Richard Sheridan, a former longtime head of the nonpartisan Legislative Budget Office who has studied Ohio budgets for more than three decades, in the latest “State Budgeting Matters” publication, says that Ohio’s Governor Ted Strickland an his Budget Director, J. Pari Sabety, “have thus far earned a well-deserved ‘A+’ when it comes to financial management.”
Sheridan says, “His (Strickland’s) first budget was enacted on time and with almost unanimous bipartisan support — a feat which none of the last six governors were able to achieve. The budget provided for the smallest increase in GRF spending in half a century and continued the phased-in tax reductions enacted just before Governor Taft left office. When it became clear that GRF revenues were not going to meet expectations for the biennium, swift action was taken to make targeted reductions in authorized appropriations. An easier course of action, and one frequently taken in the past, would have been to simply order an “across-the- board” percentage decrease in all budget constitutionally-protected spending objects. Instead each separate line item — not just agency — was scrutinized and cuts ordered based on the continuation of state spending priorities.”
But Sheridan tempers his praise by pointing out a big concern about one decision made by Strickland and the Ohio legislature. Sheridan writes:
“For reasons that are less than clear, the legislature did not provide additional requested appropriation authority to pay for the costs of the Medicaid program in FY 2008. Instead of returning to the legislature to seek legal appropriation authority to pay Medicaid bills owed in FY 2008, the administration chose to hold those bills and pay providers the day after the fiscal year ended. That action had several negative effects. First, it inflated the FY 2008 unobligated balance by that amount,making FY 2008 appear far better than it was. Second, it will improperly inflate spending in FY 2009. And third, it sets a dangerous precedent violating the cardinal budgeting principle that, by definition, an appropriation sets the maximum amount of money that can be disbursed for a defined governmental purpose.”
“To the credit of OBM, the June monthly report clearly and openly states what they did. Although it would be difficult to prove, the same kind of thing has probably happened in the past — but without being so openly revealed.
Nonetheless, such action of questionable legality serves as a blemish on what is otherwise a remarkable record of financial management by the Strickland administration.”
