Newark Advocate: “The Purpose of Ohio’s Rainy Day Fund Is To Stabilize State Government During Times Of Crisis”
COLUMBUS, OH –– Senator Portman’s rich and powerful Washington backers are out with another false ad attacking Ted Strickland, but independent state experts and newspapers have already ruled the claims in this spot misleading and dishonest.
From Liz Margolis, Strickland Campaign Spokeswoman: “It’s no surprise that Senator Portman’s rich and powerful Washington backers are putting forward more false claims to prop him up because they want him in Congress to continue pushing their agenda at the expense of Ohio’s working families. Senator Portman exploded our deficit as Bush’s Budget Director, tried to increase taxes on the middle class in order to give handouts to his rich friends, and championed unfair trade deals that cost Ohio over 300,000 jobs to places like China. The truth is Ted put Ohio on the road to economic recovery -- he balanced every budget, oversaw a tax cut for every Ohioan and by the time he left office Ohio had the 5th fastest growing economy in the country. No amount of false advertising can change the fact that Portman is an insider, an outsourcer, and everything Ohioans hate about Washington.”
False Claim: Ted Strickland shouldn’t have used the rainy day fund.
FACT: State funding experts said this claim “isn’t fair.” The rainy-day fund prevented cuts to services and tax increases and 70 percent of states used rainy-day fund during recession.
· State Funding Expert: “I Wouldn’t Blame A Governor For Spending Budget Stability Funds In A Time When You Need To Stabilize Your Budget.” “Former Gov. Ted Strickland is often criticized for running the fund to nearly empty amid the financial crisis, but at least one state funding expert says that isn't fair. ‘I wouldn't blame a governor for spending budget stability funds in a time when you need to stabilize your budget,’ said Kim Rueben, who directs the state and local finance initiative at the Urban Institute, a think tank in Washington D.C.” [Columbus Business First, 7/29/16]
· Newark Advocate Editorial: “The Purpose of Ohio’s Rainy Day Fund Is To Stabilize State Government During Times Of Crisis.” “It's also clear the purpose of Ohio's rainy day fund is to stabilize state government during times of crisis, including a steep drop in tax revenue that could have forced massive layoffs of state employees, creating more economic stress. Not to mention the Republican majority in Ohio's General Assembly (Senate only in 2009-10) had to approve the spending.” [Newark Advocate Editorial, 7/30/2016]
· CBPP: “States With Rainy Day Funds Were Able To Avert Over $20 Billion In Cuts To Services And/Or Tax Increases.” “Almost all U.S. states relied on their ‘rainy day funds’ when the economic recession began to ravage their budgets, showing that the reserves will be critical during the next downturn and states should consider putting even more money away, a think tank said on Thursday. The Center on Budget and Policy Priorities, which closely tracks states' fiscal situations, found that over 70 percent have used their reserves to address budget gaps. ‘States with rainy day funds were able to avert over $20 billion in cuts to services and/or tax increases in the recession of the early 2000s and again in this most recent recession,’ CBPP said.” [Reuters, 2/3/11]
· Institute On Taxation And Economic Policy: A Rainy Day Fund Is Designed For Use In Economic Downturns. “Rainy day funds allow policymakers to avoid fiscal policy decisions that can worsen economic downturns. When budget shortfalls are caused by short-term economic declines, tax hikes or spending cuts can actually prolong the economic slump.” [Institute On Taxation And Economic Policy, 2005]
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