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Ohio state budget (2009-2010)

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Ohio's governor signed the FY2010-11 state budget, which included general fund spending of $ 25.9 billion over the two years,[1] on July 17, 2009.[2] The state faced a structural budget shortfall that was projected to exceed $8 billion for the next biennium that started on July 1, 2011.[3][4] The FY2010 budget utilizes $8.4 billion of one-time funds.[5]

Ohio had a total state debt of $68,961,315,845 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[6]

2011 State spending & deficit in billions[7]
Total spending Health and human services Education Protection Government and tax relief Transport Other
$56.6 $25.2 $13.8 $2.2 $13 $1.1 $1.2

2011 Local spending & deficit in billions[8]
Total spending Pension Healthcare Education Welfare Protection Transport Debt
$63.2 $0.2 $4.4 $22.1 $6.7 $7.5 $3.5 $46.3

FY2010-2011 State Budget

See also: Archived Ohio state budgets

Three quarters of the way through the fiscal year revenue was 5.4% percent higher than estimates, approximately $627 million more than anticipated. In March of 2011, revenue was 13% higher than estimated.[9]

H.B. 1 was Ohio’s operating budget for fiscal years 2010-2011. This measure was signed by Governor Strickland on July 17, 2009.[10][11] The FY 2010-2011 operating budget was balanced without raising taxes on Ohio families or businesses.[12] The budget reduced state government spending by an additional $2.5 billion.[12] The budget also leveraged $5.8 billion in federal stimulus funds to avoid further job loss and further cuts to services and shifts a number of programs and agencies from GRF funding to fee- supported funding in order to make them more self-supporting.[12] The Legislative Services Commission said at least $1.5 billion in revenue came from higher fees, most which were the result of higher franchise fees for hospitals and nursing homes.[13]

Eight months into the fiscal year, Ohio's general revenue fund (GRF) tax revenues were 0.7% below estimates according to a report by the state's Office of Budget and Management on March 12, 2010.[14] The estimates were off by $75.3 million.[15] Because that was less than the 9% GRF tax revenue's were down the previous year, the office concluded "that the volatility our economy experienced a year ago is no longer present."[14]

The state delayed a 4.25% income tax rate reduction.[16]


Function FY2010 FY2011 Total
Education $13,851,625,050 $13,836,359,709 $27,687,984,759
Health and Human Services $24,319,166,296 $25,211,761,939 $49,530,928,235
Justice and Public Protection $2,218,786,154 $2,202,006,316 $4,420,792,470
General Government/Tax Relief $12,892,377,781 $13,064,342,787 $25,956,720,568
Executive, Legislative and Judicial Branches $591,001,591 $587,680,662 $1,178,682,252
Transportation and Development $1,197,278,245 $1,174,419,750 $2,371,697,996
Environment and Natural Resources $606,251,971 $548,179,248 $1,154,431,218
TOTAL $55,676,487,088 $56,624,750,411 $112,301,237,498

Federal Funds

Ohio received approximately $880 million from the federal government under HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[17][18]

Budget Negotiation History

Ohio faced not only a budget deficit in fiscal year 2009, but also faced a budget deficit of more than $7 billion in the 2010 - 2011 operating budget, according to Governor Ted Strickland and Budget Director J. Pari Sabety.[19] However, in early May 2009 it was reported that Ohio was facing a $600 million to $900 million budget gap for fiscal year 2009.[20] According to the Strickland Administration, 2009 and 2010 will witness the most serious erosion in revenues that has taken place in 40 years.[21]

The legislature and Governor failed to approve the budget by the end of June and extended the deadline by a week.[22] The state faced a $3.2 billion shortfall in the 2010-2011 budget.[23] The temporary budget allowed most state agencies to operate at 70 percent their funding from the 2009 fiscal year, divided by a 52 week allotment.[23] Other programs, such as adoption agencies, were forced to shut down.[23]

The finalized 2010-11 budget included $50.5 billion in spending, a $0.7 billion increase compared to years 2008-09. The budget includes a cut in state aid to public education. For 2010, state aid dropped from $8 billion to $7.5 billion and in 2011 aid will drop to $7.2 billion. Despite the cut in state aid, the use of federal stimulus dollars increased total education funding by $502 million.[24][25] The governor signed the budget into law on Friday, July 17, 2009.


