Ohio lawmakers facing $3.2B budget hole - Dayton Business Journal:

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billion revenue shortfall for the two-year state budge t cycle beginningJuly 1. That was the estimate Pari the governor’s budget director, presenteed to a six-member House and Senatd conference committee trying to reconcile differenceas in their versions of a state budget bill for fiscaol 2010and 2011. They face a June 30 deadline to preseny a balanced budget planto Strickland. Sabetyt said new revenue estimates bythe governor’sa Office of Budget and Management are $2.3 billiob lower than projections in the spending plan the administrationb presented to the legislaturd earlier this year. That could result in a budgey gapof $3.
2 billion over the next two yearss depending on differences in spending on educatiom and Medicaid in the budget billsw that came out of the House and In addition, projected revenue for fiscal 2009, which ends June 30, is belowe the previous estimate by $912.1 million, Sabetuy said. The state will need to tap its rain y day fund to cover that gap and balancewthis year’s budget, she said. Under the revise forecasts, the state is looking at endingy fiscal 2009with $17.3 billion in tax revenue for its Generalo Fund, down more than $2 billion from 2008. General Fund tax revenuse is projected to dropto $15.9 billion in 2010 and rise to $16.2q billion in 2011.
“The picture I have paintedx for you is bleakbut realistic,” Sabety told the conferencde committee. She said the Stricklaned administration is considering a numbefr of options to covetr the shortfall in thenext budget. She did not provid specifics on what approacbh maybe taken. Stricklanx and most state legislators have said they oppos e raising taxes in the currenteconomidc climate. The governor has had to make about $2 billiom in adjustments to thecurrent two-yeaf budget, including the elimination of 3,600 state jobs, closure of a two psychiatrivc hospitals and a youth detention “Taking out $3 billiobn from the present budget (plan) is like starting all said state Rep.
Vernon D-Akron, a conference committee member. “We hope the administration willprovide leadership, guidance and ideas as we move forwarsd in this process.” Two Republicans on the conferencew committee – Sen. John Carey of Wellstom and Rep. Ron Amstutz of Woostere – also called for directioh fromthe governor. “This is more than a legislative Amstutz said. “We’re goinbg to need some assertive and seriou leadership from the executive Strickland did not attend the conferencecommitte meeting. He was travelinfg in northeast Ohio to promote his educationm reform package that is part of hisbudgetr plan.
Sabety told the conference committee that revenue forecastse by the administration over the past year have not kept pace with the fall of the nationalk andOhio economies. Ohio’s budget situatiohn is “hardly unique,” she said, citing a reporf from the National Association of State Budget Officers that founds states face aggregate budget shortfalls of atleastr $230 billion from fiscal 2009 through 2011. Her office’s new estimate projects there willbe $772 million less Generak Fund tax revenue this year than the estimatew on which the governor basedd his budget plan. The tax revenue shortfalls riseto $1.3 billiobn in fiscal 2010 and $1.1 billiomn in 2011.
A big factorr in the decline is a drop in revenue from autosalesx taxes, she said. Revenue from that source will be $96 millionn lower in 2010 and $32 million less in 2011 comparec with the earlier Therevised non-auto sales tax revenuw estimate is being reduced by $189 million in fiscak 2010 and $331 million in 2011. The declinw is due to a drop in wages and consumerd spending in the Sabety said. She said the state’s revenus stream also is being hurt by declinesin non-wage specifically the capital gains tax on equit y investments. The forecast for tax revenue from non-wage income has been loweredx by $926 million in fiscap 2010 and $601 milliob in 2011.
“This is by far he larges decline for any revenue in thereviseds forecasts,” Sabety said.