert with the Legislature. But it’s important to remember that he took office at the very beginning of the national economic recovery, and as the national economy has improved, so has Ohio’s. When Kasich was inaugurated in January 2011, the unemployment rate in Ohio was 9.2 percent -- exactly the same as the national rate. Today, the national unemployment rate is 5.3 percent and the rate in Ohio is 5.2 percent. So Kasich’s timing has been fortunate. Our ruling Kasich said, "I took the state of Ohio from an $8 billion hole … to a $2 billion surplus." It’s possible to argue over whether the initial amount should be $6 billion rather than $8 billion. But Kasich didn’t pull that figure out of thin air, and it certainly was high by historical standards. He also used the term "hole," which is more appropriate than "deficit" would have been. Meanwhile, the $2 billion figure seems solid. Still, it’s worth noting that Kasich spoke a little grandly when he said that "I" did it, since the state’s fiscal improvement got a big assist from the national economic recovery. The statement is accurate but needs additional information, so we rate it Mostly True.
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