Difference between revisions of "Ohio state budget"

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(State Budget for FY2012-13)
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The governor's administration estimated in July 2012 that  the federal health care law will have a $940 million impact in 2014 and 2015 with increased numbers of Medicaid enrollees. The governor has proposed taxing oil and gas companies drilling in the state's shale areas to generate tax revenue that would permit a personal income tax cut.<ref>[http://www.cleveland.com/open/index.ssf/2012/08/ohio_budget_projections_for_th.html The Cleveland Plain Dealer "Ohio budget projection takes a big jump, rosier outlook could prime Gov. John Kasich's tax cut proposal" Aug. 8, 2012]</ref>
 
The governor's administration estimated in July 2012 that  the federal health care law will have a $940 million impact in 2014 and 2015 with increased numbers of Medicaid enrollees. The governor has proposed taxing oil and gas companies drilling in the state's shale areas to generate tax revenue that would permit a personal income tax cut.<ref>[http://www.cleveland.com/open/index.ssf/2012/08/ohio_budget_projections_for_th.html The Cleveland Plain Dealer "Ohio budget projection takes a big jump, rosier outlook could prime Gov. John Kasich's tax cut proposal" Aug. 8, 2012]</ref>
 
==State Budget for FY2012-13==
 
* '''See past [[Archived Ohio state budgets|state budgets]]'''
 
 
In August 2012, the governor's administration said that it anticipated a surplus of $552 million at the end of FY2013 due to higher than expected tax receipts and less than expected spending.<ref>[http://www.cleveland.com/open/index.ssf/2012/08/ohio_budget_projections_for_th.html The Cleveland Plain Dealer "Ohio budget projection takes a big jump, rosier outlook could prime Gov. John Kasich's tax cut proposal" Aug. 7, 2012]</ref>
 
 
A few months earlier, Gov. Kasich said in early July 2012 that the state would add an additional $235 million in its rainy day fund at the close of FY2012, bringing the rainy day fund to a total of $482 million.  That is a big increase from 2011, when the fund once held only 89 cents.  The increased amount in the fund is due to both higher than anticipated tax revenues and lower than expected spending, particularly in Medicaid.<ref>[http://www.cleveland.com/open/index.ssf/2012/07/kasich_rainy_day_fund_to_see_b.html "The Cleveland Plain Dealer" July 3, 2012]</ref>
 
 
===MidTerm Budget Bill===
 
 
The Ohio [[Ohio House of Representatives|House]] on April 25, 2012, approved a midterm budget bill trims state spending by $69 million through cuts and cost-saving ideas, while setting aside $30 million for high-quality nursing homes and $3 million to establish a "healthy Lake Erie" fund. The midterm budget bill now goes to the Senate.<ref>[http://www.newarkadvocate.com/article/20120426/NEWS01/204260334 The Newark Advocate "House approves budget bill absent tax plan" April 26, 2012]</ref> Gov. Kasich voiced his displeasure over the Republican additions of the money for nursing homes as well as language in the bill that stops surplus state budget funds from automatically going into the state's rainy day fund.<Ref>[http://www.cleveland.com/open/index.ssf/2012/04/ohio_gov_john_kasich_clashes_a.html The Cleveland Plain Dealer "Ohio Gov. John Kasich clashes again with House Republicans over budget" April 25, 2012]</ref>
 
 
'''Revenue Reports'''
 
 
Although first-quarter FY2012 state tax receipts were $35 million, or 0.8 percent, above forecast, September fell 1 percent short of estimates as $511 million in sales levies missed by 3.5 percent, according to the state budget office in October 2011.<ref>[http://www.businessweek.com/news/2011-10-14/state-revenue-under-plan-means-cuts-from-new-york-to-california.html Businessweek "State Revenue Under Plan Means Cuts From New York to California" Oct. 14, 2011]</ref>
 
 
'''Budget'''
 
 
On June 28, 2011, the  [[Ohio State Senate|Senate]] voted 22-11 to accept the conference committee report on a $112 billion state budget that includes cuts to schools and local governments.<ref name=passes/>  The Republican-led Ohio House on June 30, 2011, voted 59-40 along party lines to send the bill to Gov. John Kasich.<ref name=desk>[http://www.forbes.com/feeds/ap/2011/06/30/business-us-ohio-budget-ohio_8543197.html Forbes "Nearly $56B Ohio budget heads to governor's desk" June 30, 2011]</ref>  Gov. John Kasich signed the 3,262-page bill into law four hours before the start of the fiscal year, after he had vetoed seven items in the budget.<Ref>[http://www.cleveland.com/open/index.ssf/2011/06/gov_john_kasich_signs_two-year.html The Cleveland Plain Dealer "Gov. John Kasich signs two-year state budget, but vetoes seven items first" June 30, 2011]</ref>  The budget can be found [http://www.lsc.state.oh.us/fiscal/bid129/budgetindetail-hb153-cc.pdf here].
 
