News & Views from Community Solutions

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2009-06-30T09:18:00.003-05:00

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2009-05-28T15:39:00.003-05:00

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State Budgeting Matters

2009-05-07T10:43:00.003-05:00

The newest issue (May 7) of State Budgeting Matters is now posted on our Website: FY 2010 - FY 2011 State Budget: The Out-of-Balance House Version. Sheridan examines in detail what the House of Representatives did to the governor’s budget proposals, who the "winners" and "losers" are in Sub. H.B. 1, what risks the House takes in its version, and what the Senate will likely be concerned about as it acts on Sub. H.B. 1 in the next four (or more) weeks. Read it here now: https://www.communitysolutions.com/images/upload/resources/sbmv5n9.pdf

State rainy day funds may be needed now, throwing HB 1 further out of balance

2009-05-05T16:27:00.002-05:00

Less than one week after the Ohio House of Representatives sent the FY 2010-11 budget to the Senate, a Strickland Administration press conference today highlighted the abysmal under-performance of the personal income tax in April. April is a crucial month when the Tax Department closes its books on the 2008 filing season. Tax Commissioner Richard Levin’s presentation showed that 2008 annual returns produced $192 million (22 percent) less than expected. The administration’s estimates were closer to the mark in estimating employer withholding for the month (just 2 percent below estimates) but were much too optimistic in every other income tax category. In total, the income tax produced $322 million less GRF revenue in April than had been expected. Ten months into FY 2009, income tax collections are 15.3 percent lower than in FY 2009. Commissioner Levin did not mention that some of the underperformance was due to the final round of income tax cuts.

OBM Director Pari Sabety discussed the implications of the shortfall for FY 2009. She expected the downward trend in income tax revenue to continue in May and June, contributing to a cumulative deficit between $600 million and $900 million. With only two months remaining in the fiscal year Director Sabety said that only a small portion of the shortfall, perhaps $100 – $150 million, could be addressed through additional cost savings – the rest would probably have to come from the state’s rainy day fund, which requires legislative approval.

Any substantial use of the rainy day fund in this fiscal year would throw H.B. 1 further out of balance, jeopardizing the gains made by human services advocates in the House for programs such as food pantries and child and adult protective services. H.B. 1 relies heavily on the rainy day fund as well as roughly $6 billion in other federal and state one-time resources.
The continuing shortfall in tax receipts also will impact H.B. 1. OBM will not have new revenue estimates available until the conference committee, but these are likely to be much lower even than the most recent estimates prepared in December.

There are still many pieces to the budget puzzle that we don’t know, but which may become clearer in the coming days. Strangely, today’s press conference only covered the income tax. OBM will release preliminary returns for other April taxes soon (perhaps as early as tomorrow) and then we can see the big picture for total GRF revenue. It is also possible that larger than expected state agency under spending could help to address part of the FY 2009 shortfall.

The bottom line, however, is that H.B. 1 was built on unrealistic assumptions. The House used an extra $100 million in unclaimed funds and more generous Legislative Service Commission revenue estimates to make it fit together. The estimates did not take into account lower revenues from the tobacco tax which will result from recent federal legislation. Let’s stop putting on the band aids and fix the patient -- the state needs to take steps to shore up its eroding revenue base. The 2005 tax change framework, which will cause a net loss to the GRF of $2 billion in FY 2010, simply cannot be maintained in this environment.

Note: Jon Honeck is the author of this post. He can be contacted at jhoneck@CommunitySolutions.com

Recovery Watch: Shift in direction not unusual

2009-05-04T15:01:00.000-05:00

Increased levels of investment in certain programs through the American Recovery and Reinvestment Act and the Fiscal Year 2010 Budget Resolution passed last week by the U.S. House and U.S. Senate reflects a shift in priorities under the Obama Administration. In recent history, it has been common for a sweeping change in budgetary and fiscal direction during the first year of a new President’s term. During their first seven months, Presidents Ronald Reagan, Bill Clinton, and George W. Bush all signed the most significant economic legislation of their presidencies.

Reagan’s Economic Recovery Act included tax cuts, regulatory relief, higher defense spending, and tight monetary policy to control inflation. After several years of increasing deficits, Clinton changed course and proposed one of the most aggressive deficit reduction programs in history. Clinton’s plan coupled tax increases with modest spending reductions. Bush’s tax cuts, which sought to spur economic growth by putting money in the hands of consumers rather than government, were included as part of his first budget proposal.

Five Things You Need To Know This Week, May 4, 2009

2009-05-04T07:29:00.004-05:00

1. In the Nation...
For the first time in more than three decades, Social Security recipients will not get any increase in their benefits next year, federal forecasts show.
http://www.nytimes.com/2009/05/03/us/politics/03benefits.html?em

2. In the State...
The same budget plan that promises billions to primary and secondary education over the next decade would deny thousands of low-income Ohio youngsters access to state-funded preschool.
http://www.dispatch.com/live/content/local_news/stories/2009/05/03/preschool.ART_ART_05-03-09_B1_VODO806.html?sid=101

3. In the Region...
Twinsburg plant among five Chrysler to close by end of 2010
http://www.ohio.com/news/top_stories/44179587.html

4. At Community Solutions...
This week, readers of State Budgeting Matters are treated to two editions—one special edition by John Begala (May 1) and the regularly scheduled edition by Dick Sheridan (later this week). The special edition, “Medicaid and the Impending Train Wreck in Ohio Government,” illustrates how the evolution of Ohio’s Medicaid program through the decades is exemplary proof of George Santayana’s well-worn admonition: “Those who fail to learn from history are doomed to repeat it.” Read it here now: http://www.communitysolutions.com/images/upload/resources/sbmv5SpecialEdition.pdf

5. Miscellaneous
The American Chestnut Foundation hopes to reintroduce the American chestnut tree, which once dominated forests in northern Ohio and other states before becoming virtually extinct.
http://www.ohio.com/news/top_stories/44257292.html

State Budget Update

2009-05-01T14:09:00.002-05:00

As the state budget officially moved from the House to the Senate this week, human service advocates were partially successful at shoring up funding needed for many critical services.

We are pleased that the House made a number of needed changes, and we hope that the Senate will continue working toward full restoration of funding for human service programs. Some of the key changes included:

Adding $50 million per year for child and adult protective services; These programs are still $12 million short of full restoration;Boosting funding for the Second Harvest Food Banks to $12 million per year, leaving the program $5 million per year below the requested level;
Adding $1 million per year for behavioral health services for children under the age of 7;
Increasing the Medicaid rate ceiling for behavioral health providers by ½ of 1% in each year of the biennium; and
Increasing home and community based options for long term care by creating a “superwaiver” in the Department of Aging and ending limitations such as the number of slots in the assisted living program and regional limits for the self-directed Choices waiver.

We are disappointed that the House chose not to restore full funding to county job and family service departments even though more Ohioans are requesting assistance. The House also removed some executive proposals and added other provisions that will increase costs and make it more difficult to keep the budget in balance. In the long run these choices will add to the already substantial FY 2012-2013 structural deficit. Several of these items include:

Elimination of a provision that limited reimbursements to hospitals from Medicaid managed care plans to rates paid for Medicaid fee for service. The removal of this proposal will increase Medicaid managed care costs by $35.1 million in FY 2010 and $110.5 million in FY 2011 and by even more in the next biennium;
Increasing state support for nursing facilities – an industry where the supply of beds exceeds demand; and
Elimination of proposed sentencing reforms that would substantially reduce the number of low-level, non-violent offenders in prisons.

We remain concerned about state revenues. April’s monthly report will be released soon, and there is no reason to expect that state revenues will look much better than they did in March. The continued erosion of FY 2009 tax receipts will lower the base for the updated estimate currently being prepared for next month’s conference committee.

Let’s hope that the forecast specialists at the Department of Taxation and Legislative Service Commission are adding foil to the antennae on their crystal balls to improve the signal and rubbing lucky pennies as they update their estimates.

Advocates need to stay alert, engaged, and informed. The ride is just getting started.

This Week in Washington - 5/1/09

2009-05-01T14:02:00.001-05:00

Congress finished its work on the budget resolution this week. The President has indicated he will send up his detailed budget request next week, which will help move the appropriations process to the next stage. It will also include important details on the Administration’s revenue proposals, including “loophole closers” and other revenue raisers that can help finance important investments.

BUDGET CONFERENCE
Congress passed a final budget resolution on Wednesday. Remember, as a resolution, it does not go to the President for his signature. The budget projects $3.6 trillion in total outlays, including $1.1 trillion for discretionary spending, in FY2010. It also projects a deficit of $1.2 trillion. It provides reconciliation instructions to the Finance and Health, Education, Labor and Pensions Committees in the Senate, and to the Ways and Means, Education and Labor (HELP), and Energy and Commerce Committees in the House, largely to accommodate the passage of health reform. The late reporting date – October 15 – will allow the Finance Committee to put off the decision about whether to use the reconciliation process to enact health care reform legislation.

The House vote was 233-193. The Senate vote was 53-43. No Republican in either chamber voted for the final budget. Seventeen House Democrats – including Representative Kucinich – voted no. Four Senate Democrats voted no.

Adoption of the budget resolution will help move the appropriations process forward, and will help facilitate consideration of health care, education, and energy/climate change policies.

Meanwhile, House Blue Dogs continue to press for enactment of statutory pay-as-you-go rules to help restore fiscal discipline. Speaker Pelosi and Majority Leader Hoyer put the Senate on notice, via letter, that the House will attach statutory PAYGO to legislation to extend middle class tax cuts, the AMT, the estate tax, or Medicare physician payments, and will not consider any bills or conference reports on these issues unless the bills or conference reports include statutory PAYGO, have been fully offset under traditional scorekeeping, or statutory PAYGO has already been enacted into law. Speaker Pelosi has also asked committee chairmen to find ways to cut spending on programs under their jurisdiction and report back to her by June 2. Her letter did not indicate the level of savings she is looking for.

HEALTH CARE
As part of its deliberations on health reform, the Senate Finance Committee held a closed-door meeting yesterday to review options to cut costs and improve quality in the health care delivery system. In advance of the session, Chairman Baucus publicly released a policy options document, which can be found here. The Committee has not yet made firm decisions about these options, but many are expected to become part of the Chairman’s health reform “mark.”

Two additional policy options documents will be released following the “coverage” and “financing” roundtables scheduled for May. The coverage roundtable is scheduled for next Tuesday, May 5,th and we expect extensive discussion about the role of Medicaid in health reform. If one of your Senators is a member of the Finance Committee, consider contacting staff before Tuesday’s roundtable to reiterate the need to strengthen and improve Medicaid as part of health reform.

The Senate HELP Committee (of which Sherrod Brown is a member) also held reform-related events this week with hearings on primary care access and state-level reform efforts. As mentioned in last week’s email, the Finance and HELP committees are expected to mark up separate, complementary bills that will be merged into a comprehensive piece of legislation.

Cleveland's air quality improving

2009-05-01T13:44:00.003-05:00

The American Lung Association came out with State of the Air this week, its annual air quality report card. It gave Cuyahoga County a grade of F in both ozone and particle pollution, and Cleveland-Akron-Elyria ranked 10th highest for people at risk from year-round particle pollution. However, despite these grades, the report noted that Cleveland showed significant, continued improvement over the past five years. We stand to continue improving as we recognize the effects that the built environment has on public health, and we give more consideration to these factors in urban planning decisions to improve air and water quality, safety, and other health factors.

Air pollution increases the risks for certain illnesses. According to the report, year round exposure to particle pollution has been linked to increased risks from asthma, lung cancer, and cardiovascular disease. Particle pollution poses higher risks to children and the elderly, and those with lung or heart diseases. It particularly increases risks for children living near roads with heavy truck or trailer traffic. The report also found disparities in who is exposed to the pollutants, with low-income and some minority groups having higher exposure. It included speculations from scientists about the reasons for the disparities, including racism and class bias in the housing market, lack of access to health care, grocery stores, and good jobs, dirtier workplaces, and higher exposure to traffic.

The report also provided recommendations on how to improve air quality including the use of federal transportation funds to retrofit diesel engines. Local planning decisions can also improve air quality by reducing the amount of miles we drive through mixed-use and denser development patterns, improved public transit, and the use of vegetation in land developments to purify the air.

Special Edition State Budgeting Matters

2009-05-01T12:52:00.003-05:00

The May 1, 2009 issue of State Budgeting Matteris now posted on our Website. This special edition issue takes a look at Medicaid and the Impending Train Wreck in Ohio Government. Read it here now: http://www.communitysolutions.com/images/upload/resources/sbmv5SpecialEdition.pdf

A big day for budgets

2009-04-30T09:07:00.004-05:00

Yesterday the state budget bill passed the House and the federal budget resolution was approved by both the U.S. House and Senate. It's almost budget overload for those of us who work on both. An interesting fun fact: the same number of Ohio House Members and U.S. Senators voted for their respective budgets.

After passing along party lines with a vote of 53-45, the $56 billion state biennial budget bill now moves to the Senate. The Plain Dealer had a nice summary of the provisions.

Switching to the federal side, the vote was largely along party lines, (233-193 in the House and (53-43 in the Senate) with a few Democrats in both houses jumping ship and voting "no". Today's coverage in the Washington Post and New York Times of the $3.5 trillion total package is worth a read.

But the worst is not yet over - Congress will take up its 9 appropriations bills to set levels of funding for specific programs very shortly, and the Budget Resolution requires them to consider legislation on health care and higher education funding. And at the state level, we expect that conference committee will be busy as the bill coming out of the Senate will likely be quite different from that just passed by the House.

Agreement Reached on FY10 Budget Plan

2009-04-28T08:33:00.001-05:00

The House Budget Committee has announced that Senate and House negotiators have reached an agreement on a federal budget plan for fiscal year 2010. Highlights of the plan:

Discretionary spending set at levels between the House and Senate versions - $10 billion lower than the President’s proposal;
Includes reconciliation instructions on education investment and healthcare reform. This requires committees to report legislation by October 15 if legislation cannot be achieved through normal procedures;
Permanently extends the middle-income tax cuts adopted in 2001 and 2003 including the 10% bracket, child tax credit, and marriage penalty relief;
Indexes the alternative minimum tax to inflation (AMT) – so Congress won’t have to pass a temporary change each year;
Extends estate tax exemptions at 2009 levels and indexes exemptions for future years.

The full House and Senate are each expected to vote on the fiscal year 2010 budget conference agreement this week.

Five Things You Need To Know This Week, April 27, 2009

2009-04-27T10:35:00.003-05:00

1. In the Nation...
The U.S. declared a public health emergency Sunday to deal with the emerging new swine flu, much like the government does to prepare for approaching hurricanes.
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/26/AR2009042601194.html?hpid=topnews

2. In the State...
Amid cuts in areas such as child protective services and charter schools, state spending on long-term care through Medicaid continues unabated, keeping Ohio at 40 percent above the national average.
http://www.dispatch.com/live/content/local_news/stories/2009/04/26/nursing_homes.ART_ART_04-26-09_A1_8HDLOIQ.html?sid=101

3. In Our Community...
In this, the most dire housing market that tax experts can remember, property values are tumbling.
http://blog.cleveland.com/metro/2009/04/cuyahoga_county_home_values_fa.html

4. At Community Solutions...
Our staff was pleased to collect and donate 12 full boxes of food to the Cleveland Foodbank’s Harvest for Hunger campaign last week. If you’d like to know how to help hungry people in any of these 19 Northeast Ohio counties, click here:
http://www.clevelandfoodbank.org/site/PageServer?pagename=hfh_home

5. Miscellaneous...
The Internet has revolutionized how people look for jobs and how businesses find employees. Career coaches say that LinkedIn…is often the first source recruiters, executives and other professionals check when searching for potential hires. http://www.cleveland.com/help-wanted/index.ssf/2009/04/help_wanted_the_newly_unemploy.html

This Week in Washington - 4/24/09

2009-04-24T13:19:00.000-05:00

Congress named its conferees to the budget resolution yesterday and could finish work on the budget resolution next week. The Administration has indicated it could send up its detailed budget request the first week in May, which should help jumpstart the appropriations process.

BUDGET CONFERENCE

Congressional Quarterly is reporting that a tentative deal has been reached between the House and Senate on a final budget resolution that includes reconciliation instructions for health care and student aid and that cuts $10 billion from the President’s discretionary levels. (The House had cut discretionary funding by $7 billion below the President, the Senate had cut $15 billion.) CQ is also reporting that a formal conference meeting will be held on Monday, April 27. If that happens, we can expect the final resolutions to be taken up in the House and Senate during the course of the week.

The House named the following members to be conferees on the budget resolution: Budget Chairman Spratt (D-SC), ranking member Paul Ryan (R-WI), and Reps. Allen Boyd (D-FL), Rosa DeLauro (D-CT), and Jeb Hensarling (R-TX). The House also defeated a motion to instruct conferees to drop the budget reconciliation instructions from the final resolution. The vote was 227 to 196.

The Senate also named conferees after taking a series of votes on several procedural motions. The conferees are Budget Chairman Conrad (D-ND), ranking member Gregg (R-NH), and Sen. Murray (D-WA).

ESTATE TAX

It appears increasingly likely Congress will wait to take up tax legislation to address the 2001/2003 “middle class” tax cuts, AMT, and the refundable credits until next year. This could change, particularly if the debate on health care bogs down. But we remain concerned about the prospects for enacting a one-year extension of the 2009 parameters of the estate tax should the larger tax debate indeed be put off.

