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Tuesday, March 15, 2011
Governor unveils plan to plug $8 billion budget hole
Gov. John Kasich Tuesday unveiled a proposed $55.5 billion, two-year general fund budget that he says closes an $8 billion shortfall through cuts, government restructuring and other measures but without tax hikes.
*Support for local governments
Kasich’s budget calls for cutting support for local government by about a third from funding in the current two-year budget.
The current budget provides about $1.3 billion, while the proposed budget would provide about $865 million over two years.
The LGF is Dayton’s second largest source of income behind income tax. Both Dayton and Montgomery County received about $13 million in LGF money in 2010.
Dayton City Manager Tim Riordan has called a 3:30 p.m. press conference to discuss the impact of the cuts, which could include an income tax increase proposal put before voters in November.
*K-12 schools and higher education
Taxpayers and students at state colleges and universities will likely see more tax requests and higher tuition over the next two years as education spending from kindergarten to college will see cuts, although the reductions are not as deep as some feared.
Kasich said education spending will rise slightly over the next two years, but when federal stimulus dollars the state used to maintain relatively flat funding the past two years is included both K-12 and higher education will see a double digit cut.
Local schools will see an 11.5 percent reduction next fiscal year and 4.9 percent in 2013; in total K-12 spending will fall from $11.5 billion in 2011 to $9.7 billion in 2013.
Colleges and universities will see a slightly smaller reduction losing 10.5 percent of its funding in 2012. Higher education spending will see a slight bump in 2013, but overall spending will drop from $2.5 billion in 2011 to $2.3 billion in 2013.
For K-12 education, school choice and incentives to share services are two of the few programs to receive a funding boost, while early learning, gifted education, and the reimbursement for the loss of tangible property tax are all reduced.
State college students will have reduced access to some state grants for tuition, but without federal stimulus dollars the state subsidy for instruction, the largest portion of funding provided by the state to schools, will fall by $245 million, or 13 percent. The budget retains the 3.5 percent cap on tuition hikes that has been in place the last two years.
*Medicaid
Medicaid has become known as a budgetary Pac-Man, consuming 30 percent of all state government spending and threatening to crowd out other priorities.
Gov. John Kasich’s budget doesn’t push the “game over” button on the Medicaid program’s growth; the state’s total Medicaid spending would grow 5.5 percent in fiscal 2012 to $18.8 billion, according to Kasich’s budget.
But Medicaid spokesman Eric Poklar claims the budget overall would achieve $1.44 billion in savings and cuts against Medicaid’s current trend lines.
The budget would:
• create significant new growth opportunities for CareSource, Ohio’s largest Medicaid managed care provider;
• restructure payments for hospital and nursing home care to Medicaid enrollees
• rebalance long-term care by shifting more care away from nursing homes and into home and community-based settings.
*The Arts
The Dayton area’s major nonprofit arts organizations can cope with a nearly 20 percent cut to Ohio Arts Council funding under Gov. John Kasich’s new two-year budget, but smaller groups could be facing job and programming cuts, according to area arts officials.
Kasich’s budget proposal announced Tuesday calls for $5.3 million in state funding to OAC for fiscal year 2012, which is a 19.5 percent decrease from $6.5 million in fiscal year 2011.
“We are pleased that the governor has seen the value of the arts in Ohio and that funding to the Ohio Arts Council, albeit at 80 percent of the current level, will continue,” said Ken Neufeld, president and chief executive of the Victoria Theatre Association and the Arts Center Foundation. The association received a $87,595 operating support grant from OAC for fiscal 2011.
Neufeld had feared the OAC budget would be “zeroed,” he said.
Proposals are pending in several states to eliminate their arts councils, said Paul Helfrich, president of the Dayton Philharmonic Orchestra. The orchestra received $48,083 in OAC grants for fiscal 2011.
“Over the years, Ohio Arts Council funding has essentially served as an economic development tool in our communities,” supporting job creation and downtown revitalization efforts, said Julie S. Henahan, OAC executive director.
