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Governor s plan to stop Ohio budget bleeding could mean slashing 2,700 jobs

COLUMBUS Ohio would close two mental health institutions, slash as many as 2,700 state jobs, and introduce state lottery-operated electronic gambling devices in bars under Gov. Ted Strickland s plan to stop the state s budget bleeding.

The proposal unveiled Thursday morning is designed to patch a potential $733 million hole in the state budget by June 30, 2009, the best-case economic scenario outlined two weeks ago by his budget prognosticators. If the hole gets bigger, the governor said the state will tap $1 billion in budget reserves meant for just such a "rainy day."

His administration s worst-case scenario, one that has the nation dipping into recession, projects a $1.9 billion shortfall.

The plan calls for the state to close two mental institutions in Dayton and Cambridge and would open new units at other institutions, including one in Toledo, to accommodate those displaced.

Mr. Strickland said the institutions, given their condition and other problems, are unlikely to ever reopen. They are expected to close by the start of the next fiscal year on July 1.

He also drew a distinction between the lottery-run electronic games and the video independent gambling devices that the state all but outlawed recently.

"I m making a distinction, which I think is a legitimate distinction, between casino gambling or other kinds of gambling and the lottery, which is an activity that was voted on by the people and the people have supported for a long time," he said.

He and his budget director, J. Pari Sabety, said the state-run machines would be heavily regulated and monitored by the Ohio Lottery Commission, the profits of which are dedicated to schools.

That, they said, is different from the cash-paying, unregulated video games like Tic Tac Fruit that had proliferated in bars, arcades, and other locations prior to the state crackdown last year.

The lottery-run "Keno and other monitor games" would be permitted in bars and other "age and time-controlled settings."

Off limits to budget cuts are the state s new expanded property tax cuts for senior citizens and the disabled, a tuition freeze for college students, basic subsidies for schools, and expanded health care for children.

The governor also has no plans to interfere with the ongoing tax overhaul that began before he took office, despite arguments that the state would have as much as $1.6 billion more in its coffers today to work with if the changes had not taken place.

"I certainly believe [the reform] has not delivered on its promises fully, but I felt it should be given time to work," he said. "I believe there are indications in Ohio that it is beginning to have a positive effect."

There will be "significant" job cuts within the already overcrowded prisons system, but Mr. Strickland said he s been assured those cuts will not affect correctional officers, mental health workers, or other positions involved in safety and security.

The governor said total job reductions throughout government could range between 1,500 and 2,700. The first priorities will be to let current vacancies in non-essential positions go unfilled and to offer early-retirement incentives. Despite this, the involuntary layoffs are expected to number in the hundreds.

"I know the decision I ve made today will be disruptive, frightening, and painful for many of my fellow state employees," Mr. Strickland said.

"I want you to know that I would not have made any decision today regarding budget reductions that I did not feel was absolutely necessary for the good of the state and the people of Ohio."

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.

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