The state had an ongoing budget saga throughout 2009 created when the Ohio Supreme Court on Sept. 21, 2009 ruled that the Ohio General Assembly's video lottery plan to balance the FY 2010-2011 biennium budget violated the Ohio Constitution.[26] The General Assembly authorized installation of up to 17,500 video lottery terminals (VLTs) at Ohio horse racing tracks, but the Ohio Supreme Court found the plan must be subject to a statewide voter referendum because it does not fall within any of the exceptions to the right of referendum.[27]

The 6-1 majority opinion of the Court stated, “We are not unmindful of the effect our decision may have on the state budget, nor of the commendable efforts of the members of the executive and legislative branches of state government to fulfill their constitutional duties to balance the budget in Ohio; however, our own constitutional duty is to ensure compliance with the requirements of the Ohio Constitution irrespective of their effect on the state’s current financial conditions.”[28]

Ohioans also approved casinos in November 2009, a few months after Gov. Strickland proposed adding video lottery machines to racetracks to generate new tax revenue. "If I had not been confronted with these difficult circumstances, I would have obviously opposed expanding gambling in Ohio," he said. He estimated the plan would raise $851 million over two years, a source of revenue needed at a time when the governor had already reduced state spending by $2 billion, eliminated 2,500 government jobs, closed two psychiatric hospitals and two juvenile-detention facilities, and also reduced state agency budgets by 10% to 20%. "It still wasn't enough," he recalls.[29]

Budget Background

See also: Ohio state budget and finances

Ohio operates on a biennium, covering two fiscal years at a time. For example, the 2009-2011 biennium consists of year 1, July 1, 2009 to June 30, 2010, and year 2, July 1, 2010 to June 30, 2011. For the legislature, work on the budget occurs during the first six months of the first regular session of the General Assembly. First, though, individual state agencies submit their budget requests along with past expenditures and revenue to the governor who proceeds to issue a budget recommendation for the upcoming fiscal year to the Legislature. In the years in which a new governor takes office, the report can be presented as late as March 15. Both the House and the Senate must approve the budget bill before it can be signed into law by the governor.[30]

Ohio's "balanced budget" requirements come in the forms of a limit the issuance of debt and an appropriations cap that is tied to the actual revenue raised during previous years. Section 107.33 of the State law creates a cap on appropriations that is the previous year's revenue, adjusted for inflation and population growth, or the previous year's revenue plus 3.5%, whichever is greater. Article 8, Sections 1 and 2 of the 1851 Constitution permit the state to contract debts, to supply casual deficits or failures in revenues, or to meet expenses not otherwise provided for as long as those costs do not exceed $750,000. Title 1, Section 126.05 of the State law requires the director of the budget to notify the governor each month on the status of available revenue receipts and balances. The governor must then prevent expenses of state agencies from exceeding those revenue receipts. Ohio law forbids the carrying over of a deficit from one year to the next.[31]

Budget figures

The following table provides a history of Ohio's expenditures and gross domestic product (GDP).

Fiscal Year Expenditures (billions) GDP (billions)
2000 $68.4[32] $372.0[32]
2001 $74.6[32] $374.7[32]
2002 $80.8[32] $389.8[32]
2003 $85.2[32] $402.4[32]
2004 $85.2[32] $423.7[32]
2005 $92.0[32] $439.3[32]
2006 $97.4[32] $451.6[32]
2007 $100.0[32] $466.3[32]
2008 $102.7[32] $481.7[32]
2009 $105.4*[32] $480.9*[32]

General Fund 2009-10[33]

Category FY2009 Amount in millions Actual FY 2010 Amount in millions Estimated
Beginning Balance 1,682 735
Revenues 26,685 25,572
Adjustments 0 0
Total Resources 28,367 26,307
Expenditures 27,362 26,307
Adjustments 0 0
Ending Balance 735 193
Budget Stabilization Fund 2 0

