Category Archives: taxes

How About Reducing Some Bureaucracy?

Posted on November 5, 2009 by | 1 comment

By Marc Kilmer

Ohio is only a few months into the new fiscal year and the state is already facing a budget deficit. On one side are the governor and some of his legislative allies, proposing to close the deficit by raising taxes. On the other side are some legislators who want to close the deficit by consolidating government services. The idea of raising taxes in order to keep afloat a bloated state bureaucracy should be a nonstarter, but many in Columbus are choosing bureaucrats over taxpayers in this fight.

First, we need to be clear about something — Governor Strickland’s tax proposal is a tax increase, pure and simple. He wants to raise tax rates that have been in place since January. It’s not a “postponement” of a scheduled tax cut; it’s an increase in tax rates that are already in place. The governor wants to call it something other than a tax hike since he has loudly opposed raising taxes in the past, but there’s no avoiding the simple fact that his plan increases the state’s current income tax rates.

The governor says the only alternative to this tax hike is to cut education spending. Legislators should welcome the opportunity to examine just how well the state is spending taxpayers’ money on educating students. Student spending has steadily risen over the years but there is no evidence students are getting a better education. If they were so inclined, the governor and legislators could work together to seek more effective ways to fund education. But this probably won’t happen.

A good alternative to the false choice of cutting taxes or reducing education spending is the proposal to consolidate state government agencies. This would merely eliminate some redundant state agencies and departments and move their functions to another area of the government. It would not cut any government services. The projected $1 billion in savings would come from the staff reductions and savings on rent, equipment, and supplies.

Public employee unions claim the state government is already going through an “unprecedented downsizing.” It’s hard to see how this is true. In 1998, the state had 174,000 full-time and part-time employees. In 2008 that number had swelled to over 187,000. State taxpayers fund the salaries and benefits for all these workers. If the business of state government can be accomplished just as well with fewer workers, then legislators of both parties should embrace that goal.

Some object to this consolidation measure on grounds that it would not produce the savings projected or that these savings would not happen quickly enough to affect the current deficit. There is probably merit in both these claims. However, the fundamental reason to consolidate state government is not the monetary savings it will produce, but the reduction in unnecessary government bureaucracy. This would be a good idea even if it produced no savings to taxpayers. The fact that it will certainly save some money (and do so quickly depending on when the restructuring begins) makes it a great idea.

Saving taxpayer money is more than a function of just trimming government spending. State policymakers need to rethink how the state and local governments spend taxpayers’ money, which may mean restructuring state government, ending public sector unionization, reducing taxing districts, and other similar steps. Only through fundamental reform of how state and local governments operate can Ohio restore its economic strength. This state government reorganization proposal is a good first step.

Marc Kilmer is a policy analyst with the Buckeye Institute for Public Policy Solutions, a research and educational institute located in Columbus, Ohio.

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Bond Issue 28 Update: Xenia On A High Water Table Not Just Spring Hill Elementary

Posted on November 1, 2009 by | Leave a comment

I just found the multi-governmental soil survey of Xenia. It is part of the Soil Survey of Greene County made by the Natural Resources Conservation Service, Ohio Department of Natural Resources, Division of Soil and Water Conservation, Ohio Agricultural Research and Development Center, the Ohio State University Extension, the Greene Soil and Water Conservation District and the Greene County Commissioners. It was part of the technical assistance furnished to the Greene Soil and Water Conservation District. This and all other soil surveys are archived at the US Dept. of Agriculture

The soil survey presents several revealing facts about Issue 28. First, the survey defined the types of soil complexes for every parcel of land in Xenia. The area surrounding City Hall, including Towne Square, is classified as Oakely-Urban complex (undulating). The type of soil surrounding Tecumseh Elementary is described as Eldean Silt Loam. Cox Elementary is built on the same type of soil as City Hall. The type of soil underneath Spring Hill Elementary is Miamian-Urban (undulated).

