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Drastic state budget cuts loom
Revenue gap could mean closing prisons, hiking college tuition by $2,000, Strickland says
Thursday,  December 11, 2008 10:31 AM
Updated: Thursday, December 11, 2008 11:13 AM
THE COLUMBUS DISPATCH
Gov. Ted Strickland discussed the budget shortfall at a news conference Dec. 1.
KIICHIRO SATO | AP PHOTO
Gov. Ted Strickland discussed the budget shortfall at a news conference Dec. 1.

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Prisons would have to be closed, college tuition hiked and state parks shut down to deal with a mounting budget crisis, according to a gloomy analysis released today by Gov. Ted Strickland.

The administration said it is not recommending the cuts but rather making the analysis public as a way to educate Ohioans about the extent of the budget problem ahead if the state doesn't get significant federal help.

Agencies were asked to identify cuts totaling 25 percent of their budgets, the amount of discretionary spending that would have to be slashed to cover a projected $7.3 billion shortfall in the next two-year budget that starts July 1.

Among the cuts included in the analysis:

* Prisons would have to close six institutions, lay off 5,237 employees, and triple-bunk inmates in some facilities. Youth services would close two juvenile detention facilities and eliminate all parole supervision of released offenders.

* Student tuition and fees at state colleges and universities would have to increase, on average, nearly $2,000 -- causing tens of thousands of students to drop out of college, thousands of others to switch from full-time to part-time status and others to increase their student debt burden significantly.

* State per-pupil aid to primary and secondary schools would be slashed by $840 a student next year and another $870 the following year. Overall, the state education budget would be cut by $2 billion in the fiscal year beginning July 1, leaving many schools with budget deficits, unable to meet payrolls which make up about 85 percent of district expenditures. Funding to buy school buses would be whacked as well.

* An additional mental health hospital would have to be closed, and several counties (many in Appalachia) that rely on the state for mental health services would be cut off.

* An unspecified number of state parks would have to be closed.

* Ohio's subsidized child care and preschool programs would be slashed by $300 million, forcing about 56,000 children from the programs -- about 40 percent of those currently served.

* The state also would be forced to dump 6,500 elderly from the state's popular PASSPORT program which provides in-home services, aiming to keep the elderly in their homes as long as possible. That's about a quarter of those currently served.

* The Department of Agriculture's food safety inspection staff would have to be chopped almost in half, resulting in a "devastating effect on the division's mission of ensuring wholesome and safe food."

* The large reductions also would be felt with the Ohio National Guard: "The most significant impact is that these cuts will severely strain our ability to maintain the readiness of our forces and to respond in a timely manner when needed."

The 25 percent number is what would have to be cut from $28.5 billion in discretionary state spending to cover the projected budget shortfall.

For purposes of the analysis, other spending in the two-year, $52 billion budget was protected, including outlays for debt payments, tax relief and Medicaid spending for the poor.

The Strickland administration has asked the federal government for $5 billion in additional funding and has said that without significant financial help and revenue from robust holiday retail sales, the state faces a $640 million shortfall in the current budget, which ends June 30.

And the potential shortfall for the next two-year budget would be more than $7 billion if spending remains at current levels. Even if agencies slash their budgets by 10 percent, the shortfall still would be $4.7 billion, Strickland has said.

The administration already has made $1.3 billion in reductions and other adjustments to the current budget, but the administration has outlined in charts how state revenue forecasts have deteriorated in just the past 10 weeks.

The state's financial report for November released yesterday shows that state revenues were down $77.4 million last month, or 6.3 percent below already-reduced projections.

The consensus forecast from the governor's council of economic advisers also shows that job loss and unemployment in the state are expected to continue increasing until at least state fiscal year 2011, which starts in July 2010.

Officials blame the national recession, which has hammered manufacturing states such as Ohio especially hard, and experts don't expect much improvement in the economy until it becomes easier for companies and individuals to borrow money and consumers are confident about spending again.

State revenues also have been declining as a result of an across-the-board, 21 percent cut in state income tax rates that is being phased in through 2010, and property taxes for seniors also were cut last year. But Strickland so far has said he wants to protect those cuts and has said any tax increase in the current economy would be counter-productive.

More than three-fifths of Ohioans would rather see services chopped, compared to 24 percent who prefer a tax increase to preserve services, according to a new Quinnipiac University poll released today. However, 69 percent polled want selective cuts instead of across-the-board reductions.



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