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Ohio projects $167M shortfall
Friday, June 22, 2007
COLUMBUS — Against the backdrop of a gloomy economic forecast, state budget director Pari Sabety on Thursday told a House-Senate conference committee that new, reduced revenue projections have produced a $167 million shortfall in the version of the two-year budget passed by the Senate.
To keep spending at the $52.4 billion Senate level, the shortfall would have to be closed in the final state budget that must be approved by June 30.
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In a telephone interview, Gov. Ted Strickland, Sabety's boss, supported solving the problem by closing what Strickland has described as tax loopholes. This would raise an additional $172.4 million over the next two years, according to the budget office.
"I think that would be the easiest way to do it," said Strickland. In earlier approving separate versions of the budget, the House and Senate rejected all proposed loophole closings. There's been no change of heart.
"That would not be the General Assembly's desire," said Rep. Matt Dolan, R-Novelty, House Finance Committee Chairman and chairman of the conference committee.
Strickland's proposed changes include reducing the handling fee retail merchants get for collecting the sales tax; changing the nonresident sales tax exemption for Ohio motor vehicle purchases and eliminating the $300-a-month cross-border exemption from the excise tax on out-of-state cigarette purchases.
Dolan said legislators want to hear more from Sabety about raising additional money through better cash management, like spending cuts, Dolan said.
Sabety told the committee the economic forecast for the state has been revised downward since Strickland presented his budget in March.
The main culprit "is the continued slump in Ohio's housing market," she said. Other problems are "softening employment numbers" and "a declining rate of growth in wage earnings," she said.