Second, all of these areas have similar characteristics:

(1) All have temporary high water tables during certain times during the year. The depth to the seasonally high water table is more than 6 feet in all areas.

(2) Flooding is highly improbable.

(3) Moderate shrinking and swelling of soil could crack foundations and basement walls without special design techniques. The same applies to roads and streets.

Third, the facts of the soil survey that I am at present looking at reveals how the politics of money trumps the good of all school children in Xenia. The use of soil survey data by school officials to justify the elimination of an important neighborhood school is deceptively wrong. Issue 28 may be sold as good for all Xenia’s school buildings; but, it is not for the good of South Hill’s school children and their families.

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Time to End the Giveaway to Big Labor

Posted on October 30, 2009 by | Leave a comment

By Marc Kilner

If there was a law that increased the cost of government projects, deprived Ohio companies of work, and was used as a tool for businesses to harass rivals, you would think there would be a strong push for its repeal. But if that law is Ohio’s prevailing wage law, you find little effort from legislators to eliminate it. This law is simply a way to divert taxpayers’ money to union-controlled construction firms and damage non-union companies. It’s time for Ohio policymakers to help the state’s economy by getting rid of the prevailing wage law.

Enacted in 1931, the law requires companies to pay workers on most government construction projects what a government-mandated “prevailing wage.” This wage is determined by a complex set of bureaucratic guidelines, and violating these guidelines — even if the violation is only for a few dollars and is unintentional — can lead to big fines.

The intended purpose of the prevailing wage law is to keep government construction projects from depressing local wages. Its real effect, though, is to increase the cost of these projects to taxpayers since by mandating higher wages than would otherwise be paid and decreasing the number of bids for the project. Taxpayer-funded construction could be done for less money if this law was repealed, helping both local governments and the state during this period of severely decreased tax revenue.

Not only are taxpayers hurt, but so, too, are the companies which unintentionally violate the law’s complex regulations. There are many instances of companies filing complaints against other businesses in order to stifle competition.

The misuse of this law to harm competition (and taxpayers) was on clear display last year when non-union companies lost bids on the construction of the Huntington Park Stadium. Although their bids were lower than unionized competitors, the companies had a few prevailing wage violations in previous years, making them ineligible for county work. So companies that submitted higher bids won while taxpayers lost.

The latest fight on the prevailing wage front comes with the Ohio Valley Associated Contractors and Builders levying complaints against union firms for violating the law. They are doing this to show just how ridiculous the regulations are and in the hope that it will lead to reform. While it may be poetic justice that union firms are now suffering under a law long used to hurt nonunion companies, in the end no one wins in this battle.

This political jockeying could be ended if the prevailing wage law were repealed. Businesses would no longer have to worry about unintentionally violating the law. And with the increased competition on government construction projects and the ability of local governments to accept the lowest bid for these projects, taxpayers would see significant savings.

This law’s repeal would be a winning proposition for most Ohioans. Some businesses would no longer be as competitive for these contracts, though, and some union bosses would no longer have the leverage they possess today. Protecting inefficient businesses and the power of Big Labor should not be a priority for Ohio’s legislators, though.

The prevailing wage has a long and dark history in Ohio. It has caused almost eighty years of wasting taxpayer money and conflict between union and nonunion businesses. In the midst of deep economic difficulties for the state, repealing the prevailing wage law would help stimulate the economy and reduce government spending. It’s time for this pernicious law to go.

Marc Kilmer is a policy analyst with the Buckeye Institute for Public Policy Solutions, a research and educational institute located in Columbus, Ohio.

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Congress Moves Closer to Health Care Takeover

Posted on October 15, 2009 by | Leave a comment

Yesterday, the final Congressional committee approved a fifth “version” of health care reform legislation. The truth is: there wasn’t a single page of actual legislative language passed. The Senate Committee passed a list of non-binding concepts – not a real bill. All the projected costs were based on “estimates” from concepts.

