Columbus, Ohio -- As the national economic slowdown continues to deprive Ohio of expected revenues, Governor Ted Strickland today ordered $540 million in budget adjustments in order to make sure Ohio’s budget remains in balance.

 

This reduction comes in addition to a $733 million budget adjustment plan announced last January, for a total of $1.27 billion in budget adjustments over the biennium.

 

"I believe this decision is the best way forward given the challenging economic environment we face in the months ahead," Strickland said. "We are making tough decisions, while also protecting the core priorities such as investing in education, children’s health care and tax reform that I believe will help revitalize our economy in the long run."

 

"The best long-term solution is to get the national and Ohio economies moving again," Strickland said. "When you look at our $1.57 billion jobs bill and our recently-enacted energy bill, I believe Ohio is doing more than any other state. It's time for a more aggressive and more vigorous jobs stimulus package at the national level."

 

The adjustment includes a 4.75 percent across-the-board cut to state agencies, after holding harmless key programs, and while also protecting tax reform passed by previous legislatures, the newly-established homestead tax cut, children’s health care expansions, the tuition freeze for state colleges and universities, and increased funding for local school districts.

 

Strickland decided not to ask the legislature for additional authority to use funds from the state’s rainy day fund, primarily because he believes that those funds may be needed if there is further weakening in the national economy, as many are predicting today.

 

"I think it’s safe to say it's raining now, but I fear there's a larger storm looming ahead," Strickland said.

 

Strickland also praised state employees for their hard work and dedication.

 

"While we were able to protect core priorities, today's announcement will offer true challenges for state employees," Strickland said. "We honor the work that they do every day, particularly during this difficult time."

 

Specific line items fully exempted include: Medicaid (line item 525); Department of Education line items for foundation funding, pupil transportation, gifted pupil program, special education enhancements and career/technical education enhancements; Board of Regents line items for OCOG, OIG, SSI and capital component; Ohio Department of Job and Family Services line item for Disability Financial Assistance; Expositions line item for Junior Fair Subsidy; all GRF line items within the Department of Rehabilitation and Correction; all GRF line items within the Department of Youth Services; Ballot Board advertising reimbursement; Secretary of State line items for poll worker training and county postage reimbursement; debt service line items; line items related to tax relief; and all GRF line items for the legislative and judicial agencies. 

 

Additionally, the Department of Taxation’s revenue generation activities will receive a reduced cut of 2 percent across the board.  Finally, the Community and Hospital Mental Health Services (line item 408) in the Department of Mental Health will receive a reduced cut of 2 percent.

 

Budget reductions announced today will result in $198 million less being spent by state agencies through June 30, 2009.  The remaining $342 million shortfall will be made up through a variety of cash management actions.