More tough decisions ahead for budget

Published 10:02 am Thursday, June 18, 2009

With only days left before the General Assembly has to send a balanced budget to the Governor for his signature, legislators were told this past week that based on updated tax revenue estimates, the state faces a multi-billion dollar budget shortfall over the next two years.

Office of Budget and Management Director, Pari Sabety, and Mark Flanders, who is the Director of the non-partisan Legislative Service Commission, delivered the somber news on June 11 during the first meeting of a joint conference committee on House Bill 1 — the state operating budget for fiscal years 2010-2011.

This committee must work over the next two weeks to reach agreement on 579 differences between the House and Senate versions of the budget.

Email newsletter signup

As Chair of the Senate Finance & Financial Institutions Committee, I was chosen to serve as co-chair of the conference committee.

Director Sabety testified that OBM tax revenue estimates are now $2.3 billion lower than when the Governor’s budget was introduced, and her office projects that there could be a $3.2 billion budget gap over the biennium.

However, she said that “the exact size of this gap is dependent on substantial differences between the House and Senate versions of HB1 in education and Medicaid that [the conference committee] will be reconciling in the days ahead.”

She added, in response to a question from the committee, that if you factor out cuts that were made in the Senate’s version of the budget, the shortfall would be “in the neighborhood” of $2.5 billion.

Director Flanders, on the other hand, said that the state could see $2.6 billion less in tax collections and other revenue sources over the biennium.

However, after the hearing, staff from the House and Senate met with Director Sabety, and it became clear that depending on whether the conference committee uses LSC or OBM projections, the actual shortfall number is between $3 and $3.2 billion.

Former President Dwight Eisenhower used to say “give me a one-armed economist,” because he got so frustrated with his economists always giving him two sides of the argument.

With only one hand, they wouldn’t be able to say “but on the other hand…”

As I try to digest all these numbers and the different scenarios that could impact the final budget picture, I know how President Eisenhower must have felt.

What is clear in this situation is that no matter if the shortfall ends up being $2.5 billion, $3 billion or $3.2 billion, the House, Senate and Governor have a tremendous challenge ahead.

My colleagues and I in the Senate had to make many difficult decisions over the past several weeks, cutting funding for good programs we have long supported, to ensure our budget—at the time—was balanced. While the Senate’s work to eliminate earmarks and dramatically reduce state agency administrative expenses helps set the tone moving forward, the Legislature and the Governor have many more tough decisions ahead to ensure the final version of HB 1 is balanced.

The conference committee has roughly two weeks to reach an agreement on HB 1 and issue a report to the full General Assembly detailing the changes that were made to the bill.

The House and Senate then have to approve the conference committee report before it is sent to the Governor, who has to sign HB 1 by June 30.

As a member of the conference committee, I will continue to do all I can to help protect against a tax increase on Ohio families and work with members of the House and the Governor to pass a budget that is sustainable, fiscally-responsible and does what is right for the future success of our region and the entire state.

John A. Carey is a member of the Ohio Senate and represents the 17th District.He can be reached at Ohio Senate, Statehouse, Columbus, Ohio 43215 or by phone at (614) 466-8156.