This health care debate is so complicated that Senators cannot deal with the thousands of pages of legal construction. It is too big for them or any single government agency to handle. This whole process proves the federal government is not designed to run the nation’s health care. The current bills are an unconstitutional expansion of federal authority and a dangerous threat to your civil rights.

Here are the “concepts” the Senate Committee voted to make law yesterday:

  • New mandates to force Americans to purchase insurance with tax penalties imposed on individuals and employers, enforced by the IRS.
  • New powers for the HHS Secretary to define benefits for every private plan in America and redefine those benefits annually.
  • Health care premiums for millions will go up, not down, starting in 2010.
  • Largest expansion in Medicaid since 1965, enrolling 14 million more at an estimated cost of $345 billion.
  • Medicaid expansion will be paid for by cuts to Medicare ($404 billion).
  • Medicare cuts will include a 25% payment cut to physicians in 2011.
  • Medicare cuts will also include cuts to Medicare Advantage ($117 billion), which will result in a 70% reduction in benefits.
  • Premium insurance plans will be taxed at 40% above set limits (expected to raise $201 billion in new taxes).

Real legislative language won’t be available until after these “concepts” are merged behind closed doors with an earlier version passed by the Senate Health Committee.

Physician groups, such as the American Academy of Ophthalmology, have now “taken the gloves off” to oppose the Senate Finance Committee bill. The insurance industry is finally waking up to this grave threat. Docs, hospitals and insurers made a TERRIBLE strategic mistake trying to cut their own deals with Congress. Now the true dangers of this government takeover are being exposed and the future of private health care in America is under fatal attack.

Within a few weeks we will likely see a consolidated Senate bill, as well as a House bill (consolidating three different versions) brought to the floor for a vote. Contacting your Representatives and Senators more critical than ever!

Source: The American Policy Roundtable, October 15, 2009.

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The Constitution, Federal Legislation, and Ohio

Posted on October 14, 2009 by | Leave a comment

By Matt Meyer

“First do no harm” should hang above the halls of Congress. Unfortunately, those four simple words aren’t a consideration in our nation’s capital. How else could you explain the budget-busting global warming and national health care bills currently dominating the public debate? Separately, each measure is fiscally irresponsible. Taken together, the bills will devastate Ohio’s weak economy and place enormous unfunded mandates on the state’s Swiss cheese budget.

First, there is the Waxman-Markey cap-and-trade bill. With Ohio’s natural abundance of coal, almost 90% of Ohio’s energy is produced by CO2 producing coal-fired power plants. Those power plants feed electricity to what is left of Ohio’s manufacturing plants, which produce still more CO2 emissions. All of that production translates into jobs. On the renewable energy side of the fence, Ohio isn’t blessed with an abundance of sunshine, consistent wind, or powerful rivers to power solar panels, wind turbines, or hydro plants. Although Ohio currently has two nuclear power plants, there appears to be no political will to build additional nuclear power plants.

Given these irrefutable facts, it is hard to imagine a scenario in which Ohioans don’t suffer increased costs, job losses, and economic decline should the cap and trade bill pass. Unlike the future made-in-Hollywood catastrophes portrayed by the global warming crowd, those costs, losses, and decline will be immediate and real for Ohioans.

On health care, Medicaid spending already consumes 39% of the state budget. The Baucus national health care bill would restrict Ohio from setting eligibility requirements, which would increase the load on states by $37 billion according to the Congressional Budget Office. Because Ohio is the seventh largest state and possesses an anemic economy, a big slice of that $37 billion will fall on Ohio taxpayers.

With these enormous economic stakes, Ohio’s two senators must put aside partisan urges, resist trendy but illogical policy options, and work toward solutions that are in the state’s best interests. To do otherwise is not only bad for Ohioans, but would actually go against the Founders’ original intent for the Senate when it was first established in the Constitution.

For America’s first 126 years, U.S. senators were elected by state legislatures. The reason rests in the Founders use of checks and balances to keep the political system in harmony. With U.S. representatives elected by popular vote in apportioned districts based on each state’s share of the total U.S. population, the House served as the place where the “will of the people” ruled. In theory, if a handful of large states with a majority of representatives banded together, they could pass legislation harmful to the other states.