Fiscal 2010 Tax Collections Compared With Projections Used in Adopting Fiscal 2010 Budgets (Millions)[33]

Category Amount
Sales Tax Original Estimate 6,995
Sales Tax Current Estimate 6,995
Personal Income Tax Original Estimate 7,061
Personal Income Tax Current Estimate 7,479
Corporate Income Tax Estimate 100
Corporate Income Tax Estimate 100

Accounting principles

See also: Ohio government accounting principles

The Ohio Auditor of State is responsible for auditing all public offices in Ohio, more than 6,500 entities including cities, counties, villages, townships, schools, state universities and public libraries as well as all state agencies, boards and commissions. Mary Taylor was elected Auditor of the State in 2006. Her office published the state's audit reports online, directly on the home page.[34]

The Institute for Truth in Accounting (IFTA) rates Ohio “Worst” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Ohio's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[35] Ohio's CAFRs are prepared and published online by the Ohio Office of Budget and Management. J. Pari Sabety is the Director of the Ohio Office of Budget and Management.[36][37]

Credit Rating Fitch Moody's S&P
Ohio[38] AA+ Aa2 AA+

Ohio had no statewide, official spending database online. However, HB 420 would make this information available.[39]

Economic Stimulus Package

Ohio was expected to receive $8.9 billion from the $787 billion dollar American Recovery and Reinvestment Plan.[40] All told, the federal stimulus plan would create or save 133,000 jobs in Ohio, based on White House estimates.[41] However, in July of 2009 concerns are being raised that point to tracking the impact of the recovery funds as agencies are receiving guidance on how to spend the money from federal agencies.[40]

  • Ohio established a website to provide information on how the federal stimulus funds are being used in the state of Ohio.[42]

According to preliminary reports, Ohio was expected to receive:

  • $104 million towards the Ohio Housing Finance Agency[43]
  • $96.1 million for the state energy program[44]
  • $648.2 million for transportation highway projects[45]

As of June 2009:[40]

  • $711 million has been dedicated to maintaining and increasing medicaid assistance.
  • On June 25th, the legislature had obligated $384 million of the $936 million highway infrastructure stimulus dollars to the Federal Highway Administration.
  • The federal Weatherization Stimulus Program, totaling $267 million in funding, will begin work on weatherizing 32,000 units. The cleared for half that cash and obligated another $20 million.

As of February 28, 2010

  • Ohio had received $3.009 billion and disbursed $2.951 billion[15]
  • In February 2010, 72 state programs received and disbursed federal ARRA funds, with the following six programs receiving 87% of the funds:[15]
    • Ohio Department of Education Title I received $10,558,761
    • Ohio Department of Education IDEA received $16,621,108
    • Ohio Department of Education State Fiscal Stabilization received $31,068,784
    • Board of Regents (BOR) State Fiscal Stabilization received $28,170,464
    • Department of Jobs and Family Services Emergency Temporary Assistance for Needy Families received $35,289,216
    • Department of Jobs and Family Services eFMAP received $109,664,838.

Budget transparency

Ohio had no statewide, official spending database online. However, HB 420 would make this information available.[46]

Government tools

The Ohio Arts Council posted a searchable database of the grants that it awards during each fiscal year.[47]

See also: Evaluation of Ohio state website

Economic stimulus transparency

The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[48] Ohio will receive an estimated $5,496,927,002.[49]

Ohio also launched a rebate program that should have created jobs in the state, but instead has created jobs in Texas and Central America.[50]

Independent transparency sites

The Buckeye Institute has launched a website, Ohio Sunshine.[51] According to the site,
"Our mission is to serve as a convenient place where Ohio citizens and others with an interest in ensuring that government is open, honest and accountable may join together and work to ensure that government data is available to everyone. This includes government officials and offices at all levels that might find a convenient place to post information that is commonly requested, thereby reducing their own burden while simultaneously easing the burden of citizens seeking information."[52]

