Balancing Beleaguered State Budget Tops Lundy's Town Hall Agenda

Ohio House State Representative spoke at the on Saturday to address the contentious and complex issues that have arisen as legislators close the funding gaps created by a $6.5 billion budget shortfall. 

From deep cuts to cost-saving measures to one-time money opportunities, Lundy walked the audience through what’s going to be one of the more difficult times in the state’s history as Ohio slowly recovers from the Great Recession. 

Last Thursday, the Ohio House approved a $55.6 billion budget plan that will now move to the state Senate for review. 

In an attempt to erase the multibillion-dollar shortfall created by the drying up of federal stimulus funds and a sluggish economy, education will be cut by $3.1 billion and local government will take a $600 million hit, Lundy said. 

Legislators also hope to produce $1.4 billion in Medicaid savings and are working to restructure the state’s debt to save $500 million. 

And, unexpectedly after 13 consecutive months of job growth, the state will earn $841 million more in tax revenue vs. this time last year, and legislators hope to see that number increase to a projected $1.5 billion through continued job growth. 

“I can’t tell people with a straight face that the economy is great. It’s not,” he said. “And it’s even harder for me to say it’s getting better. We’re crawling out of the hole is the best way to explain it.” 

The state also expects to generate roughly $1.1 billion in one-time money by selling five state prisons and privatizing state liquor stores. 

The $900 million in liquor funding would be used for economic development and create Jobs Ohio, a privately run company overseen by Kasich that would replace the Ohio Department of Development, he said. 

Regarding education, think tanks are projecting that school districts will collectively lay off 8,000 teachers during the next two years, which could, at worst, create a 50-to-1 ratio of teachers to students in Ohio’s public schools. 

“If you have 40 to 50 students in a classroom to deal with, then you can’t control working conditions,” Avon teacher Gylene Pelton said. “Right now, with the (union contracts), you can say how many preparations you have – possibly two or three preparations as opposed to five preparations. If a teacher has to teach five different subjects and have 50 students in a class --  which it could get to -- how can you be successful?

“Our taxes keep going up, the funding for schools keeps going down and then Senate Bill 5 attacks the rights of teachers and tries to vilify teachers and public employees … I can see where SB5 would be attractive to people but the reality is the children and schools will suffer,”  Pelton said.

Cities will be hard-hit too, as initial projections say the state could lose 30,000 fire and police jobs through 2013, Lundy said. 

“State-to-state, Ohio’s ranked 26th in taxation out of 50 states. Then, when you factor in local taxes—when you take local and state taxes—Ohio, all of the sudden, jumps up to number five,” Lundy said. “And that’s where the big argument comes about Ohio’s taxes are too high.” 

"Well, yes, they’re too high because what happens is so much of the responsibility is placed on the local level," he continued. "But the thinking is that, because of the reductions in education and local government funding, you’re going to see more levy issues and higher amounts … So we’re certainly not going to get to lower taxes when looking at this big picture.” 

Locally, Avon just passed a that will generate about $1.8 million per year and help the district cope with the $2.2 million in state funding losses that are projected over the next two school years. 

On the state level, Kasich and the Ohio General Assembly will work through June to finalize the budget, which goes into effect July 1.