 
Cities, townships and other local governments will receive $1 billion less in state aid over the next two years through a combination of cuts to state funding and changes to the tax money they get, but the budget also includes a $45 million grant program in the budget for local governments that share services.<ref name=desk/>
 
 
The budget deposited approximately $250 million into its rainy day fund.<ref>[http://www.thenewsstar.com/article/20120624/BUSINESS/206240302 The News Star "Budget turnarounds: Some states socking cash away" Jun 23, 2012]</ref>
 
 
The governor told his budget director in August 2011 to monitor revenue collections so any emerging deficit can be avoided, saying "we’re not going to go back in the hole.”<ref>[http://www.bloomberg.com/news/2011-08-04/ohio-s-kasich-prepares-for-cuts-if-balky-economy-pinches-revenue.html Bloomberg "Ohio’s Kasich Readies for Spending Cuts If Faltering Economy Clips Revenue" Aug. 4, 2011]</ref> 
 
 
The state budget accounted for $40 to $45 million to reimburse state employees for the equivalent of four days’ wages plus four sick days because employees agreed not to accrue eight personal days under a 2009 union contract to help balance the budget then.  Reimbursement began in August 2011.  The Kasich administration did not criticize the reimbursements.<ref>[http://www.dispatch.com/content/stories/local/2011/08/11/state-worker-payouts-personal-days.html The Columbus Dispatch "State this month will reimburse workers for personal days they gave up" Aug. 11, 2011]</ref>
 
 
In Aug. 2011, the state announced that it sold only one prison for $72.7 million, and not the 5 prisons it had hoped to sell for $200 million.  To compensate for not selling the other four prisons, Ohio Department of Rehabilitation and Correction reorganized the management and operations of them.  Officials said that the privatization fulfills the goal of reducing overhead costs by saving $13 million annually.<ref>[http://www.cleveland.com/open/index.ssf/2011/09/ohio_state_prison_system_sales.html The Cleveland Plain Dealer "Ohio corrections system sells one prison to private operator, reorganizes four others" Sept. 2, 2011]</ref>
 
 
'''Budget Highlights'''
 
 
* The budget eliminates the state estate tax starting in 2013.<ref>[http://www.forbes.com/sites/ashleaebeling/2011/06/30/ohio-estate-tax-repeal-maine-oregon-tweak-tax/ Forbes "Ohio Repeals Its Estate Tax; Maine And Oregon Tweak Theirs" June 30, 2011]</ref><ref name=tb>[http://www.toledoblade.com/State/2011/06/09/Senate-OKs-budget-with-harsh-cuts.html The Toledo Blade "Senate OKs budget with harsh cuts" June 9, 2011]</ref>
 
* Provides for the sale of six prisons expected to generate around $200 million.<ref name=tb/><ref>[http://www.cleveland.com/open/index.ssf/2011/06/gov_john_kasich_signs_two-year.html The Cleveland Plain Dealer "Gov. John Kasich signs two-year state budget, but vetoes seven items first" July 2, 2011]</ref>
 
* Permits the governor to pursue a long-term lease of the Ohio Turnpike by a private operator as long as lawmakers approve the terms.<ref name=tb/>
 
* Raises the threshold at which government must pay union-scale wages on public projects from the current $78,000 to $125,000 in 2012, $200,000 in 2013, and $250,000 in 2014.<ref name=tb/>
 
* Allows counties and universities to sell buildings to private owners and lease them back.<ref name=tb/>
 
* Provides no funding for enforcement of smoking in indoor public places and phases out support for the Quit Line.<ref name=tb/>
 
 
===Legislative Proposed Budget===
 
 
After the Senate approved its budget, the House voted 97-0 to reject the Senate changes to the budget, allowing a group of state lawmakers from both Republican-led chambers to work out their differences in a conference committee.<ref>[http://www.forbes.com/feeds/ap/2011/06/09/business-us-ohio-budget-ohio_8508198.html Forbes "Ohio Senate passes $55.7 billion state budget" June 9, 2011]</ref>  The six-member conference committee passed a unified budget on party-line vote of 4-3 on June 27, 2011.<ref>[http://www.forbes.com/feeds/ap/2011/06/28/business-us-ohio-budget-ohio_8538758.html Forbes "Ohio budget panel sends bill to floor vote" June 28, 2011]</ref> Changes made by the Republican-controlled committee included removing a provision to privatize the lottery and a host of changes in education funding.  Those changes included eliminating a controversial merit pay system for teachers, permitting a smaller number of new charter schools to be opened without the current system of direct sponsors, banning new e-schools until 2013, and requiring districts to pay for only two additional years of education for high school dropouts. The committee also inserted a provision specific to Cleveland Public Schools that would permit the mayor to remove collective bargaining rights for employees at public schools being converted into charter schools as long as he files a letter with the Cleveland Board of Education and the state employment relations board saying he is doing so.<ref>[http://www.cleveland.com/open/index.ssf/2011/06/state_budget_conference_commit.html The Cleveland Plain Dealer "State budget conference committee passes unified budget on party-line vote" June 28, 2011]</ref>  It also included a last-minute "Invest Ohio" tax credit, a 10 percent income tax credit for investors in small businesses, capped at $100 million for the biennium, added the night of the vote.<ref name=passes>[http://www.cleveland.com/open/index.ssf/2011/06/senate_passes_budget_deal_on_n.html The Cleveland Plain Dealer "Ohio Senate passes budget deal on near party-line vote" June 28, 2011]</ref>
 
 
On June 28, 2011, the [[Ohio State Senate|Senate]] voted 22-11 to accept the conference committee report.<ref name=passes/>
 
 
'''Senate Proposal'''
 