To review: enacting a one-year extension to the estate tax could require 60 votes in the Senate, which could be difficult after the vote on the Lincoln-Kyl amendment during the budget resolution. Estate tax supporters are likely to push adopting the Lincoln-Kyl parameters for one year as a “compromise” instead of the 2009 levels. (The Lincoln-Kyl amendment increased the exemptions to $10 million per couple/$5 million per individual and reduced the tax rate to 35 percent.)

Proponents have leverage because, unless 60 votes can be produced for any proposal, the default will be that the estate tax will be completely eliminated in 2010, which they would prefer. Allowing either the Lincoln-Kyl parameters to be adopted for one year or the estate tax to disappear in 2010 would make it more difficult to restore the 2009 parameters as part of a broader tax bill because many members on both sides of the aisle will not want to be perceived as voting for a tax increase.

HEALTH CARE
Action is well underway to structure components of health reform legislation for consideration this summer. Committee chairmen in both the House and Senate are working to have bills ready for committee mark-ups following Memorial Day with floor debate after the July 4th recess.

In the Senate, the HELP and Finance Committees are expected to produce separate bills that will be combined on the Senate floor. Finance Chairman Baucus and Ranking Member Grassley hope to drill down on a number of key issues during a series of health reform roundtables for committee members and health experts, which kicked off on Tuesday. They will focus on three areas: delivery system reform, coverage, and financing.

In the House, the chairmen of the Energy and Commerce Committee, the Ways and Means Committee, and the Education and Labor Committee have pledged to work together on health reform legislation that is expected to follow a similar timetable as the Senate legislation. (Although the public focus of the Energy and Commerce Committee this month has been on climate change legislation, intense behind the scenes work on health reform is well underway.)

H.B. 1 Update: Items of Interest

2009-04-24T08:54:00.003-05:00

We have concerns about a number of unmet needs in the Executive Budget in health and human service programs and the state’s overall fiscal health. Here an update of the changes made by the House to some of the items that we have been watching.

Eligibility determination (income maintenance) for County Departments of Job and Family Services (CDJFSs). CDJFSs serve as the front door for human service programs. GRF dollars are used along with federal food stamp, Medicaid, and TANF dollars to fund staff to perform eligibility determinations for these programs. Even though caseloads for food stamps, Medicaid, and cash assistance are expected to increase, state GRF support for this line item (GRF 600-521) is substantially reduced when compared to FY 2008 actuals ($19 million less in FY 2010 and $25 million less in FY 2011). The state does add some flexibility to counties by allowing the local mandated share to be used for food stamp or Medicaid eligibility determination; however, this change will reduce funding for TANF services at a time when TANF resources already have been substantially reduced due to the spend-down of the surplus balance. In a nutshell, this change plugs a hole in one funding stream by creating a hole in another.

House Changes: There were no changes to this program.

TANF funding for county Prevention, Retention, and Contingency (PRC) programs and Title XX services. The Executive Budget reduced the TANF allocation for counties by $32 million per year when compared to FY 2008 actuals. In addition the county allocation from the transfer of TANF funds to Title XX will be reduced from $67 million to $6 million per year. PRC funds provide diversion, emergency assistance and work participation activities while Title XX dollars are primarily used to fund child welfare and adult protective services. During an economic downturn, reports of abuse and neglect rise.

House Changes: The House added $12.5 million in new GRF fund dollars per year through JFS line item 660-533, Child, Family, and Adult Community & Protective Services. Funds will be distributed according to the current ODJFS Title XX distribution formula. Funds are to be used to help individuals at or below 200% of poverty achieve or maintain self-sufficiency; respond to reports of abuse, neglect, or exploitation of children or adults; provide outreach and referral services for home and community based services for individuals at risk of placement in a group home or institution; and to provide protective services in cases of actual or potential abuse, neglect, or exploitation of a child or adult.

Child welfare programs. Due to the spend-down of the TANF surplus, a total of $17.5 million per year in TANF funding earmarked for child welfare programs is eliminated in the Executive Budget. These programs provided financial assistance to kinship caregivers who provide a permanent home to children who have been in the child welfare system, financial assistance to help former foster children transition to adulthood, and funding to recruit adoptive families for children in need.

House Changes: The House added $5 million per year in a new GRF line item (600-541, Kinship Permanency Incentive Program) in the ODJFS budget for financial assistance to kinship caregivers.

Food assistance. The Executive Budget maintains funding for the Ohio Association of Second Harvest Food Banks at $8.5 million per year, but the need for food assistance is rising. An additional $8.5 million per year is needed to help the food banks keep up with their growing demand.

House Changes: The House added $1 million per year in GRF to JFS line item 600-410, TANF MOE, and earmarked the funds for the Ohio Association of Second Harvest Food Banks to purchase and distribute food products. The House also added $1.5 million per year to JFS line item 600-535, Early Care and Education, for the Children’s Hunger Alliance to fund the Child Nutrition Program outreach efforts.

Lift the statutory cap on assisted living slots. To ensure long term financial sustainability in the Medicaid program, Ohio must develop a long-term care system that is more balanced between institutional care and home and community based care. Right now Ohio's care system is heavily skewed towards nursing facility care, and increasing home and community based options for consumers will help to bring balance to this system.

House Changes: The House lifted the statutory cap on assisted living slots; however, the House backed away from meaningful long term care system reform by increasing state financial support for nursing home care through a significant rate increase that will cost an additional $56.4 million in FY 2010 and $177.3 million in FY 2011.

Need for New Revenues. We remain concerned about the strength of our revenue system, which has been severely damaged by five years of tax cuts and the unprecedented amount of use of one time funds to support FY 2010-2011 spending. We estimate that up to an additional $8 billion in new revenue will be needed to support state spending in the next biennium. We have been telling everyone who will listen to us that we must act responsibly and act now to start dealing with our structural deficit. We have recommended a series of revenue options that will yield about $2 billion in new revenues over the biennium to begin to address the state’s structural deficit.

House changes: The House adopted the LSC revenue estimates, which enabled them to assume an additional $342 million in revenues (Federal revenues are excluded from this analysis due to changes in the treatment of Title I federal stimulus). The LSC estimates were more pessimistic than the Executive in FY 2010 but assumed a more robust recovery in FY 2011. The change between the two estimates is very small given the overall size of the state budget; however, we have two concerns about relying on a more optimistic forecast. First, neither the LSC nor executive forecasts have been adjusted to account for the impact of the recent $0.62 per pack federal tax increase on cigarettes. This change, according to the testimony of LSC Director Mark Flanders before the House Finance committee, will likely reduce GRF revenues by $100 million over the biennium. Second, the balance sheets in both the Executive and LSC forecasts assume that $387.2 million in GRF revenue will be carried forward from FY 2009 to FY 2010. Through March 2009 state tax receipts were trailing revised estimates by $195.8 million. It is looking more and more unlikely that the state will be able to hit its FY 2009 revenue targets.

Advocacy Needed for Early Care and Education

2009-04-23T16:14:00.002-05:00

The House Substitute Budget bill released yesterday slashed funding for Early Childhood Education by $23 million and did not restore funding for Early Childhood Mental Health Treatment and Consultation. We need to give our legislators the message that we cannot cut from one area of early childhood to fund another early childhood priority. We need new dollars to fund all of these priorities. Calls are needed today to the leadership in the House to urge them to restore the funding for Early Childhood Education and restore the funding for Early Childhood Mental Health Treatment and Consultation.

House Leadership to Call TODAY:

Speaker of the House Armond Budish: (614) 466-5441
Majority Floor Leader Jennifer Garrison: (614) 644-8728
House Finance Chair Vernon Sykes: (614) 466-3100

You can also send a letter to your Representative and House Leadership through the groundWork website here: http://www.groundworkohio.org/getinvolved/contactrep.cfm

Happy Earth Day

2009-04-22T13:37:00.003-05:00

Since it's Earth Day, it's a good time to think about the environment. The environment includes the issues that affect people’s health, such as safety, school quality, access to jobs, and public transit, and water and air pollution. Air pollution increases the risk of many health conditions like asthma and cancer. Like so many environmental hazards, air pollution has been shown to have a disproportionate effect on children, elderly, and inner-city residents. Industrial urban areas like Cuyahoga County face even greater challenges in protecting air quality, however there have been advances. At the federal level, the Environmental Protection Agency found last week that carbon dioxide and five other industrial emissions represent a significant threat to public health and welfare, which opens up federal regulation of these gases, and shows an interest on the federal level to reduce air pollution.

At the same time, Congress is considering cap-and-trade legislation to reduce emissions by putting a cap on allowable levels and making those allowances tradable on the open market, with varying proposals on how to use cap-and-trade revenue to offset rising energy costs for households. Some worry that cap-and-trade would drive up energy and related costs in ways that low-income populations cannot afford. Others worry that if we don't reduce consumption, the price for energy will still increase quickly in addition to increased health care costs (for asthma, cancer, etc.) due to air pollution.

Recovery Update: Where to look for stimulus info?

2009-04-21T10:58:00.002-05:00

This is the inaugural posting in a new series providing regular updates on the American Recovery and Reinvestment Act as it is implemented.

There is more information coming out on the ARRA and its programs nearly every day. But specifics are sometimes difficult to find, and cutting through the clutter to find good, reliable, up-to-date, simple information can be challenging.

After literally hours of searching and reading, and killing a small forest-worth of trees printing out materials, I’ve compiled this list of the best sources online for stimulus information (all in my opinion of course).

TIMING OF INFORMATION RELEASE
Ninety days from enactment (May 15, 2009) is the deadline for most federal agencies to submit their plans to Congress. We expect there to be many more specifics available after that date. Some departments are moving more quickly than others.

GENERAL INFORMATION
www.Recovery.gov – the official website of the Obama Administration. Rumor is that the final destination of each stimulus dollar will be posted on this website as information become available. For now, the “Featured News” section is most helpful – they compile the releases from all federal departments and link directly to the sites.

www.Recovery.Ohio.gov – Governor Strickland’s official recovery website. As project funding is announced, it will be posted here. If you have a project for which you are seeking stimulus funding, you MUST submit an expression of interest through this website to be considered (and do it as soon as possible as some programs are closing shortly). When you click on “submit a proposal” it also links to a series of documents that lists programs distributed by various levels of government.

http://Brown.senate.gov/ – Senator Sherrod Brown has a special section of his website dedicated to the recovery act. Resources under “Economic Recovery Package” are very helpful and updated frequently. I found the grant deadlines document especially helpful – Senator Brown’s staff has done some of the work for us!

www.StateRecovery.org – a resource from the Council of State Governments, examines recovery funding from a state perspective. The “Key Deadlines” and “State Responses” sections are particularly interesting.

SPECIFIC PROGRAMS
Each federal department has created a special recovery website (this is part of the transparency guidelines for the ARRA). They are usually in the form : website/recovery (examples: www.hud.gov/recovery, www.hhs.gov/recovery, www.ed.gov/recovery) Here you can find specific program information and allocations as they become available. HUD and Education have also done several webcasts on specific issues that are very helpful if you are interested in those particular programs.

One thing I’ve found most helpful is to google search the program name (in quotes) and “recovery act” – this can quickly connect you to info put out by national organizations about specific programs. Keep in mind many programs existed before ARRA, and while some have been slightly modified, you can usually find some good info on how the money has been distributed in the past.

If you still have questions, it may be time to call the Governor's Office (614-644-5320 for the Office of Faith Based and Community Initiatives), Senator Brown's Office (1-888-896-OHIO) or your U.S. House Member. Or send me an e-mail. Who knows, your question might be the topic of a future "Recovery Update" post!

This Week in Washington - 4/20/09

2009-04-20T14:34:00.001-05:00

Member of Congress are returning to DC after their two-week district work period and will be back in session tomorrow. We are looking ahead to a busy legislative schedule in the weeks and months ahead as Congress is likely to consider sweeping legislation on health care and climate change, not to mention the standard business of considering appropriations bills for FY2010. One issue that is likely to be discussed is the estate tax. This week’s update is an opportunity for us to provide additional background on this important issue.

The estate tax is one unresolved issue facing the Budget Resolution conference committee. The House resolution assumes that the estate tax would continue under the 2009 parameters, which provides an exemption of $7 million per couple and $3.5 million per individual with a statutory rate of 45 percent. The 2001 tax-cut law gradually phased out the estate tax by raising the exemption levels and reducing the top rate. Under current law, the tax will disappear completely in 2010 but reappear in 2011 under its 2001 parameters, with a $1 million exemption and a 55 percent rate on the largest estates. No policy-maker wants this to happen, so some action on the estate tax is very likely to occur this year.

The full Senate approved the Lincoln-Kyl amendment to substantially weaken the estate tax by increasing the exemption to $5 million per individual/$10 million per couple, reducing the top rate to 35 percent, and “reunifying” the estate tax and gift tax exemptions. While the vote, which was 51-48, was on an amendment to create a reserve fund and is not binding, a majority of Senators went on the record in support of cutting the estate tax below the President’s levels.

The picture was blurred a bit by a subsequent vote on a Durbin amendment to create a point of order against any estate tax legislation beyond what is assumed in the underlying resolution unless it provides an equal amount of tax relief to taxpayers earning less than $100,000. That vote was 56-43. Senator Durbin mainly offered this amendment to give moderates something to be for so they could vote against the Lincoln-Kyl amendment. In other words, it’s going to take a lot of work to get them to ultimately vote against further reductions in the estate tax.

The conferees are likely to drop the Durbin amendment because it causes procedural problems for the budget resolution when it comes back for final approval.

Although we don’t know for sure yet, there’s a growing sense that extending the middle class tax cuts could be deferred until next year. (This does not pose a problem for the refundable credits because they are also in place through 2010.) If that happens, comprehensive estate tax legislation is also likely to be deferred until next year. The President and opponents of further reductions in the estate tax will not want to let it expire in 2010, so it is looking increasingly likely that a one-year extension of the 2009 parameters will need to be enacted this year.

We’re very worried that the anti-estate tax crowd will use this as an opportunity to cut the estate tax for just one year, possibly to the levels proposed in the Lincoln-Kyl amendment. In fact, the ranking member on the Finance Committee, Senator Grassley, has made it clear that any estate tax legislation, even an extension, will be blocked unless they get a higher exemption and a lower rate.

We’ll be working to figure out a way to put significant pressure on Congress, and on Senator Voinovich in particular, to ensure that the 2009 levels stay in place for at least one more year.

Five Things You Need To Know This Week, April 20, 2009

2009-04-20T08:29:00.005-05:00

1. In the Nation...
President Barack Obama promised Saturday to eliminate dozens of government programs that have been shown to be "wasteful or ineffective" and said he will call on his cabinet to hunt their budgets for more.
http://online.wsj.com/article/SB124002247015831371.html

2. In the State...
Gov. Ted Strickland's school-funding plan, which helped get him elected in 2006, is becoming a victim of reality: The reality of less money and more politics.
http://news.cincinnati.com/article/20090419/NEWS01/904200333/1055/NEWS

3. In the Region...
Earth Day 2009 was celebrated across Northeast Ohio over the weekend, including Earthfest at the Cleveland Metroparks Zoo (the longest-standing Earth Day event in the U.S.), events at Lake Metroparks Farmpark and an Eco-Fair at Penitentiary Glen, the Lorain County Metro Parks’ Carlisle Reservation, and Medina County’s first annual Earth Day Family Walk. Officially, Earth Day is Wednesday, when the Earth Day Network’s “Green Generation” campaign will be launched. The campaign is a two-year initiative that will culminate on the 40th Anniversary of Earth Day in 2010.
http://www.earthday.net/greengeneration

4. At Community Solutions…
After the first round of testimony in the House, members have heard from multiple groups about the inadequacies of the Medicaid budget. There is no doubt that the economy is presenting major challenges for all. Even though the federal government is providing an unprecedented amount of additional revenues, these revenues are temporary. Community Solutions believes that Ohio would be wise to use these revenues to cover increasing caseloads, maintain current levels of services, and invest in short-term solutions that will save money in the long run. The April 16 issue of State Budgeting Matters provides an overview of the FY 2010-FY 2011 Executive Budget proposal for the Department of Jobs and Family Services’ (ODJFS) Medicaid program and an estimate of ODJFS Medicaid spending for the FY 2012-FY 2013 biennium: http://www.communitysolutions.com/images/upload/resources/sbmv5n8.pdf

5. Miscellaneous...
They bought into the notion that if they went to college—never mind the debt—their degree would lead to a lucrative job. And repaying their student loans would never be a problem.
http://www.nytimes.com/2009/04/18/your-money/student-loans/18student.html?_r=2&em

NEO Media Guide Moves Online

2009-04-14T15:34:00.002-05:00

We're very pleased to release the Northeast Ohio Media Guide as an online subscription service after 50+ years as a printed publication. In this format, we think it'll be an even better resource since we'll be able to update the information regularly, both through our own effort and through news shared by users. Are you a Media Guide user? What do you think of this new format?

Updated stimulus matrix should help to navigate funding streams

2009-04-13T09:39:00.002-05:00

We’ve updated the ARRA Matrix on the Community Solutions website that lists key health, social service, and education appropriations included in the economic recovery package. The new (and improved) document still includes program descriptions, but adds the far-right column which lists the final distribution authority – who actually spends the money for each program (or in other words, where to apply in most cases).

