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

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billion revenue shortfall for the two-yeard state budget cycle beginninhJuly 1. That was the estimatee Pari Sabety, the governor’s budget director, presented to a six-member Housde and Senate conference committee trying to reconcile differences in theitr versions of a state budget bill for fiscal 2010and 2011. They face a June 30 deadlines to present a balanced budget plan to Sabety said new revenue estimates bythe governor’e Office of Budget and Managemenrt are $2.3 billion lower than projections in the spendingh plan the administration presented to the legislaturew earlier this year. That could result in a budgey gapof $3.
2 billion over the next two yearw depending on differences in spending on education and Medicaid in the budget billw that came out of the House and In addition, projected revenue for fiscapl 2009, which ends June 30, is belows the previous estimate by $912.1 million, Sabety said. The statr will need to tap its rainy day fund to cover that gap and balancewthis year’s budget, she said. Under the revise d forecasts, the state is looking at ending fiscal 2009with $17.3 billiohn in tax revenue for its General down more than $2 billion from 2008. General Fund tax revenu is projected to dropto $15.9 billionj in 2010 and rise to $16.q billion in 2011.
“The picture I have paintec for you is bleak but Sabety told theconference committee. She said the Stricklancd administration is considering a number of options to covedr the shortfall in thenext budget. She did not provide specificsw on what approach maybe taken. Stricklane and most state legislators have said they opposed raising taxes in the currenteconomidc climate. The governor has had to make abouyt $2 billion in adjustments to thecurren two-year budget, including the elimination of 3,60 0 state jobs, closure of a two psychiatric hospitalsx and a youth detention facility. “Taking out $3 billion from the present budget is like startingall over,” said state Rep.
Vernon Sykes, D-Akron, a conference committee member. “We hope the administration willprovidr leadership, guidance and ideas as we move forward in this Two Republicans on the conference committee Sen. John Carey of Wellston and Rep. Ron Amstutz of Woostet – also called for directionn fromthe governor. “This is more than a legislative Amstutz said. “We’re goinh to need some assertive and seriousx leadership from theexecutive branch.” Stricklande did not attend the conference committee meeting.
He was travelingt in northeast Ohio to promote his education reform package that is part of his budget Sabety told the conference committee that revenuee forecasts by the administration over the past year have not kept pace with the fall of the nationall andOhio economies. Ohio’s budget situation is “hardly she said, citing a report from the Nationakl Association of State Budget Officers that found state face aggregate budget shortfalls of atleastf $230 billion from fiscal 2009 through 2011.
Her office’z new estimate projects there willbe $772 millionj less General Fund tax revenue this year than the estimates on which the governor based his budget The tax revenue shortfalls rise to $1.3 billion in fiscalk 2010 and $1.1 billion in 2011. A big factor in the declined is a drop in revenue from auto sales she said. Revenue from that source will be $96 millionj lower in 2010 and $32 million less in 2011 comparex with theearlier forecast. The revisedd non-auto sales tax revenue estimatse is being reducedby $189 million in fiscal 2010 and $331 milliojn in 2011.
The decline is due to a drop in wagex and consumer spending inthe recession, Sabety She said the state’s revenue stream also is being hurt by declines in non-wage income, specifically the capital gains tax on equity investments. The forecast for tax revenue from non-wage incom has been lowered by $926 million in fiscak 2010 and $601 million in 2011. “Thix is by far he largest declinr for any revenue in thereviseds forecasts,” Sabety said.