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Published: Friday, 6/22/2007

Legislators told to cut $167M from new budget

BY JIM PROVANCE
BLADE COLUMBUS BUREAU

COLUMBUS - Ohio lawmakers have a $167 million hole to patch in their proposed $52.3 billion budget due to reach the governor's desk next week.

Stagnant employment and wages, a dip in cigarette taxes blamed on the smoking ban, and the housing market slump prompted Gov. Ted Strickland's budget director yesterday to lower Ohio's anticipated revenue estimates by $431 million over the next two years.

After factoring in an anticipated surplus for the fiscal year ending June 30, a pay freeze for nonunion state workers, and some lower-than-expected spending for Medicaid and schools, the administration figures the budget that the Ohio Senate recently passed is still $167 million short.

The newer numbers were accepted with nary a blink by the bipartisan House-Senate conference committee charged with hammering out a compromise between the differing versions passed by the two chambers.

Some conference committees in prior years had been greeted with far worse news just as they thought they were nearing agreement on a budget.

"On a [$52] billion state budget, this is a decrease of less than half of 1 percent,'' Budget Director J. Pari Sabety said. "If it's a trend, it's something we're going to have to monitor.''

The lower numbers, however, may dampen the hopes of social service advocates that government-subsidized health insurance could be extended even further than now proposed for children and working-poor parents.

Rep. Dale Miller (D., Cleveland), a conference committee member, noted that the $167 million hole would have been $110 million shallower if lawmakers hadn't removed some of the tax changes Mr. Strickland had proposed.

Among them were a decrease in the sales tax discount compensating vendors for collecting the tax for the state and the elimination of a current sales tax exemption for automobiles purchased by nonresidents and taken across state lines.

The Republican-dominated committee is unlikely to restore those tax changes, said its chairman, Rep. Matt Dolan (R., Novelty). "That would not be the General Assembly's desire,'' he said. Instead, the committee will look at reducing spending in the Senate's proposal and examining some cash-flow maneuvers suggested by Ms. Sabety.

"As we commit ourselves to reconciling our differences over the next few days, we must abide by the principles which brought us here - to live within our means and invest in what matters,'' Ms. Sabety told the committee.

"It is those principles, accompanied by a high level of bipartisan partnership, that has resulted in the first budget voted out of both houses of the legislature unanimously [in 83 years],'' she said.

Mr. Strickland's budget proposal unveiled in March carried a $52.9 billion price tag. The House responded with a $52.1 billion plan that kept much of Mr. Strickland's core proposals intact and built on his higher education plans, but rolled back some of his Medicaid and economic development proposals.

The Senate's $52.3 billion counterproposal restored many of the economic development programs and further enhanced college and university spending to the point that student tuition would be frozen at current levels for the next two years.

A budget must be enacted by June 30.

Contact Jim Provance at:

jprovance@theblade.com,

or 614-221-0496.



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