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Higher tax receipts aid state budget

Ohio’s fiscal outlook better than other states’, officials say.

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By William Hershey, Columbus Bureau 8:45 PM Saturday, December 3, 2011

COLUMBUS — Against a backdrop of economic uncertainty, Ohio’s current state budget appears to be weathering the storm with tax receipts exceeding estimates and spending below the projections Gov. John Kasich and legislators made earlier in the year.

A national report issued last week by the National Governors Association and the National Association of State Budget Officers, the “Fall 2011 Fiscal Survey of States,” found that overall the economic downturn, weak economic growth and the end of federal stimulus help have hurt states’ search for money.

In Ohio, however, the November report from the Office of Management and Budget showed that for the first third of fiscal 2012, which began July 1, tax revenues for the general fund were up 1.6 percent — $96,135,000 — above estimates made for the budget Kasich signed June 30.

State general fund revenues have been up primarily due to stronger than expected sales tax receipts, according to the budget office.

The state report also showed general fund expenditures for the same period were 2.6 percent — $268,916,000 — below estimates. This may be partly a timing issue, according to the budget office.

Some spending for Medicaid, the health care program for the poor, aged, blind and handicapped, may be delayed because of changes in the payment system, according to the office, and expenditures may catch up.

The general fund is used for primary, secondary and higher education, prisons, Medicaid, environmental protection and other services. The budget calls for spending slightly more than $27 billion this year, according to state budget documents.

Tim Keen, state budget director, and his aides still are studying the new national report.

“But the initial reaction here is that Ohio is doing well in comparison to other states in what has been — and will continue to be — a very challenging and uncertain economic climate,” Dave Pagnard, Keen’s spokesman, said in an email.

Sen. Chris Widener, R-Springfield, chairman of the Senate Finance Committee, said lawmakers resisted “rosy scenarios” when putting the taxing and spending plan together earlier this year.

“I think things are definitely stable in Ohio,” said Widener. The state’s economy, however, is tied closely to the national economy and both depend on one thing, he said.

“It all comes back to jobs,” said Widener.

Ohio’s unemployment rate for October stood at 9 percent and has been at or above 9 percent in six of ten months this year.

Nationally, the October unemployment rate also stood at 9 percent and has been at or above that for eight of 10 months this year.

Amidst continuing high unemployment, the national study found that overall 2012 state budgets included a 2.9 percent increase in general fund spending, up to $667 billion from $648 billion last year.

Ohio was one of 43 states whose general fund spending for 2012 was up from 2011, according to the national report.

State spending for Medicaid, paid for jointly by the state and federal governments, is up in 2012 partly because of the end of the federal stimulus program. The stimulus program increased the federal share for Medicaid. Also, Medicaid enrollment has increased, the national report said.

In Ohio, Medicaid spending so far this year has been $4,542,733, below the estimate of $4,749,264. That’s up, however, from $4,081,726 for the same time period last year.

The national report also highlighted spending cuts that states, including Ohio, have made to keep their budgets balanced. In Ohio, this included reducing state support to local governments. The savings to Ohio in 2012 were estimated at $182 million.

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