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Fiscal 'train wreck': State senator claims next state budget will require program cuts |
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Tuesday, 02 February 2010 |
By WILLIAM LANEY
Managing Editor
Ohioans need to brace for a “train wreck” when Gov. Ted Strickland and legislators work on the biennial operations budget in 2011, an area General Assembly member warns.
State Sen. Keith Faber, R-Celina, reviewed issues affecting state legislation including his work on regulatory reform, worker’s compensation and the upcoming state budget. Faber, a Celina Rotarian, spoke Monday to approximately 50 members of the Wapakoneta Rotary Club.
Faber said in the next 12 months Strickland and the General Assembly should start working on the biennial operations budget. He called the situation “ugly” and “a train wreck coming in the next year.”
The state budget used between $4 billion and $12 billion of federal money to balance the last biennial budget, a gap created largely by a 12 to 18 percent decrease in state revenues. Faber said it was the worst decrease in state revenue in years, perhaps worse than even income tax revenue decreases during the Great Depression.
The state senator said he knows of only two ways to fill the void left by federal dollars flowing into the state’s $50 billion to $54 billion budget — cut spending and programs or increase taxes.
He estimated it would require a 4-cent hike in sales tax and a “dramatic increase in income tax and a dramatic increase in the CAT (commercial activity tax) tax.”
“I don’t think you can really raise enough money by increasing taxes enough to offset the devastating effect of the economy,” Faber said.
He explained the only answer is to cut the budget, which could include a 10 to 20 percent reduction in education spending. A gap casino income will not come close too closing — he estimates districts will receive approximately $100 per students. The state currently pays approximately $5,700 per student.
Faber railed against Strickland’s delay in a tax cut after taxpayers received the benefit through the first 11 months of the year.
“He is calling it a temporary refund adjustment, but I think it is bad for Ohio and bad for the economy,” Faber said. “I think it was his simple way of solving a budget hole that he created through a risky video lottery terminal scheme that flopped.”
Faber also talked about the need to create an atmosphere conducive to a new era of jobs. He would like to see traditional manufacturing jobs be converted into new generation manufacturing jobs.
He noted Ohio lost 360,000 jobs in the past 42 months, with more than 66 percent coming in the first two years and the remainder in the last 18 months.
“We are on a downward spiral here in Ohio and we have to reverse that trend,” Faber said. “The way we put this in reverse is we focus on what helps create jobs in Ohio and that is business and industry. Despite what you might hear coming from Washington, despite what you might hear coming from Columbus, government doesn’t create jobs — the private sector creates jobs.”
Faber said the role government can play is “to help level the playing field and then get out of the way.” He recapped his work on regulatory reform which resulted in Senate Bill 3, which passed the Senate and is now stalled in the Democratic-controlled House.
Another “job-killing issue” is the increase in worker’s compensation premiums as a state discount factor is reduced, Faber said. The state Senate passed a two-year moratorium on worker’s compensation rate changes to give businesses a chance to budget the previous increases and the Legislature to conduct a study and work on an answer.
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Last Updated ( Wednesday, 03 February 2010 )
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