 
The [[Ohio State Senate|Senate]] passed a $112 billion, 5,000 page budget on June 8, 2011, with 23 Republican "yes" votes, and 10 Democratic "no" votes.  It privatizes half-dozen state prisons, state liquor operations, lottery operations and the turnpike.  It also cuts $2 billion dollars in funding for local governments and schools, as well as cuts legislator pay by 5 percent.  The Senate Budget also contains symbolic efforts to curb abortion, the elimination of the estate tax in 2013 and decentralized E-check testing.<ref name=conference>[http://www.cleveland.com/open/index.ssf/2011/06/senate_passes_sprawling_112_bi.html The Cleveland Plain Dealer "Ohio Senate passes sprawling $112 billion state budget along party lines; conference committee next" June 8, 2011]</ref>
 
 
One Senate proposal was the privatization of the state's liquor sales, which would allow local governments to see more cash, but was in contrast with the governor's proposal to use liquor sales to fund JobsOhio.<ref>[http://www.forbes.com/feeds/ap/2011/05/26/general-oh-ohio-budget-changes_8487585.html Forbes "Ohio senators prepare changes to state budget plan" May 26, 2011]</ref> 
 
Some of the other Senate provisions included:<ref> [http://www.businessweek.com/ap/financialnews/D9NFEJQO0.htm/ Business Week, Ohio senators prepare changes to state budget plan, may 26, 2011] </ref>
 
*A push to strip a provision from the House-passed bill that specifically applied a state business tax to all casino wagers without deducting winnings and payouts
 
*Also up in the air is the governor's plan to shift 2 percent of pension contributions from employers to employees. The House-passed budget stripped the idea from the legislation.
 
 
Senate Republicans wanted to restore $115 million in funding to spend on the state's schools. They also hoped to restore $100 million to local governments. The additional $100 million for the state's Local Government Fund would still mean a cut of some $455 million to local communities. About $1.3 billion from business taxes would be shifted from local communities and schools to the state's general revenue fund to fuel spending in other areas of state government.<ref> [http://www.cleveland.com/open/index.ssf/2011/05/ohio_senates_version_of_the_bu.html/ Cleveland Plain Dealer, Ohio Senate's version of the budget would restore some money to schools, local governments, may 31, 2011] </ref>
 
 
'''House Proposal'''
 
 
On May 5, 2011, the [[Ohio House of Representatives|House]] approved with a vote of 59-40 along party lines a $112 billion, 4,004-page  all-funds budget in [http://www.legislature.state.oh.us/BillText129/129_HB_153_PH_N.html House Bill 153] for the next two years.<ref name=cpd>[http://www.cleveland.com/open/index.ssf/2011/05/divided_ohio_house_passes_budg.html The Cleveland Plain Dealer "Divided Ohio House passes budget full of cuts on heels of rosy revenue news" May 6, 2011]</ref><ref name=blade>[http://www.toledoblade.com/State/2011/05/06/Ohio-House-passes-budget-more-tax-cuts.html The Toledo Blade "Ohio House passes budget, more tax cuts" May 6, 2011]</ref>  It is $70 million larger than the governor's proposed budget.<ref name=blade/>
 
 
The House budget featured many significant changes to the way the state operates, such as doing away with the estate tax beginning in 2013, privatizing six state-owned prisons, relaxing the rules for charter schools and transferring the state's liquor operations to a privately run job-creation board.<ref name=cpd/>  New construction projects that cost less than $3.5 million would not be subject to Ohio's prevailing wage law, whereas the threshold used to be $79,000.<ref>[http://www.mariettatimes.com/page/content.detail/id/535927/State-budget-ushers-in-changes.html?nav=5002 The Marietta Times "State budget ushers in changes" May 12, 2011]</ref>
 
 
The budget made many cuts, including:<ref name=cpd/>
 
 
*up to 20 percent in basic aid for Ohio school districts, approximately $800 million;<ref name=mansfield>[http://www.mansfieldnewsjournal.com/article/BF/20110508/OPINION01/110508001/Will-state-budget-avoid-higher-taxes-?odyssey=nav|head The Mansfield News Journal "Will state budget avoid higher taxes?" May 8, 2011]</ref>
 
*reduction of $640 million to local governments over the biennium, but the budget attempts to make it easier for governments to consolidate services or merge townships;<ref name=expect>[http://www.dispatch.com/live/content/local_news/stories/2011/05/24/kasich-doesnt-expect-easing-of-budget-cuts.html?sid=101 The Columbus Dispatch "Kasich doesn't expect rising state revenue to ease budget cuts" May 24, 2011]</ref>
 
*reductions to the Local Government Fund totaling $555 million;
 
*cuts to higher-education funding, reducing state aid to universities an average of 13 percent and capping tuition increases to 3.5 percent each year;
 
*reducing $470 million in payments to nursing homes;
 
*a 2 percent reduction in public pension costs, with public employees paying an additional 2 percent of their salary toward their pension.<ref name=mansfield/><ref name=expect/>
 
 
The governor said that increasing revenues would not mean that local governments and schools would be spared from the cuts in the House-approved budget.<ref name=expect/>
 
 
Although revenue numbers have risen higher than those used as the basis for the House budget, the governor's administration said that they will need to pay about $500 million in bills deferred by the previous administration.<ref name=cpd/>
 
 
'''Initial House Proposal'''
 
