Friday, March 30, 2001
By DAVID SKOLNICK
VINDICATOR POLITICS WRITER
YOUNGSTOWN -- Gov. Bob Taft looks out his window and sees that it's raining, and the forecast calls for more of the same.
An economic downturn has left the governor's administration estimating a shortfall of about $850 million in overall revenues through the year 2003. Taft ordered a 4 percent cut in spending this week on top of cuts of 2 percent to 4 percent earlier this year. Further cuts are also expected.
"The economy is clearly in a downturn and there doesn't appear to be any immediate hope of coming out of it," Taft said during a meeting Thursday with Vindicator reporters and editorial writers. "To me, that's pretty much a rainy-day situation."
Used for emergencies: A portion of the $1 billion the state has in its rainy-day fund for such emergencies will probably have to be used to ease Ohio's financial woes. The fund has been untouched for nine years.
"We're faced with a financial crisis," said Taft, who was in Youngstown signing a steel bill and honoring participants in the local OhioReads program. "We're in for a very tight economic period and very slow revenues in the foreseeable future. The rainy-day fund is something we may well need to use to tide ourselves over."
Using money from the rainy-day fund to make up budget shortfalls is "a last resort," Taft said. House Speaker Larry Householder and Senate President Richard H. Finan oppose using the rainy-day fund.
Other measures: Taft said his goal is to solve the state's financial crisis without a tax increase.
"Our taxes in Ohio are very high overall when you look at the income tax and sales tax compared to other states," he said. "You never say absolutely, never under any circumstances. I hope this [downturn] doesn't go deep enough where we're saying something different. But when the economy is slowing down, it's not a good time to do a tax increase."
Taft said the state Legislature is "talking about huge, huge cuts on other state programs ... such as higher education, technology, job training. I'm very concerned about it. I cannot accept a budget that decimates our state operations. We can maybe tighten our belt a little more, but our budget is already extremely tight."
The governor has not ruled out layoffs, but said he hoped it would just be keeping unfilled state jobs vacant rather than handing out pink slips.
"There's a real limit you can go until you are cutting flesh and into deep, serious problems in your departments and agencies," he said. "A lot of people would say we're in a manufacturing recession and our revenues are growing extremely slowly."
Although a Householder proposal to place electronic slot machines at the state's seven racetracks could generate needed money for Ohio, particularly education, Taft said he is still opposed to it.
School funding: Taft also admitted he is not on the same page with Householder and Finan when it comes to the school funding issue. The state is under a court order to fix the way it pays for schools.
"There are significant gaps," he said. "There's still quite a bit of work to do. There are still a lot of issues where we do not have an agreement."
But Taft said the state will come up with a plan by the June 15 deadline imposed to meet an Ohio Supreme Court order.
Taft said he was disappointed with the passage of a bill in the Senate this week that overhauls the state's proficiency tests. Taft said the bill does not go far enough, particularly when it comes to accountability, and he would be hesitant to sign it into law unless the House significantly strengthens it.