State budget deficit could be as high as $10 billionWritten by Associated Press | | firstname.lastname@example.org
The incoming chairman of the Ohio Senate finance committee says the hole in the next state budget could be as large as $10 billion, nearly $2 billion more than what was earlier predicted.
Much has been discussed about roughly $8 billion in one-time grants and other money used to balance the current two-year budget that won’t be there in future years.
But the problem probably will grow beyond that, said Sen. Chris Widener, R-Springfield.
“There is also a series of other things swirling around out there impacting our budget above and beyond one-time money. We have other expenditures we are committed and obligated to make,” he said.
Among them, he said, are Medicaid growth that could exceed $1 billion and a $180million interest payment owed the federal government on borrowing for the state unemployment-compensation fund.
“There are probably 12 to 15 things that are going to come to roost one way or another, positive or negative, to have an impact on the next state budget,” Widener said.
Gov.-elect John Kasich must submit a blueprint for balancing the $50billion-plus budget for the next two years by mid-March.
The Republican has said he wants to cut taxes and phase out the state’s income tax.
To reduce spending, he has proposed diverting nonviolent offenders from prisons and taking on public employee unions.
The administration of outgoing Democratic Gov. Ted Strickland hasn’t made budget projections since last year, but revenue is higher than expected, said spokeswoman Allison Kolodziej.
Office of Budget and Management numbers show that personal income-tax collections were up 5 percent and sales-tax collections also had increased in the latest three-month period from the same period a year earlier.
Kolodziej said any projections about revenue growth and spending levels remain speculative.
Widener isn’t optimistic about revenue growth.
“It’s expected to continue to be on the plus side, which is a positive note,” Widener said. “But I don’t personally think there is going to be any major revenue growth in the next budget.”
AP story through The Plain Dealer