Unrealistic optimism about revenue helped dig the deep budget hole out of which Ohio legislators and Gov. John Kasich are hoping state government can climb during the next two years. Fortunately, the years of relying on money that wasn't there seem to be over.
State tax receipts for July were $1.24 billion, higher than for the same month last year - but lower than had been expected. With the two-year budget cycle just beginning, the state already is $16 million short of revenue needed to support spending plans.
Doing the math indicates that at that rate, the two-year budget could record a $384 million deficit. Or it could be worse.
News on the economy during recent days has been anything but cheery. Stock markets seem to be in a free fall. Standard & Poor's decision to downgrade the federal government's credit rating could ripple through the entire economy, including state governments, businesses and households. There is talk of a "double-dip recession."
No one wants that, of course. But even a slowdown not on the level of a recession would affect state government revenue, possibly severely.
Kasich is right to have adopted a cautious attitude. He told a reporter this week the state has to "be prepared to take action if our revenue starts to fall off."
Against the background of spending cuts already made to balance the budget, additional corrections would be very unpopular. Still, Kasich and legislators should be ready to act quickly if what happened last month becomes a trend. Again, false optimism about the budget has been demonstrated to be a serious mistake - one that should not be repeated.