Thursday, December 28, 2006


Tax Reform Pokes Holes in '08-'09 Budget

The tax reform package passed as part of the state fiscal year 2006-2007 state budget will create substantial difficulties for the new administration and legislature as they begin work on the 2008-2009 state budget. The chief culprit is the continued phased-in reduction of the personal income tax. This alone translates into a stunning $2.6 billion reduction in state revenues over the biennium. Remember that 25% of these tax cuts will go to the 1 percent of Ohio taxpayers who have taxable income of more than $274,000 a year.

The most recent monthly financial report from the Ohio Office of Budget and Management showed continued revenue weakness in several categories. Earlier this year, my colleague David Ellis estimated that total net new revenue available for budget writers would be $603 million from FY07 to FY08, and $662 million from FY08 to FY09. To put these numbers in context, just a 5% annual increase in state Medicaid spending could eat up roughly a third of these new revenues. Without additional state revenues most groups seeking additional state spending are likely to be disappointed. Of course if we hit another recession, all bets are off.

Wednesday, December 27, 2006


Ohio Supreme Court Hands Cuyahoga County A Loss on TANF Lawsuit

Over six years ago the Cuyahoga County Commissioners filed a lawsuit against the Ohio Department of Job and Family Services and the State of Ohio. They accused the state of unlawfully diverting federal TANF funds away from their purpose of aiding the needy and instead using them to balance the state budget. After winning in two lower courts, the Ohio Supreme Court ruled today that the Board of Cuyahoga County Commissioners didn't have standing to challenge state's transfer of TANF and Title XX funds to the General Revenue Fund without evidence that it suffered a direct and concrete injury. This effectively ends the lawsuit.

The most recent legal arguments took a somewhat bizarre turn earlier this year when the Cuyahoga County Prosecutors office missed a March 8 deadline for filling the proper paperwork with the Ohio Supreme Court and were therefore denied the chance to argue their case orally in court.

The decision was written by Justice Judith Lanzinger and the other justices unanimously concurred with the judgment.

Thursday, December 21, 2006


Strickland Names Insurance and Job and Family Services Director

Mary Jo Hudson – the Ohio Department of Insurance

Mary Jo Hudson is a Columbus attorney. She was sworn in as a member of Columbus City Council in September 13, 2004. She filled a seat left vacant by Richard Sensenbrenner. Mary Jo has been practicing law for 15 years in Columbus. She chaired the Jobs and Economic Development Committee for Columbus City Council. In addition to serving on Columbus’ Civil Service Commission, Mary Jo’s resume includes volunteer stints with a number of area nonprofit organizations, including the United Way; the Center for New Directions; the Human Rights Campaign; and the Women’s Fund of Central Ohio, which provides grants that benefit women and girls. Growing up in St. Mary’s, Ohio, Mary Jo broke through traditional gender barriers at the age of 11, when she became of the first of two girls to join an all-boys baseball league. Governor-elect Ted Strickland may have made a little bit of history with this appointment; I believe that Mary Jo becomes the first open lesbian ever appointed by an Ohio Governor to a cabinet level position.

Helen Jones Kelly – the Ohio Department of Job and Family Services

Helen Jones Kelly is currently the director of the Montgomery County Department of Job and Family Services. Previously she served as executive director of Montgomery County Children’s Services. The two organizations merged in 2006. Prior to that position, she served as a referee (magistrate) and Assistant Legal Director for Montgomery County Juvenile Court. She served as a member of the Pew Commission on Children in Foster Care. She served as president of the board of the National CASA Association and served on the Executive Advisory Council for the Child Welfare League of America. Ohio Supreme Court Justice Tom Moyer appointed her to be co-chair of the Ohio Advisory Council on Children, Youth and Families. Mrs. Jones-Kelley was also a foster parent.

Tuesday, December 19, 2006


The Fall (and Rise) of Manufacturing

The idea that manufacturing has been declining has been in the public’s consciousness for a long time. In fact, the U.S. economy has been reconfiguring itself over the past several decades, with the number of manufacturing jobs steadily declining and the number of service-sector jobs steadily increasing.

However, just because manufacturing jobs are declining doesn't necessarily mean that manufacturing industries themselves are declining. A comparison of the change in the number of manufacturing jobs to the change in the value of the portion of Gross State Product (GSP) derived from manufacturing shows an interesting trend. They’re moving in opposite directions. The figures clearly show that between 2001 and 2005, sharp declines in manufacturing employment have been matched by robust growth in manufacturing GSP; an indication that capitalization and increases in other production efficiencies are replacing labor. In fact, growth in manufacturing GSP between 2001 and 2005 actually outpaced total GSP in both Ohio and the U.S (12 percent vs. 8 percent for Ohio, and 14 percent vs. 12 percent for the U.S.).

For more information on this and related issues, download the latest report from The Center for Community Solutions entitled, Poverty, Income, and Employment, A Social Indicators Update.

Thursday, December 14, 2006


The Lows and Highs of State Spending

The National Association of State Budget Officers has released its annual report on state spending trends. There are a few things that are interesting about the numbers for Ohio.

Ohio ranks 30th out of 50 states in K-12 education as a share of total state spending in 2005. At the same time though, Ohio ranks 14th in terms of the percentage point change in K-12 education as a share of total state spending between 1995 and 2005.

In terms of higher education, Ohio ranks 41st out of 50 states in higher education spending as a share of total state spending in 2005, and the percentage of higher education spending as a share of total state spending actually dropped between 1995 and 2005 by 2%.

While Ohio ranks 12th in terms of Medicaid spending as a share of total state spending in 2005, it ranks 30th in terms of the percentage point change in Medicaid as a share of total state spending between 1995 to 2005

Saturday, December 02, 2006



If it isn’t already, H.B. 685 should be on your radar. It’s a piece of legislation designed primarily it would appear to make life more difficult for the new Strickland administration.

H.B. 685 requires the executive branch to pay the legislature (the Joint Committee on Agency Rule Review – JCARR) $50 each time that they submit a proposed or revised rule that changes any word of current code (remember by statute 20% of all administrative rules are subject to review every year). The money is to be deposited into a “rule fund” to be used by the committee to “defray the costs of their operations.” There is no explanation of how these funds would be spent, who would control the funds, or why there is a need for additional funds.

H.B. 685 requires the executive branch to prepare a very detailed description of the impact of a proposed rule on business. It requires the executive branch to provide a “description with reasonable particularity, of the Ohio businesses it reasonably appears that the proposed rule is likely to have a significant impact on.” I’m not sure I know what “reasonable particularity” means but it sounds like the executive branch would have to name every individual business in the state that might be impacted by a rule – a formula for gridlock.

H.B. 685 also allows just six members of the legislature (serving on JCARR) to delay any proposed rule for as along as 4 months, and perhaps indefinitely. Coincidentally, there are currently 6 Republican members of JCARR.

House State Government committee is hearing testimony on the bill on Tuesday, Dec. 5th at 1:00 pm in Room 018 of the Statehouse.The House State Government committee is scheduled to meet again on Thursday, Dec. 7th at 9:30 am in Room 122 of the Statehouse to take additional testimony and to vote the bill out of the committee.

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