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Sunday, June 8, 2003

Ohio budget: Senate's $49.3B plan


Fiscal crisis continues

In April, when the Ohio House passed a $48.7 billion budget that was a goofy patchwork of spending cuts, tax hikes and fiscal sleight-of-hand, we expressed hope that the Senate would take a deep breath and fix it.

Silly us. On Thursday, the Senate approved, by a 24-9 vote, a $49.3 billion plan that may out-goofy the House. It increases spending 11 percent over the current budget. Instead of real tax reform, it tinkers with a handful of exemptions, abatements and phase-outs. And it installs a two-year "temporary" sales tax increase of one cent on the dollar that shifts more of the tax burden onto lower- and middle-income Ohioans.

House Speaker Larry Householder, R-Glenford, says the Senate budget is too big, but it's only 1.23 percent bigger than the House's. Actually, both are too big: This week, the Office of Budget and Management reported that revenues are another $200 million behind for the current year, which ends June 30. Next week, the office will release even worse figures for 2004-05 that Householder warns will be "shocking."

The meetings to reconcile the House and Senate budgets this month won't be much fun. In particular, they will tussle over the House cuts in education and social services that the Senate restored.

A couple of longer-term predictions: State lawmakers will have to keep scrambling every few months to fix the 2004-05 budget. And about 20 months from now, they will begin to discuss making the "temporary" sales-tax increase permanent.

All this could have been avoided had lawmakers taken seriously the comprehensive tax-code reform Gov. Bob Taft offered in January that actually would have lowered income tax rates while broadening the tax base for the 21st century economy. They argued that tax reform should take place during good times, not a fiscal crisis. But now, with even gloomier revenue projections due next week, some are saying they may have to adopt more of Taft's plan after all.

Good. Ohio legislators have spent the past two years lurching from crisis to crisis. It's time they put their House - and their Senate - in order.




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