In the Senate, however, to check the tyranny of the majority, the Founders allocated each state only two senators, thereby structurally blocking large states from riding roughshod over the smaller states as could happen in the House. To further check the accumulation of power in the federal government, the Founders placed the election of senators in the hands of state legislatures who would ensure that those individuals elected to the Senate would protect the interests of the states regardless of what the passions of the people wanted. For example, a majority of people in a state may want a federal program that individually costs them very little in taxes, but would place large unfunded costs on the state.

In 1913, the passage of the 17th Amendment altered this finely tuned structure by placing the election of senators in the hands of the people. Not surprisingly, shortly after this structural change to the Constitution, the era of big government in Washington, D.C. unchecked by the states began its march. Congress went from the New Deal to the Great Society to the era of unfunded mandates to today when Washington simultaneously considers bills that would nationalize 17% of the U.S. economy, and imposes additional burdens on our energy production just months after exploding the federal deficit, nationalizing car companies and banks, and passing the largest single year budget in American history.

So, how could Ohio’s senators or senate candidates support legislation like the Waxman-Markey or Baucus bills? When they no longer have to be accountable to the state they represent because it has no power to check their votes (i.e., a legislative threat not to reelect them should they vote yea), they can place other special interests and even their own ideological views ahead of what is best for Ohio, its economy, and its citizens.

The irony, of course, is that these “reforms” will hit Ohioans regressively so that the very middle class workers and poor that they claim to fight for will be hit the hardest.

Source: Buckeye Institute Weekly News Digest, October 12, 2009.

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Strickland’s Tax Proposal Not the Answer

Posted on October 8, 2009 by | Leave a comment

By Marc Kilmer

Months after a contentious legislative session that struggled over balancing the state budget, Ohio is still facing a deficit. To deal with this, Governor Ted Strickland has proposed postponing scheduled tax cuts. He says the only other option is to cut spending. But what if there was a better way of dealing with these budget problems? If state policymakers would have taken steps to reform the bloated state bureaucracy, Ohioans would not be faced with this ongoing budget mess.

There were over 182,000 people employed by the Ohio state government in 2007, the last year for which numbers are available from the Census Bureau. Another 546,000 were employed by local governments. Your taxes pay the salaries of each of them. On the whole, these are hard-working people who do a good job and help provide necessary services. They are well-compensated for these services, though, and they receive good fringe benefits. No one is saying these government employees should not be paid for their services. But if their compensation was more in line with the private sector, taxpayers would see significant savings.

For instance, state employee salaries have risen faster than salaries for other Ohio workers. From 2001 to 2007, Ohioans’ per capita income rose 21%. State employee income, however, rose 27%. If state employees’ income would have risen at the rate of the rest of Ohioans, the state government would have spent $413 million less this year. And if the number of state employees remained at its 2001 level, the state would have spent $648 million less this year.

Considering that Governor Strickland is talking about $844 million in reduced education spending if the proposed income tax cuts take effect, it’s clear that the growth in state government employment is a significant contribution to the present budget problems. If state policymakers would have applied the brakes to state hiring over the past eight years, there would be no need for the governor to be discussing raising taxes.

Of course, if the number of state employees remained at its 2001 level and their compensation grew only as much as the rest of Ohioans’ compensation, this would translate to even more than $648 million in reduced spending. There would also be savings from the fringe benefits these employees receive, such as health insurance and pensions. And if these benefits were more in line with the private sector, state taxpayers would see even larger savings.

Take state employee health insurance, for instance. Government workers receive good health insurance coverage and they only pay an average of 15% of their premiums. In the private sector, employees pay closer to 30% of their premiums. If state employees were more like private sector employees, that would save taxpayers around $150 million this year.

