Ohio Budget Problems Worst in Half Century

Ohio Budget Problems Worst in Half Century

Strickland, State Leaders Gird for More Painful Cuts




OhioNewsBureau

by John Michael Spinelli

Columbus, Ohio: Gov. Ted Strickland and state leaders, facing a worsening financial picture by the day, are girding to make evem more budget cuts on top of current ones, as they try to patch a projected $7.3 billion deficit.

On the Monday after Thanksgiving week that Americans were officially informed that the economy has been in recession for a year, a fact nearly everyone but Washington leaders and the mainstream media understood, Strickland, who came office in 2006 on a platform to "turnaround Ohio" from years of policies devised and pushed by the Ohio GOP, is hoping the slip-sliding state he inherited after 16 years of total control by Republicans, and which has plummeted even further in his first two years, can be bailed out by a new Washington led by President-elect Barack Obama and a Democratic congress.

The news from Strickland's budget director Pari Sabety is that Ohio is expecting a shortfall of $640 million for the balance of the fiscal year that ends June 30, 2009. This figure syncs up with forecasts of a $1.9 billion deficit projected earlier this year. Two budget reductions order by Strickland this year to the tune of $1.3 billion are under way.

“Over the next two years, Ohio will confront the most serious erosion of revenues it has experienced in the last 40 or 50 years,” Sabety said in the Dayton Business Journal. She added that officials are forecasting the first-ever annual decrease in wage and salary income.

Even if all state agencies cut budgets by 10 percent over the two-year budget period, Sabety said the deficit still stands at about $4.7 billion. This effort still accounts for a $2 billion deficit in fiscal 2010 and a $2.7 billion shortfall in the following year.

Strickland won't know how bad things are until after the holiday shopping season is over and sales tax revenues are factored into the size and scope of future budget cuts. With Ohio's economy being what it is, it's tough to a good consumer when you have lost your job or fear loosing your job, as has happened to many thousands of workes across the state.

Strickland's real ace in the hole is President-elect Obama and a sympathetic Democratic congress. Strickland supported New York Sen. Hillary Clinton in Ohio's Democratic primary, but then buddied up with Obama during the General Election.

In his letter to Washington, a city and its leaders who he said is to blame for Ohio's dismal economy, the first-term governor wrote Obama, saying in part: "In Ohio, even though we have already made nearly $1.3 billion in budget adjustments this biennium and most agency spending levels have been reduced to 87.25% of their originally budgeted levels, we are still facing a projected shortfall of $640 million in 2009. Ohioans have sacrificed and have been resilient in the face of the cuts taken thus far. However, additional cuts would be devastating as we are trying to provide basic safety net services during this recession and to stimulate the economy."

He asked Obama and congress to send $100 billion in block grants go to states and $3.2 billion in additional funding under the Temporary Assistance for Needy Families program. The prison psychologist and former Methodist minister also urged the immediate passage of a recovery package.

Ohio is a state whose job base is heavily dependent on Detroit's Big Three automakers and their supply chain. Strickland called for passage of a $25 billion to help out General Motors, Ford and Chrysler, who together employ about 25,000 Ohio workers.

"There will be no national economic recovery without strong states, and I have no doubt that Ohioans, with their resolve and creativity, will do their part and come together in extraordinary partnerships to meet the challenges before us. It is with this collaborative spirit and resolve that I write this letter asking for your partnership. I stand ready to work with you and your incoming administration on this challenge," Strickland concluded in his letter.

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