It is our hope that this document will help advocates navigate the sometimes choppy waters of the various funding streams as you try to figure out where you might be able to get money for your programs. If you have questions on specific programs, feel free to contact me at ecampbell@communitysolutions.com

Still looking for more information? I'll be at Lakeland Community College on Thursday to discuss this subject in more detail. The program is free, but pre-registration is required: www.lakelandcc.edu/comeduc/

Five Things You Need To Know This Week, April 13, 2009

2009-04-13T09:05:00.002-05:00

1. The Nation
The Stimulus and Poverty: First Steps toward a Strong Antipoverty Policy
Over the coming weeks, Spotlight on Poverty is running a special series that examines how the American Recovery and Reinvestment Act affects low-income Americans.
http://www.spotlightonpoverty.org/ExclusiveCommentary.aspx?id=7e5e73f6-7891-4046-a5b9-41bd3aa2275a

2. The State
States slashing social programs for vulnerable
Battered by the recession and the deepest and most widespread budget deficits in several decades, a large majority of states are slicing into their social safety nets—often crippling preventive efforts that officials say would save money over time. Ohio faces large cutbacks in child welfare investigations, with some counties losing 75 percent of their investigators, which may mean more injured children and more taken into foster care.
http://www.nytimes.com/2009/04/12/us/12deficit.html?hpw

3. The Region
Savers rewarded by Ohio program
Those who have followed the Akron Beacon Journal's “Reclaim the Dream” series, where readers are encouraged to save money or reduce their debt, know that the importance of having some savings. Whether you're saving up for a rainy day or something specific, having savings empowers you.
http://www.ohio.com/business/42867732.html
Reclaim the Dream Website: http://www.reclaimthedream.net/

4. Community Solutions
American Recovery and Reinvestment Act outlined
An updated outline of the American Recovery and Reinvestment Act, prepared by Emily Campbell of the Public Policy team, assists users by giving the final distribution authority for all funds; in other words, it lets you know exactly where to apply for the money. The updated report can be found here: http://www.communitysolutions.com/images/upload/resources/ARRA-Summary_Updated-040909.pdf
On Thursday, Emily will be the featured presenter at Lakeland Community College on the economic recovery package. The 8:30 a.m. program is free, but pre-registration is required: www.lakelandcc.edu/comeduc/

5. Miscellaneous
Credit card companies using new fees, rates to get more out of consumers
If you're one of the nation's 173 million people with credit cards, you may find that card getting more expensive--even if you don't carry a balance.
http://blog.cleveland.com/business/2009/04/credit_card_companies_using_ne.html

This week in Washington, 4/10/09

2009-04-11T12:43:00.003-05:00

Congress is in the middle of its two-week spring recess, so it gives us an opportunity to take a little longer view of the budgets passed by the House and Senate. This week’s update is longer than usual because it give more in-depth explanations of the issues that will be part of the conference discussion.

PRIORITIES FOR THE BUDGET CONFERENCE
The budget resolutions passed by the House and Senate both preserve Congress’s ability to address the President’s key initiatives. The next step in the process will be to resolve the differences in a conference committee. We actually expect the final resolution to be worked out behind closed doors over the next several weeks by a small group of Budget Committee Democrats in consultation with their Leadership and the White House. Since no Republicans supported the resolution in committee or on the floor, they are only expected to be part of the final, formal conference meeting which will occur after all the decisions have been made.

OVERVIEW OF THE RESOLUTIONS
The House and Senate budget resolutions are similar in a number of key ways. Deficits will fall substantially over the next five years under both versions. They do remain high relative to the economy by historical standards because of the recession and financial system breakdown. But the key point is that under both plans, deficits over the next five years would be lower than the deficits that would occur if current policies remain unchanged.

Both the House and Senate resolutions assume that tax cuts that benefit middle-income taxpayers enacted in 2001 and 2003 (the 10 percent bracket, the child tax credit and marriage penalty relief) will be extended without being offset.

Both the House and Senate resolutions facilitate reforming the nation’s health care system to move toward universal insurance coverage and slow the rate of growth of health care costs system-wide. They also pave the way for enacting other major investments such as improving education and facilitate enactment of comprehensive climate change legislation.

Discretionary funding: The final budget resolution will set the total amount of funding available to the Appropriations committees for discretionary programs for the next fiscal year, 2010. The good news is the Senate rejected all amendments to cut domestic discretionary funding below the cuts made by the Budget Committee.

The President would increase domestic discretionary funding by 5.4 percent over last year, excluding inflation. Congress was concerned about increasing spending again after having just enacted increases in the Omnibus Appropriations for 2009. So the House cut domestic discretionary by $7 billion – to a 5 percent increase over last year after adjusting for inflation. The Senate cut domestic discretionary even further -- by $15 billion below the President, a 3 percent increase over last year after adjusting for inflation.

These increases should be put into perspective. The President’s budget includes one-time funds for decennial census. It also includes a technical adjustment for the FHA loan guarantee program that does not reflect a change in policy. Much of this increase reflects conditions in the mortgage industry. Without these two policies, the House increase is only 3.5 percent after adjusting for inflation and the Senate increase is only 1.5 percent after adjusting for inflation.

The President is proposing to increase veterans spending by more than 10 percent. The House and Senate budget resolutions want to increase funding for veterans programs even further, to an 11.5 percent nominal increase over last year.

Once you factor in those increases, funding for all other discretionary programs would increase by just 0.6 percent under the Senate budget resolution (adjusted for inflation). That leaves very little for investments in programs that have been significantly underfunded in recent years, like Head Start, education, housing, public health, and more. If members believe increases are needed in some of these other areas, they need to build support higher discretionary funding levels for 2010 than are assumed by the Senate.

Finally, domestic discretionary spending is not the cause of the deficit problem. While total discretionary spending has increased significantly in recent years, it has been overwhelmingly for defense and homeland security. Domestic discretionary spending has grown only slightly since 2001 after inflation is taken into account. Even after the increases provided in the Omnibus Appropriations bill for 2009, total domestic discretionary funding has increased just 1.1 percent per year on average since 2004 (adjusted for inflation.) A number of key programs that invest in the education and well-being of children and families have been significantly underfunded as a result of this budget policy.

Reconciliation instructions: The House plan includes reconciliation instructions to three committees that would facilitate passage of legislation to enact Obama’s key initiatives in health care, education, and possibly climate change. The Senate resolution includes no reconciliation instructions so this issue will need to be resolved in conference. Every President in recent memory, including both Presidents Bush, has used this process in their first years to enact major domestic initiatives.

The House resolution suggests reconciliation would be used to facilitate consideration of legislation to reform health care and to make improvements in student financial aid. But because the Energy and Commerce and Ways and Means Committees both received instructions in the House, it is conceivable that the procedure could be used for climate change legislation if it’s not used for health reform. Including the instructions in the final budget resolution does not require that the reconciliation process be utilized.

Legislation that is brought to the floor as a reconciliation measure is protected by special rules and procedures, particularly in the Senate. The types of amendments that can be offered are limited, and the time for debate is predetermined. This means a Reconciliation bill cannot be filibustered, and only requires a simple majority of 51 votes to pass, rather than the 60 needed to shut down a filibuster.

The Senate resolution did not include Reconciliation instructions mainly because Republicans, especially those on the Finance and HELP Committees who are engaged in bipartisan discussions on health reform, labeled the move as partisan and an attempt to shut them out of the process.
Taxes/Estate tax: The House and Senate resolutions both assume most of the tax cuts proposed by the President, including the extension of the tax cuts first enacted in 2001 and 2003 for everyone earning $250,000 or less. The House plan contains $613.2 billion in unpaid-for tax relief over five years, while the Senate plan as it came out of Committee contained $825 billion. The Senate also adopted several problematic tax-related amendments during floor consideration that could lead to more tax cuts and that will need to be addressed during conference. Next week’s update will contain a more detailed explanation of the Estate tax amendments adopted in the Senate.

Other Senate tax amendments: The Senate also adopted amendments to exempt various groups, particularly small businesses, from the return in 2010 of the 36 and 39.6 percent brackets for those earning $250,000 or more. The Senate also adopted several amendments that would make it harder to enact some of the President’s revenue proposals. We’re fairly confident these amendments will be dropped in conference. But, as with the estate tax, the votes on some of these amendments show us we have work to do to persuade members that some revenue increases must be part of the equation for restoring fiscal responsibility and improving fairness in the tax code.

$350,000 to Local HIV/AIDS Programs

2009-04-10T10:04:00.003-05:00

Of over $350,000 in recent grants to local organizations, close to half will help create or expand programs that provide HIV testing to Greater Clevelanders.

Twelve (12) organizations will benefit from grants from the AIDS Funding Collaborative (AFC) to support HIV/AIDS-related services and prevention programming in Greater Cleveland.

Grants to five organizations will help develop or expand programs that provide HIV testing. Through its grant, University Hospitals will become the first hospital in Northeast Ohio to initiate routine rapid HIV testing in its Emergency Room protocol. The only other Ohio hospital conducting such testing is University Hospital of Cincinnati.

For information about the grants, click here.

Congrats to those protecting tenants in foreclosures

2009-04-10T09:49:00.001-05:00

Congratulations to Reps. Mike Foley and Ted Celeste for actively looking after the interests of renters who find themselves forced out of foreclosed properties through no fault of their own. The Cleveland Tenants Organization was recently honored with the prestigious Anisfield-Wolf Memorial Award, a $20,000 prize, for their outstanding work on this same issue. CTO was given the award by The Cleveland Foundation and Community Solutions to recognize their initiative and actions to help renters facing eviction due to foreclosure and to warn the hundreds of families who may not have known it was coming. They took on this major task with no additional external support simply because they recognized its importance and could foresee what a crisis it would become for families in our community. How fortunate we are to have such resources available.

Does this mean budget wonks are cool?

2009-04-06T13:52:00.002-05:00

Director of the Office of Management and Budget Peter Orszag (as opposed to Pari Sabety, director of Ohio’s Office of Budget and Management) appeared as a guest on the Daily Show with Jon Stewart last week. Orzag’s appearance comes between “certified cool” guests – actors Seth Rogan and Michael J. Fox (who is on tonight).

During the 10-minute segment, Orszag explained the difficulties of budget forecasting, the importance of addressing health care costs, and projected federal deficits. The interview highlighted some really important issues, and also made light of some of the extremely difficult challenges facing our country. What I found really funny (or sad) is the fact that Jon Stewart’s solution to reducing the deficit - ripping out the Department of Commerce - would only just begin to scratch the surface of the problem. The Commerce budget for 2010 is $13.8 billion total (which includes a huge $4 billion increase to conduct the census). The federal deficit for 2009 is expected to top $1.2 trillion.

If only the rest of us could make budgeting as interesting as the Daily Show...

Five Things You Need To Know This Week, April 6, 2009

2009-04-06T08:41:00.001-05:00

1. The Nation
Despite President Obama's call for federal employees to "do their part" and accept smaller-than-usual pay raises, Congress is considering a budget that could spend an additional $1.3 billion or more on pay for civilian federal workers.
http://www.usatoday.com/news/washington/2009-04-03-government-pay-raises_N.htm

2. The State
Progress made—and progress still needed—in implementing recommendations of the Ohio Medicaid Administrative Study Council are tracked in the new report, Managing Medicaid: An Update on the Report of the Ohio Medicaid Administrative Study Council, by Wendy Feinn. Community Solutions will continue monitoring the status of Medicaid in the coming months as part of our Public Policy and Advocacy agenda.
http://www.communitysolutions.com/images/upload/resources/OMASCFinalReport.pdf

3. The Region
The Akron Film Festival begins Thursday in a new venue and has more workshops, as well as a selection of short and feature-length films. The festival will be based in the Akron Art Museum this year, a change from last year's presentations in the Summit Artspace building…And while the festival comes close on the heels of the larger Cleveland International Film Festival, the Akron event has different films and a different audience. For more information: http://www.AkronFilmFestival.com.

4. Community Solutions
We’ve taken a major step in our move toward a primarily electronic communications platform! After 50 years as our signature publication, the Northeast Ohio Media Guide, is now an online subscription service ($50/year). A user name and password are required to access the system…so subscribe today!
https://www.communitysolutions.com/mediaguide/login.asp

5. Miscellaneous
Quit-smoking hot lines are smokin' hot thanks to the largest-ever increase in the federal tobacco tax.
http://blog.cleveland.com/metro/2009/04/ohio_stopsmoking_800quitnow_li.html

This Week in Washington - 4/3/09

2009-04-03T16:12:00.000-05:00

The House and Senate have adopted separate versions of a budget resolution, so the next step in the budget process will be for a conference committee to resolve the differences in a final resolution.

THE BUDGET RESOLUTION IS MOVING TO THE NEXT STAGE

Both the House and Senate adopted their versions of the budget resolution on Thursday. The House resolution was adopted by a vote of 233-196. The Senate resolution was adopted by a vote of 55 to 43. Ohio’s delegation voted along straight party lines, with the Democrats voting “Yea” and the Republicans saying “Nay”.

The budget resolutions adopted by the House and Senate both promote a balanced approach to budgeting that will support the President’s key initiatives – reforming health care, addressing climate change, and strengthening education -- while taking important steps to strengthen the economy and restore long-term fiscal stability.

The Senate considered a number of difficult amendments. Fortunately, efforts to further reduce discretionary funding below the cuts made in Committee were defeated. However, the Lincoln-Kyl amendment in favor of cutting the estate tax below the 2009 parameters for very wealthy estates was adopted by a vote of 51-48. Despite our efforts, Senator Voinovich votes for this amendment. While this is very disappointing, the defeat was a very narrow one, which will be important when actual estate tax reform legislation moves in the next 12 months.

The Senate also agreed to a second estate tax amendment offered by Senator Durbin that creates a 60-vote point of order against putting the wealthy ahead of the middle class. That vote was 56 to 43 and essentially a “cover” vote for those who didn’t want to be seen putting the wealthy first. It was supported by some of the same Senators who voted for the Lincoln-Kyl amendment (but not by Senator Voinovich). Since the House budget resolution did not include a counterpart to the Lincoln-Kyl amendment, we will work to ensure that it is dropped in conference.

NEXT STEPS ON THE BUDGET RESOLUTION
Our main priorities for conference will be to preserve non-defense discretionary funding and revenue levels, and ensure that the budget resolution will facilitate consideration of key policies including health reform. As more analysis of the final House and Senate resolutions becomes available, we’ll distribute it to advocates.

PCSAO Ohio's Factbook Released

2009-04-03T13:58:00.000-05:00

Did you know that the 9th edition of the Public Children Services Association of Ohio’s Factbook was released this week? It features information about foster care, child abuse and neglect, poverty, teenage pregnancy, community services and much more. Based on data presented in the report, PCSAO makes some policy recommendations. Check it all out here.

Time to resurrect the LBO?

2009-04-03T12:58:00.002-05:00

Today’s Columbus Dispatch reports that “Nearly eight years after they killed it, legislative Republicans want to re-create their own state budget watchdog, saying one is needed… Joined yesterday by about a dozen other House GOP members at a news conference, Minority Leader William G. Batchelder of Medina outlined a bill to bring back the Legislative Budget Office.”

I just had to smile, because that has been a key point made over and over (and over) by Dick Sheridan in State Budgeting Matters. Check out his story as Ohio’s first LBO director in the 1/15/09 issue, and see why he thinks it’s time for the state to resurrect the LBO. What do you think???

The April 1, 2009, edition of State Budgeting Matters is posted on our Website.

2009-04-01T15:50:00.002-05:00

The April 1, 2009, edition of State Budgeting Matters is posted on our Website. In this issue, Dick Sheridan looks at the FY 2010 - FY 2011 State Budget: Paramount Considerations. Check it out here: http://www.communitysolutions.com/images/upload/resources/sbmv5n7.pdf!

Senate estate tax amendment is harmful

2009-04-01T13:50:00.005-05:00

We have received word that Senators Lincoln and Kyl are planning to offer an amendment to the budget resolution in support of reducing the estate tax below the 2009 parameters with an unspecified funding offset.

We urge Ohio's Senators to oppose the Lincoln-Kyl amendment and any other amendment that would extend estate tax relief beyond the current 2009 law. Under current law, the estate tax will be fully repealed next year, only to revert to pre-2001 levels in 2011. Because of these provisions, Congress will have to consider the issue before the end of this year. This amendment forces a test vote on the estate tax – and will establish a precedent for the estate tax reform policy that could influence debate on actual estate tax legislation sometime in the next 12 months.

The Senate budget resolution assumes the President’s proposal to retain the 2009 parameters, which exempts up to $3.5 million for individuals, and $7 million (indexed) for couples from any estate tax. The rate would be 45 percent but the effective rate for most estates would be much lower because of other exemptions already in law.

The Lincoln - Kyl amendment would create a deficit-neutral reserve fund allow the estate tax exemption to be increased to $10 million per couple and $5 million per individual with a 35 percent rate.

Retaining the 2009 parameters as the budget resolution provides is already very generous – it costs $485 billion from 2012-2021 (the 10-year period it would be fully in effect). Increasing the exemption for individuals to $5 million and for couples to $10 million while reducing the rate to 35 percent costs an additional $245 billion for a total cost of $730 billion over the same period.

If offsets are available, they should be used to finance higher priorities like health care reform, Social Security reform, improving education, or reducing the deficit rather than for tax cuts that only help those with estates valued at more than $7 million per couple. Surely it would be unseemly now to cut the estate tax below its current levels with the economy in turmoil and millions of people are losing their jobs or otherwise struggling in the aftermath.