Government employees should certainly be compensated for their services. But there is no reason why they should have better pay and benefits than they would receive in the private sector. When there is such a large gap between the state government’s spending and revenue, state policymakers need to review the generous compensation and benefits received by state employees and look for ways to rein it in. A hiring freeze, reducing the rate of salary increases, and paring back benefits to private sector levels are not radical propositions. In fact, it’s just common sense.

Source: Buckeye Institute Weekly News Digest, October 5, 2009.

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Why Darwin’s propagandists oppose the book The Mystery of Life’s Origin

Posted on October 6, 2009 by | 1 comment

Propagandists for Darwin’s theory often claim their opponents are unscientific. They claim their opponents never offer science an alternative theory. They criticize their critics for their continual criticism. This is true of Eugenie Scott, PZ Meyer, Richard Dawkins, and the like.

I have noticed one so-called creationist work often mentioned and criticized by Darwinian propagandists. That work is The Mystery of Life Origins: Reassessing Current Theories by Charles B. Thaxton, Walter L. Bradley, and Roger L. Olson. Therefore, I bought that book and have been reading it.

While reading the first chapter, I began to realize why this book is a problem to Darwin’s propagandists. First, a better sub-title for the book would be Reassessing the Current Theories of Chemical Evolution. That is the actual subject of the book and for good reason: its authors are all professional chemists, evangelists or philosophers. Second, these authors identify the scientific community’s problems with chemical evolution, the statistical improbability of the evolution of cellular life by random chance, the lack of evidence for evolutionary predestination based on finding life on other planets, and the most troubling problem is with the nature of information available to and present by origin science theories.

Quoting preeminent scientists like George Gaylord Simpson, philosophers of science like Karl Pooper, and the prestigious scientific journal like Nature, the authors demonstrates the evolutionary theory of origins is mere speculation, which is exactly the claim made by Darwin’s propagandists against Intelligent Design. If you have watched the documentary Expelled, then you know they also admit they do not know how life actually began.

Consequently, the theories of Creation Science and Intelligent Design are as scientific as is the theory of Evolution to the extent the scientific community (meaning academia, big business, and government) produces and allows observational research by which to verify various theories. To test the plausibility of any theory and its inferences, real scientific research and publication of findings is required; but if it is prevented by the status quo in academia and society, academic and intellectual freedom is denied.

That is the underlying issue of the Evolution v Creation debate. It’s about philosophical views and the suppression of intellectual freedom. It’s bad politics as the many court cases hindering academic and freedom. According to Darwinian propagandists like Eugenie Scott, these cases presumably prove that the Creation Science and Intelligent Design theories are just religious theologies pretending to be science. Decisions of judges are not scientific judgments either.

The belief in a Creator of the material world and that the Creator intervenes in nature to direct or repair it is not illogical. To the members the Continental Congress of this nation, it was self-evidently rational. For a magnificently complex universe and life in it to come about by random accidents was self-evidently irrational. The proposition of Darwinian evolution that life developed by random chance mutations is still illogical as well as unproven. Complex machines do not just assemble themselves by accident. They are purposefully made according to a predetermined design according to ability and knowledge (information).

I have also noticed that all Origin theories, even the Genesis account, always assume preexisting material, organism, or universe from which our world and life in it came into existence. Both name elements and components, describe processes, identify sources, and employ reason and observation. Prior to Darwin and the rise of atheistic secularism, scientific discoveries were expected to give scientists and society a greater understanding of the Creator and his purpose(s) for creation. That is why religion is not a hindrance to science. On the contrary, it is only a hindrance to unethical scientific agendas.

If as David Bohm theorizes, the entire blueprint of the universe and all forms of life exist in every part of nature. Then, its source must have been very intelligent and skillful. Evolutionists like Richard Dawkins speculate that an intelligent being or being could have been the source. Others called that being God. For still others, their personal experience of God verifies their belief. Seeing that millions of people around the world for two millenniums have repeatedly have experienced the same verification, should not God then be regarded as an empirical fact?