 
House Republicans rolled out their first changes to the Governor's proposed budget on April 28, 2011, including eliminating the estate tax in two years and on money wagered instead of taxing them on net revenue as is the current practice.<ref>[http://www.dispatch.com/live/content/local_news/stories/2011/04/28/budget-changes-ohio.html?sid=101 The Columbus Dispatch "House GOP budget hits the casinos, adds $70 million in spending" April 28, 2011]</ref>
 
The House also changed the governor's school-funding proposal to give schools an additional $80 million over the biennium and provides $15 million more for a home-care program for Medicaid-eligible seniors.  It cuts aid to state agencies by an additional $40 million.  Overall, the House budget increases spending by $70 million.<ref name=likely>[http://www.dispatch.com/live/content/local_news/stories/2011/04/26/house-gop-likely-to-seek-changes-in-kasich-budget.html?sid=101 The Columbus Dispatch "House GOP likely to seek changes in Kasich budget" April 26, 2011]</ref> Lawmakers rejected a proposal permitting privatization of county jails.<ref>[http://blog.cleveland.com/metro/2011/05/ohio_house_committee_approves.html The Cleveland Plain Dealer "Ohio House committee approves $120 billion, two-year state budget" May 3, 2011]</ref>
 
 
The [[Finance and Appropriations Committee, Ohio House of Representatives|House Finance Committee]] approved the biennial $120 billion budget with a party line vote on May 3, 2011.<ref>[http://blog.cleveland.com/metro/2011/05/ohio_house_committee_approves.html The Cleveland Plain Dealer "Ohio House committee approves $120 billion, two-year state budget" May 3, 2011]</ref>
 
 
On June 1 Ohio House Speaker William Batchelder panned a move by the state Senate to strip the budget of a proposal that would more closely tie teachers' wages to how well they and their students do in the classroom. The House version of the budget featured a plan to overhaul teachers' evaluations and how they get paid. Teachers' salaries would be based on their performances and evaluations instead of the current increases based on seniority and level of training. Senate President Tom Niehaus said his chamber wanted to remove the wording to avoid conflict with any union agreements that schools made with teachers as part of federal Race to the Top grants.<ref> [http://www.forbes.com/feeds/ap/2011/06/02/business-us-ohio-budget-ohio_8496304.html/ Forbes, Ohio House leader takes issue with budget changes, June 2, 2011] </ref>
 
 
The Senate proposal also spends $115 million more than the House on school districts, $100 million more on local governments, and $15 million more on the in-home nursing care program PASSPORT. The bill also opens the door for private management of the state lottery, while protecting the Ohio Turnpike from being taken private without legislative approval, and alters the accountability of charter schools. The legislation proposed by Republican leaders also includes $1.7 billion in property tax relief to Ohio homeowners and tax credit expansions for job creation and historic preservation.<ref> [http://www.businessweek.com/ap/financialnews/D9NIKPA83.htm/ Business Week, Senate budget plan strips new OH union law wording, May 31, 2011] </ref>
 
 
===Governor's Proposed Budget===
 
 
Governor [[John Kasich|John Kasich]] presented his FY2012-13 budget to the [[Ohio General Assembly|Ohio General Assembly]] by March 15, 2011.  He fulfilled his promise to not raise taxes but did make deep spending cuts.<ref name=slashes>[http://money.cnn.com/2011/03/15/news/economy/ohio_kasich_budget/ CNNMoney.com "Ohio governor slashes $8B from budget" March 15, 2011]</ref><ref>[http://www.reuters.com/article/2011/03/08/us-usa-ohio-idUSTRE72764R20110308 Reuters "Ohio governor sees reform, spending cuts in budget" March 8, 2011]</ref> 
 
 
On March 15, 2011, the governor proposed a $55.5 billion two-year budget proposal that he called "the most reform-oriented budget in modern Ohio history."  Under the budget, totally spending is $119.5 billion, down from $120.3 billion in the prior budget; general revenue spending, however, increased from $50.8 billion in the prior budget to the governor's proposed $55.5 billion.<ref name=reform>[http://www.usatoday.com/news/nation/2011-03-15-ohio-budget_N.htm USAToday.com "New Ohio gov unveils 'reform-oriented' budget" March 15, 2011]</ref>
 
 
The proposed budget eliminated an $8 billion budget shortfall with program restructuring, budget cuts and privatization of public assets.  The governor maintained the $800 million, two-year income tax cut that went into effect in January and added an additional $34 million in tax incentives designed to create jobs.<Ref name=unveils>[http://www.forbes.com/feeds/ap/2011/03/15/general-oh-ohio-budget_8357168.html Forbes "Ohio governor unveils budget proposal" March 15, 2011]</ref> 
 
 
The proposed budget includes a provision for leasing the state's wholesale liquor distribution system to JobsOhio to fund the state's economic development activities.<ref name=slashes/>
 
 
'''Medicaid'''
 
 
One of every three state tax dollars is spent financing the Medicaid program which serves 2.1 million Ohioans.  Under Kasich's proposed budget, the state would spend $11.8 billion on Medicaid in 2012 and $13.2 billion in 2013, which are a proposed reduction of $1.4 billion over the biennium. Those figures include federal funds, which account for 64 percent of the money that goes into Medicaid in the state.  The proposed budget includes a proposal to encourage home health care and community-based services as an alternative to nursing homes.<ref>[http://www.statebudgetsolutions.org/publications/detail/ohio-hopes-medicaid-reforms-bring-savings State Budget Solutions "Ohio Hopes Medicaid Reforms Bring Savings" June 21, 2011]</ref>
 
