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Policy Matters Ohio. Balancing the budget on the backs of the children: Ohio’s budget proposal heads into the home stretch. Wendy Patton, May 16, 2011. www.policymattersohio.org. House changed little in the budget.

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  1. Policy Matters Ohio Balancing the budget on the backs of the children: Ohio’s budget proposal heads into the home stretch Wendy Patton, May 16, 2011 www.policymattersohio.org

  2. House changed little in the budget

  3. Growth in Medicaid shapes the budget: Share of Ohio general revenue fund by major program (state & federal funds together) Source: Policy Matters Ohio based on Ohio Legislative Services Commission historical tables, Table 3 - Total State and Federal GRF Expenditure History

  4. Change in Medicaid Utilization in Ohio, 2010 - 2010 • Kai

  5. A somewhat different storyShare of expenditures in the Ohio general revenue fund by major program (state funds ONLY) Source: Policy Matters Ohio based on Ohio Legislative Services Commission historical tables, Table 2 - State - Source GRF, LPEF, and LGF Expenditure History 

  6. Characteristics of the budget: • Risk - Sweeping policy changes, some with inadequate funding. • Passing the buck – Revenue sharing and tax replacements to local government and schools seized by the state. • Privatization – Prisons, schools, turnpike, liquor profits, even charter universities. • Job loss – Education cuts alone to cost close to 50,000 jobs

  7. Some policy is good • Medicaid eligibility is not cut. • Optional medical services are preserved. • Prison sentencing reform is embraced. • Elder care balanced between home and institution. • Privatization will permanently drain public wealth • Seizing local funds does not stabilize state finances yet destabilizes public finance at all levels of government • The unspoken agreement that elimination of collective bargaining rights will restore fiscal stability is a myth. Inadequate financing negates progress

  8. Top Ten Spending Cuts Source: Policy Matters Ohio based on data from Ohio Legislative Services Commission - Budget in Detail

  9. Top Ten Increases Source: Policy Matters Ohio based on data from Ohio Legislative Services Commission - Budget in Detail

  10. Overwhelming Demand for Local Access to Safety Net Programs • 1 of every 4 Ohioans will seek assistance at a local job and family service agency this year. • 1/3 of those seeking assistance are new to the system. • 1 out of every 6 Ohio citizens receives food assistance (increase of 61%) • 1 out of every 5 Ohio citizens receives Medicaid (increase of 30%) with a projected growth of 158,000 in the next two years.

  11. Cuts affecting services for children • Cuts to public education total $2.1 billion biennium to biennium • Other cuts are found throughout the budget. Source: Policy Matters Ohio based on Ohio Legislative Services Commission, Budget in Detail

  12. Local governments • Lose $1 billion from state seizing of tax replacements and half of revenues sharing. • Face another $230 million loss from repeal of the estate tax in 2013, 80 percent of which goes to local governments. • Cleveland anticipates closure of firehouses, reduction of police patrols, cuts in ambulance services, 80% reduction in substance abuse services. • A survey of townships in southwest Ohio found that on average, 16 percent of their GRF depends on the LGF.

  13. Legislators continue to ignore the revenue side of the ledger • $7.7 billion in tax expenditures are not touched, although almost every agency is cut. • The proposed budget contains implementation of the final year of the tax overhaul of 2005, an $800 million tax cut which favors top earners. • The proposed budget expands tax credits and eliminates sources of revenue to local government (the estate tax).

  14. Tax loopholes….Spending Cuts Source: Policy Matters Ohio budget Brief, May 10, 2011

  15. The 2005 tax cuts favor top earners Source: Policy Matters Ohio based on data from the Institute on Taxation and Economic Policy

  16. Business taxes have not kept up with inflation for a long, long time Source: Policy Matters Ohio based on Ohio Legislative Services Commission historical revenue data

  17. Why are legislators not taking a balanced approach? • The myth is jobs grow where taxes, wages, standard of living, public services and human rights are low. • We can’t be China – the low road has not worked in Ohio; low taxes have not yielded a burst of jobs.

  18. Ohio jobs as a share of U.S. jobs:The tax overhaul of 2005 did not make a difference Source: Policy Matters Ohio, drawn from US Department of Labor, Bureau of Labor Statistics, CES, non-agricultural employment, annual averages

  19. A balanced approach to budgeting • Leadership needs to take a balanced and responsible approach to budgeting. • Service delivery must be efficient, but the budget should not be balanced on the backs of Ohio’s children. • Ohio corporations have said that a well trained workforce, quality of life and good public schools for employees children matter to their location decisions. • This budget works against what makes Ohio a great place.

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