“But Mom, all the other kids are doing it!” This could be the rallying cry of some officials in our local government. However, is this really the foundation upon which we should base our future?

Further, are “philosophical” questions related to good governance only appropriate at higher levels of government? Just because an edict from a higher authority says that something is legal, does that mean we should put the “pedal to the metal” and not ask whether what we are doing is right?

Discretion Is Still Required

• Technically, it was legal to raid the social security trust fund “lock box.” The first day they did it, it probably didn’t seem like that big of a deal. But, how does it seem now?
• Technically, it was legal to exercise little care for balancing the federal government’s budget or setting a cap on national debt levels. So we borrowed and we borrowed and we borrowed. How’s all that debt working out for us today?
• Technically, it was legal to defy fundamental principles of sound investing and invest in “dot com” companies that had no real assets or earnings. For a while, it even looked like a winning strategy. But it didn’t end very well, did it?
• CDO’s and government “backstopped” real estate transactions were legal too, right? “All the other banks are doing it!” So, banks threw caution to the wind – and simultaneously threw aside decades of standards for successful mortgage lending – and look where it got us.

Abandoning fundamental philosophies of free market capitalism and limited government is a lousy long term strategy, even if its legal and even if “everyone else” is doing it.

If we fully adopt the “its legal – then go for it” logic, we could believe Ohio is actually lagging behind California. After all, California has legally acquired $500 billion in debt while Ohio only has $8 billion. Think of all the economic development we could create with an additional $492 billion of debt!  Preposterous.

Choosing the Responsible Path

The government becoming an investor and an owner in private real estate may seem harmless today, but it forebodes an “East Germanesque” kind of future where government grows in size and influence and the private sector diminishes.

Consider this excerpt from Article 8 §6 of the Ohio Constitution:

“COUNTIES, CITIES, TOWNS, OR TOWNSHIPS, NOT AUTHORIZED TO BECOME STOCKHOLDERS, ETC.; INSURANCE, ETC. §6 No laws shall be passed authorizing any county, city, town or township, by vote of its citizens, or otherwise, to become a stockholder in any joint stock company, corporation, or association whatever; or to raise money for, or to loan its credit to, or in aid of, any such company, corporation, or association: provided, that nothing in this section shall prevent the insuring of public buildings or property in mutual insurance associations or companies. Laws may be passed providing for the regulation of all rates charged or to be charged by any insurance company, corporation or association organized under the laws of this state, or doing any insurance business in this state for profit.”

This citation appears to support the principle that government ownership and/or investment of taxpayer money in private business is a fundamental line that should not be crossed.  Private capital cannot hope to compete with the government over the long term. This is America – the government is not supposed to own the means of production!

Legally Diverting Funds – Everyone Is Doing It!

Consider again these questions and potential ramifications for diverting county tax revenues from their traditional course of distribution.

• Diverting funds from existing county services, stresses the budgets of those services and may cause them to appeal for more help.
• Pooled money created by diversion tends to cause a dissonance between what we can afford to buy and what we actually buy. For instance, would we have built the class “A,” marble floored, gymnasium included (i.e. that competes with local private business), bronze markered, wood paneled, architectural glassed, Civic Center in Union Township if we had bought only what we could afford through traditional means of funding?
• Using diverted or other forms of government “stimulus” funding on a case-by-case basis for special projects and deal making tends to create an uneven playing field in the marketplace.
• Scraping together diverted local funds for down payments in order to access state or federal matching funds should be done with extreme caution! For instance, are all the CCTID projects that are receiving matching funds (around $50 million+ in the next several years) absolutely necessary? Will a wider road or extra turn lane really bring more businesses to our area? How will we afford to maintain these tens of millions of dollars of new infrastructure in the future?
• Important also is the question whether anyone cares that both the state and the federal governments from whom we are getting the matching funds are broke? Doesn’t it matter that we are robbing future generations in order to fund short term projects of questionable utility today?

Making Fiscally Responsible Choices

Across all levels of government, we need to stop finding new ways to shamelessly spend money we don’t have! We need to work toward self sufficiency in our infrastructure outlays. We need to limit the scope and size of government. We need to establish a favorable and consistent underlying framework of conditions that are inviting to and promote free market capitalism.

Locally, we need to open up our area to all investors, not just the handpicked ones.  And, we need to keep the government out of private sector investing.

Such are the ways of fiscally responsible government.