While global financial markets are marred by uncertainty, Ohioans' hard-earned tax dollars are being prudently invested and safeguarded.
To highlight the contrast between Ohio's fiscal management with that of the federal government, look no further than the recent actions of Standard & Poor's.
In analyzing the fiscal management of each, the firm decided last month to upgrade Ohio's outlook (from "negative" to "stable"), but last week downgraded the federal government's credit rating. Additionally, Fitch also recently improved Ohio's bond rating. These ratings agencies applauded state leaders for bringing our budget into balance through sound financial management, and credited the Ohio Treasury with conservatively managing debt.
One of the reasons that Ohio's outlook is improving while the federal government is drowning in red ink is that Ohio's constitution mandates a balanced budget. Our state is prohibited from racking up and carrying over deficits, and finally has elected leaders who are taking this requirement seriously.
In the Treasurer's office, we have taken many steps to insulate public funds from the uncertainty that has shaken global markets. This puts taxpayers and local governments in the safest position to weather the storm, even if the worst-case scenario plays out in the stock market and bond yields continue on a downward path.
Over $1 billion in Ohio taxpayer dollars are being safeguarded in secure short-term and overnight investments to maintain liquidity and guarantee that cash will be available when needed by cities, counties and school districts. My office is constantly monitoring markets in Europe and Asia so that we can act quickly if international securities take a hit.
On behalf of the State Treasury Asset Reserve (STAR Ohio) program, where we invest funds for local governments, we have also increased liquidity and eliminated investments in banks in Spain, Italy, Portugal and Greece who could be impacted by the European sovereign debt crisis.
Contrast this approach with what happened in Florida, where rather than stressing safety, the state sought higher yields through risky and legally questionable investments. These investments potentially cost taxpayers hundreds of millions of dollars after the collapse of housing and financial markets in 2008.
In our office, we ended the fiscal year with a $400,000 surplus, and are reducing general revenue fund operating expenses by $1.2 million over the next two years. We will also save $100,000 annually by automating check processing and ending the unsecure daily practice of physically driving checks across the state to the depository bank. If families and small businesses are tightening their belts, then government should do the same.
In Ohio we have embraced our balanced budget requirement, and raised our fiscal outlook in the process. We accomplished this without raising taxes. By charting a conservative fiscal course we are achieving positive results for taxpayers, even amidst global economic uncertainty.
Josh has done a fine job so far. He and this new team of executives in the Ohio government (with the exception of the "hot water bottle" Jon Husted, who was actually FOR voter ID law before he was AGAINST IT) are doing a great job and getting Ohio back on track.