 
'''Pensions'''
 
 
The governor wants to increase workers' pension contributions by 2% and reduce the government's share by the same amount.<ref name=likely/>
 
 
'''Sale of Prisons'''
 
 
The governor also proposed the sale of five state prisons to private operators to raise $200 million, enough to fill the hole left by expiring federal stimulus dollars.<Ref name=unveils/>
 
 
The governor also wanted to include provisions of [http://www.legislature.state.oh.us/analysis.cfm?ID=129_SB_10&ACT=As%20Introduced&hf=analyses129/s0010-i-129.htm Senate Bill 10] to change sentencing into the budget.  The bill as introduced would save about $24.9 million a year through FY2015, according to an [http://www.lsc.state.oh.us/fiscal/fiscalnotes/129ga/sb0010in.pdf analysis] by the Ohio Legislative Services Commission.<ref>[http://www.bloomberg.com/news/2011-03-15/kasich-takes-to-airwaves-to-pitch-ohio-budget-that-may-sell-state-prisons.html Bloomberg "Kasich Takes to Airwaves to Pitch Ohio Budget That May Sell State Prisons" Jan. 15, 2011]</ref>
 
 
'''Local Governments'''
 
 
Under the governor's proposed budget, local aid will be reduced 33%, down to $865 million.  The money raised from the prison sale could generate between $400,000 to more than $1 million a year in new tax revenues for municipalities.  In addition, the proposed budget would also allow local governments to generate new revenue by posting public notices online instead of in newspapers and selling naming rights to their buildings.<ref name=reform/>
 
 
'''Restructuring of Debt'''
 
 
The proposed budget also called for restructuring mostly outstanding state general obligation debt by pushing debt service payments due in FY2012 into FY2015 through FY2025. Pushing off the debt means $440 million more for the current budget.<ref>[http://www.trust.org/alertnet/news/governor-unveils-cuts-to-close-ohio-budget-gap Reuters AlertNet "Governor unveils cuts to close Ohio budget gap" March 15, 2011]</ref>
 
 
The budget also reorganized several agencies and their functions.  Overall, the reform measures are expected to save $1.4 billion over the two-year budget.  The Department on Aging would lose 90% of its funding but would also transfer responsibility for long-term care and other programs to other departments under the governor's health transformation initiative.<ref name=slashes/>
 
 
'''K-12 Education'''
 
 
Overall funding for education would drop 11.5% in the following fiscal year due mostly to the loss of $981 million in federal funds, but the governor proposed doubling the voucher program, lifting the limits on the number of charter schools and permitting parents and teachers to take over failing schools.<ref name=slashes/>
 
 
'''Funding Increases'''
 
 
Under the proposed budget, the state's Board of Career Colleges and Schools would see a 12% increase in state funding to promote training and education and
 
the Department of Development will get a 6.6% increase as it revamps economic growth programs and assists in the creation of JobsOhio, a public-private partnership created earlier this year to attract companies to the Buckeye State.<ref name=slashes/>
 
 
'''Higher Education'''
 
 
The proposed budget would raise funding for higher education by $67 million, with an increase of 2.7% in FY2012 and an increase of 0.9% in FY2013. He proposes giving universities more autonomy in exchange for less state funding and exempting them from union-friendly state rules on construction projects that the governor says increase costs.<ref name=reform/>
 
 
The proposed budget also included a cap of 3.5% on tuition increases, creating three-year bachelor's degree programs, and increasing teaching loads for faculty by one new course every two years.<ref name=reform/>
 
 
===Senate Bill 5 and Union Issues===
 
 
Ohio voters passed [[Ohio Senate Bill 5 Veto Referendum, Issue 2 (2011)|Issue 2]], overturning Senate Bill 5 by a margin of 61% to 39% on November 8, 2011.<Ref>[http://www.statebudgetsolutions.org/publications/detail/ohio-voters-repeal-the-states-collective-bargaining-reform-law State Budget Solutions "Ohio voters repeal the state's collective bargaining reform law" Nov. 8, 2011]</ref>  Gov. Kasich warned local leaders after the defeat, "Let me be clear, there is no bailout coming. There's no bailout because frankly, there is no money," Kasich said.<ref>[http://www.cleveland.com/politics/index.ssf/2011/11/ohio_voters_overwhelmingly_rej.html The Cleveland Plain Dealer "Ohio voters overwhelmingly reject Issue 2, dealing a blow to Gov. John Kasich" Nov. 8, 2011]</ref>
 
 
Sen. [[Shannon Jones|Shannon Jones]] introduced Senate Bill 5, the text of which can be found [http://www.legislature.state.oh.us/BillText129/129_SB_5_PSC_N.html here].  The Ohio Senate approved the bill by a vote of 53-44 on March 30, 2011. The [[Ohio House of Representatives|House]] and Senate passed the bill, which was signed into law by Gov. Kasich.<Ref>[http://www.cleveland.com/open/index.ssf/2011/03/ohio_house_approves_overhaul_o.html The Cleveland Plain Dealer "Ohio House approves overhaul of collective bargaining law" March 30, 2011]</ref><Ref>[http://www.ajc.com/news/nation-world/ohio-house-oks-collective-890986.html The Atlanta Journal Constitution "Ohio House OKs collective bargaining limits" March 30, 2011]</ref>
 