Food Stamp benefits will increase tomorrow

2009-03-31T15:45:00.005-05:00

It's no April Fools joke - tomorrow is an important day for individuals who rely on food stamps. Benefits are scheduled to increase 13.6%, or $20-$24 for the average family as a result of the American Recovery and Reinvestment Act. Food stamp benefits are closely related to economic conditions, so it’s not surprising that caseloads have increased significantly over the last year.

As the graph below shows, the number of food stamp recipients in Ohio has risen 15.4% since 2005, to an average of nearly 1.8 million people receiving the benefit each month during calendar year 2008. When 2009 data begins to be available later this year, we expect to see a continued climb.

Source: ODJFS

The food stamp increase is well-designed stimulus because it meets the “Three T” criteria of targeted, timely, and temporary. The temporary increase that begins in April is expected to bring an additional $178 million into Ohio during the next six months, and should generate around $330 million in economic activity in our state. Since 75% of recipients are in families with children, and nearly one-third of recipients are elderly or persons with disabilities, this important economic stimulus has the added bonus of assisting vulnerable Ohioans.

Last Week in Washington - 3/30/09

2009-03-31T12:16:00.001-05:00

Budget resolutions will be moving in both the House and Senate next week. Please help ward off cuts to domestic discretionary spending and increases in tax cuts in the Senate.

The House and Senate will take up their respective versions of the budget resolution this week. We are not expecting difficult amendments to be offered during the House debate, so the “ask” for moderate legislators is to support the final resolution.

The Senate debate is likely to be quite contentious and votes on a number of difficult amendments are expected. The “ask” for moderate Senators is to oppose any amendment to cut discretionary spending or increase tax cuts, especially if those tax cuts are not assumed to be paid for.

Brief summary of House and Senate resolutions. Both resolutions would facilitate legislation to carry out President Obama’s main initiatives: health care reform, climate change/energy legislation, strengthening education, and start to address the long-term fiscal problem.

Discretionary: The House resolution reduces non-defense discretionary (including international) funding by $7 billion below the President’s request. The Senate resolution reduces non-defense discretionary spending by $15 billion below the President’s request. The remaining increases are quite modest when put into proper perspective.

The House budget resolution assumes domestic discretionary (excluding international) funding would be increased by 3.5 percent above 2009 levels, taking into account inflation and factoring out a must-do increase for the decennial Census and a technical increase for a Federal Housing Administration (FHA) loan program.

The Senate budget resolution assumes an increase of just 1.5 percent over last year’s levels, taking into account inflation and factoring out a must-do increase for the decennial Census and a technical increase for a Federal Housing Administration (FHA) loan program. (The President would provide an increase of 3.9 percent for domestic discretionary programs, making the same adjustments for inflation, the Census and FHA loan guarantees.)

Mandatory: The House resolution includes “reconciliation instructions” to the Energy and Commerce and Ways and Means Committees for health care reform legislation, and to the Education and Labor Committee, for higher education, presumably to accommodate the President’s proposal to end the Family Federal Student Loan program and use the savings to increase federal Pell grants. The Senate resolution includes no reconciliation instructions, but this will be an open issue for conference. If the reconciliation process is triggered, it mainly affects consideration of legislation in the Senate. The time for consideration would be limited, the types of provisions that could be included would be limited as would the types of amendments that could be offered, and the bill could not be filibustered, so only 50 votes would be needed.

Both the House and Senate resolutions include a number of deficit-neutral reserve funds for health care reform, climate change/energy, child nutrition, and higher education.

ACTION STEP Please contact Senator Voinovich and urge him to:
1) oppose further cuts in the discretionary spending levels; and
2) oppose any increases in tax cuts, especially in the estate tax, beyond what’s assumed in the resolution.

The decisions that get made this week could have a significant impact on policies that help the most vulnerable people in this country. So please weigh in to ensure the best possible outcome! If you need more info, contact me at ecampbell@communitysolutions.com.

Five Things You Need To Know This Week, March 30, 2009

2009-03-30T08:12:00.003-05:00

Five Things You Need To Know This Week, March 30, 2009

1. In the nation...
On Wednesday, April 1, a key element of the economic recovery package — an increase in food stamp benefits — will kick in, providing a big economic boost to communities across the country and helping struggling families put food on the table. The Center on Budget Policy and Priorities (CBPP) explains that benefits will go up by 13.6 percent, or roughly $20-$24 per person per month for most families, and that all food stamp households will benefit. Between December 2007 and December 2008, food stamp enrollment nationally increased by more than 4 million, or about 15 percent; Ohio saw a 12 percent increase. CBPP notes that experts agree that food stamps are one of the most effective forms of economic stimulus available. Click here for more information.

2. In the state...
If you live in a property-wealthy school district hoping for a funding windfall, or in a poor, rural district worried about the pain of the state budget ax, pay close attention to the Statehouse in the next few weeks. Many changes to Gov. Ted Strickland's school-funding plan are in the works.
http://www.dispatchpolitics.com/live/content/local_news/stories/2009/03/29/NEW_SCHOOL_FUNDING.ART_ART_03-29-09_A1_QGDCRGJ.html?sid=101

3. In the region...
In a continuing rite of spring, Summit, Medina, Wayne and Stark counties will collect old refrigerators, stoves, washers, dryers and other household appliances in April. The collections allow residents to rid themselves of appliances that contain refrigerants that could otherwise require a recycling fee.
http://www.ohio.com/news/42068567.html

For information about recycling in Cuyahoga:
http://www.cuyahogaswd.org/pdf/GuideRecPrograms.pdf

4. At Community Solutions
This week, we will launch the beginnings of a new and improved Website and unveil an exciting new product—our online subscription service to the Northeast Ohio Media Guide. Visit http://www.communitysolutions.com/ on Friday (April 3) to take a look and subscribe to the new Media Guide service, which replaces the 50+-year biennial publication.

5. Miscellaneous
On Saturday (April 4), the Rock and Roll Hall of Fame induction ceremony will rock Cleveland’s Public Hall for the first time since 1997. Admission to the Rock and Roll Hall of Fame and Museum will be FREE all day. Find the week’s schedule of activities here:
http://www.rockhall.com/induction2009/events

Got an event coming up? Submit your event, free of charge, to our online Community Calendar: kseeman@CommunitySolutions.com.

Help us create community solutions together by donating here: https://www.communitysolutions.com/howhelp/donation/

Last Week in Washinton - 3/23/09

2009-03-23T09:26:00.001-05:00

It will be a big week for budget discussions in Washington as it looks like the House and Senate Budget Committees will consider their respective versions of the budget resolution this week.

BUDGET RESOLUTION
The House and Senate Budget Committees plan to mark up their respective versions of a budget resolution this week. If they do, House and Senate floor consideration would occur the following week (March 30). The two-week recess for Easter and Passover starts on April 6. Leadership hopes to complete conference sometime in late April or May.

Congress is still hearing a lot of opposition to many aspects of the President's budget proposals. This is not simply opposition from conservative Democrats and Republicans; a number of Democrats are concerned that after the stimulus bill and omnibus appropriations, that this is not the time to further increase nondefense discretionary or appropriated spending.

These concerns have been heightened by the Congressional Budget Office's reestimate of the President's budget which projects a deficit of nearly $1.7 trillion (11.9 percent of GDP) in 2009 and $1.1 trillion (7.9 percent of GDP) in FY2010. This is significantly worse than the levels projected by the Administration when it sent up the budget. It reinforces the importance of two aspects of the President's budget proposals: containing health care costs is essential to addressing the long-term fiscal problem, and revenues are going to have to be on the table.

OMB Director Peter Orzag has launched a blog. An entry this week provided more information about one-time increases in discretionary spending for the Census and the FHA that help to explain why the President's levels are not excessive. Add it to your bookmarks!

HEALTH
Both sides of the Hill are engaging in health care reform-related activities. Committees in both bodies are holding hearings. The Finance Committee, which is the lead Committee in the Senate, has signaled that it is working toward marking up a bill in late spring.

Sheridan: FY 2010 - FY 2011 State Budget: Weaknesses

2009-03-18T15:41:00.003-05:00

The March 18, 2009, issue of State Budgeting Matters is now available on our Website. Visit www.CommunitySolutions.com and look in 'What's New?' on our homepage.

Last Week in Washington - 3/16/09

2009-03-16T14:57:00.001-05:00

Congress finally finished the budget process for fiscal year 2009 by passing the Omnibus Appropriations bill. Meanwhile, the President’s budget has been taking lots of hits from both sides of the aisle as Congress develops a budget resolution. Now is a good time to ask for meetings with your Representatives when they’re home for a two-week recess which begins on April 6.

BUDGET RESOLUTION

The House and Senate Budget Committee Chairmen are consulting with their members, leadership, and other Committee Chairs to develop a budget resolution will establish a framework for legislative activity on spending and revenue policies for the rest of the year.

The House and Senate Budget Committees have said they intend to mark up their respective versions of the budget resolution the week of March 23 and bring them to the House and Senate floor the week of March 30. Conference would occur during April. There will be a two-week recess for Easter and Passover starting on April 6. (It is possible this schedule will get pushed back if the Budget Committee chairmen need more time to reach agreement on a budget resolution, meaning among Democrats since Republicans are not expected to engage in bipartisan negotiations on this budget.)

Remember that a budget resolution is just a blueprint for legislative action that occurs during the rest of the year. It makes only a few binding decisions, such as the total amount of funding that will be available to the Appropriations Committees for discretionary programs. It also lays out some of the rules and procedures under which other spending legislation may be considered.

The key authorizing committees (those that actually write the laws to carry out policies) are also assessing the President’s budget proposals and policymakers on those Committees are beginning to shape their positions and priorities.

Suggested Action Steps
Please consider sending letters or memos to your members of Congress over the next week and ask them to ensure the budget resolution does the following three things: 1) adopts the President’s discretionary funding levels; 2) makes the tax code more equitable by assuming that, if the middle class tax cuts from 2001/2003 are extended, the Obama improvements in refundable credits permanent — fully offset — are also expected to be part of a tax bill; and 3) supports the adoption of health reform legislation that provides universal coverage and reduces the rate of growth in health care costs.

Members are getting a lot of pushback on the details of the President’s budget so it could make a big difference if you can deliver this message to policymakers who are developing the Budget Resolution — or will be key to its passage — AND to policymakers on the committees that actually will make changes in policies. These include: House Budget Committee: Austria, Jordan, Kaptur; House Appropriations Committee: Kaptur, LaTourette, Ryan; Senate Appropriations Committee: Voinovich; and the House Energy and Commerce Committee: Space, Sutton. If any of these Members represent your area, please consider contacting them in the coming weeks.

And as always, contact me for additional info on any of these issues.

This Week in Washington, March 6

2009-03-06T14:16:00.000-05:00

Lots of budget-related discussions are underway. The Omnibus is stalled in the Senate, the President’s budget is being discussed in many committees, and health care and climate change are prominently featured on the legislative agenda for later this spring. Meanwhile, the economic news is pretty dismal. Today’s jobs report indicates that unemployment has grown to 8.1 percent.

OMNIBUS APPROPRIATIONS

Despite having warded off a number of amendments this week, the Senate has been unable to garner the 60 votes needed to adopt the Omnibus bill to fund nine Appropriations bills through September 30, the end of the current fiscal year. Congress will pass a short-term continuing resolution today and will try again to adopt a larger package next week. We are still hopeful that a deal can be reached but it is possible the Congress will end up passing a year-long appropriations bill, which would continue to freeze funding for most domestic discretionary programs at last year’s levels. These discussions show the continuing difficulty this Congress is having on reaching bipartisan agreements.

PRESIDENT’S BUDGET

The President’s budget proposal is encountering challenges from both sides of the aisle. Senator Voinovich has been an especially harsh critic. Stay posted for more info and advocacy opportunities as the budget continues to be developed.

HEALTH CARE FRAMEWORK, TIMING

After a bipartisan meeting yesterday, the Senate Finance Committee has indicated it will discuss health care in three pieces in preparation for a June markup and floor consideration in July.

On the House side, Majority Leader Steny Hoyer said the House hopes to take up its version of health care reform by August.

Have a great weekend!

March 1, 2009 "State Budgeting Matters" is now posted on our Website!

2009-03-02T11:23:00.003-05:00

A sticky wicket is a cricket term that has become a metaphor for difficult circumstances. It is an appropriate metaphor for the large number of policy changes that are included in Governor Strickland's proposed FY 2010 - FY 2011. Dick Sheridan explores these wickets in the latest issue of State Budgeting Matters. Read it here.

Presidential Budget Highlights

2009-02-27T11:03:00.004-05:00

Yesterday evening the White House hosted a conference call discussing programs that help vulnerable populations identified in the President’s budget. Here are some highlights by department:

Agriculture: $1bil per year for child nutrition, outreach to enroll more seniors in SNAP
Health & Human Services: Nurse home visitation, “promise neighborhoods”, increase LIHEAP funding
Housing & Urban Development: fully fund housing voucher program, capitalizing the Affordable Housing Trust Fund at $1bil initially, fully funding Community Development Block Grants
Justice: Prisoner re-entry programs, funding for the Second Chance Act
Labor: Unemployment insurance extended benefits program, transitional jobs, career pathways, job training for ex-offenders
Social Security: Increase in administrative funding to reduce backlog
Treasury: Making Work Pay and Child Care tax credits made permanent
Cross-cutting issues: reform asset tests in means testing, reduce the impact of cap & trade on low income individuals.

So what happens next? The Office of Management and Budget will continue to develop a more detailed proposal, which will be released in April and will serve as a starting point for congressional consideration of the budget resolutions and appropriations bills. Meanwhile, the budget committee will begin hearings to determine overall spending levels. We should have much more information in the coming weeks and months, and there will be lots of opportunities for advocacy. Stay tuned…

If you want to learn more about the budget process, how and when to engage in the process, and how to be most effective, attend the “Budget 101” session at the Human Services Institute in Cleveland March 13.

Our latest resource summarizes ARRA provisions

2009-02-24T10:40:00.006-05:00

As we began to evaluate what was in the final version of latest stimulus bill, we quickly found that there was no single rundown of health, social service, and education appropriations. So we’ve created one.

The American Recovery and Reinvestment Act of 2009 is a behemoth at over 1000 pages. Looking at the bill itself and using the latest state estimates from FFIS and the Department of Education, we have produced a summary of select appropriations in the ARRA, available now on our website. We hope it will be a useful resource for advocates.

If you have questions, please feel free to contact me.

New SBM examines critical questions

2009-02-17T10:13:00.003-05:00

Dick Sheridan's latest "State Budgeting Matters" is now available. In it, he examines 10 critical questions that will need to be answered before the final state operating budget can be adopted. They are:

1. Whether the FY 2009 state budget will have to be rebalanced;
2. Whether the budget for the forthcoming biennium can be balanced before the current budget expires on June 30;
3. Whether the proposed FY 2010 – FY 2011 budget request is balanced;
4. How to satisfy requirements for the receipt of federal economic stimulus aid;
5. What happens if the administration’s estimates of tax receipts for the coming biennium, and the economic forecast on which they are based, are optimistic;
6. How accurate are the administration’s forecasts for Medicaid enrollments;
7. What effect will proposed revenue and spending actions have on units local government;
8. What the future implications of relying on one-time, non-recurring revenues to sustain proposed levels of spending will be;
9. What happens if current collective bargaining agreements are not changed; and
10. In the administration’s proposed budget, who wins and who loses?

Check out SBM for more info.

Congress should restore state aid

2009-02-11T14:50:00.001-05:00

Community Solutions joined Governor Strickland and numerous other groups across the state in reaching out to our congressional delegation urging Congress to include discretionary aid to states in the final Recovery and Reinvestment Act.

Here are some excerpts from our letter:
“Once again, the federal government has the opportunity – indeed responsibility – to partner with the states in responding to this deep recession. Please restore the $40 billion in state aid to the Economic Recovery Package and enable Ohio and other states to identify and provide aid where it is most urgently needed in each state….

State expenditures have grown at an annual average rate of 1.4 percent over the past five years – less than half of the rate of inflation. For these five years, the cumulative impact on state services is an overall cut of eight percent. In the meantime, Ohio’s sagging economy has placed heightened demands for basic state services by persons displaced by the economic turmoil….”

A new issue brief from the Center on Budget and Policy Priorities examines three tax cuts added or expanded by the Senate. They found that the Senate reduced spending by removing certain funds (including aid to states) which were well-designed to stimulate the economy. The tax cuts substituted by the Senate are not targeted and are thus unlikely to provide a substantial boost to the economy.

The ramifications of a failure of the federal government to help our state will be truly devastating. Substantial cuts in services or even outright elimination of some programs is a real possibility. Strickland’s proposed budget already cuts state employees salaries – imagine what would happen if positions had to be eliminated. At the very moment when Ohioans are most in need, our state would be unable to help. We need our federal legislators to step up and provide some relief – failing to do so would be devastating.

Groundhog Day?

2009-02-04T15:42:00.002-05:00

In the classic movie Groundhog Day reporter Bill Murray is assigned to cover the rodent-related festivities in Punxsutawney and has to continue re-living the day until he gets it right. Ohio may be in a similar situation with its budget deficit. How ironic then that the Executive Budget came out on February 2.

