By Marc Kovac
Gov. John Kasich answered the $8 billion budget question Ohioans have been asking for more than a year, offering a biennial spending proposal that would fill the estimated shortfall through a combination of spending cuts and government reform.
Kasich released his first executive budget during a press briefing Tuesday afternoon, followed by an evening town-hall session in downtown Columbus.
Highlights included the end of billions of dollars in federal stimulus dollars and other one-time money, a resulting reduction in state funding for local governments and policy changes aimed at helping school districts, county commissioners and other public offices cope with cuts.
It also includes collective-bargaining reform, moving through the Legislature in a separate bill, and increased use of shared services among local offices.
“This budget is woven with one reform after another,” Kasich told reporters Tuesday afternoon. “It is, I would guess, the most reform- oriented budget presented in modern Ohio history.”
Kasich’s critics were quick to attack the governor’s spending plan, however.
In a released statement, Ohio AFL-CIO President Tim Burga said, “Kasich’s proposal calls for a huge overall decrease in money for education and major cuts to funding for local government services in every city across the state. ... [L]ocal governments will have no other options but to cut services and layoff workers or raise taxes to keep fire stations, hospitals, and libraries open.”
Brian Rothenberg, executive director of the liberal advocacy group ProgressOhio, said the proposal represented “the biggest shift in taxes onto local government in Ohio history.”
But Kasich defended the changes as necessary to position Ohio for future economic growth.
“We’ve been able to balance this budget each year for the two years as constitutionally required, and we did it without a tax increase, which allows us to be in a position where Ohio can compete for jobs, where we can expand the employment in this state and where people can have hope again,” he said.
The governor was required under state law to submit his executive budget proposal to state lawmakers by Tuesday.
It’s the first step in a legislative process that likely will stretch at least through late June, before the start of the next fiscal year, which begins July 1.
The executive budget outlines Kasich’s spending plans, with an eye toward dealing with an $8 billion funding gap.
The governor has outlined general revenue spending of $26.9 billion in fiscal 2012 and $28.6 billion in fiscal 2013, increases of 1.1 percent and 6.4 percent, respectively.
Medicaid (medical and related services to needy Ohioans) and school funding (primary, secondary and higher) account for the largest percentage of total general revenue fund spending.
State Budget Director Tim Keen said the spending proposal does not include across-the-board cuts to agencies, though many have reduced their spending by 10 percent to 15 percent.
“I believe that this budget thoughtfully allocates limited resources,” Keen said. “There’s a lot of reductions across the [general revenue fund] agencies. Most GFR agencies have less money in ’12 and ’13 than they did in fiscal ’11. However, it was not across the board.”
Kasich and other administration officials said they balanced the budget through a combination of spending cuts and reforms in four major areas: Medicaid, public education, local governments and prisons:
• Medicaid: The executive budget calls for better coordination of publicly funded health services, including physical, mental and long-term care; increased funding for care of seniors and the disabled who want to remain in their homes rather than nursing facilities; and improvements to Medicaid reimbursement rules.
• Education: Kasich will push for changes to teacher licensing requirements; rewards for teachers who excel in the classroom and potential dismissal for those who are failing; increased scholarships and community school options over public schools.
The budget proposes increases of 2 percent and 1.5 percent, respectively, over the next two years for basic funding to schools, though overall funding levels will be lower because of the loss of federal stimulus and other one-time funds.
The budget also caps university tuition increases at 3.5 percent for the next two years; increases university faculty teaching loads; and calls for establishment of three-year degree programs at state colleges and universities.
• Local Government: The executive budget would cut local government funds to $525 million in fiscal 2012 and $339 million in 2013. That compares to about $642 million in fiscal 2010 and $665 million estimated in the current fiscal year.
• Prison Reform: The governor also outlined plans to sell five state prison facilities, located in Ashtabula, Lorain, Grafton and Marion.
The governor also wants to create a statewide public notice website, to replace much of the advertising currently required in newspapers of record.
Kasich’s budget proposal calls for the lease of the state’s liquor wholesaling functions to JobsOhio, the new private nonprofit, headed by the governor and a board he appoints. The move would provide funding in coming years to pay for economic development initiatives to be absorbed by that office.
The budget proposes a reduction in the appropriation for public transit funding. The majority of these reductions, $2 million per year, will be taken from the eight largest transit systems in Ohio to minimize the effect to the rural and small urban systems that rely more heavily on General Revenue Funds. Youngstown’s WRTA is among the eight systems.
The spending plan, however, does not include the oft-discussed sale or lease of the Ohio Turnpike or other state resources, including the Ohio Lottery.
It also does not include the elimination of the state’s estate tax, one of Kasich’s goals. Nor does it mention the possibility of state-run slot machines at Ohio’s racetracks.