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Budget director questioned

By Marc Kovac

Thursday, March 17, 2011


• Area workers gather to voice concerns

• Tax phase-out unpleasant surprise for schools

• Worker benefits fading

• Kasich's spending blueprint demands legislative scrutiny

• Budget director questioned

Executive Proposed Budget for FY 2012-13

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Executive Budget for Fiscal Years 2012 and 2013

By Marc Kovac


Democrats in the Ohio House questioned Gov. John Kasich’s budget director Wednesday about the impact of funding cuts to schools and local governments under his proposed two-year, $55 billion-plus spending plan.

The first day of hearings before the House’s Finance Committee provided a snapshot of the debate to come over a biennial budget that includes a mix of law changes, program reforms and spending cuts aimed at filling an $8 billion budget deficit.

“I know you refer to it as the jobs budget,” said Rep. Matt Lundy, a Democrat from Elyria. “I see it more as the jobs buster. We’re talking about local government funds getting cut 50 percent, which would have a negative impact on police and fire, cuts in education that would impact teaching.”

But Tim Keen, head of the state’s Office of Budget and Management, countered, “If you believe that government is the way for Ohio to grow our way to prosperity, then perhaps you need to have some concerns. If you believe that free markets and allocation of resources to help businesses grow, then this is a bill that you should support.”

Keen was the first committee witness on House Bill 153, legislation that will outline state spending over the next two fiscal years. His testimony kicked off legislative proceedings on the budget that likely will stretch into late June.

Kasich’s executive budget includes general revenue fund appropriations of $26.9 billion in the first year and $28.6 billion in the second, increases of 1.1 percent and 6.4 percent compared with year-earlier spending.

The budget secures income-tax cuts that were postponed by the previous administration, allows for the use of state liquor profits to fund economic development through the new JobsOhio nonprofit, calls for increased funding of in-home senior care and other reforms to Medicaid programming, and proposes the sale of five state-prison facilities.

The administration has not yet released spreadsheets showing how individual school districts, universities or local governments would fare under the budget proposal.

Keen said direct state formula funding for school districts would increase 2 percent and 1.5 percent, respectively, in the next two fiscal years.

But he added that the loss of federal stimulus and other one-time money used to balance the last biennial budget would have an impact on overall funding of schools and local governments.

According to documents, local government funding will decrease to $526 million in fiscal 2012 and $339 million in 2013, down from $642 million in fiscal 2010 and an estimated $665 million in 2011.

That proposal prompted numerous questions from Democrats on the House Finance Committee, who voiced concern about the impact on local governments and school districts.

“My concern, obviously, is that we’re going to see 600-plus levies across the state to raise revenue and we’re going to see property tax increases to pay for this,” said Rep. John Carney, a Democrat from the Columbus area.

But Keen said the governor made it clear that federal stimulus funding would not be a part of the next budget.

“That should have been clear to people from the time that [the last biennial budget bill] was put together and built that money in,” Keen said. “This should be no surprise to anyone. I’m not sure that local communities need to be talked to, unless folks have lived in caves. This money is gone, and people should have been preparing for it.”

Keen added that he didn’t think the changes in the budget would require new levies and increased local property taxes to make up the difference.

Instead, law changes proposed in the bill and others already making their way through the Legislature — collective-bargaining and pension reforms, for example — could provide a means for local governments to control their costs.

“To me, it’s not a definite state of affairs that districts must go to the ballot and pass levies,” he said.

“Perhaps districts should look at their operations and look at their costs. Perhaps they should avail themselves of some of the tools that the General Assembly is in the process of providing them or that are contained in this budget bill to contain their costs.”