Thursday, April 26, 2001
School boost alters budget
Ohio's 'rainy day' funds tapped
By Spencer Hunt
Enquirer Columbus Bureau
COLUMBUS House Republicans hope to begin public debate today on a budget plan that would rely on hefty cuts and offer some some rainy day money to help spend $1.4 billion more on schools over the next two years.
The Wednesday decision was a win for Gov. Bob Taft, who wanted to use funds normally banked for a fiscal crisis to help fill a budget deficit and satisfy a court order to reform school funding. Fellow Republicans, House Speaker Larry Householder and Senate President Richard Finan, had previously refused to consider the idea.
Mr. Householder, R-Glenford, and House leaders continued to work on the plan Wednesday night to get it ready for a committee hearing. Although the governor's office offered support, it was not clear if Senate Republicans would embrace it.
House lawmakers praised the plan even as they tried to minimize the impact of cuts to agencies - particularly to higher education.
Ohio universities would lose more than $150 million in previously promised funding.
Lawmakers will try to soften that blow by lifting a 6 percent cap on tuition increases in the summer of 2002. Universities will be able to raise higher than the cap if they meet certain requirements, including a 55 percent graduation rate and a 75 percent freshmen retention rate.
That proposal has raised fears of massive tuition hikes statewide and brought more than 100 Ohio State University student protesters to the Statehouse Wednesday morning.
I wish we had more money to do things with higher education, State Rep. David Goodman, R-Bexley said. This is the best thing we can do under the circumstances.
Other state agencies would lose an average 1 percent in promised funds over the next two years, according to the House Majority Whip, Rep. Jim Trakas. The Independence Republican said some agencies would take across-the-board cuts while others would face more specific losses.
The Ohio Bicentennial Commission, for example, would see a $30 million 200th birthday celebration fund shrink to $12.5 million, Mr. Trakas said.
The House plan also would delay some promised tax breaks to bring in more money. Included is a $40 million corporate franchise tax credit businesses would have been able to claim for research and development costs.
The House plan would then dip into so-called rainy day funds the state has bankrolled over the years. The money is supposed to be used only during fiscal emergencies when tax revenues plummet.
A $100 million Medicaid emergency fund would be used up, according to Mr. Trakas. Another $150 million from the state's $1.1 billion budget stabilization would also be available to agencies on a contingency basis.
Mr. Trakas said agencies could spend the money if Medicaid costs exceeded projections. Rep. James Hoops, R-Napoleon, said the money might also be used to help upgrade state agency computers.
Jennifer Detwiler, a spokeswoman for Mr. Householder, insisted the Legislature wasn't balancing the budget with rainy day funds, stressing the $150 million would only be used if the state agencies decide it's needed.
Mr. Taft's office nevertheless praised the House decision to use rainy day funds.
The governor has said all along that's the way to go, said spokeswoman Denise Lee.
Mr. Finan, R-Evendale, still isn't convinced.
He remains firm in his commitment not to use the rainy day fund, said spokeswoman Lisa Peterson.
All the cutting and budget maneuvering was created in part by Ohio's slowing economy, which created a $562 million shortfall in the projected budget. The General Assembly also faces a June 15 deadline to satisfy an Ohio Supreme Court order to narrow the gap between the state's poor and rich schools.
Although the governor proposed spending $808 million over the next two years, he agreed to support a $1.4 billion spending package House and Senate lawmakers favor.
Officials said the latest plan would boost aid to school districts from $4,294 this year to about $4,814 per pupil next school year and $4,949 the following year.
The plan also provides $300 million in so-called parity money that would help correct the imbalance between property-poor and property-rich districts. Officials said 489 out of 612 districts would be eligible for the parity aid.
Even as lawmakers move forward, a coalition of schools and school officials that has twice successfully sued the state has already said it's not enough. The group plans to again fight the state when the Ohio Supreme Court hears arguments on the school funding system June 20.
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