Tuesday, January 30, 2001

Taft unveils austere budget

Most agencies will see small spending increases

By Spencer Hunt
Enquirer Columbus Bureau

        COLUMBUS — Ohio Gov. Bob Taft wants to spend well over $1 billion more on schools, prisons and crucial state services for the poor, aged and disabled. That means state agencies that do not help teach, lock up or care for Ohioans face a lot of bad news in the two-year, $44.8 billion general revenue fund budget Mr. Taft unveiled Monday.

        While some boards and commissions face cuts, most agen cies would see increases averaging less than 1 percent.

        A slowing national economy, spiraling Medicaid costs and an Ohio Supreme Court order to fix the state's school funding system are the driving forces behind Mr. Taft's austere spending proposal, which now goes to the General Assembly.

        While the plan does not call for any tax increases, it assumes Ohio will join a multistate lottery, Powerball or the Big Game, next year to boost school funding. That might ignite a political wrangle between Mr. Taft and conservative lawmakers.

        “This is the tightest budget in a decade,” the governor said. “Our goal is to tighten our belts with minimal impact on essential state services.”

        The budget plan calls for no new taxes and would spend $21.8 billion during the fiscal year that begins July 1 and a little over $23 billion in the 2002-2003 fiscal year. Those figures reflect the state's lowest expected revenue growth in years.

        The budget contains Mr. Taft's $808 million spending proposal to reform school funding. The state faces a Supreme Court-imposed June 15 deadline to improve its system.

        The governor also recommended a $176 million in crease for universities and colleges over the next two

        years. Mr. Taft is recommending that Ohio State University be allowed to exceed the 6 percent cap on tuition. Ohio State reportedly wants to raise tuition by 9 percent.

        The budget would spend $102 million to increase funding at prisons. Mr. Taft also proposes $145 million more for programs that would help up to 4,900 seniors and mentally retarded Ohioans live outside nursing homes and institutions.

        Other state agencies must ponder some tough choices. At the Department of Jobs and Family Services, for example, agency leaders' options include hiring freezes, program cutbacks — even layoffs.

        “Those are all tools that could go into a belt-tightening process,” said agency spokesman Dennis Evans.

        Questions about the state and nation's business climate are at the core of Mr. Taft's spending dilemma. A strong economy that produced 7.5 percent growth in state revenues last year has sputtered and is expected to turn in only 1.1 percent growth through 2002.

        Tom Johnson, Mr. Taft's budget director, warned things could get worse before they get better. The second year of Mr. Taft's spending plan hinges on an economic rebound that would send more cash into state coffers.

        “As we all know, (an economic) soft landing is not guaranteed,” Mr. Johnson said. “If there is a recession, we will be back to revisit this budget.”

        Lawmakers, however, may find it difficult to enact some of the spending proposals Mr. Taft already has outlined.

        The governor's education budget counts on up to $70 million over the next two years from a multistate lottery Ohio has not yet joined.

        Millions that might otherwise be spent on Ohio Lottery games flow freely to neighboring states whenever Powerball and Big Game jackpots exceed $100 million. The state lottery must get lawmakers' approval before it can join one of these games.

        “I believe that if we don't join a multistate lottery, our lottery rev enues will continue to decline,” Mr. Taft said.

        That poses a problem for many religious groups and conservative lawmakers who are opposed to legalized gambling.

        “I do not believe games of chance bring security to a family, a school or a state,” said Sen. Doug White, R-Manchester, chairman of the Senate Finance Committee, which will play a key role in upcoming budget talks.

        State Sen. President Richard Finan, R-Evendale, supports the move. “It's the only way to have a chance to provide enough funding for primary and secondary education.”

        Another tough political fight may be waged over state Medicaid payments to nursing homes, an area the governor and agency leaders have targeted for cuts.

        The Enquirer reported payments to nursing homes increased $16.9 million, even though state records show more than one out every 10 nursing home beds went unused on any given day.

        Mr. Johnson said the governor would push for changes in the way that nursing home Medicaid payments are calculated.

Ohio's slowing economy reflected in budget

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