 
In addition to limiting collective bargaining rights, the bill also requires state employees to pay at least 20% of their health insurance premiums, eliminates tenure as a consideration when deciding on layoffs, and institutes merit-based pay for some public sector workers.<ref name=debate>[http://articles.cnn.com/2011-02-18/us/ohio.budget_1_public-sector-budget-deficit-state-capital?_s=PM:US CNN.com "Debate over workers' rights heats up in Ohio" Feb. 18, 2011]</ref> The bill would also end salary schedules.<ref name=tov>[http://www.wtov9.com/news/26943131/detail.html WTOV.com "Unions Rallying Against Senate Bill 5 In Columbus Tuesday" Feb. 21, 2011]</ref>  In addition, under the bill public employees who strike would have two days of wages deducted from their paychecks for each day of a strike, and public employees violating a court injunction against a strike would face additional fines and jail time.<ref name=lose>[http://blogs.abcnews.com/thenote/2011/03/ohio-public-employee-unions-lose-wisconsin-and-indiana-democrats-seek-deals-.html ABCNews.com "Ohio Public Employee Unions Lose; Wisconsin And Indiana Democrats Seek Deals" March 2, 2011]</ref>
 
 
Senate Bill 5 applies top 400,000 public employees<ref>[http://online.wsj.com/article/SB10001424052748703408604576164441153633876.html The Wall Street Journal "Budget Battles Roil Straitened States" Feb. 25, 2011]</ref> including 42,000 state workers in addition to 19,500 workers in the state's university and college system.<ref>[http://www.reuters.com/article/2011/02/25/us-ohio-unions-idUSTRE71O75220110225 Reuters "Ohio Republicans may modify state worker union bill before vote" Feb. 25, 2011]</ref>
 
 
'''Votes'''
 
 
On March 2, 2011, the [[Insurance, Commerce and Labor Committee, Ohio State Senate|Senate Committee]] approved the bill with a vote of 7-5. <Ref name=committee>[http://www.reuters.com/article/2011/03/02/us-ohio-unions-idUSTRE7202UC20110302 Reuters.com "Ohio committee votes to end state worker strike rights" March 2, 2011]</ref>  The full [[Ohio State Senate|Senate]] passed the bill by a vote of 17-16 vote, with six Republicans voting against it.<ref>[http://firstread.msnbc.msn.com/ MSNBC.com "Ohio bill curbing union rights passes state Senate" March 2, 2011]</ref>  Ohio Democratic senators could not halt a vote by leaving the state as occurred in [[Wisconsin]] because there are enough Republican members to form a quorum in the Ohio Senate and state laws do not require representative of both parties be present to conduct business.<ref name=teachers/>
 
 
'''Impact of the bill'''
 
 
While the bill did not completely end collective bargaining, opponents of the bill said it would have the same effect because the provision for elimination of binding arbitration gives the final word in negotiations to state and local government employers.<ref name=lose/><ref name=tov/>  On Feb. 24, 2011, Republicans agreed to amend the bill to permit collective bargaining for wages, but it would still prohibit collective bargaining for benefits, sick time, vacation or other conditions.  Senate Democrat [[Joe Schiavoni|Joe Schiavoni]]
 
 
The bill is similar to the one that sparked protests in [[Wisconsin]]<ref>[http://www.msnbc.msn.com/id/41755772/ns/politics-more_politics/ MSNBC.com "Wis. stalemate: Deal struck, cops sent to Dem homes" Feb. 24, 2011]</ref>
 
 
'''Protests and Debate'''
 
 
Protest against the bill lasted for more than a week and drew up to 8,500 people <Ref>[http://www.bizjournals.com/dayton/news/2011/02/21/wisconsin-protests-spill-into-ohio.html The Dayton Business Journal "Wisconsin protests spill into Ohio" Feb. 21, 2011]</ref><ref name=bloomberg>[http://www.bloomberg.com/news/2011-02-23/rev-jesse-jackson-weighs-in-on-ohio-union-bill.html Bloomberg "Rev. Jesse Jackson weighs in on Ohio union bill" Feb. 23, 2011]</ref><ref name=committee/>
 
 
The Fraternal Order of Police president said on Feb. 23, 2011 that his organization can agree with parts of the bill, such as more transparency in the bargaining process.<ref>[http://www.dispatchpolitics.com/live/content/local_news/stories/2011/02/23/copy/hint-of-progress-amid-the-protests.html?adsec=politics&sid=101 The Columbus Dispatch "Hint of progress amid the protests over Senate Bill 5" Feb. 23, 2011]</ref>
 
 
Lawmakers supporting the measure said SB5 was necessary.  "The reality is, in the state of Ohio, we're out of money," said Sen. Jones.  "What we need to do is give management the flexibility to be able to continue to provide the high-quality services that they've come to expect."<ref name=debate/>  Proponents of the bill say it could help control spending and provide more flexibility for cash-strapped governments.<ref>[http://www.10tv.com/live/content/local/stories/2011/02/22/story-columbus-senate-bill-5-protests.html?sid=102 10tv.com "Ohio Unions Protest Collective Bargaining Bill" Feb. 22, 2011]</ref>  Gov. Kasich supports the legislation.<ref>[http://www.washingtonpost.com/wp-dyn/content/article/2011/02/19/AR2011021903841.html The Washington Post "In Wisconsin and Washington, budget battles reshape political landscape" Feb. 20, 2011]</ref>
 
