Strickland maps $56B budget plan

2/3/2009

COLUMBUS Gov. Ted Strickland proposed a $56 billion two-year budget Monday that would impose or raise 120 fees on Ohioans, take on more debt, slash funding for some state agencies, and divert nonviolent offenders away from state prisons.

He is urging lawmakers to give the Ohio Department of Transportation authority to place tolls on new road projects and to make failure to wear a seat belt a primary offense. That would allow police to pull over motorists for violations without having another reason for the stop, as well as allow the state to draw more federal highway funds.

The budget is dependent upon Ohio receiving more than $3 billion in aid from the federal economic stimulus package pending before Congress. When added to rainy-day fund emergency reserves and other transferred cash from various state agencies, the two-year budget would depend on about $5 billion in one-time money.

This is a stimulus package, said J. Pari Sabety, the governor s budget director. The goal of Congress and the President in proposing the package to states is, rather than being an additional challenge to the economy by laying off people and making draconian cuts to programs we are actually spending agents for the recovery.

Hence, the money can t sit somewhere, she said. It needs to be spent.

The economic stimulus funds represent 5 percent of total state revenue over the next two years and are the primary reason that state spending increases 4.4 percent on average over the next two years despite declining tax collections.

That is a significant concern, said Rep. Randy Gardner (R., Bowling Green), who had a chance to give the voluminous budget proposal a cursory study.

I agree that, if the federal government is going to send money to the state, most of it should be spent, he said. If there are severe economic conditions, why not guarantee every unemployed Ohioan either job training or at least a two-year degree? There s plenty of money to achieve this.

That way we would not be building [long-term] spending he said.

The governor s state-of-the-state address last week was for the most part the good news a greater role for the state in funding schools, tuition freezes in many cases for college students, expanded health coverage for uninsured children and some adults, and more tax credits for job creation.

But reality set in with yesterday s budget proposal as Ms. Sabety explained how the state would pay for all of this while also patching a projected revenue hole that could stretch as wide as $7.3 billion. A new budget must be in place when the next fiscal year begins on July 1.

Although the governor delivered on his promise not to raise taxes, the budget includes 120 higher fees for licensing, permitting, and regulatory oversight.

Vehicle owners would pay more to register their vehicles and sanitation trucks would pay higher fees to dump garbage at landfills.

To deal with prison crowding, Mr. Strickland s budget includes plans to move some nonviolent offenders away from state institutions into community and alternative sentencing programs.

Even with these changes, the state has proposed increasing spending for the Department of Rehabilitation and Correction by $100 million over the next two years.

The bottom line is, in order to keep Rehabilitation and Correction within the [fiscal years] 2010 and 2011 numbers proposed, we need to pass sentencing reform , Ms. Sabety said. Without passing that and without additional revenues, we would have to close an institution.

With the help of the federal stimulus package, promised higher federal matches, and new or higher fees on hospitals and nursing homes, the state would maintain Medicaid health coverage for the poor and infirm.

This is a high priority for the governor, especially in light of an economic situation unlike any we have faced in the past 50 years, Ms. Sabety said.

Nursing homes, however, weren t happy with the governor s plan to cut their rates for caring for Medicaid-funded residents.

In its current form, this proposal is devastating and likely to bankrupt some facilities and cause more facilities to further reduce skilled nursing services, said Alan Melamed, spokesman for the Skilled Nursing Care Coalition.

The budget proposal anticipates pay cuts for state workers as high as 6 percent, with those who are paid less receiving smaller reductions. The union representing most public workers is locked in negotiations with the state, but Ms. Sabety said the pay cuts also will apply to nonunion state employees, including the governor.

The budget also is based on an agreement that employees would pay 10 percent of the premium costs toward their vision, dental, and life-insurance benefits. The state currently picks up 100 percent of the tab.

While Ms. Sabety was delivering the grim news, Mr. Strickland was 140 miles away pitching his education reform proposals at Toledo Public Schools Grove Patterson Academy.

The school already has a longer school year than the state and national average of about 180 days but not as long as the 20 additional days the governor has proposed for Ohio schools.

Mr. Strickland has proposed replacing the state s unpopular Ohio Graduation Test with the ACT college assessment exam; requiring student projects, passage of end-of-course standardized tests, and community service as conditions for graduation, and reducing the minimum number of property tax mills that schools must levy from 23 to 20 mills with the state picking up the difference.

His budget would boost basic education subsidies by $321.5 million in the first year and $603.5 million in the second.

Ms. Sabety said reductions would take place elsewhere in the Department of Education because some costs that currently have separate line-items in the budget have been rolled into the governor s more comprehensive school-funding formula.

She said the state s share of local education would climb to 59 percent by 2017 if Mr. Strickland s education reforms are fully embraced by lawmakers.

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