True to his promise, the governor’s budget is balanced and does not include tax increases. Instead, it uses an elaborate cocktail of cuts, pay decreases, fee increases, and federal stimulus money to plug the state’s budget hole (estimated to be over $8 billion for the next biennium by CCS). But as today’s Beacon Journal rightly points out, “All of the federal money, and the new fees proposed by the governor, cannot hide the hard reality: Ohio doesn't have the continuing revenue to cover its priorities and needs.”

At the end of the day, we still have a structural deficit estimated by CCS to be in the neighborhood of $3 billion. So like Bill Murray, Ohio will keep going through the same thing until we finally get it right. Maybe now’s the time to stop the cycle?

State Budgeting Matters Examines Creative Budgeting

2009-02-04T15:27:00.003-05:00

Now that budget season is upon us, new editions of "State Budgeting Matters" will be posted twice each month.

In the latest installment, Dick Sheridan discusses some creative ways the state budget can be balanced. He points out that, "Adverse economic times, such as the state and its citizens are now facing, can provide an opportunity to make policy decisions that would not be possible in better times". Read the whole article here.

The executive budget is here!

2009-02-02T16:24:00.002-05:00

While the State of the State last week was interesting, today is an even more exciting day for those of us who follow the state budget process. The Governor's budget proposal is finally available! You can get both the full text of the Executive Budget Proposal for fiscal years 2010-2011 and the "Budget in Brief" highlight documents from the OBM website.

We at Community Solutions are diligently working to examine the documents, and will be posting more updates on our blog in the days and weeks to come. Check back often!

This Week in Wasington

2009-01-30T16:55:00.000-05:00

A good week for SCHIP! The Senate warded off a number of amendments to the SCHIP reauthorization and completed action on a bill with Senator Brown voting yes and Senator Voinovich voting no. Meanwhile, the House passed the economic recovery package on Wednesday. The Senate will start debate on the economic recovery package on Monday and is expected to debate it for at least one week.

ECONOMIC RECOVERY PACKAGE MOVING IN SENATE AND HOUSE

The House passed its version of the economic recovery package by a vote of 244-188. For the Ohio delegation is was a strict party line vote.

The Senate Finance and Appropriations Committees adopted their pieces of the economic recovery package earlier this week. Senator Voinovich, newly appointed to the Senate Appropriations Committee, voted against the bill that came out of committee.

There is concern about possible floor amendments that would: 1) reduce state fiscal relief (temporary FMAP increase and the state fiscal stabilization/education fund); 2) reduce or modify the improvements in the refundable tax credits that help low-income working families and stimulate the economy, and 3) strike unemployment modernization from the bill at the time it is most needed.

In addition, there will likely be a significant number of poorly designed and badly-targeted tax cuts offered on the Senate floor that could end up squeezing out key spending investments that are far greater economic stimulus.

SCHIP REAUTHORIZATION MOVING IN THE SENATE

After three days of contentious floor debate, the Senate passed its version of SCHIP by a strong bipartisan vote of 66 – 32 with the restoration of legal immigrants at state option intact! We’re well on our way to increasing health care coverage for approximately 4 million low-income children!

Next Steps
Yesterday House Speaker Pelosi echoed floor statements by Senator Baucus of hopes the House will take up the Senate’s version of the bill next week, and move the legislation quickly to the President’s desk for signature. There are some differences between the House and Senate versions, however. If the House does not adopt the Senate’s SCHIP bill, both houses should be able to resolve their differences pretty quickly.

HOUSE TO ACT ON FY 2009 OMNIBUS APPROPRIATIONS BILL NEXT WEEK

The Speaker has indicated that the House is likely to take up a bill next week to fund the nine unfinished domestic appropriations bills through the remainder of the fiscal year (September 30, 2009). This is probably not a significant opportunity for advocacy as the Committees have already drafted their bills to use funding provided through the FY2009 Budget Resolution. The current continuing resolution provides funding through March 6, 2009.

PRESIDENT’S BUDGET HIGHLIGHTS TO BE UNVEILED FEB 24

We expect to get a first look at the President’s budget proposals on Tuesday, February 24.

Governor Strickland highlights early care and education in his State of the State address

2009-01-30T16:42:00.002-05:00

groundWork applauds Governor Strickland for highlighting the early care and education system in this week's State of the State address, saying that Ohio needs to move towards a comprehensive system that is aligned from pre-kindergarten through higher education, saying that our system is not a "series of disconnected steps, it's a staircase upwards". In an effort to promote a P-16 education system, the Governor plans to unite all early childhood education development programs and resources into the Department of Education (ODE).

Further discussions with members of the Administration emphasized that although early childhood programs will be brought together under ODE, they will continue to offer services through both public schools and private community providers. Bringing the programs under one roof will also allow the administration to streamline the standards and reporting requirements of the various programs, improving efficiency and quality throughout the system.

Also included in Governor Strickland’s education proposal was the implementation of mandatory full-day kindergarten for every child in Ohio. Currently, slightly more than half of Ohio’s children participate in a full-day program. Research has shown that full-day kindergarten can reduce grade retention by 26 percent. This would represent a significant cost savings for Ohio’s K-12 system, which spent $43 million in 2006 on grade retention for students in kindergarten through third grade alone.

Will the Unified Long Term Care Budget become a reality?

2009-01-30T15:43:00.003-05:00

“We will also provide more choices to Ohioans in need of long term care…. With a unified long-term care budget, we begin to balance services and funding, allowing our elderly and disabled Ohioans more choices.”

With these words, Governor Strickland hinted in his State of the State address that the Unified Long Term Care Budget (ULTCB) will have some level of funding in his budget proposal (due to be introduced on Monday).

The ULTCB was created as part of the SFY 2008/2009 budget and it consolidates budgeting and policymaking for long-term care into a single authority maximizing the state’s flexibility in meeting consumer’s needs. The ULTCB Workgroup decided to take an inclusive approach to their recommendations, which include all Ohioans in need of long term care, regardless of age or payer source. In the Workgroup's final report, they outlined a five year implementation plan that will begin in the coming biennium and extend through the next two. Since FY2010 will be the first year of funding, hopefully Strickland’s comments during his speech signal that he is going ahead with the recommendations, even with the budget difficulties the state is facing.

Want to learn more about the ULTCB? Two sessions at the upcoming Human Services Institute will focus on this topic. Our speakers will be Dr. Robert Applebaum of SCRIPPS (who was a member of the ULTCB Workgroup) and Director of Aging Barbara Riley. The Institute is March 13 and registration is on our website.

Governor's State of the State

2009-01-28T15:30:00.002-05:00

Governor Strickland’s State of the State address acknowledged the real fears that many face in this recession, and the sacrifices that will have to be made. He reiterated that at flat funding, Ohio would face a $7.3 billion deficit in the 2010-11 budget, which, by CCS’ estimate exceeds $8 billion.

He also announced several initiatives to strengthen the economy and improve the longterm outlook for the state. Education remained a high priority - education will be a comprehensive P through 16 system, the Department of Education will oversee early childhood development programs, we will have universal all-day kindergarten and an improved school funding formula with the state taking on an increased portion of education funding to 55 and then 59%. He also described ways to increase accessibility of health care to an additional 110,000 Ohioans.

However, these initiatives require additional funding, and yet his executive budget, will not increase taxes and is $3.2 billion below 2009 planning levels. Rather than increasing tax revenues, his budget relies on revenues from existing resources, one-time cash transfers, increases in agency fees, fines, and penalties, and an anticipated $3.4 billion from the federal economic recovery package. The budget has spending reductions including 10-20% program cuts to services at a time when families are having a harder time getting by. Hopefully painful cuts to vital services won’t be part of a temporary solution to a permanent problem. Even if these sources are enough for the 2010-11 budget, they won’t solve the structural deficit, our habit of spending more than we collect in revenues.

To see the text of the address, go to http://www.governor.ohio.gov/GovernorsOffice/StateoftheState/StateoftheState2009/tabid/984/Default.aspx

Revisiting Medicaid Reform Released

2009-01-28T13:40:00.002-05:00

On Monday, Community Solutions released a report on Medicaid reform indicating substantial progress in the state’s effort to make Medicaid more efficient and reduce operating costs. The report was prepared by the Center for Health Outcomes, Policy and Evaluation Studies (HOPES) at The Ohio State University College of Public Health. Read the report here!

The State of the State is "Steadfast"

2009-01-28T13:26:00.000-05:00

Governor Strickland’s State of the State address just wrapped up. He discussed a variety of issues, but as expected, most of his speech focused on education. The Community Solutions public policy & advocacy team will be posting several commentaries on this blog focusing on various aspects of the State of the State. Check back often for new updates.

You can read the full text of his address on the Governor’s website here.

Will you be our fan?

2009-01-22T16:37:00.002-05:00

Are you on Facebook? If so, become a fan of Community Solutions by clicking here.

And in the true spirit of social marketing, let me know if your organization is on Facebook and I'll happily become your fan! You can e-mail me directly, find me on Facebook, or comment on this post.

67th Annual Human Services Institute Registration is Now Open!

2009-01-21T14:34:00.004-05:00

Details for the 67th annual Human Services Institute are now available: https://www.communitysolutions.com/hsevent/!

Join us on March 13 for the 67th annual Human Services Institute! It's a day filled with more programming than ever, including plenary addresses on education in Ohio and environmental justice, as well as 30 educational sessions addressing topics such as:

• Federal/State Budget Advocacy
• Nonprofit Business and Succession Planning
• Long-Term Care: Issue of the Century
• Childhood Obesity
• Using Social Indicators and Related Data for Grant Applications
• Foreclosure Prevention, and
• many more!

Click here for sessions details!

Marketing Opportunities! Make connections and tell your story with two unique opportunities - click here to find out more!

Don't hesitate, register now and pass along the word to a friend...

This Week in Washington

2009-01-17T16:50:00.002-05:00

PROGRESS ON SCHIP!

The House passed the SCHIP reauthorization bill on Wednesday by a strong bipartisan margin. The House version is very similar to the first vetoed bill from 2007 (CHIPRA1) with a few changes, and also includes ICHIA (optional coverage for legal immigrant children and pregnant women). Ohio Representatives Austria, Boccieri, Driehaus, Fudge, Kaptur, Kilroy, Kucinich, LaTourette, Ryan, Space, Sutton, Tiberi, Turner, and Wilson all voted for the bill.

The Senate Finance Committee marked up its version of the SCHIP reauthorization package Tuesday where ICHIA was added by amendment in a 12-7 vote. The committee also included an amendment offered by Senator Snowe to allow dental coverage of underinsured children as an option under SCHIP (i.e., children with private insurance who lack dental coverage).

Senate floor action will begin late next week with debate expected to continue into the following week.

Once the Senate passes its version, the legislation will go to a conference (formal or informal) to resolve remaining differences in the House and Senate bills.

ECONOMIC RECOVERY PACKAGE

Information on the Senate’s version of the recovery package is expected soon. The Senate Appropriations and Finance Committees could mark up as early as next week, with the full Senate considering the measure toward the end of the month or early February. The Senate package will be fully amendable.

The House Appropriations and Ways and Means Committees are expected to mark up their sections of the package next week. Floor consideration is likely the week of January 26 (most likely Wednesday). The package is not likely to be amendable.

Below is a list of key provisions in the package:
· FMAP: $87 billion in state fiscal relief through a temporary increase in the federal Medicaid match and relief to states by extending the moratoria on the regulations adopted last year;
· Other state fiscal relief: $79 billion in state fiscal relief to prevent cutbacks to key services, including $39 billion to local school districts and public colleges and universities, $15 billion to states as bonus grants for meeting performance measures, and $25 billion to states for public safety and other critical services, which may include education;
· Low-Income Home Energy Assistance: $1 billion in additional funding;
· Unemployment Insurance: encourages modernization, continues the Emergency Unemployment Compensation Program, and increases UI checks by $25/week;
· Child Tax Credit: temporarily lifts the earnings requirement for families to qualify;
· Earned Income Tax Credit: expanded for families with three or more children by increasing the “credit rate” — also known as the phase-in rate — to 45 percent (from the current 40 percent). Also extends the income range over which married couples qualify for the maximum EITC — known as “marriage penalty relief.”
· Higher education tax credit: $2,500 tax credit for the first four years of higher education expenses, which will now be partially refundable;
· Pell grants: $500 increase in the maximum Pell grant;
· Medicaid/COBRA: provides temporary subsidies for health insurance coverage to those who lose their jobs;
· Food Stamps: $20 billion for a temporary increases in food stamp benefits;
· TANF: allows states to qualify for “emergency contingency funds” for each quarter in 2009 and 2010 based on increased expenditures for basic assistance (if the state also has an increase in its caseload for that quarter compared to the same quarter in 2007 or 2008), increased expenditures for subsidized employment, and/or increased expenditures in short-term non-recurrent benefits. In each category, the state qualifies for an amount equal to 80 percent of the increased costs (if any).
· Public Housing Capital Fund: $5 billion for building repair and modernization;
· HOME Investment Partnerships: $1.5 billion to help local communities build and rehabilitate low-income housing using green technologies;
· Neighborhood Stabilization: $4.2 billion to help communities purchase and rehabilitate foreclosed, vacant properties;
· Homeless Assistance Grants: $1.5 billion for the Emergency Shelter Grant program to provide short term rental assistance, housing relocation, and stabilization services;
· Child Support Enforcement: $1 billion to provide federal incentive funds for states to collect support owed to families;
· SSI: provides a one-time payment to SSI recipients in 2009. For individual SSI recipients, the payment would equal the average one-month payment of singles; for couples, the payment would equal the average one-month payment;
· Child Care: $2 billion in additional funding for the remainder of 2009 and 2010;
· Head Start: $2.1 billion in additional funding over the 2009-2010 period; and
· WIA: House bill adds $4 billion total, including $1.2 billion for youth.

The House package is reported to cost $825 billion over two years. About $275 billion of that is through tax cuts.

Since different versions are likely to emerge, a conference is expected, but Obama officials have indicated they will work to have the differences reconciled quickly. The goal remains to complete work by Presidents’ Day.

House Recovery Package: Something Old and Something New

2009-01-16T16:29:00.001-05:00

On Thursday the House Appropriations Committee and Ways and Means Committee gave us our first look at the much talked about federal recovery package. The American Recovery and Reinvestment Act of 2009 totals $825 billion in spending and tax cuts designed to bring the country out of the recession. A great deal of focus is placed on job creation and energy issues. The bill also provides billions of dollars for programs helping people hardest hit by the economic downturn. It includes traditional stimulus spending and some measures not tried in last year’s stimulus package.

Among the strategies we have seen successfully before are those programs that quickly put money back into the economy. To address rising energy costs, the bill includes $1 billion for LIHEAP (Low-Income Home Energy Assistance Program). Supplemental nutrition assistance is increased by $20 billion, and time restrictions on how long participants can be on the food stamp program are lifted. The current extension of unemployment insurance will be further stretched through December 31, 2009. In addition, the benefit itself will be raised by $25 a week during the same time period.

Some of the boldest measures come in the field of health care. In addition to a 4.8 percent increase in the federal Medicaid contribution and further relief for high unemployment states, the bill includes measures explicitly and implicitly designed to bring the country closer to universal health care.

The act contains $600 million in training dollars for primary care providers “to address the shortages and prepare our country for universal health care.” Funds will support training for doctors, dentists, nurses, and medical students who commit to work in underserved communities.

To stretch health care coverage the bill makes some significant changes to the COBRA program for unemployed workers 55and older and those who have been steadily employed for 10 years. These people will be able to “retain their COBRA coverage until they become Medicare eligible or secure coverage through a subsequent employer.” The COBRA adjustments also provide a 65 percent subsidy for the first 12 months to those who lost their jobs on or after September 1, 2008.

For those who are not voluntarily unemployed and live at 200 percent of the federal poverty level (or a level set by the State), states have the option of adding them and their dependents to the Medicaid rolls. Eligibility is also extended to people receiving food stamps.

These are ambitious measures that could go a long way to relieving the pressure of health care costs for many Americans. It is important to remember, however, that the American Recovery and Reinvestment Act is only two-year legislation intended to bring the country out of the current recession. It is by no means clear that these changes would become permanent.

Sheridan: Restoring Legislative Fiscal Equality

2009-01-16T09:24:00.002-05:00

The January 15, 2009 issue of State Budgeting Matters is now available on our Website. Sheridan looks at Restoring Legislative Fiscal Equality. Leave us your comments here!

http://www.communitysolutions.com/images/upload/resources/sbmv5n2.pdf

www.CommunitySolutions.com

Congress Moves Closer to SCHIP Reauthorization this Week

2009-01-16T08:44:00.000-05:00

Wednesday 14 members of Ohio’s congressional delegation voted for the Children’s Health Insurance Program Reauthorization Act of 2009.

In a strong bipartisan showing, Representatives Austria, Boccieri, Driehaus, Fudge, Kaptur, Kilroy, Kucinich, LaTourette, Ryan, Space, Sutton, Tiberi, Turner, and Wilson supported a four-and-a-half year reauthorization of the program which will cover an additional four million children nationally. This brings the total number of children covered by SCHIP (State Children’s Health Insurance Program) or Medicaid programs to over ten million.

Thursday a similar proposal passed out of the Senate Finance Committee for consideration on the Senate floor.