 
'''Union Provisions in House Budget'''
 
 
The House budget proposal includes provisions on merit pay for public workers similar to those in Senate Bill 5.  The House budget includes a measure that would end continuing contracts for new teachers and include criteria for teacher performance evaluations that appear similar to what is in Senate Bill 5. Some questioned whether the inclusion of such provisions is meant to counter the referendum on Senate Bill 5.<ref>[http://www.dispatch.com/live/content/local_news/stories/2011/04/28/budget-changes-ohio.html?sid=101 The Columbus Dispatch "House GOP budget hits the casinos, adds $70 million in spending" April 28, 2011]</ref>
 
 
===Preparations and Requests  for FY2012-13 Budget===
 
The FY2012-13 budget period took effect July 1, 2011.<ref name=finally/> State agencies submitted initial budget requests on Dec. 1, 2010, many of which predicted dire consequences if budgets were cut.<ref name=painful/>  The state Department of Corrections said that even if funding was maintained at 100% of current funding, it would have to cut 339 corrections positions and close prisons due to the expected increase in payroll costs during the next two years.<ref name=painful/>
 
 
The state faced an estimated $8 billion shortfall in the $53 billion biennial budget, and to balance it means that lawmakers will have to adjust inflow and outflow approximately 15%.<ref name=painful>[http://www.dispatch.com/live/content/local_news/stories/2010/12/02/agencies-budget-outlook-painful.html?sid=101 The Columbus Dispatch "Agencies' budget outlook: Painful" Dec. 2, 2010]</ref><ref>[http://blogs.wsj.com/capitaljournal/2010/10/25/november-winners-might-feel-like-losers-when-bills-come-due/ The Wall Street Journal "November Winners May Feel Like Losers When the Bill Comes Due" Oct. 25, 2010]</ref>  GOP leaders warned school districts that they could face cuts of up to 20% in state aid.<ref>[http://www.dispatchpolitics.com/live/content/local_news/stories/2010/12/05/copy/budget-tactic-offer-savings.html?adsec=politics&sid=101 The Columbus Dispatch "Budget tactic: Offer savings" Dec. 5, 2010]</ref>
 
 
The budget submissions by state agencies included new or higher fees as a way to maintain current services with the anticipation of reduced state funding. Kasich has not directly commented on the proposals but he has said that he backs the standard that the anti-tax group Americans for Tax Reform, which maintains that is acceptable to impose certain fees but they are not to be used to increase overall state revenue and spending.<ref>[http://www.dispatchpolitics.com/live/content/local_news/stories/2010/12/20/copy/do-fees-fit-with-anti-tax-pledge.html?adsec=politics&sid=101 The Columbus Dispatch "Do fees fit with anti-tax pledge?" Dec. 20, 2010]</ref>
 
 
In September 2011 the state was responsible for a $180 million interest payment to the federal government for borrowing for the state's unemployment compensation fund.<Ref name=high>[The Cleveland Plain Dealer "Ohio's budget shortfall could be as high as $10 billion, lawmaker says" Dec. 24, 2010]</ref>  Medicaid growth would add more than $1 billion to the budget hole over the next two years if caseloads continue to grow at the 9 percent-a-year pace they have since 2007.<ref name=high/>
 
 
See also: [[Ohio Budget Planning and Management Commission for FY2012-13]].
 
  
 
==Capital Budget==
 
==Capital Budget==

Revision as of 09:10, 30 April 2014

Ohio state budget

Flag of Ohio.png
Budget calendar:  Biennial
Fiscal year:  2012-2013
Date signed:  June 30, 2011
Other state budgets
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The Ohio legislature passed a new biennial $55.8 billion budget for FY2012-13 on June 30, 2011, the last possible day to do so before the start of the new fiscal year on July 1, 2011.[1] Gov. John Kasich signed the budget bill, found here, into law four hours before the start of the fiscal year, after he had vetoed seven items in the budget.[2]

The state operates on a biennial budget cycle and the fiscal year begins on July 1.[3]

As of August 2012, Ohio had a total state debt of approximately $239,540,635,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the FY2013 state budget gap.[4] The FY2013 state budget was down slightly from the FY2012 state budget debt total of $240,236,606,000.[5]

To balance the FY2012-13 budget, Gov. Kasich and legislators had to address an $8 billion gap between revenue and projected expenditures. However, as revenue projections improved, the budget gap decreased. State lawmakers, however, took criticism for increasing spending. The biennial general revenue budget grew from $50.7 billion under former Gov. Strickland to Kasich's $55.5 billion plan.[6]

In October of 2012, Ohio's total state debt per capita was $20,748.52.[7]

See also: The Ohio State Budget on State Budget Solutions

Federal Aid to State Budget

The chart below represents how much of the state’s budget comes from the federal government. The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):

State 2008 2009 2010 2011
Ohio 31.22% (#19) 35.18% (#16) 38.85% (#19) 38.93% (#15)
  • Figures were calculated by dividing each state’s intergovernmental revenue into its general revenue.[8][9]

State Budget for FY2014-15

Gov. Kasich released his proposed FY2014-15 state budget on February 4, 2013.