Sources: Eugenie C. Scott, “American Antievolutionism: Retrospect and Prospect” in Evolution: The First Four Billion Years, Michael Ruse and Joseph Travis, eds., Cambridge, MA: Belnap Press, 2009): pp. 370-399; Expelled, No Intelligence Allowed, DVD, directed by Nathan Frankowski (Universal City, CA: Vivendi Entertainment, 2008); The Mystery of Life’s Origin (Dallas, TX: Lewis & Stanley,: 1984): pp. 1-7.

Note: I found “Evolution” at the Xenia Library but I could not find “Mystery,” but I did find it at the downtown Montgomery County Library. Other Greene County Libraries have “Expelled,” but the Xenia Library seems to prefer to spend tax dollars on Evolution.

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Good News-Ohio Unemployment Rate Drops 10.8%; Bad News-It’s still Above 10%

Posted on September 28, 2009 by | Leave a comment

According to a 20 September report in the Dayton Business Journal, the Ohio economy faces some positive development in the labor market. Ohio unemployment dropped a whopping 0.4% from 11.2% in July to 10.8% in August.

That’s the good news.

The bad news is the unemployment rate is still well over last year’s rate of a mere 6.7%.

The multiple million dollar question (that represents loss of income) is whatever happened to full employment? That is the employment of all able-bodied citizens. I would include domestic labor such as stay -at-home moms and homemakers as among the employed. Could it be that the welfare state needs unemployment for its beneficent rule?

What scares me is the possibility that the devil really is in the details. As reported by the Dayton Business Journal, “Nonfarm payroll fell about 30,100 jobs to 5.1 million employees from 5.13 million in July, while the ranks of Ohio’s unemployed – those without jobs and actively looking for work – fell to 641,000 from 666,000.” See, 666 x 1,000 probably means there are a thousand devils ruining Ohio jobs. Some people seem to think that if you add up all politicians including lobbyists the number equals about the same.

I’m not blaming the Dayton Business Journal for preaching this bad news in a positive way for one simple reason: they were simply reporting what the Jobs and Family Department of Ohio reported. For example:

“A decrease in Ohio’s labor force was a primary factor in the drop of the August unemployment rate,” department Director Douglas Lumpkin said in a release. “The unemployment rate declined as the number of service-providing and goods-producing jobs decreased and fewer Ohioans were actively seeking work.”

Did you notice the double-speak oozing out of that statement?

I always thought a reduction in the labor force resulted in an increase in the unemployment rate, but not in Ohio. If you get depressed or otherwise sick of trying to find work, it means you are non-existent. It implies that members in the non-labor force are no longer independent citizens. They are nobodies in the statistical world of imperial politics. Such no-bodies may become some-bodies if they submit the imperial paternalism of the welfare state, which by the way, is run mostly by rich politicians and quasi-state institutions called national corporations.

The poor saps who have stopped looking for work are ba-a-a-d people. I can’t understand why anyone could quit looking for work in a society run by rich people who have intentionally worked to put people out of work by their wonderfully increasing debt producing policies that is making it nearly impossible for all but those bailed out by Chinese government loans to continue employing non-labor force people–go figure.

The government should thank those non-labor force people for making the unemployment rate look better than it is. Maybe it will assist political bureaucrats to convince foreign investors to continue loaning them more money.

The unemployed and the state’s economic dependents, however, will be unable to help pay back all of that beneficial debt that will continue to tax Ohio and American citizens’ economic prosperity without their full knowledge and approval.

Source: Dayton Business Journal, September 18, 2009

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Congressman Austria Co-Sponsors Czar Accountability & Reform Act

Posted on September 24, 2009 by | Leave a comment

As you may know, recent attention has been drawn to the administration’s appointment of new czars. While the position of the czar has existed in past administrations, the present concern is focused on the number of czars President Obama has appointed in his short time in office, as well as the amount of power these individuals are given. It has been estimated that there are currently 34 czars in the administration. Questions of constitutionality have arisen because czars are not required to go through the regular confirmation process as, for example, is required for a cabinet secretary. With sweeping new policies that have extensive ramifications, like the stimulus bill, it is important that these individuals are kept accountable to the public.

