Innovation Ohio says budget shortfall is $5 billion, not $8 billion

For Immediate Release: June 7, 2011

Contacts: Dale Butland, 614-783-5833, Janetta King, 740-350-9164

Innovation Ohio says budget shortfall is $5 billion, not $8 billion

Columbus—Innovation Ohio, a progressive think tank headquartered in Columbus, released an analysis today which finds that Ohio’s “budget hole” for FY 2012-13 is $5.1 billion, not $8 billion as Gov. Kasich and his allies routinely assert.

Innovation Ohio says three key assumptions underlying the $8 billion projection made in 2009 by then-Auditor of State Mary Taylor and her Senior Policy Advisor, Tim Keen, were erroneous. Taylor was elected Lt. Governor in 2010 and Keen is Director of the Office of Management and Budget (OBM) and a member of Kasich’s Cabinet. Specifically, the Taylor/Keen projection assumed (1) that Ohio would experience revenue growth in FY 2012-13 of only $1.756 billion; (2) that tax revenue in the 2010-11 budget would not exceed the anticipated rate; and (3) that no new “one-time” money would be available to the state. All three assumptions turned out to be false.

According to the Kasich Administration itself, tax revenue in the current fiscal year (which ends June 30) will be $1 billion more than anticipated. They also now say that due to economic recovery, revenue in FY 2012-13 will be $2.791 billion—over $1 billion more than they assumed in 2009. Finally, the Administration now acknowledges that contrary to their original assumption that no new “one-time money” would be used in the FY 2012-13 budget, Ohio will actually use an additional $783 million in such money.

When all this additional money is subtracted from the alleged “$8 billion hole”, the FY 2012-13 shortfall suddenly drops to $5.182 billion.

Nevertheless, Gov. Kasich and his political allies continue to invoke the $8 billion figure, despite the fact that their own budget undermines their claim.

Said IO President Janetta King:

“The games that Gov. Kasich, Budget Director Keen and their legislative allies are playing with the Ohio budget are both deceitful and shameful. They deliberately talk about an $8 billion hole they know does not exist —and they continue to use it as a scare tactic to frighten Ohioans and justify their extremist policy agenda. It is time for the people of Ohio to know the truth.”

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