Tax changes

The proposal is expected to include features several tax changes, including:

  • a 20 percent income tax cut to be phased in over three years, which would begin with a 7.5 percent cut in 2013, another 7.5 percent in 2014 and a final 5 percent cut in 2015;[10]
  • reduction in the state sales tax rate from 5.5 percent to 5.0 percent;[10]
  • small businesses up to $750,000 will have a 50 percent exclusion;[10]
  • shifting from a goods-based sales tax structure to a service-based tax structure.[10]

Medicaid expansion

Kasich's budget also includes the state extension of Medicaid benefits to low-income Ohioans, with the caveat that the state would roll back plans to expand Medicaid if the federal government changes the rules on reimbursing Medicaid costs.[10]

State Budget Director Tim Keen asked agency heads to start planning for the 2014-15 budget by preparing two budget options: One spending estimate for that two-year cycle should be for no increase over current levels, and the second estimate reflecting a 10 percent reduction in spending.[11]

The governor's administration estimated in July 2012 that the federal health care law will have a $940 million impact in 2014 and 2015 with increased numbers of Medicaid enrollees. The governor has proposed taxing oil and gas companies drilling in the state's shale areas to generate tax revenue that would permit a personal income tax cut.[12]

Capital Budget

The governor proposed a $1.74 billion capital budget on March 12, 2012.[13] It was the first capital budget in four years and focuses on the state’s educational and public-service infrastructure.[13]

The Governor's Capital Budget Fact Sheet can be found here.

Budget transparency

Ohio currently has no statewide, official spending database online. However, House Bill 420 would make this information available.

Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
Ohio.gov Transparency
{{{1}}}
{{{1}}}
{{{1}}}
N
600px-Red x.png
{{{1}}}
{{{1}}}

In June 2012, the state started providing information on its Bonds and Investor Relations Portal here. It includes credit reports and state financial reportsThe site does state that it does not purport to present full and fair disclosure with respect to state debt or any of the state's bond programs within the meaning of applicable securities laws.[14]

See also: Evaluation of Ohio state website

Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois has created a multi-measure transparency profile for Ohio, which measures state transparency as of September 2011 using indicators from a range of organizations, including Sunshine Review. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[15] According to the report, Ohio received a grade of D- and a numerical score of 51, indicating that Ohio was "lagging" in terms of transparency regarding state spending.[15]

Budget Background

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.[16]

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.[17]

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. Dave Yost was elected Auditor of the State in 2010. His office publishes the state's audit reports online, directly on the home page.[18]

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.[19] 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.[20]

Credit Rating Fitch Moody's S&P
Ohio[21] AA+ Aa2 AA+

Ohio currently has no statewide, official spending database online.

Stimulus

Between February 2009 and June 2013, Ohio received $7,873,180,000.00 in federal funding.[22]

Public Employees

See also: Ohio public employee salaries
See also: Ohio public pensions

According to 2008 Census data, the state of Ohio and local governments in the state employed a total of 750,760 people.[23] Of those employees, 539,008 were full-time employees receiving a net pay of $2,188,567,523 per month and 211,752 were part-time employees paid $208,806,484 per month.[23] More than 54% of those employees, or 409,618 employees, were in education or higher education.[23]

Mental health professionals and IT workers are the most highly paid public salaries in the state, exceeding $100,000 annually.[24]

The Buckeye Institute posted a state employee salary database here and a local employee salary database here.

External links

Additional reading

References

  1. The Columbus Dispatch "Ohio House passes $55.8 billion 'reform-oriented' budget' June 30, 2011
  2. The Cleveland Plain Dealer "Gov. John Kasich signs two-year state budget, but vetoes seven items first" June 30, 2011
  3. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
  4. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  5. State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  6. Cincinnati Enquirer, How Ohio subtracts by adding, June 5, 2011
  7. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  8. US Census Federal Aid to State and Local Governments
  9. Tax Foundation' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013
  10. 10.0 10.1 10.2 10.3 10.4 WOUB.com "Kasich Unveils State Budget" Feb. 4, 2013
  11. The Marietta Times "Ohio still tightening its belt" July 5, 2012
  12. The Cleveland Plain Dealer "Ohio budget projection takes a big jump, rosier outlook could prime Gov. John Kasich's tax cut proposal" Aug. 8, 2012
  13. 13.0 13.1 Office of Budget and Management "Governor Kasich’s Proposed Capital Budget" 2012
  14. Bonds and Investor Relations Portal visited July 10, 2012
  15. 15.0 15.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  16. State of Ohio,"The Ohio Budget Process," accessed June 1,2009
  17. Ohio Budget Watch
  18. Ohio Auditor of the State Web site, retrieved November 5, 2009
  19. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  20. Ohio Office of Budget and Management Web site, retrieved November 5, 2009
  21. State of Ohio, “State Credit Ratings-as of June 24, 2009"
  22. Recovery, "Stimulus Spending by State"
  23. 23.0 23.1 23.2 2008 Ohio Public Employment U.S. Census Data
  24. MSNBC's Red Tap Chronicles, Does your city manager earn $800,000?, Sept. 23, 2010