Ohio’s next two-year state budget. As many of you are aware, the current budget was balanced using billions of dollars in one-time federal money that will not be available in the next budget period, making it critical that we start work now to ensure Ohio is living within its means.
The challenges in balancing Ohio’s budget are many. The state’s “rainy day” fund was depleted to help fill the shortfall in the current budget, so lawmakers will not be able to rely on those funds for help in the future. Nearly half of our current $50 billion biennial budget is spent on health and human services such as Medicaid, and with demand on these programs expected to continue to grow these costs will consume an ever-increasing portion of our state’s resources. Ohio’s unemployment compensation fund has been depleted for months, with the state borrowing millions from the federal government to pay claims – money that must eventually be paid back.
Additionally, the downturn in the economy has resulted in decreasing tax revenues for the state as families and businesses have curtailed their spending habits. While many experts agree that the economy is growing, albeit slowly, it could still take years for the job market and other sectors to completely recover. As such, we could be facing several more years where state revenue grows very slowly, if at all.
Due to these concerns about Ohio’s long-term financial health and the ability of the Legislature to balance the budget in future fiscal years, members of the Senate worked to establish the bipartisan Budget Planning and Management Commission last year. This bipartisan panel of lawmakers is tasked with developing recommendations for how to balance the next two-year state budget as well as exploring long-term solutions to Ohio’s budget challenges. Legislators serving on the commission include myself as well as Senators Chris Widener (R- Springfield) and Dale Miller (D- Cleveland) and Representatives Ron Amstutz (R- Wooster), Jay Goyal (D- Mansfield) and Vernon Sykes (D- Akron).
The commission recently held its first meeting, where the Ohio Legislative Service Commission provided members with information pertaining to state fiscal issues. Their presentation included a look at the growth of tax revenues, personal income tax and general revenue funds during the past 35 years as well as details on the areas that take up a considerable portion of our resources, including education and Medicaid. This information will be invaluable as the commission continues to learn more about the challenges facing the next state budget and possible approaches to keeping it balanced.
Other meetings in the weeks ahead will allow the commission to hear from other agencies and organizations about the shortfalls faced by other states and the solutions they have implemented to see what we can learn and what methods we may be able to apply to our situation. A report of the commission’s findings is due by November 30 to legislative leaders in both chambers as well as the Governor so that they have time to review it prior to the start of discussions on the next state budget.
As our meetings continue, I think it is important for the commission to look at everything with a critical eye, including areas no one has wanted to touch in the past – the potential for downsizing state government, reducing the number of state agencies, selling state assets and privatization, for example. There are no easy solutions to the budget situation that awaits us, which means we must take every opportunity to look at potential long-term, structural changes to our state budget that will help realize future savings without placing more of a burden on Ohio taxpayers.
The upcoming budget process will be one of the most difficult lawmakers have faced in recent memory, and the work of the Budget Planning and Management Commission will help provide legislators with ideas of how to address a looming multi-billion shortfall ahead of the crunch of the traditional budget deliberations. I look forward to working with all of the members of the commission as we tackle the challenging issues that lie ahead.
Please do not hesitate to contact my office if you have questions or concerns about any state-related matter. You can reach my office by phone at (614) 466-9737, by e-mail at SD07@senate.state.oh.us or by writing State Senator Shannon Jones, Ohio Statehouse, 1 Capitol Square, Columbus, OH 43215. I look forward to hearing from you.
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Wednesday, May 11, 2011
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