Ohio budget office: Tax revenues continues to drop
Written by Associated Press | | news@toledofreepress.comOhio’s tax revenue collection continued to decrease in January, according to preliminary estimates from the state’s budget office.
New estimates released by the Ohio Office of Management and Budget showed the state took in $60.5 million less than expected in total taxes last month, The Columbus Dispatch reported.
That was 3.2 percent less than expected, and it leaves the state with an $85 million shortfall with five months left in the current fiscal year.
State tax revenue also is expected to decline by about $825 million in the first year of the next two-year budget, which begins July 1. The legislature will begin debating that budget next week.
Gov. Ted Strickland is relying on more than $3 billion in federal stimulus money to help balance it by funding Medicaid, education and state services. Strickland has said he’s confident the funds will come through, though they haven’t been approved.
“Ohio’s economy continues to struggle as our nation continues to face a recession,” said Strickland spokeswoman Amanda Wurst.
The collapsing financial market has made it difficult for states to forecast their budgets, even in the short term, she said.
State sales tax collections in January were down $60.2 million, an 8.5 percent decline from expectations announced the previous month, according to the preliminary report. The final report is expected Tuesday.
Ohio’s income tax receipts were $45 million, a 4.7 percent decrease.
“It’s continued to put stress on states, stress that hasn’t been experienced for decades,” Wurst said.
Previous budget directors have faced criticism when revenue estimates didn’t match reality and the state’s spending had to be adjusted. Director J. Pari Sabety couldn’t be reached for comment, The Dispatch reported.
A steep drop in state revenue last year led to three rounds of budget cuts and other adjustments that totaled $1.9 billion. Agency spending cuts funded about two-fifths of that, and the rest came from unspent funds and other budget adjustments.
State officials have said they’re closely watching the state’s finances, but they have not disclosed whether the current budget may be cut further.