With Ohio and the nation facing the ramifications of the current recession, especially unemployment and the resulting increase in the need for safety net programs, SCHIP will be a lifeline to families. The loss of health care is one of the most frightening aspects of job loss for many families. Passage of this legislation will help ease the pressure on Ohio’s SCHIP-eligible families.

It is important that Congress and the Obama administration move quickly to pass this long overdue legislation. As the impact of the economic downturn further deepens, this successful program will take on even greater importance to struggling families.

Briefing a success, despite the weather

2009-01-15T12:08:00.000-05:00

Like the postman, the Public Policy & Advocacy team will not allow snow, sleet, or wind to keep us from our important work. We braved the sometimes blinding snowstorm and sub-zero weather that hit Columbus yesterday to go ahead with our legislative briefing on tax and budget policy. A little dramatic? Maybe, but a budget deficit of over $8 billion (by CCS estimates) requires some drastic measures.

Over 40 legislators and legislative staff attended the event. After a welcome and introduction by John Begala, John Habat gave an engaging presentation on the current tax structure, impact of recent tax reform, and revenue enhancement options. Attendees were very interested in Community Solutions’ new, state-of-the-art model for independently projecting revenues and expenditures and evaluating the fiscal impact of budget proposals.

And we’re taking the show on the road – if advocates are interested in a similar presentation on state taxes and revenues, send me an e-mail at ecampbell@communitysolutions.com. No matter the weather, we’ll be there!

2009-01-13T18:39:00.001-05:00

SCHIP 2.0

Congress is back in session and high on their list of priorities is finally reauthorizing the State Children’s Health Insurance Program (SCHIP) which couldn’t overcome a presidential veto in 2007. The House of Representatives is scheduled to vote on Wednesday the 14th where it is likely to pass. Then the focus moves to the Senate with committee consideration this week followed by consideration by the full Senate next week.

The House and Senate bills are similar. The program will mean 4 million children in addition to the over six million children currently covered will be served by either the SCHIP or Medicaid programs. The majority of those newly covered children covered will be under 200% of the federal poverty level (currently $21,200 for a family of four). The legislation runs through September 2013 and is largely funded by a .61 cent increase in the tobacco tax.

One major difference between the two bills is coverage for low-income, legal immigrant children. The House gives states the option to remove the Medicaid and SCHIP five year waiting period for these children while the Senate does not. However, an amendment to add this provision to the Senate bill is expected to be offered and passed during Thursday’s Finance Committee markup. The chairman of the Senate Finance Committee and other Committee members have voiced support for covering legal immigrant children . This provision, known as ICHIA (Immigrant Children’s Health Improvement Act), will also give states the option to provide coverage for low-income immigrant women who are pregnant.

Hopes are high in Washington that a bill will be ready for the president’s signature soon after the inauguration on January 20. Be sure to weigh in with your House members and Senators Brown and Voinovich on the importance of this program to Ohio’s families.

Taxing Issues REDUX Presents State Budget Analysis, Options, New Methodology

2009-01-12T09:07:00.005-05:00

Taxing Issues REDUX, a new report released by Community Solutions earlier today, documents the unprecedented decrease in state revenues and cuts in expenditures facing Ohio, identifies a number of revenue options the state should consider, and provides a unique, sophisticated revenue forecasting methodology. To view this report please click here. Please leave us your comments on the report.

House Leaders Speak on Budget Challenges

2009-01-12T00:05:00.002-05:00

House Speaker Armond Budish, a democrat from Beachwood, and House Minority Leader William Batchelder, a republican from Medina, spoke at City Club in Cleveland on Friday about the economy and the upcoming biennial budget.

Both made gestures to meet the challenge by putting partisanship aside. Rep. Budish described how he named the House clerk from the majority party and a deputy clerk from the minority party. Rep. Batchelder proposed a nonpartisan independent legislative budget office.

To balance the budget, Rep. Batchelder suggested that Ohio trim its budget through government efficiency, and rejected tax increases and gambling as revenue options. Rep. Budish expressed the need to be creative to increase revenues, including the possibility of gambling. Both talked about using taxes to strengthen the economy. Rep. Budish suggested business incentives, and Rep. Batchelder suggested decreasing income and inheritance taxes. Both stated that an increase in the federal government’s share of Medicaid is vital.

This Week in Washington

2009-01-09T16:47:00.000-05:00

The new Congress has been sworn in and is ready to get to work. The big story is the economic recovery package, but the process is slower than leaders had hoped because members are challenging some of the details. So the leadership is looking for something else that can move quickly while the economic recovery negotiations continue, and the SCHIP reauthorization may fit the bill -- it could move next week. Details below!

SCHIP COULD MOVE VERY QUICKLY

Legislation to reauthorize SCHIP will likely move before the economic recovery package with votes anticipated next week in the House and possibly in the Senate as well. Hopefully the legislation will closely resemble the first vetoed bill from 2007 which passed with bipartisan support. Democratic leaders have indicated they would also like to include ICHIA (optional coverage for legal immigrant children) in the reauthorization. Keep an eye out for more details from us next week.

Action Steps. We would encourage you to reach out to members in the House to help bolster support.

ECONOMIC RECOVERY PACKAGE

The process for moving the economic recovery package has been slower than the leaders had hoped. While the Obama transition team and Congressional leadership have done significant work on many provisions, rank-and-file members are back in Washington, DC and are asking questions and asking for changes. Important decision-making meetings are occurring now, but the roll-out timeline appears to be slowing down.

Today’s jobless report puts additional pressure on Congress to act.

Cost. The target cost for the package is still about $800 billion over 2 years. About $300 billion of that is likely to be tax cuts, but that amount could increase in the Senate. The leadership is trying to prevent the package from becoming a free-for-all by insisting that provisions put money in the hands of consumers, help protect jobs and vital services, and help create jobs.

Committees. Some committee hearings are possible next week. The House and Senate Appropriations Committees, the House Ways and Means Committee, and the Senate Finance Committees are the most likely to hold markups. Floor consideration should follow fairly quickly after the committees act.

Floor. The House bill is not likely to be amendable. However, the Senate package will be fully amendable, so floor consideration could take a week or even two. Since different versions are likely to emerge, a conference is likely. The goal is to complete work by Presidents’ Day.

Key items. Our work is likely to focus on defending key provisions and warding off damaging amendments. Chances are good that the package will include:
· Substantial state fiscal relief (including no less than $100 billion in a temporary FMAP increase),
· Unemployment Insurance modernization,
· Temporary improvements in the refundability of the child tax credit,
· Temporary increases in food stamp benefits, and
· Improvements in the TANF contingency fund and other safety net programs.

Key threats. There is conern over attacks being mounted on several high-priority policies such as:
· State fiscal relief,
· Unemployment modernization,
· Improvements in the refundability of the child tax credit (CTC), and
· Improvements in other safety net programs.

There is also concern that some Senators will push for high-cost business tax credits that would not stimulate the economy and could force reductions in resources for higher priority provisions.

CONGRESSIONAL BUDGET OFFICE (CBO) RELEASES NEW BUDGET PROJECTIONS

CBO now projects a deficit of nearly $1.2 trillion in the current fiscal year (2009) if there are no changes in policy. This does not include the cost of the economic recovery bill or other new legislation, or the additional funds needed for the wars in Iraq and Afghanistan (CBO’s baseline includes spending for the war at the level supported by funds already appropriated for 2009 — that $67 billion is less than half of what is needed to maintain current operations). That would be the largest deficit in history in nominal terms, and at 8.3 percent of GDP, it would be the largest deficit as a share of the economy since World War II (the previous post-war high was 6.0 of GDP in 1983).

The effects of the recession will fade over the next several years, so CBO’s baseline deficits will decline from the level projected for 2009. CBO projects that the deficit will decline to just over $250 billion in 2012 and remain fairly close to that level through 2019. But this assumes that there is no change in current laws, which means the 2001 and 2003 tax cuts are assumed to expire at the end of 2010 and no further relief from the AMT will be provided.

Batchelder gave a shout-out to Dick Sheridan

2009-01-09T14:42:00.002-05:00

How nice to hear Rep. Bill Batchelder recommend Dick Sheridan's newsletter--State Budgeting Matters--to the audience at today's City Club Forum! Those who have followed Ohio public policy and state budgeting for any length of time value Dick's knowledge and experience. And...the latest issue of SBM was posted this morning: "That Was The Week That Was."

Welcome back, Ken Slenkovich

2009-01-07T15:54:00.002-05:00

We're so pleased to welcome Ken Slenkovich back to Cleveland and to Community Solutions as our William C. and Elizabeth M. Treuhaft Chair for Health Planning. Ken was with us from 1990 to 2002 and was very involved in research and planning projects related to community health issues. Learn a little bit about Ken here.

Watch Batchelder and Budish Live!

2009-01-07T11:13:00.000-05:00

Due to overwhelming response, the City Club forum is sold out. But even if you can’t be there, you can still get the inside story. The presentation will be broadcast live at 12:30pm on Friday on the City Club Website. Don’t miss this opportunity to hear legislative leaders and their take on the upcoming state budget!

Budish and Batchelder at The City Club, 1/9/09

2008-12-19T16:46:00.003-05:00

Community Solutions is sponsoring The City Club's Friday Forum on 1/9/09 with new Speaker of the House Armond Budish and William Batchelder, Minority Leader of the House.

Reservations:
Online: https://www.cityclub.org/content/speakers/speakerRegister2.aspx?spkID=5700
Phone: toll-free, 888-223-6786; locally, 216-621-0082

More Cuts in This Budget - What About Next Budget?

2008-12-19T16:42:00.001-05:00

The most recent estimate of this budget’s deficit is $640 million. Today, Governor Strickland announced that they will fill the gap with budget cuts of $180.5 million, with the rest of the shortfall being met through Medicaid adjustments and various cash management strategies. These 5.75% (mostly) across the board cuts follow the September 4.75% cuts. Our revenue problems have been exasperated by the weakening national economy, and our budgets have seen drastic cuts.

We are hearing that we must all share in the sacrifices that are needed to get us through this. The question is, how do we do this. Hopefully, the $640 million in adjustments will get us through this budget. But as we look at next budget’s estimated $7.3 billion deficit at flat funding, we will need to look at all options and make the choices that do the last harm to the economy and Ohio’s future. Options include the Rainy Day Fund, temporary tax increases, examination of this decade’s tax reforms, and budget cuts.

When weighing whether to decrease government spending or raise revenues, we should appreciate government as a major part of our economy - every dollar cut is a loss of income to someone. It is particularly hard to cut the services that make up our safety net when more and more families are falling on hard times. Economists, including Barack Obama’s new budget director, Peter Orszag, recommend temporary tax increases for high income tax brackets over general tax increases or budget cuts. Ohio has increased income tax rates for high income brackets in past recessions, in both 1982 and 1992, and added a temporary sales tax increase during the last recession. Even with a federal economic recovery package, there will be tough choices, and we’ll have to consider all options.

Unique Look at Cuyahoga's Workforce

2008-12-19T14:18:00.002-05:00

Community Solutions released today a unique study of Cuyahoga County’s workforce, completed for the Cleveland/Cuyahoga County Workforce Investment Board (WIB). 2008 Cuyahoga County Workforce Indicators, unique in its comprehensiveness, covers 11 dimensions of the workforce population:

Educational Attainment
Labor Force Participation
Unemployment Rate
Occupations
Median Earned Income
Workforce Characteristics of Householders
Persons with Work Disabilities
Means of Transportation and Travel Time to Work
Persons Ages 16 and Over Attending School
Characteristics of Persons Looking for Work
Health Status and Employment

Find the full report at www.CommunitySolutions.com.

This recession needs many solutions

2008-12-03T16:40:00.004-05:00

We started December with a confirmation that the country has in fact been in recession since December, 2007. The news came at the same time that Governor Strickland announced an additional $640 million shortfall in the current budget, which brings us to the recession scenario as outlined by the Office of Budget and Management last January. This recession has already lasted longer than most, Ohio’s unemployment rate of 7.3% has exceeded its height of 6.3% in 2003, and we are expecting a third consecutive year of tax revenue declines. Meanwhile, we are allowing the continuation of income tax cuts along with a host of other tax reforms that are yielding decreased revenues. Ohio is relying on federal aid to states and strong holiday sales to avoid more budget cuts, but holiday shoppers face a recession too. Governor Strickland acknowledged today that we will need multiple solutions. Our Rainy Day Fund can be part of that solution, but depleting the entire fund wouldn’t get us far past the current budget, not to mention the $7.3 billion deficit currently projected for the FY2010-11 budget if spending remains level.

Of course, Ohio is not alone in its budget situation. 43 states face budget shortfalls. According to the National Conference of State Legislatures (NCSL), in FY 2009, 20 states have cut a total of $7.6 billion, and 30 states have shortfalls of another $30 billion.

President-elect Obama met with current and in-coming governors yesterday, and it is expected that a stimulus plan will come shortly after Obama takes office and will include aid to states. Leaders of the National Governors Association (NGA) and NCSL made recommendations on how to strengthen our economy, including state aid to avoid program cuts in countercyclical and safety net programs and immediate infrastructure investments that create jobs. Ohio is using the latter strategy with its job stimulus plan which offers effective investments which can be rolled out relatively quickly.

The aid to states would potentially be quicker and more substantial than it was in the last recession. As proposed by NGA, most of the state aid would fund infrastructure projects and some funds would temporarily increase the federal share of Medicaid. States would welcome this stimulus considering that, unlike the federal government, they (mostly) cannot deficit spend. The funds would allow state programs to meet an increasing need for services as more families meet hard times. The prospects of state aid and Ohio’s job stimulus plan offer hope, and we need to continue to find additional approaches to maintain essential services and Ohio’s economy.

A great way to honor others

2008-10-13T14:02:00.003-05:00

Do you know of someone who works tirelessly as a volunteer? Do you think a particular nonprofit organization's work is especially worthy of honor? Consider nominating them for the MTV: Most Treasured Volunteer Award or the $20,000 Anisfield-Wolf Memorial Award (NPOs only). Find more info here!

Reclaiming the dream in NE Ohio

2008-10-06T13:35:00.003-05:00

There’s going to be an interesting public forum--“Reclaim the Dream”—on 10/14, 7 p.m., at the University of Akron’s E.J. Thomas Hall. It’s about pressures on the middle class and is being presented by the Akron Beacon Journal, Western Reserve Public Media, WKSU and the University of Akron; Community Solutions is a sponsor. The forum is just the beginning of a multi-media project that will last for at least a year. Check out the new project Website that encourages community participation: http://www.reclaimthedream.net/.

Pain of recent state cuts will be felt in counties

2008-10-03T10:37:00.007-05:00

Between the state departments of Mental Health, Alcohol and Drug Addiction Services, Job and Family Services, and MR/DD, nearly $39 million in cuts were made in the most recent round of state budget adjustments to line items that provide funds to counties to pay for services or administer programs.

The reduction of state funds to county boards and departments forces them to use their local dollars to maintain current service levels. The cuts in these line items does not guarantee shortfalls at the local level, but makes it much more difficult for counties to contend with unexpected events (like the aftermath of Hurricane Ike and power outages last month) or increases in caseloads, when such services are most needed.

While the state is a major provider of health and human service funding, it is the counties (and those they contract with) that actually provide most of the services. Now counties will face difficult choices. Some cost-saving steps being taken across the state have been reported in recent news articles and include: relying more heavily on extra funds generated from recently passed levies, cutting county workforce by offering early retirement or by leaving positions unfilled, cutting back on non-mandated programs including enhanced child visitation or job training, or using waiting lists to manage caseload.

As with most budget issues, the impact doesn’t stop there. The counties provide funds to many nonprofits and providers to actually provide services. Some organizations have already been forced to cut their budgets. Unfortunately, this is only the beginning.

New State Budget Matters examines budget problem

2008-10-01T10:56:00.002-05:00

In the latest edition of State Budgeting Matters, Dick Sheridan clears some confusion surrounding the state's budget troubles and brings up some additional questions.

"What happened in September is that the second round of budget revisions were comprised exclusively to a reduction in anticipated tax revenues, whereas the February shortfall included assumptions about Medicaid spending and reimbursements.... Especially noteworthy is the fact that the new revenue forecasts are halfway between what OBM had projected in February as the 'zero growth' and the 'recession' forecast for 2009."

To read more, go to www.communitysolutions.com.

Ohio not alone in budget troubles

2008-09-26T14:44:00.002-05:00

With economic indicators providing a bleak outlook, Congress considering a new economic stimulus package, and negotiation of a mammoth bailout for financial firms taking place in Washington, fiscal concerns have risen to the forefront of our public consciousness. Ohio is far from alone in its budget troubles.

Already 22 states have reduced services for residents as a result of budget problems, according to an updated report released today by the Center on Budget and Policy Priorities. Ohio is one of the states enacting budget cuts that will affect services for children, the elderly, the disabled, and families, as well as the quality of education and access to higher education.

Ohio’s closure of two mental health facilities makes it one of 11 states that have cut programs for the elderly and disabled.
Governor Strickland protected Medicaid and SCHIP programs during the latest round of cuts, but 14 other states have implemented or proposed cuts that will affect eligibility for health insurance programs or access to health care services.
Twelve states, including Ohio, have reduced funding for K-12 education programs.
While 17 states have cut funding to public colleges and universities, the tuition freeze enacted in HB 119 remains in place in Ohio.
Ohio is one of 19 states reducing their state workforce, which is likely to impact the ability of residents to access state services. Fully 14 percent of positions in ODJFS are estimated to be eliminated or left unfilled.