That is why Rep. Austria became a cosponsor of the Czar Accountability and Reform Act (H.R. 3226), which would prohibit the use of tax dollars to pay the salaries and expenses of these “czars” without the advice and consent of the Senate. There must be complete disclosure, transparency and accountability for those appointed to these important positions.

— From Congressman Steve Austria’s E-Mail Updates.

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3C is Going to Cost, Cost, Cost Ohio Taxpayers

Posted on September 23, 2009 by | Leave a comment

By Marc Kilmer

Hopping a train and riding from Cincinnati to Cleveland or Columbus certainly seems like a popular idea. Opinion polls show strong support for it, a wide variety of civic organizations are backing it, and people are coming to meetings excited to see the trains roll. All this begs the question, though — if passenger rail is so popular, why do Ohio’s taxpayers need to subsidize almost 60% of its yearly cost?

There is often a difference between what people say and what they actually do. It’s easy to tell a pollster you are in favor of something. That’s an abstract question. But when it comes to actually paying money to achieve that object or otherwise paying a cost for it, many times the actions people take differs from what they tell pollsters. Other priorities take precedence over this objective they supposedly strongly supported.

Passenger rail in Ohio is a perfect example of this. The government agencies and community groups advocating for rail routinely trumpet opinion polls showing the strong support for their position. Amtrak’s recently completed feasibility study of passenger rail in the state, though, shows that this supposedly strong support is an illusion.

Sure, passenger rail supporters claim otherwise. They say that since Amtrak predicts nearly 500,000 people will ride it every year, there is a huge demand for rail service. This number is a bit misleading, though, as it includes people who will make multiple trips a year on the train. As other passenger rail systems have shown, a small number of people make numerous trips. Usually these are higher-income workers who travel between cities for meetings. The vast majority of people who have access to passenger rail never set foot in a train station.

Even if there are 500,000 trips a year on this new service (a dubious proposition), those riding the trains would only do so if someone else paid for most of the cost of their ride. Passenger rail users in Ohio would only pay for 41% of the cost of operating the system. State taxpayers would be paying the rest. If you have a business selling a product for forty-one cents that costs you $1.00 to manufacture, then you don’t really have a product people want.

Of course, the situation gets even worse for passenger rail advocates. Not only would taxpayers be required to pay $17 million a year for a system that costs $29 million a year to operate, they would also be required to fund the system’s start-up costs, which would run close to $500 million. And given the history of rail projects around the nation, it’s almost certain these initial estimates will be exceeded by the actual cost of the project.

Rail enthusiasts claim that of course passenger rail will be subsidized by taxpayers, just like all other transportation is subsidized. What they overlook is that road transportation is almost entirely funded by gas taxes paid by drivers and other vehicle-related revenue such as car registration fees. Air travel receives a subsidy, certainly, but it is less than one cent per passenger mile. Rail, on the other hand, receives twenty-two cents per passenger mile. When it comes to fleecing the taxpayers for transportation subsidies, rail is king.

Ohio’s backers of rail contend that Ohio’s neighbors are proceeding with passenger rail so Ohio shouldn’t be left behind. It’s true that taxpayers in Michigan, Illinois, and other states are subsidizing passenger rail in their states. If these state governments are wasting money, does it mean Ohio should, too? Lawmakers in some of these states are reconsidering their support for passenger rail. Michigan, for instance, is looking to slash rail subsidies and rail ridership is declining. These states would be in a much better fiscal position if they would have never begun rail subsidies in the first place.

Passenger rail may sound good in theory but when it actually comes to paying for it, those who would ride it just aren’t willing to pay its full cost. With Ohio’s budget problems, it makes little sense to ask taxpayers to pay the tickets of the small minority of state residents who would take the train. Any way you look at it, if passenger rail returns to Ohio, only a few Ohioans will use it, but every taxpayer will be taken for a ride.

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