Ohio forced to weather storm
Gov. Ted Strickland’s announcement earlier this week that another round of cuts to the budget is necessary goes to show what many economists have known for some time, which is the poor economic conditions for several years are catching up to the state.
Strickland ordered $540 million in cuts and adjustments because of revenue shortfalls. That move comes on the heels of $733 million in cuts that come in January. The total is more than $1.2 billion in cuts from the two-year $52 billion budget that runs through July of next year.
It is encouraging to see Strickland did not touch his expansion of children’s health care and the tuition freeze for students at Ohio’s state universities.
“We are making tough decisions but we are doing that while also protecting the core priorities such as investing in education, providing health care to our children and supporting tax reform that I believe will help revitalize our economy in the long run.”
The governor wants the cuts to come from three primary sources:
4He wants state agencies to cut 4.75 percent of their budgets.
4He wants to use interest earned from the state’s tobacco settlement funds.
4He wants to dip into the state’s rainy day fund for Medicaid funding.
The governor was quick to point out he did not want to tap too heavily into the $750 million remaining in the rainy day fund, and that is wise considering there are indications the state’s financial condition could worsen.
With the state’s economy heavily reliant on the housing market, the hope is the federal government’s seizure of mortgage giants Fannie Mae and Freddie Mac will bring some stability back to that area of the economy.
And despite the fact no state is escaping the financial troubles, it’s good to see Ohio’s priorities have not changed despite having to weather the storm.