Public Policy Advocates

Ohio Not Alone In Budget Difficulties

The National Conference of State Legislatures (NCSL) met in Philadelphia last week for their annual conference where several representatives of the Ohio Legislature attended the conference.  The NCSL released its annual State Budget Update report, detailing each state’s current fiscal situation, including deficit or surplus projections.  Corina Eckl, director of the fiscal program for NCSL, told conference attendees that collecting information from the states has been more difficult than in years’ past, because eight states, including Ohio, missed their July 1st deadline for completing budgets.

According to the report, thirty-five states estimate they will have a 10 percent or higher budget shortfall in their 2010 budgets and twelve of those states expect a gap of more than 20 percent.  For fiscal year 2009, states have dealt with $113 billion in budget shortfalls with another $142.6 million in expected gaps for FY 2010.  While Ohio leaders have refused to enact any tax increases to fill the budget gaps, other states opted for a tax increase.  Of the $113 billion in budget corrections, so far $24 billion has been replaced by tax increases.

Governor Strickland Joins Midwest Governors In Effort To Get Rail Funding

Governor Strickland announced recently he has signed on to a memo with the Governors of six other midwest states to apply for some of the $8 billion set aside by the federal government for rail funding.  Strickland hopes to connect Cleveland, Columbus, Dayton, and Cincinnati as part of what the administration described as “President Barack Obama’s nationally-prioritized Chicago Hub Network,” which also connects Toledo, Louisville, Indianapolis and Chicago to western points beyond. 

Ohio’s Transportation Budget, House Bill 2, included provisions for the planning of a conventional-speed passenger train connecting the “Tri C Corridor,” with hopes of converting it to high-speed rail in the future.  This system will be the starting point for connecting to other states and major metropolitan areas in all directions.  The Governor said he is looking forward to working with the other governors and the Obama administration to make the midwest a leader in high speed rail, creating jobs and opportunities for economic development for the future.

Auditor Taylor Takes Issue with Strickland Veto

Auditor of State Mary Taylor sent a letter to Governor Strickland this week, criticizing him for one of the 61 line-item vetoes he made to House Bill 1, the biennium budget bill.  The issue of concern was Governor Strickland’s veto of a provision added by Senate Republicans which would grant the state auditor more authority in recovering costs from public audits.

When the Auditor’s office performs a public audit, they have traditionally paid for that service through a line item within the budget, capped at a certain amount.  In the Governor’s introduced budget, this was approximately $460,000 per year.  However, the new language offered by the Senate required the Office of Budget and Management to reimburse the Auditor’s Office from the General Revenue Fund for whatever costs they incurred.  Governor Strickland vetoed the language on the grounds that it was too broad.  He stated in his veto message that this provision would allow the Auditor’s office unchecked authority to spend GRF money for office operations without any oversight.

Auditor Taylor felt that the Governor had overstepped his bounds in an attempt to control the functions of her office.  In her letter, Mrs. Taylor said, “With this veto and others, the Governor infringes on the professional independence and authority to hold state government accountable that Ohio law grants exclusively to the Auditor of State.”  Governor Strickland’s office responded, saying that the current system works, and the new language could have resulted in additional money being spent on audits at a time when all state agencies need to tighten their belts.

Piketon Nuclear Power Plant Plans Cancelled

The U.S. Department of Energy (DOE) rejected a loan application on funding for a “next generation” nuclear enrichment facility in Piketon Tuesday, but announced new investments to help clean up the contaminated Cold War-era weapons manufacturing site.  The application for a loan guarantee to help finance the American Centrifuge Plant did not meet the agency’s statutory and regulatory requirements to qualify for funding, according to an agency spokesman.  However, the DOE encouraged USEC, the company hoping to build the plant, to resubmit their plans in 12 to 18 months.  The DOE also offered $45 million in research and development grants.

Officials for USEC released a statement calling the rejection a broken campaign promise on behalf of President Obama.  CEO John Welch said, “President Obama promised to support the loan guarantee for the American Centrifuge Plant while he campaigned in Ohio. We are disappointed that campaign commitment has not been met.”  USEC also claimed that as many as 600 jobs would be lost as a result of the loan guarantee failure.  

However, DOE officials have responded by saying that the $150-200 million investment being made to clean up the former Portsmouth Gaseous Diffusion Plant would result in the creation of more than 800 jobs, offsetting those losses.  Meanwhile, the DOE is still processing an application from French company to build a similar nuclear plant on the site, pending approval of the company by the Nuclear Regulatory Commission.

State Medicaid Director Corlett Will Step Down

State Medicaid Director John Corlett announced his plans to step down from his post in late August.  He intends to move back to Cleveland to pursue other interests.  Director Corlett said that he was proud of some of the work that he was able to accomplish during his tenure, but admitted that it was difficult to work on some of the reforms due given the state’s current fiscal situation.

House And Senate Announce Fall Session Schedule

House Speaker Armond Budish and Senate President Bill Harris released the General Assembly’s session schedule for the rest of 2009 this week.  The schedule can be found here.  Legislators expect to hold session during much of September and October, with possible session days scheduled for November and December.