Ohio’s tight budget becomes painful reality

Published 10:10 am Thursday, July 23, 2009

For the past several months, as chairman of the Senate Finance & Financial Institutions Committee, I have been working with Governor Strickland and his Administration and my colleagues in the House and Senate to craft a balanced budget.

The process has been difficult to say the least.

Ohio has been hit especially hard by the global recession. Our state’s heavy reliance on manufacturing, and particularly the struggling auto industry has not only left many Ohioans out of work or worried about their jobs, but has caused state revenues to drop by historic percentages.

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Just days after the Senate was forced to cut $650 million to balance our version of HB 1 in early June, the Administration announced that the state faced an additional $3.2 billion shortfall.

The Governor, House Speaker Armond Budish and Senate President Bill Harris all agreed that increasing taxes to fill this budget gap would be devastating for Ohio families and businesses during these very tough economic times.

While I believe this was the best decision for the long-term success of our state, it meant that funding for some worthy state programs and services had to be reduced.

In addition to $2.4 billion in cuts unveiled by the Strickland Administration on June 19, the Governor also proposed an expansion of the Ohio Lottery to install thousands of video lottery terminals, or VLTs, at Ohio’s seven horseracing tracks to generate an estimated $933 million over the next two years. Key differences between Republicans and House Democrats and Governor Strickland about how VLTs should be implemented created a stalemate in the budget process, which pushed negotiations past the June 30 deadline and forced the Legislature to approve three seven-day continuing budgets to keep state government operating.

Most of my colleagues in the Senate and I preferred that the question of whether to allow VLTs at racetracks go before Ohio voters.

But, we maintained that if the Governor wanted to move forward with his VLT plan without a vote of the people, he had the power to do it through executive order as he did when he expanded the Lottery last year to include Keno.

After weeks of heated back and forth, the Governor determined on July 10 that he had the executive authority to allow VLTs to move forward.

It was the first time since 1991 that the budget had not been passed on time. Although state government was still functioning, services and projects were threatened. I know of several economic development projects that were in danger.

The final version of HB 1 provides stable funding for primary and secondary schools and higher education. While the Senate, House and Governor disagree about some areas of education policy, there is consensus that support for our schools should be a priority.

In addition, local government funding remained intact in HB 1, and we were able to restore $143 million in funding for Ohio’s libraries over the Administration’s “balanced budget framework.” While still significant, our libraries will receive an $84 million cut, instead of the $227 million cut the Governor proposed.

I voted for the budget, not with a glad heart, but with the realization that I did the best I could with the circumstances and personalities at hand. I do not think anyone was completely satisfied with the result, which is not unusual for a budget process.

There are a few items that did not get funding in HB 1 that I believe I have a responsibility to address.

For instance, both disability medical assistance for the poorest of the poor and post adoption special subsidies for parents who have adopted children with special needs were not funded. In addition, only about half of the funding for soil and water districts is included in the budget.

With this in mind, I recently introduced legislation with State Senator Dale Miller (D-Cleveland), who is the Ranking Minority Member on the Finance Committee, to fund these very important priorities. Senate Bill 155 would “decouple” Ohio law from recent federal tax law changes, which would save $20 million per year in foregone revenue to the state.

There will also be other legislation needed in the near future to deal with education, corrections and expansion of the Lottery. HB 1 keeps the state going, but gives the Legislature and Governor no time to relax or cause to celebrate.

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.