Because Ohio and other states cannot run a deficit, they must draw down reserves, cut expenditures, or raise revenues (or a combination of the three) to balance their budgets. With revenue collections continuing to fall below estimates, the increasing girth of Ohio’s budget shortfall will require the state to consider enacting temporary or permanent tax increases and drawing more from the Rainy Day fund to avert deeper cuts in vital services.

Fifteen states, including Ohio’s neighbor Michigan, have already enacted tax increases, closed loopholes, restricted tax credits, or implemented other revenue raising measures. New Jersey has begun means testing its homestead exemption, eliminating property tax rebates for families earning over $150,000. Maryland enacted a $1.35 billion tax increase. Rhode Island and California have moved to limit or eliminate certain corporate tax breaks, while Massachusetts and New York have closed corporate tax loopholes.

Ohio must keep its options open to ensure that vital services are available in this time of economic hardship when residents need them most.

New Report on Regional Achievements in Higher Education

2008-09-24T09:34:00.001-05:00

Yesterday, Community Solutions released a new report by Mark Salling, Ph.D., based on release of new data from the American Community Survey. It is entitled "More Persons Attending College and Getting Degrees, 2000- to 2007: The Cleveland-Akron-Elyria Region Doing Well."

And Now, More Budget Cuts

2008-09-18T09:42:00.007-05:00

State agencies just submitted their FY2010-11 budgets, and now they’re revising their current budgets to accommodate the latest round of budget cuts. Last week, the Governor announced another $540M in spending cuts ($198M to agencies and $342M in other actions). Combined with the $733M cuts announced last January, this brings us to the “zero growth scenario” middle range of the original OBM deficit projection – OBM had estimated the deficit to be between $733M and $1.9B. Other options include postponing phase-in of tax cuts, federal stimulus, and rainy day funds.

These cuts come as a response to the lagging economy. Both the personal income tax and the sales tax are coming in below estimate, both of which reflect economic conditions. We’ve seen eight straight months of Ohio job loss, along with recent Wall Street drama, and OBM has reported that it expects weak growth for several more quarters. A recent court case also narrowed revenues from the Commercial Activity Tax (CAT) by an estimated $188M in FY2010 when it found the CAT unconstitutional as applied to grocers. The CAT is therefore not as broad-based as originally intended. In addition, we started FY2009 with expenditures that had been delayed from last fiscal year. However, August GRF tax revenues came in (although still below estimate) much better than July’s. Even before these cuts, we’ve seen decreased revenues and spending each year since 2006. The latest budget cuts will be implemented starting October 1. Although painful, it’s better to act sooner than later because it allows more time to fix the problem.

The 4.75 percent across-the-board cuts include an estimated $80M to ODJFS but do not touch “core priorities” which include tax reform and the homestead exemption expansion as well as children’s health care expansions, tuition freezes, and increased local school funding. Programs will be cut at a time when the need for public services is rising. This will cause job lay-offs and cancelled contracts, which further weaken the economy. If we increased revenues (or postponed phase-in of tax cuts) rather than cutting programs, some of those revenues would come from money that would otherwise remain in savings rather than being spent. Additionally, those tax payments could be partly deducted from federal taxes, which would keep more money in Ohio.

Federal stimulus would also help, which Governor Strickland is requesting from Washington D.C. including Medicaid, unemployment insurance, and public infrastructure grants.

Another option is to access the Rainy Day Fund. The Governor announced that they will use existing authority to use $63M of the reserve for Medicaid, and that they will avoid using more of the reserve now in case things get worse later, which seems probable. Using the reserve fund at this point would put those dollars into our economy now and avoid the negative effects that program cuts have on the economy.

Ohio Needs Its Income Tax

2008-08-29T13:08:00.002-05:00

As well all know, Ohio continues to face challenges funding needed services. Our largest funding source is the individual income tax - we receive approximately 44% of current state general revenue funds from this source. However, there are some proposals to eliminate it.

The Buckeye Institute released a report this week which proposes to completely phase out the income tax over a 16 year period, and H.B. 534 is a bill in the state legislature that would completely phase it out over a ten year period. Even if the theories proved true that eliminating the income tax would attract people and eventually grow the economy, Ohio doesn’t have the extra funds to play around with.

Ohio's economy has been weak this decade, and the tax reductions in H.B. 66 haven’t helped that. As the 21% income tax reduction gets fully phased in, 2009 revenues will be reduced $2.2 billion from their base while providing very little relief for low and middle-income workers, according to a Policy Matters Ohio report, ‘A Step Toward Fiscal Balance: Options for Ohio’s Income Tax.’ The income tax is Ohio’s most progressive tax source – it is graduated so that those who can afford to, pay more. States that don’t have an income tax rely more on sales tax, which takes a greater toll on the poor. We have to fund state services one way or another. Eliminating the income tax would just force us to rely more on other tax sources that are less reliable, grow more slowly, and are more regressive.

Poverty Numbers May Change but Work Remains the Same

2008-08-25T15:47:00.000-05:00

Every year at this time the Census Bureau releases data on how many Americans lived in poverty the year before, and how many were without health insurance. Every year we wait anxiously to see if poverty was better or worse than the year, and years, before.
Whether or not poverty has inched up or down as of 10AM on August 26th (when the Census Bureau releases its numbers), the facts remain the same. Demand at food pantries is at, or beyond, capacity to meet the need. Since January 1st of this year 43,000 more Ohioans have enrolled in Medicaid. Foreclosures are at record highs. We don’t need the data to tell us what we already know. Ohioans, like all Americans, are struggling.

As strains on the public safety net increase, legislators must take a hard look at the day to day challenges their constituents face and consider critical budget decisions that need to be made in the coming years. Talk of tax cuts and spending cuts, especially in an election year, may sound like common-sense tough talk, but governing is not that simple. Cuts, on either the tax or spending side, must be made cautiously to ensure adequate support for effective programs while enabling the growth of the economy. Not all tax cuts are equal. Nearly half of the national deficit is the result of tax cuts enacted since January 2001.
It is also time for a serious discussion about the need for strategic increases in revenue. While popular rhetoric argues that tax increases are bad for the economy, especially small business, in the 1990s tax increases accompanied even greater growth than we saw in the most recent recovery from 2001 to 2007. Just as our family budgets need to keep up with rising costs, so does our nation’s.

We will learn some interesting facts from the Census Bureau data. But when the dust settles, and we know which is the poorest city in the United States, our work remains the same; encouraging sound fiscal policy that invests in people and making sure people have access to those investments.

Tax Foundation's Tax Rankings Are Questionable

2008-08-08T14:24:00.002-05:00

The Tax Foundation has released its annual report that ranks states by their residents’ state-local tax liability. However, there are a number of reasons to question the report’s reliability. The Tax Foundation again substantially changed its methodology from its previous report, suggesting that they doubt their own calculations. For example, Ohio ranked fifth highest in the Tax Foundation’s 2007 report published last year. However, their latest report changes Ohio’s 2007 ranking from fifth to eighth. The 2008 rankings place Ohio seventh in the country. Those disappointed by the ranking should be patient, because they may prefer next year’s 2008 revision. The report analyzes state fiscal year 2008, which ended June 30, however, meaningful data for this type of analysis are not yet available.

Also of note, the numbers are very tight - the bulk of states have similar tax liability. According to their latest report, Ohio is one of twenty-nine states with state-local tax liability between 9% and 10.5%. Putting the reliability issue aside, this calls into question the quest to move down ten or twenty spots in the rankings if this would only decrease taxes by one percent or less. Meanwhile, the price for this change would be the inability to provide the education, infrastructure, and public services that attract people and businesses to Ohio.

Habat Delivers Comments on Medicaid Managed Care

2008-08-07T13:12:00.002-05:00

Yesterday Director of Public Policy and Advocacy, John Habat, presented comments as part of the Medicaid Managed Care Listening Sessions held by the Ohio Department of Job and Family Services, Office of Ohio Health Plans. The text of his remarks can be found on the Community Solutions website.

In the next few weeks ODJFS will host three additional listening sessions across the state. Details can be found here.

Fiscal Year 2008 Wrap-up

2008-08-06T09:56:00.002-05:00

The first year of our biennium budget closed on June 30 with over $800M left in GRF. We avoided a deficit through mid-year budget cuts, one-time funds, and delaying payment for 2008 expenses until July 1 (to use SFY09 funds). Both revenues and expenditures came in below original estimates. All major tax sources came in below estimate even though the estimates had already taken into consideration the effects of the 2005 tax reforms. The biggest shortfalls occurred in the second half of the fiscal year. Tax receipts came in below SFY07 levels while expenditures increased, indicating a growing structural deficit. Although we start SFY09 with challenges, the entire $1.1B rainy day fund remains available as a resource, economists expect the national economy to start picking up the second half of the fiscal year, we have an economic stimulus package with promising investments, and local governments can now expect to receive $150M to deal with the foreclosure crisis, which has been a major reason for our sluggish economy. Read more at SFY08 Summary.

Happy New Year! (and yes, we know it's July)

2008-07-01T11:43:00.002-05:00

Today marks the first day of state Fiscal Year 2009, which runs July 1, 2008 – June 30, 2009. And while there was no official countdown or ball that dropped on Capitol Square, reaching the mid-way point of the biennium should still be cause for celebration.

The FY 2008-2009 state budget enacted almost unanimously a year ago includes significant strides for health and human services. SCHIP eligibility was extended to insure another 20,000 Ohio children in the largest Medicaid expansion in over a decade. Tuition was frozen at Ohio’s public universities. New investments in early care and education programs totaled nearly $300 million. Even with a worsening economic forecast, these accomplishments were preserved in the Capitol Budget/ Budget Corrections bill signed by Governor Strickland last week.

But like a New Year’s Eve party, the celebration will be short lived. The planned phase in of the 2005 tax reforms will continue to erode tax collections. Economic realities have caused OBM to lower revenue estimates. Meanwhile, demand for state services is on the rise. As advocates across the state prepare for the next biennium budget, we will need to keep our priorities in front of us.

What firefighters can teach us about budgeting

2008-05-01T15:52:00.002-05:00

Recently, Sprint began running a TV commercial entitled “What if firefighters ran the world?” It shows a legislature composed of firefighters in full turn-out gear using their cell phones’ push-to-talk features to solve the country’s problems. What do the firefighters do? They balance the budget, cut taxes, and increase spending on roads and water treatment.

If only it were that simple. Obviously, being a policymaker is more difficult than portrayed in the advertisement, as is being a firefighter. (How many of us would run into a burning building?) Elected officials must attempt to balance competing interests and conflicting priorities. They hear from advocates, lobbyists, constituents, caucuses, and other Members, on the entire gamut of possible issues. Good policymakers attempt to see into the future to try to anticipate consequences, and even the very best sometimes make mistakes. On the other hand, the firefighters are the epitome of decisiveness and consensus, two things we would sometimes like our legislators to display more frequently.

The problem is that the type of faulty reasoning – that we can lower taxes while increasing spending and have a balanced budget – used for comical effect in the commercial sometimes works its way into real-world policy debates. As a recent New York Times editorial pointed out, “To restore the health of the budget, let alone keep ambitious campaign pledges for spending more money, the next president, regardless of which party wins, will have to tax the American people more than any of the candidates has been willing to admit.”

It is not just the federal level where policymakers are up against difficult budget realities. Our state is facing a budget shortfall, and it would be a shame to see the significant progress on health and human service programs made in the SFY 2008-2009 budget erased due to economic downturn and a resistance to exploring additional revenues. There are options to meet this challenge, but few are politically popular. Unlike firefighters in a Sprint commercial, we can’t have it all. Correcting Ohio’s budget shortfalls will mean either a reduction in services or an increase in revenues, or both. These are real issues that require real discussion. Unfortunately, outfitting the General Assembly with push-to-talk mobile phones probably won’t help.

Good News for Ohio!

2008-04-24T06:26:00.002-05:00

Good news for Ohio! For months advocates and policymakers have called foul on a directive released last year by the Centers for Medicare and Medicaid Services (CMS). The directive limited the ability of states to expand their SCHIP programs to children in families above 250% of poverty. With Ohio looking to expand its SCHIP program to 300% of poverty, the directive took the wind out of the sails of the bipartisan effort to provide health care to more of Ohio’s children.

Last week the General Accountabiity Office and the Congressional Research Service released opinions stating that, under the Congressional Review Act, the August 17th directive should have been sent to Congress for review before being implemented.

The new legal opinions help to validate the perspective that the directive has illegally, abruptly and unilaterally changed longstanding SCHIP rules through a “backdoor” mechanism. By making these far-reaching and harmful changes through a mere letter to state officials, Governors, families, and others were left with no opportunity to comment on how they might damage children’s coverage.

In Ohio, the directive already has meant that 35,000 children will not be able to take advantage of the SCHIP expansion.

In light of the growing evidence of the illegality of the August 17th directive and its ongoing harm to Ohio, and other states, efforts to cover more uninsured children, we need to continue the effort to see that the directive is suspended until SCHIP reauthorization can be completed. It is only fair to the nation’s children that far-reaching decisions about which of them can be covered through SCHIP are addressed in a public, open debate, rather than through a backdoor process that illegally circumvented even the chance for Congress to provide input.

Revenues Starting To Show Economic Slowdown

2008-04-16T10:29:00.003-05:00

The April LSC and OBM budget reports are out. The past few budget reports have warned that the weakened economy would start to show itself through lagging tax revenues, and the April reports seem to bare this out. However, expenditures remain below estimate so far this year, and LSC expects them to stay below estimate as the executive branch implements its budget reduction plan to reduce general revenue fund (GRF) FY2008 spending by about $202M. We saw large inflation in March according to the U.S. Labor Department. Although, LSC reports that if there is a national recession, analysts expect it to be shallow with a quick recovery.

Revenues - Tax revenue is up a meager .4% year-to-date compared to this time last year. All GRF sources are $517M (2.7%) below estimate year-to-date and $371M (18.4%) for the month of March. Every major tax source came in below estimate in March, and LSC reports they will probably remain below estimate for the rest of this fiscal year. GRF tax receipts are down $262.4M (1.9%) so far this year and down $110.7 million (7.3%) in March, mostly because of the personal income tax, which is most affected by economic conditions. The March sales and use tax, which also reflects the strength of the economy, also lowered, at 10.4% below estimate. The commercial activity tax came in 13.2% below estimate in March, and LSC predicts it will finish the year below estimate. Other tax revenue streams that are below estimate year-to-date include the corporate franchise tax, auto sales tax, public utility tax, earnings on investment, and the cigarette tax.

Expenditures – Most categories remain below estimate except for Medicaid, which is $18.8M (.3%) above estimate year-to-date. Medicaid caseloads have exceeded estimates for 8 consecutive months, and expenditures would be higher if it weren’t for delays in program expansions and provider rate increases. JFS will receive $8.9M for Medicaid due to a settlement with Merck & Co., Inc. - every bit helps. Additionally, spending in three higher education grant programs has been delayed next fiscal year.

FY 2008-09 Budget Corrections – we’re still waiting for the legislature to weigh in on most of the Governor’s proposed budget fixes, which require legislative action. Executive budget cuts are already being implemented. He has not yet proposed use of the rainy day fund or touching any tax reforms from the past few years.

FY 2010-11 Budget – OBM expects state revenue growth to remain flat in 2010-11 and acknowledged that this is because of the tax reforms of HB 66 and the weakened economy. OBM’s Operating Budget Guidance limits department requests to 90 and 95% of adjusted 2009 appropriations, even for GRF funds used for state match of federal funds. This limit is by fund, not by appropriation line item, which means that departments have to prioritize funding across all programs. Therefore, advocacy for the next budget should begin now at the state agency level as departments are preparing their budget requests for submission by September 15.

Budget reports show increasing needs

2008-03-27T20:29:00.007-05:00

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

Estate Tax Redux

2008-03-13T09:49:00.001-05:00

As debate over the budget resolution continues on the Senate floor, Senators are once again discussing the estate tax. Currently the estate tax effects one out of every 200 estates. Once scheduled changes are implemented in 2009, that number will drop to three out of every 1000.

Despite the fact that the 2009 exemption of $7 million per couple would shield 997 out of every 1,000 estates from tax, Senator John Kyl of Arizona has introduced an amendment to further reduce the estate tax by raising the exemption to $10 million per couple and lowering the top rate from 45 percent to 35 percent rate. All of the additional benefits would go to the 3 in 1000 estates that would be taxable under 2009 law. According to the Joint Committee on Taxation, Kyl’s amendment would amount to repeal of more than three-quarters of the estate tax.

So what do all these numbers mean? Because Senator Kyl’s amendment does not provide any offsets to make up the lost revenue, his amendment is likely to add another $300 billion to the deficit over ten years (when interest costs are included). Alternatively, if the lost revenue were made up with spending cuts, then we would see an increased burden on state budgets seeking to maintain programs in the face of sharply reduced federal funding.

Reductions in a tax for so few should not put essential investments for so many at risk. At a time when Americans are asking for increased commitment to health care, education, and veterans’ assistance, among other things, the Senate should think carefully about whose priorities it puts first.

Senators George Voinovich and Sherrod Brown need to hear from their constituents about the need to defeat the Kyl amendment on the estate tax in the interest of protecting essential programs and preventing further strain on already strapped Ohio state budget.

