OHIO Financial problems discussed

The organization projects a $3 billion deficit for Ohio by 2006-07.
By DAVID SKOLNICK
VINDICATOR POLITICS WRITER
LIBERTY -- State officials will be forced to make tough decisions in the near future to keep Ohio financially solvent, said the president of a nonpartisan economic and tax organization.
Rick Yocum, president of the Ohio Public Expenditure Council, told Youngstown-Warren Regional Chamber members today at a breakfast at the Holiday Inn MetroPlex that his organization has projected a $3 billion shortfall for the state during the 2006-07 budget cycle.
That is largely based on the June 2005 expiration of a temporary 1 percent sales tax implemented last year by the state Legislature and Gov. Bob Taft. The tax brings in about $1.3 billion annually, he said. Also, the state continues to spend more than it collects in taxes, Yocum said.
The state has experienced significant financial problems in recent years, forcing it to deplete its rainy-day fund -- a fund of about $1 billion saved during prosperous times -- and use all of its tobacco settlement money, also about $1 billion, as well as raise the sales tax to balance its budget.
"The current budget is built on one-time revenues, and they're all gone," Yocum said.
Yocum also decried the state's term limits law that forces elected officials to stop holding their current offices for more than eight years in a row. The turnover in the state Legislature forces "amateur legislators" to make tough decisions, he said.
Projected actions
The OPEC president said he expects the state Legislature not to reinstate the 1 percent sales tax increase immediately after it expires in June 2005.
But Yocum said the state will be left with no other choice but to reinstate the sales tax at some point in the future as well as broaden the tax to other items and services that currently aren't taxed.
Also, he said, the state may force the mergers of some school districts as a way to save money and will probably legalize some sort of gambling once Taft, who strongly opposes legalized gambling in Ohio, leaves as governor in January 2007.
Yocum's other suggestions are to close some state universities, state campuses and state law and medical schools. But he said it is highly doubtful that the state Legislature would be willing to consider those ideas.
skolnick@vindy.com