Governor trims $733 million in state spending

Thursday, January 31, 2008 12:35 AM
By Mark Niquette and Catherine Candisky
THE COLUMBUS DISPATCH

Gov. Ted Strickland wielded his budget ax today in response to a souring economy, announcing agency-by-agency spending cuts to prevent a budget shortfall expected during the next 17 months.

His plan totals $733 million in cost savings and program reductions. If more are needed, Strickland said he would dip into the state’s rainy day” fund, which currently totals around $1 billion.

The governor also announced he will expand state-regulated gambling, such as Keno and similar Ohio Lottery games limited to adult settings like bars, which will raise $73 million during the next 18 months.

The General Assembly recently banned gaming devices similar to slot machines, but Strickland noted that his proposal would allow only state-regulated gambling through the Ohio Lottery Commission with proceeds supporting primary and secondary education.

Among the most visible cuts announced were the the closing of two mental health facilities, in Dayton and Cambridge.

Statewide, staff reductions will total between 1,500 and 2,700 workers. The cuts will come from positions not filled, buyouts, early retirements and layoffs.

Strickland said he doesn’t know how many involuntary layoffs may be needed but said “I would think it would be reasonable to think several hundred.”

The governor also issued new restrictions on hiring, travel, printing and equipment purchases.

“I believe today’s decision is the most common-sense approach,” Strickland said. “The budget reductions I’m ordering today represent real sacrifice.”

Strickland is protecting funding to primary and secondary schools, as well as colleges and universities so a tuition freeze can remain in effect. He also is pressing ahead with a planned expansion in children’s health care and restoration of dental benefits to adult Medicaid recipients. Other programs for the poor as well as a cutback in seniors’ property taxes also is safe.

The state will move forward with plans to expand the children’s health insurance program to cover children in families earning up to 250 percent of the federal poverty level, $42,925 a year for a family of three. Dental benefits to adult Medicaid recipients also will be restored later this year.

Planned Medicaid rate increases to hospitals remain on hold, but community providers, including doctors, will receive a planned increase, Strickland said.

The governor also will ask lawmakers to eliminate a 3 percent pay raise to homecare providers under the Department of Aging’s PASSPORT and Choices programs, which was scheduled for July 1.

Last week, Strickland announced new projections showing that the state faces a shortfall when the current two-year budget expires on June 30, 2009, ranging from $733 million to $1.9 billion depending on whether the economy shows low growth, zero growth or falls into a recession.

The governor is forced to make cuts because he so far doesn’t want to raise taxes or stop tax cuts enacted in 2005 – which are reducing state revenues each year as they are phased in by 2011.

The Ohio Constitution requires the state to end a biennium witha balanced budget.