Ohio Revenues up in January, but Budget Expected to Tighten in 2009

2008-03-04T12:50:00.002-05:00

Ohio, along with about half the states, faces a budget shortfall in fiscal year 2009, according to the Center for Budget and Policy Priorities. Both the OBM and LSC February monthly budget reports describe a slowing national economy in late-2007 and early-2008. The President signed a federal fiscal stimulus on February 13 of $168 billion for fiscal years 2008-09, which is good news (despite debate about the form of the stimulus) considering that approximately half of economic forecasters are now predicting a national recession this year. Ohio faces its own challenges, including high foreclosure rates, with 1.8% of Ohio households in foreclosure at some point of 2007, according to LSC. LSC also reported that Ohio’s unemployment rate rose to 6% and is forecast to average 6.3% in FY 2009 (our current budget used a forecast of 5.5% for this year and 5.4% for next), which is expected to affect state revenues and the need for Medicaid and other public assistance programs.

Revenues – Although General Revenue Fund (GRF) tax receipts were above estimate by $31.9 million in January, they remain below estimate so far this state fiscal year by $86.6 million (.8%), and OBM and LSC do not expect the January surplus to continue. OBM reported that the tax reforms of H.B. 66 continue to phase in and affect year-over-year revenue growth.

Expenditures – Expenditures have been $171.4 million under estimate so far this state fiscal year (1%) and came in $33.1 million (1.5%) below estimate in January, according to OBM. All spending categories came in under estimate in January except for Tax Relief, however, they are expected to come in closer to estimate once December and January payroll close. Medicaid GRF spending was $27.7M (3.5%) below estimate in January per OBM, at least partly because expansions and rate increases that were planned for January 1 have not happened, however, expenditures are about $5.6 million above estimate year-to-date (.1%) because of increased caseloads, especially in the Aged, Blind and Disabled category. The good news is that Ohio’s federal share is set to increase in federal fiscal year 2009 by about $40 million over the budgeted amount because of an increase in Ohio’s federal matching FMAP rate. Ohio continues to work with the federal government to expand Medicaid to serve the increasing need and to maximize federal matching funds. TANF spending was over-estimate $6.2 million in January and $7.1 million year-to-date. OBM reports that TANF will only fund Prevention, Retention and Contingency services and Child Care from the TANF general revenue fund for the rest of this fiscal year.

OBM testimony
J. Pari Sabety, OBM Director, testified in front of Ohio’s House Finance Committee on February 26 about a shortfall of between $733 million and $1.9 billion for the current biennium budget. Director Sabety outlined three possible scenarios for Ohio’s economic picture – low growth, no growth, and recession. Based on its analysis, OBM found the low growth scenario the most likely ($733 million shortfall) and used it to balance the budget. Strategies to correct the budget deficit include budget cuts (52%), lapses to the General Revenue Fund (21%), transfer to the General Revenue Fund ($50.3 million), additional tobacco securitization interest income ($25 million) and proceeds from enhanced lottery proceeds including keno ($73 million). Director Sabety explained that the Governor’s plan maintains his priorities to maintain tax cuts and to avoid new or increased taxes or fees. Most of the savings would be accomplished through administrative action, but some pieces will require legislative authority, probably in April or May. The two main reasons given for the shortfall were reduced revenues and increased Medicaid spending for reasons including unrealized savings from Medicaid cost containment ($51 million in SFY 2008 and $164 million for SFY 2009). Medicaid caseloads have exceeded estimates for six consecutive months. Director Sabety answered Committee questions about the reliability of the latest projections, the extent a downturn will impact Medicaid and cash assistance caseloads, plans for an increasing older population, the unified longterm care budget, the timeline for Medicaid enrollment expansions, postponement of increased provider rates, and unrealized Medicaid cost containment savings.

Governor Strickland congressional testimony
Governor Strickland testified before the U.S. House of Representatives Committee on Energy and Commerce, Subcommittee on Health, February 26, 2008. He opposed the President’s cuts in Medicaid spending and state flexibility and CMS regulations that would cut program funding (which Congress has put a moratorium on), saying that they’re budget cuts made outside the legislative process that have been disguised as regulation.

Report Finds "Economic Stimulus Good, But More Needed"

2008-02-19T10:57:00.001-05:00

The Center for Community Solutions released a new report that evaluates the federal economic stimulus package signed by President Bush last week and examines its impact on Ohio. The report concludes that while the package’s tax rebates are reasonable, additional stimulus may be necessary. According to the authors, “Because of economic downturn, Ohio is facing budget shortfalls that the recently enacted federal stimulus package does nothing to address.” It cites several other stimulus options that would have a greater effect on Ohio including federal aid to states in the form of block grants, an increase in federal Medicaid match, expansion of LIHEAP, emergency food assistance, unemployment insurance, and the Highway Trust Fund.

To view the full report, visit http://www.communitysolutions.com/images/upload/resources/EconomicStimulusMoreNeeded021508_2.pdf

“The State of the State is Resolute”

2008-02-06T14:19:00.000-05:00

Governor Strickland gave his State of the State address today. He focused primarily on education and economic development. He spoke of investing in Ohio’s future through an educated workforce, infrastructure, and emerging industries.

Education – To create a more educated workforce, the Governor has proposed a 10-year plan in which associates and bachelors degrees will be available within 30 miles of everyone in the state. He also put forth the ‘Seniors to Sophomores’ initiative, where, starting next school year, high school seniors will be able to earn college credit at Ohio’s public universities - for free. He also proposed creating the position of Director of Department of Education to oversee K-12 education. The position would be appointed by the Governor. Governor Strickland will offer his full education plan next year based on his stated principles.

Economic development - Creation of good jobs, infrastructure investment, and investment in emerging industries like biomedicine and advanced/renewable energies to stimulate the state’s economy and maintain Ohio as a strong industrial base. ‘Building Ohio Jobs’ would invest $1.7 billion (funded through restricted bonds) to create 80,000 good jobs. This would be done through advanced and renewable energy, distribution infrastructure, bioproducts with renewable sources, biomedicine, downtown revitalization, Clean Ohio Fund, and the Ohio Public Works Commission.

Other issues - Governor Strickland wants to create the Ohio Department of Veterans Affairs to consolidate veterans’ programs. He also would like the legislature to keep electricity rates stabilized as part of the Energy Jobs and Progress Plan. He addressed the foreclosure crisis with plans to implement rules and possible legislation that incorporate elements of the compact that Ohio offered to mortgage companies, which they declined.

The Governor seemed to respond to suggestions that he wait until next fiscal year to begin cutting budgets by emphasizing the need to be proactive and plan for the future. Overall, he showed commitment to investing in the things that add promise to Ohio’s future, even during fiscally tight times.

Economic Stimulus: Bang for the Buck

2008-02-04T14:03:00.000-05:00

Fiscal stimulus has been the hot topic in Washington for the past several weeks. The House already passed a stimulus package created with the input of the White House, and the Senate will take up consideration this week. We will likely see a stimulus package hit the President’s desk very soon, with a good chance that he will sign it.

Unfortunately, in the rush to build consensus on a stimulus package, Congress jettisoned an important method of stimulus that has the potential to be most effective: direct government payments to individuals, which could come in the form of an increase in food stamp benefits or an extension of unemployment insurance. Not only would an increase in these programs provide much-needed support to low-income families, who are likely to feel the impact of an economic downturn most deeply, but according to economists, they would provide the swiftest impact on the economy.

When measuring “bang for the buck”, or how much economic activity is generated by spending on certain policies, food stamps and unemployment insurance come out ahead, according to the industry research firm Moody’s Economy.com. For every dollar spent on the food stamp benefit, $1.73 is generated throughout the economy in what economists call the ripple effect. $1.64 is generated for every dollar spent on unemployment insurance.[1] And unlike tax breaks, which individuals may use to pay down debt or increase savings, recipients must spend additional food stamp benefits, quickly infusing money into the economy.

In testimony before the Senate Finance Committee, Peter Orszag, Director of the non-partisan Congressional Budget Office stated, “The most effective fiscal stimulus polices share two common features: they focus on the time period when stimulus is most likely to be needed, and they are designed to increase economic activity as much as possible for a given budgetary cost.”[2] He went on to site food stamp increases and unemployment insurance extensions as the only two proposals currently being considered that are both fast acting and highly effective stimulus.

It appears unlikely that food stamps and unemployment insurance will be a part of the first stimulus package sent to the President. There are rumors that a second round of stimulus will be considered later in the year. Let’s hope that the passage of a bill does not mark the end of the discussion.

[1] “Food stamps offer best stimulus – study.” CNN Money.com, 29 January 2008.
[2] Statement of Peter R. Orszag, CBO Director, “Options for Responding to Short-Term Economic Weakness.” Before the Committee on Finance, United States Senate, 22 January 2008.

Ohio's December financial reports

2008-01-16T22:39:00.000-05:00

The December monthly financial reports from the Governor’s Office of Budget and Management (OBM) and the Ohio Legislative Service Commission (LSC) seem to indicate that the rest of the country may soon feel some of the economic strain that Ohio has experienced. Unemployment is up nationally, the housing market is stagnant, and oil prices continue to rise.

So far this state fiscal year, Ohio’s general revenue fund tax receipts have been slightly less than projected (1.6%) and expenditures are slightly more than projected (1.6%) according to OBM, with November a particularly rough month. The OBM report indicated that the corporate franchise tax and personal income tax contributed to the revenue shortfall, and tax reforms continued to affect revenue growth. Expenditure increases were partly due to rising caseloads in Public Assistance and Medicaid. Although Medicaid disbursements were only 1.1% above estimate so far this fiscal year, a one percent increase costs an additional $109 million according to OBM. Most other expenditure categories were below estimate year-to-date.

The Governor’s Counsel of Economic Affairs expects Ohio’s GDP to grow at a slow rate (1.6% annually) through mid-2008. It attributes this to higher energy costs, a tightening of credit conditions, and a softening labor market. According to LSC the Federal Reserve has indicated that it does not expect a rebound in this region’s housing and construction markets until 2009. The good news is that many analysts suspect that Ohio’s housing market has already seen the bulk of expected damage from the sub-prime mortgage situation, whereas much of the rest of the country is just beginning to see the effects. Perhaps the worst is behind us.

SCHIP Picks Up 6 New Votes and Loses One

2007-09-26T15:51:00.000-05:00

In an inspiring display of bipartisan government, 12 Ohio members of the House of Representatives voted to insure 4 million more low-income children. The Children’s Health Insurance Program Reauthorization Act passed the house 265-159 with Representatives Hobson, Kaptur, LaTourette, Pryce, Regula, Ryan, Space, Sutton, Tubbs Jones, Turner, and Wilson voting in favor. These members deserve our thanks for standing up for Ohio’s children. Just click on the names and you will be linked to their contact page.

But the work is not done. The Senate will vote on the bill in the Thursday. Senator Brown supported the bill in its earlier version, but Senator Voinovich was opposed. We are hoping he will be able to support it the second time around.

All indications are that President Bush will use his veto pen for only the fourth time in his presidency to veto this bipartisan legislation for children. And then the fight goes back to the House. The House is 25 votes shy of having the necessary 290 to override a veto. Ohio has five members who voted against the compromise bill. If the president vetoes the bill, the focus will be on maintaining the six votes we picked up last night and urging Representatives Boehner, Chabot, Jordan, Kucinich, and Schmidt to reconsider their opposition. Representative Kucinich said he would not support the compromise bill because it does not include coverage for legal immigrant children.

But for now...on to the Senate!

Can I Put That On My Credit Card?

2007-09-17T11:36:00.000-05:00

Can you imagine putting $2.9 trillion on your credit card? Well that is exactly what the U.S. Government has done since 2001 when President George Bush took office. Since that time Congress has raised the statutory federal debt limit four times and last week the U.S. Senate Finance Committee approved legislation to raise it yet again. The total limit will now stand at a mind boggling $9.815 trillion. The next time you wonder why the dollar continues to lose value, why the U.S. Federal Reserve Bank is reluctant to lower interest rates, why credit markets continue to tighten I hope you will remember the role that current administration federal fiscal policy – cutting taxes without cutting spending – has and continues to play in producing this fiscal mess. Citizens for Tax Justice has released a paper on this sobering subject.

Oh and by the way that $2.9 trillion dollars is on all of our credit cards, as well as those of future generations, for many, many years to come.

Poverty in Ohio Remains High

2007-08-30T15:11:00.000-05:00

Well the numbers are in and while they are better than some may have expected, they aren’t good. Every year the human services advocacy community awaits the poverty numbers with conflicted anticipation. One the one hand hoping numbers are down because more people are moving toward self-sufficiency. But at the same time knowing that higher numbers means more press coverage and hopefully more attention from policymakers. In many ways, the tone to this year’s poverty numbers could be characterized as “To be continued….” While most figures remained close to 2005 levels, other indicators, such as health insurance, are cause for alarm.

Let’s look at the big picture first. Poverty in the United States is down from 12.6% in 2005 to 12.3%, 36.5 million people, in 2006. Most of that reduction comes from seniors as poverty among children and working age adults went basically unchanged. On the whole, Ohio is doing slightly better than the national figures with 1.4 million Ohioans, or 12.2%, living in poverty. But Ohio is the only state with more than one city in the top 10 of the nation’s poorest cities, Cincinnati is 3rd and Cleveland is 4th. Median income is up nationally, but down in Ohio from $44,919 in 2005 to $44,532 last year.

With the exception of the drop in median income, one could say we are holding steady. But there are some disturbing factors inside the numbers. Specifically, where we are in relation to where we were during the last recession and the growing numbers of the uninsured.

In 2001, the last recession was at its lowest point. For the first time on record, the national poverty rate is lower in the fifth year of an economic recovery than it was during the recession. Most growth in the economy since the last recession has been concentrated among those in the top income brackets which has resulted in a very uneven recovery. Low-income and middle-income Americans have not seen the same gains over the last five years.

Most alarming in Tuesday’s census figures was the increase in the number of uninsured Americans. 2006 saw an additional 2.2 million people (47 million total) join the ranks of the uninsured, including 600,000 children (8.7 million total). This is the sixth year in a row that the number of people without health care coverage has increased; further fueling national discussions about the need to address what continues to be a growing crisis.

Ohio faired much better than the rest of the country in the number of uninsured, but still had 1.1 million Ohioans without health care coverage in 2006, 10.1 percent of the population compared to 15.8 percent nationally. State and county officials have made a yeoman’s effort at enrolling as many eligible children as possible in Medicaid and the State Children’s Health Insurance Program (SCHIP), but with available federal funds dwindling and new restrictions enacted in 2006, making sure that low-income children without health care get the coverage they need is becoming more difficult.

Recently President Bush, through the Centers for Medicare and Medicaid Services (CMS), has released a series of new rules that would significantly limit the ability of all states to cover as many low-income children as possible. In Ohio these rules could have a devastating effect on the recent SCHIP expansion enacted by the Governor and the Ohio General Assembly to cover children up to 300 percent of the poverty level. Governors, legislators, and advocates have spoken out on a bipartisan basis on the dangers of enforcing the CMS restrictions.

Going forward we need to continue to shine a light on the impact of low wages, poverty, and lack of health care coverage on Ohioans, directly and indirectly. We cannot move forward as a state with one hand tied behind our backs. Resources must be dedicated to programs designed to help people lift themselves out of poverty if Ohio to succeed at catching up with the rest of the rest of the country in this most recent economic recovery. Human capital investments such as job training programs, and food and health care supports are essential to providing both the safety net and the ladder.

Head Start Reauthorization Moving?

2007-08-16T10:04:00.000-05:00

The Head Start program has not been reauthorized since 1998, but earlier this spring and summer reauthorization legislation began to move. On May 2, 2007, the House approved H.R. 1429, “Improving Head Start Act of 2007.” On June 19, 2007, the Senate approved its version of Head Start reauthorization, “The Head Start for School Readiness Act.”

In the past the Bush administration proposed to transfer control of the program from local grantees to the state – in effect block granting the program. That proposal is no longer considered a viable option. In the most recent House debate an amendment was narrowly defeated that would have allowed Head Start providers affiliated with religious groups to hire employees based on religious preferences. Both the House and Senate versions authorize increases in spending, increase program eligibility to 130 percent of the federal poverty level, increase the set aside for Early Head Start, terminate the national reporting system (testing), and emphasize increasing staff qualifications and salaries.

According to the Federal Funds Information for States the funding levels authorized in the both the House and Senate bills are about $14 million higher for Ohio in federal fiscal year 2008 than what is currently contained in the pending appropriation bills and almost $20 million higher than what the President proposed in his 2008 budget.

The Senate appointed members of the Senate Health Education Labor and Pensions Committee as Senate conferees, but the House has yet to appoint their conferees. Ohio U.S. Senator Sherrod Brown is a member of the Senate Health Education Labor and Pensions Committee and as such will have a voice in the conference process. There is no scheduled date for beginning the conference committee, and the prospects for successfully moving the legislation are unclear as the 2008 elections move ever closer. The Bush administration opposes several provisions in the legislation, particularly the proposal to terminate the national reporting system.

Essential Information for HHS Advocates

2007-08-16T09:15:00.000-05:00

If you are all interested in how the budget treated health and human services you need to read Dick Sheridan's most recent State Budgeting Matters. Part 1 deals with Medicaid and Part 2 deals the Children and Family Services division of ODJFS. Dick will be reviewing other departments through the fall. Stay tuned.