Maybe the Ohio Office of Budget and Management is relying on Arthur Andersen for accounting advice. How else to explain the agency's creative, and seemingly illegal, maneuver to balance the state budget by delaying tax-relief payments to school districts and local governments in at least seven counties.
By law, the state has to balance its books on Sunday, the end of the current fiscal year. Because cash is short, OBM is holding off the payments until after the new fiscal year starts Monday. In effect, the state is failing to pay its bills when due, to the tune of something like $100 million.
This tactic - nothing more than a smoke-and-mirrors accounting gimmick - is irresponsible and shortsighted as a matter of policy. Not only does it put the already-strapped state in the hole to start off the new fiscal year July 1 but it also could mean that school districts that don't get their state checks won't be able to pay their bills, forcing them to borrow temporarily.
And borrowing to stay ahead of the bill collector is something the Ohio Supreme Court ruled in its 1997 decision that schools can't be required to do.
For example, the North Royalton district in Cuyahoga County hadn't received $1.5 million it expected from the state this week, leaving the school system facing its own illegal deficit going into the weekend. In Cuyahoga County alone, schools are being temporarily shorted $58 million. The other counties involved include Wyandot, Mercer, Washington, Stark, Tuscarawas, and Union.
It is especially silly for OBM to be engaging in such maneuvers, given that the state is under the gun from the Supreme Court to come up with a solution to long-standing school-funding problems.
The state has gone through all sorts of fiscal contortions, including the unwise borrowing of money, to balance the budget while assuring adequate funding for primary and secondary education. Other sectors of state government have been stripped bare in the process. It is highly unlikely that holding up tax-relief payments is what the Supreme Court had in mind.
Equally silly was the contention by Gov. Bob Taft's press secretary, Joe Andrews, that Mr. Taft had nothing to do with the action, which he described as “an administrative decision” by OBM. “They're the ones charged with distributing the money.”
For Mr. Andrews' information, OBM works for the governor, and the bucks - all $100 million or more - stop on Mr. Taft's desk. If he isn't in charge, who is?