Thursday, March 27, 2008

 

Budget reports show increasing needs

Nationally, more and more economists are acknowledging the likelihood of recession. The increase of 63,000 to February's unemployment, the largest increase since 2003, didn’t help things. Personal income and consumer spending are down, according to OBM. Mortgage issues continue to haunt Ohio. LSC reports that Ohio has one of the highest ratios of homeowners who have less than 50% equity. Some good news for Ohio, LSC reports that Ohio’s unemployment levels dropped from 5.8% to 5.5% in February after gaining some jobs in January. Given that Ohio’s economy can lag others, some might expect the current state’s budget shortfall to be worse than the latest OBM and LSC reports indicate. However, the numbers are likely to look worse in the coming months as the economy adds pressure to our safety net programs and continues to affect tax collections.

Revenue
General revenue fund tax receipts continue to lag and are $151.7M (1.2%) below estimate year-to-date. Total general revenue fund is down $184.3M (1.1%) year-to-date, although it is 4.6% higher than at this point last year according to LSC. Taxes that are below estimate year-to-date include personal income tax (-$118.2M/-2.1%), corporate franchise tax (-$35.6M/-11.3%, although up in February), auto sales tax (-$22.3M) public utility tax, the foreign insurance tax, estate tax, and the cigarette tax. Earnings on investment are below estimate $40M year-to-date. Non-auto sales tax remains above estimate year-to-date, but LSC and OBM do not expect this to continue. The commercial activity tax (which goes to schools and local government for loss from phase-out of the tangible personal property tax) is down $16.4M (2.2%) year-to-date.

Expenditures
Expenditures are $310.3M (1.75%) below estimate year-to-date and $52.7M below for February. Program spending in the first half of the fiscal year, for which payroll entries were complete, was $134.3M (1.0%) below estimate. All categories are below estimate except Public assistance and Medicaid, which was $34.2M (.6%) over estimate according to LSC. Medicaid is $10.6M over estimate year-to-date. Medicaid expenditures would be higher if the program expansions and provider rate increases had been implemented as planned for this past January. Caseload increases and unrealized cost containment measures have added to Medicaid expenditures. OBM expects the net of these Medicaid savings and increases to add another $132.4M in spending this fiscal year. Most of the Medicaid caseload increase has been in the Covered Children and Families category, where the need increases as the economy weakens, but much of the cost increase is in the more expensive Aged, Blind, Disabled category. Ohio continues to pursue the Medicaid expansions that were approved in HB 119, which not only serve those who need health care, but brings federal dollars to Ohio.

TANF – LSC reports that ODJFS expects TANF reserve dollars (unspent from previous years) will be completely depleted by early FY09. Ohio’s reserve dollars had topped $894M in federal fiscal year 2005 before the secret got out, and they've been well utilized ever since. These reserves must be spent for “assistance,” which means that they must be spent in the Ohio Works First program. Once the reserves are gone, Ohio Works First will have to be funded from the same TANF federal and state current year funds as the other programs that HB 119 funded through TANF.


Medicaid Buy-in for Workers with Disabilities:
The federal government approved Ohio’s program, which allows people with disabilities to work while keeping their Medicaid. Beginning April 1, 2008, participants up to 250% of the federal poverty level can pay a premium to keep their Medicaid coverage. See more at http://jfs.ohio.gov/ohp/mbiwd.stm

This page is powered by Blogger. Isn't yours?