Richard Sheridan Urges Ohio Adopt One Year Budget, Tells Assembly To Cut Strickland’s Big Increases

It is always interesting to read Ohio budget expert Richard Sheridan’s analysis. Sheridan writes for The Center For Community Solutions. In the March issue of State Budgeting Matters, Sheridan advises the state legislature to change its usual practice of creating a two year budget and, this year only approve a one year budget. And he urges the Assembly to trim Strickland’s proposed budget increases.

Sheridan notes that, because of the federal infusion of money, Ohio’s budget is getting a big boost that he fears will not be sustainable. Sheridan calculates that Governor Strickland’s budget proposal is 7.2% higher for 2010 than for 2009, and 5.2% above that for 2011.

This big increase in spending technically violates a 2006 State Appropriation Limit (SAL) law that limits budget increases to only 3.5% each year (unless the sum of the inflation rate plus the rate of population change is greater). Exceeding the SAL limit, according to the 2006 law, can only be exceeded by a 60% vote in the Assembly. Regardless that Strickland’s budget proposal greatly exceeds the 3.5 % limit set by SAL, because the new federal money is excluded from the SAL calculation, Strickland’s budget proposal does not violate the SAL law.

Sheridan is worried about what will happen at the end of the biennium, after the state budget has been greatly increased, and predicts that in order to maintain what Strickland proposes tax increases will be needed.

Sheridan urges the Assembly to approve only a one year budget, for one reason, to better monitor the Rainy Day Fund. He writes, “In the FY 2010 budget that the legislature adopts, it should consider not spending the state’s Rainy Day Fund money, as the governor proposes, but rather continuing to save it for possible use after the federal economic stimulus money dries up by FY 2012 when the state will have to find ways of maintaining the spending levels they authorized based on the use of non-recurring federal stimulus moneys. It may be that some or all of the Rainy Day Fund money will be needed in FY 2011, but by adopting a one-year budget legislators would be able to postpone that decision until there is greater certainty about when there will be a national economic recovery and what its fiscal implications for Ohio will be.”

Sheridan notes many double digit increases in certain programs and agencies proposed by Strickland, and urges the Assembly to modify these increases. He writes, “Legislators should also carefully review the spending increases proposed by the governor that are not required by the conditions of the federal economic recovery legislation, especially the line items proposed for double-digit percentage increases.”

Here are some of the increases in the budget proposal that Sheridan notes:

  • Administrative Services IT Security Infrastructure 25% increase, $257,520
  • Risk Management Reserve 116.80 % increase, or $3,000,000
  • State Printing 16.88% increase, $2,488,073
  • Agriculture Animal Disease Control 11.93% increase, $385,678
  • Consumer Analytical Lab 48.44% increase, $410,014
  • Commerce Labor & Worker Safety 26.83% increase, $451,077
  • Controlling Board Emergency Purposes 1,000% increase, $4,000,000
  • Strategic Business Investment Division 25.92% increase, $1,210,703
  • Ohio Main Street Program 141.47 % increase, $336,875
  • Education Personal Services 16.40% increase, $1,711,994
  • Policy Analysis 109.40% increase, $552,053
  • Educator Preparation 133.10% increase, $1,159,111
  • Health Free Clinics 223.68% increase, $431,737
  • Infectious Disease Protection & Surveillance 695.65% increase, $1,237,929
  • Help Me Grow 174.72% increase, $23,213,895
  • Hispanic/Latino Affairs Personal Services 108.85% increase, $171,137
  • State Library Board Ohioan Library Support 131.19% increase, $163,744
  • Natural Resources Real Estate & Land Management 17.77 % increase, $301,833
  • Division of Forestry 13.71% increase, $832,627
  • Public Defender Multi-County: State Share 13.71% increase, $595,962
  • Trumbull County 89.09 % increase, $202,695
  • Rehabilitation & Correction Community Nonresidential Programs 32.50% increase, $5,378,435
  • Mental Health Services 10.13% increase, $7,438,958
  • Rehabilitation Services People with Disabilities 42.03% increase, $5,545,290

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