STEVE INSKEEP, host:
It's MORNING EDITION from NPR News. I'm Steve Inskeep.
RENEE MONTAGNE, host:
And I'm Renee Montagne.
We've been spending time with new governors in our occasional series on the challenges they face. In Ohio it's the worst budget crisis the state has seen in generations. And Republican John Kasich has just months to deal with it.
INSKEEP: That's because for the past couple of years federal stimulus dollars helped make up for Ohio's falling state revenues. Now the stimulus money has stopped and the state is looking at deep cuts in spending. NPR's Don Gonyea paid a visit to the governor.
DON GONYEA: Even before he took office, John Kasich signaled a blunt approach in dealing with the deficit and public relations. This is from a speech to the Ohio Farm Bureau last month. He's talking about a favorite target of politicians everywhere, the so-called special interests.
Governor JOHN KASICH (Republican, Ohio): They think they're going to be able to carve out their little piece of pork. They think they're going to keep their snouts in that trough. If they do, you lose, we all lose. I'm not going to stand for it.
GONYEA: Already a deadline looms. The law requires a balanced budget. A proposed new spending plan to eliminate a projected $8 billion shortfall needs to be submitted by mid-March. Still, Kasich says this is what governing is all about. And in his inaugural address he seemed to relish the challenge.
Gov. KASICH: Get ready for an exciting time. Put on the seat belt, because we're going.
GONYEA: Kasich spent nine terms in the U.S. House, where he chaired the budget committee. After leaving Congress a decade ago, he went to work for the now-bankrupt investment firm Lehman Brothers. Kasich also once hosted a weekly show on the Fox News Channel.
He got elected with just 49 percent of the vote, ousting Democratic incumbent Ted Strickland. Candidate Kasich tapped into long-term economic anxiety in Ohio, where the jobless rate is now just below 10 percent but was in double digits for most 2009 and '10.
Ohio State University's Paul Beck says you have to go back to the 1930s to find a budget crisis so serious in the state.
Professor PAUL BECK (Ohio State University): So it's a real challenge. It would've been a big challenge for any governor. I think it's a big challenge for Governor Kasich in particular, because he's already said he isn't going to raise taxes.
GONYEA: The state of the economy, and nearly 400,000 lost manufacturing jobs in the past decade, have hurt revenues and driven up demand for services in Ohio. Governor Kasich says government can work better with less. As for what is on the chopping block...
Gov. KASICH: We look at everything. We look at privatization. We look at killing things that don't work. There's just no options that are off the table, except tax increases, because we can't stomach them.
GONYEA: Under scrutiny are aid to cities, funding for education, possibly privatizing the Ohio lottery or leasing out the Ohio turnpike. That's just a partial list. Kasich also thinks huge savings can be gotten through changes to the Medicaid. And he promises to take on public employee unions and their pension and benefit plans.
Gov. KASICH: And of course the need to have civil service reform, which is bankrupting a lot of our cities through things like binding arbitration.
GONYEA: The pushback has already begun.
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GONYEA: About 300 people representing a coalition of groups, including unions, protested outside the state capitol recently. They argued that the cuts Kasich is considering will disproportionately hurt working people and the poor.
State Representative Bob Hagan is a Democrat from the blue collar city of Youngstown. On Kasich's approach to the budget he says...
State Representative BOB HAGAN (Democrat, Ohio): To the victor go the spoils, and I understand that.
GONYEA: Republicans control the Ohio House and Senate. Hagan says given the budget situation, it's wrong to continue to continue to give big tax breaks to higher income residents when they've benefitted so much from big tax cuts over the past decade. His message for the governor...
State Rep. HAGAN: I think he has to be reminded that he only got 49 percent of the vote. That's not quite a mandate. I really want him to understand that there are a lot of people that could really be hurt and devastated by this.
GONYEA: At a statehouse luncheon for Ohio lawmakers from both parties, Kasich asked Democrats to work with him on the budget. But he also stated a political reality.
Gov. KASICH: Let's just be honest. Many of you are not going to go for this budget we're going to do. OK? I got that. That's cool. Republicans are going to probably carry most of the load. I hope I'm going to be wrong.
Gov. KASICH: Kasich did say to lawmakers he'll never let political differences get personal. But that doesn't mean Ohio isn't in for some bruising political battles. And they begin right away.
Don Gonyea, NPR News.