The Dayton Art Institute doesn’t anticipate the need to cut programs because it has diverse revenue sources and also factored reduced arts funding into its current budget, said Janice Driesbach, the museum’s director and chief executive.
“However, reduced funding does impact our vibrancy,” Driesbach said. DAI received a $46,827 operating support grant from the arts council for fiscal 2011.
The 20 percent cut will have a greater impact on organizations with smaller budgets, such as Cityfolk, which received two operating support grants totalling $21,988 for fiscal 2011.
Cityfolk may have to look at cutting staff, programming or concerts because of both OAC and National Endowment for the Arts funding cuts, said Kathleen Alter, executive director.
“I think we are going to see nonprofits that have to get leaner and it’s very unfortunate, because the last thing we need is any more jobs to go away right now,” Alter said.
Kasich’s budget didn’t call for any changes to the Ohio Film Office, which offers film tax credits to encourage motion picture production in Ohio. In the last two years, production companies have spent $78.3 million making movies, television programs or commercials in Ohio, according to state officials.
The new budget includes film tax credits of $10 million each in fiscal 2012 and 2013, said Amir Eylon, director of Ohio’s Division of Tourism, which houses the state’s film office. “That means that the motion picture tax credit continues and we are going to be able to compete for additional productions,” Eylon said.
*Prisons
His proposal also calls for selling five prisons to private operators to raise $200 million and for closing four prison camps.
“Together we will embrace a new direction and together we will take a better, higher path that lifts the hopes and opportunities of every Ohioan from every walk of life and from every corner of our great state,” Kasich said in a press release.
The budget calls for general fund spending of $26.9 billion the first year, a 5.1 percent increase from the current year, and for $28.6 billion the second year, a 6.3 percent increase.
The Department of Jobs and Family Services, which includes Medicaid, gets the biggest chunk, $12.9 billion the first year and $14.3 billion the second. The largest single item is Medicaid, $11.8 billion the first year and $13.2 billion, the second.
The budget is for the two-year period, starting July 1, 2011. The Ohio House first will consider the budget and after approving it send it to the Senate for consideration.
Dayton Daily News reporters Chris Magan, Ben Sutherly, Dave Larsen, Jeremy Kelly, Lucas Sullivan and Margo Kissell contributed to this post. The Associated Press contributed to this report.
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TweetKasich to hold televised show tonight on state budget
Gov. John Kasich and members of his cabinet will take to the airwaves tonight at 6 p.m. in a town hall meeting on the state budget proposal released earlier today.
The broadcast will air on C-SPAN and at www.OhioChannel.org.
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TweetPoll: Voters down on Kasich, would repeal collective bargaining overhaul
A Public Policy Polling poll released Tuesday found that if Ohio voters had it to do over, they’d pick Democrat Ted Strickland over Republican John Kasich for governor.
According to the poll, Strickland would win a re-do election, 55-40 percent. Kasich knocked incumbent Strickland out of office in November, 49-47 percent.
The poll also found that if Senate Bill 5 - legislation to limit collective bargaining rights for public workers - becomes law, that voters would back repealing it at the ballot box.
The poll found that 54 percent would vote to repeal the law, while 31 percent would vote to keep it.
Results of the poll come on the same day Kasich is to unveil his first state budget proposal.
It also comes a day after an Ohio Poll, sponsored by the University of Cincinnati, found that 40 percent of Ohio adults approved Kasich’s job performance, while 47 percent disapproved.
In the PPP poll, 54 percent of voters disapproved of Kasich’s performance, while 35 percent approved.
Also, 63 percent said public employees should have a right to collective bargaining rights for wages,benefits and working environment rules, while 29 percent said they should not.
“Voters in Ohio are feeling significant buyers’ remorse about the November election results already,” Dean Debnam, PPP president, said in a press release.
“Of course the reality is if Democrats had turned out Kasich never would have been elected. The voters who stayed home have mostly themselves to blame.”
The poll surveyed 559 Ohio voters from Thursday, March 10 to Sunday, March 13 and has a margin of error of plus or minus 4.1 percent.
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