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The
Columbus Dispatch…
Budget uses
accounting maneuvers
By Jim Siegel
Thursday, March 17, 2011
State Budget Director Tim Keen wasn't dressed like a magician, but
state lawmakers wanted to know yesterday how he made an $8 billion
shortfall disappear, even as it appears that overall spending increased
in the new two-year budget.
Of the 59 agencies funded by general-revenue dollars, which include
most state taxes and some federal matching funds, Keen said 44 would be
cut in 2012 and seven see no increase.
But the two-year, $55.5 billion budget shows general-revenue-fund
increases in each year - a 1.1 percent bump in 2012 and another 6.4
percent in 2013.
"It appears there is a substantial increase in overall spending in this
budget," said Rep. Jay Goyal, D-Mansfield. "You also say there is an
$8billion structural imbalance from the previous budgets, yet it
appears there is a $7 billion increase in the all-funds line items."
Keen said the spending is a result of accounting shifts more than
actual increases, though Medicaid spending is going up.
For example, he said, moving the Passport home-care program for seniors
into the Department of Job and Family Services put about $300 million
into the general-revenue fund in 2012.
Other increases, he said, show up because the federal government is
ending a temporary increase in matching Medicaid funds, forcing Ohio to
spend more money for the same health-care services.
Keen also outlined how the $8 billion budget shortfall was closed,
though he did not put price tags on all the efforts.
They included Medicaid savings of $1.4 billion, cutting commercial
activities tax money from schools and local governments, and a wide
variety of other agency cuts.
He said revenue-growth estimates also are more robust than what was
projected months ago. The state would get $500 million from the lease
of Ohio liquor sales and $440 million by delaying debt payments, an
option Keen has opposed in the past. He said it was "not optimal" but
"given the magnitude of the problem we faced and the alternatives to
this proposal, we proceeded in this direction."
Asked after the hearing how much savings he gets from policy changes
versus revenue increases, Keen said it's "tricky." Outside of Medicaid,
"It's hard to say definitively what comes from what."
The budget cuts schools by about $1.3 billion over two years, and
Democrats accused the Kasich administration of breaking a promise made
to schools that they would continue to be reimbursed for the loss of
revenue from eliminating taxes on equipment, inventory and utilities.
Keen defended the move, saying those reimbursements were "inequitably
distributed" and will now be utilized in the general school-funding
formula with a greater emphasis on the ability to raise local revenue.
Democratic lawmakers pressed Keen about whether local governments and
schools would be forced to raise taxes as a result of the funding cuts.
Local governments will see a $640 million reduction over two years.
"Should my local property taxpayers be anticipating a property-tax
increase given the fact that the state is not doing anything to make up
the deficit?" Rep. John Patrick Carney, D-Clintonville, asked Keen.
The budget director said schools already go to the ballot on a regular
basis.
"To me, it's not a definite state of affairs that districts must go to
the ballot and pass levies," Keen said.
"Perhaps districts should look at their operations and their costs.
Perhaps they should avail themselves of some of the tools we are
providing them to contain costs."
Kasich and legislative Republicans are looking at a variety of
potential cost-saving plans, including making it easier for governments
to share services and weakening collective-bargaining power for
public-employee unions.
Read it at the Columbus Dispatch
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