State budget deliberations at impasse; Ohio has first interim budget in 18 years

At press time, Ohio’s budget stalemate has forced the legislature to pass its first interim budget in 18 years. A seven-day budget, funding the state at 70% of prior year’s levels, was signed by Gov. Strickland on June 30, the last day of FY 2009.

Exceptions to the 70% funding model were made for K-12 and higher education programs, debt service and the Medicaid entitlement.

A second seven-day budget has also been drafted in the event talks continue to stall.

While most of the hundreds of differences in the Democrat controlled House and Republican controlled Senate version of House Bill 1 have been ironed out, the governor and legislative leaders have reached a stalemate on one key issue – the expansion of gambling. Strickland asked legislators to approve the placement of video lottery terminals (VLTs) in Ohio’s seven racetracks. Republicans leaders in the Senate insist that he can approve the measure through an executive order and refuse to support gambling expansion when it has been voted down four times by voters.

Since it was announced that revenue estimates originally released in early 2009 were $3.2 billion short, Strickland proposed $2.3 billion in cuts and other moves to produce a constitutionally mandated balanced budget. The remaining $933 million was to come from VLT revenue. 

Leaders from both parties insist tax increases are not on the table.

OSCPA staff continues to closely monitor a number of other provisions in the budget, including:

• Removal of the consolidation of state boards and commissions (including the Accountancy Board of Ohio)
• Eliminating potential carveouts from the Commercial Activity Tax (CAT)
• Ensuring the annual CAT filing date moves from Feb. 9 to May 10

Watch upcoming issues of the OSCPA Weekly for continuing developments surrounding Ohio’s 2010-11 biennium budget.

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