When John Kasich became governor of Ohio, 'there was an $8 billion budget deficit and now there's a $2 billion surplus.
Hoping to add some political muscle to Republican John Kasich's bid for the White House, former California Gov. Arnold Schwarzenegger endorsed the Ohio governor for president during a rally in Columbus this week. But did Schwarzenegger, a fellow Republican, bend the truth when he described Ohio's financial turnaround under Kasich? In his endorsement speech, Schwarzenegger called Kasich an 'action hero,' saying that when Kasich became governor in 2011, 'there was an $8 billion budget deficit and now there's a $2 billion surplus.' We decided to check that claim. Kasich has made similar statements throughout his campaign for president, and highlighted this fiscal transformation on his website. 'I took the state of Ohio from an $8 billion hole ... to a $2 billion surplus,' Kasich said during the Republican presidential debate in Cleveland last year. The national PolitiFact team took a deeper look at Kasich's claim last August. It's very similar to Schwarzenegger's claim. Here's what it found: 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, though he took issue with some of the methodological details. Whatever the number, Kasich avoided a potential misstep when he spoke of this as a 'hole' rather than a deficit. 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. Schwarzenegger used the term 'deficit,' which we interpreted as a minor misstatement rather than an attempt to deceive. A $2 billion surplus? This figure is clearer. Ohio'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. The surplus remained above $2 billion this week, said a spokesman for the budget office. 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. Schwarzenegger's claim strongly implies Kasich played a central role in the turnaround, though it doesn't explicitly link the two together. But it's important to remember that Kasich 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. As of December, the national unemployment rate was 5 percent and the rate in Ohio was 4.8 percent. So Kasich's timing has been fortunate.
Our ruling In his endorsement speech, Schwarzenegger said that when Kasich became governor, 'there was an $8 billion budget deficit and now there's a $2 billion surplus.' 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 starting point should be $6 billion rather than $8 billion. But Kasich and Schwarzenegger didn't pull that figure out of thin air, though it certainly was high by historical standards. Kasich also used the term 'hole,' which is more appropriate than 'deficit.' 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 statements are accurate but need additional information, so we rate them Mostly True.
113033-proof-35-4c462ec1fefebb56ceb6f431f53c09b6.jpg