See also

External links

Additional reading


  1. Ohio Office of Budget and Management "H.B. 1 Represents the Lowest Growth Budget in Modern Ohio History"
  2. Office of the Governor "Governor Signs FY 2010-2011 Budget Bill" July 17, 2009
  3. "Ohio committee votes to end state worker strike rights" March 2, 2011
  4. The Toledo Blade "Temporary fixes have Ohio ahead of red-ink trend, but $8B gap likely next year" July 11, 2010
  5. The Columbus Dispatch "$8 billion in 'one-time money' used in current state budget" August 12, 2010
  6. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  7. Office of Budget and Management, Budget Highlights
  8. USA Spending, State Guesstimated* Government Spending
  9. The Columbus Dispatch "Higher tax revenue might ease state's budget cuts" April 13, 2011
  10. [1]
  11. FY2010-20100
  12. 12.0 12.1 12.2 FY 2010-2011 Operating Budget Highlights
  13. The Columbus Dispatch "Do fees fit with anti-tax pledge?" Dec. 20, 2010
  14. 14.0 14.1 The Office of Budget and Management Home Page
  15. 15.0 15.1 15.2 Monthly Financial Reports - March 2010
  16. National Governors Association and National Association of State Budget Officers Fiscal Survey of States June 2010 (dead link)
  17. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  18. H.R. 1586
  19. "Governor Discusses Impact of National Economic Deterioration on Ohio Budget," December 1, 2008
  20. Plain Dealer, "Ohio income-tax revenue drops, leaving huge hole in yearly budget,"May 5,2009
  21. Dayton Daily News, "State's budget deficit growing: For the first time, most Ohioans may make less money in 2009 than they did in past years," December 1, 2008 (dead link)
  22. The State Journal, Bad News For Buckeye State's Budget, July 9, 2009 (dead link)
  23. 23.0 23.1 23.2 Plain Dealer, State budget standoff hitting children and school districts in Northeast Ohio, July 9, 2009
  24. USA Today, "Ohio governor signs $50.5B state budget," July 17, 2009
  25. Reason:Hit & Run, "How to Cut State Spending: Increase It (Ohio Edition, But Fill In Your State's Name Here)," July 21, 2009
  26. Ohio Office of Budget and Management, "Testimony of J. Pari Sabety, Director Ohio Office of Budget and Management On H.B. 318," October 28, 2009
  27. The Supreme Court of Ohio, "State ex rel. v. Brunner," September 21, 2009
  28. The Supreme Court of Ohio, "State ex rel. v. Brunner," September 21, 2009
  29. The Wall Street Journal "Strapped States Find New Virtues in 'Vice'" May 11, 2010
  30. State of Ohio, "The Ohio Budget Process," accessed June 1,2009
  31. Ohio Budget Watch (timed out)
  32. 32.00 32.01 32.02 32.03 32.04 32.05 32.06 32.07 32.08 32.09 32.10 32.11 32.12 32.13 32.14 32.15 32.16 32.17 32.18 32.19 US Government Spending, "Ohio State and Local spending," accessed June 1,2009
  33. 33.0 33.1 National Governors Association and National Association of State Budget Officers Fiscal Survey of States June 2010 (dead link)
  34. Ohio Auditor of the State Web site, accessed November 5, 2009
  35. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  36. Ohio Office of Budget and Management Web site, accessed November 5, 2009
  37. CAFRs
  38. State of Indiana, “State Credit Ratings-as of June 24, 2009"
  39. House Bill 420
  40. 40.0 40.1 40.2 Dayton Business Journal, GAO:Stimulus dollars flowing in Ohio, July 8, 2009
  41. American Recovery and Reinvestment Act, "Impact," accessed June 1,2009
  42. Recovery Ohio
  43. Columbus Business First, "OHFA awarded $104M in stimulus funding," May 27,2009
  44. Dayton Business Journal, "Energy dollars from stimulus up for grabs," May 29,2009
  45. CNN, "States race clock on $19B in stimulus," May 28,2009
  46. House Bill 420
  47. Ohio Arts Council Grants
  48. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  49. Wall Street Journal, "Stimulus spending by state," April 23,2009
  50. Ohio Watchdog, Ohio Rebate Program Created Jobs … where?!, July 29, 2010
  51. (dead link)
  52. "Mission Statement"