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Budget Surplus Predicted

In the marathon House debate over the $55.6 billion budget – which fixes an $8 billion structural deficit – there was a lot of gloom. But there was also this ray of light from Rep. Jay Goyal, a Democrat of Mansfield.

“We currently have an 840 million surplus with the current budget. If this trend continues, it’s likely that we are going to end the year with a $1.2 to $1.5 billion surplus in this fiscal year.”

Goyal used to back up the Democrats’ claim that former Gov. Strickland made the right choice in taking federal stimulus dollars and pouring money into education. While Republicans debate that, there’s no doubt that tax revenues are coming in ahead of projections. Ron Amstutz of Wooster chairs the House Finance Committee, which hammered out the details of the just-passed state budget. It anticipates at least 100 million dollars in revenue coming in than Gov. Kasich’s spending plan introduced in March did. And Amstutz is looking for even better tax numbers next month.

“We should have an opportunity to make some choices such as perhaps taking some of the pressure off our local government partners in this plan, or perhaps making a modest beginning and recharging the depleted budget reserve fund.”

Lawmakers are debating the budget that would take effect starting July 1. But because the budget that expires on June 30 is balanced, these positive projections are making it likely that there will be a surplus as the new budget biennium starts. Local governments and schools have been howling about the 3 billions dollars worth of less money they’re getting this year compared to last, and Dale Butland with the progressive think tank Innovation Ohio says a surplus should go back into K-12 public schools.

“Anything you can do to not force taxpayers to increase their taxes to make up for these education cuts and to staunch the job loss that’s going to come from these cuts, I think Ohio is way, way ahead of the game if they do that.”

But Matt Mayer at the conservative Buckeye Institute says a surplus should be used to pay off bills that have been put off till 2012, with the rest banked in the state’s rainy day fund.
“Of course everyone is going to put their hand out for the money. But the reality is that we need to build back our reserve. We need to make sure we take care of debt. That’s the first order of business in kind of the new economic normal we have here in Ohio.”

Brian Rothenburg at Progress Ohio says he’d like to see the money go to repairing budget holes in the safety net – to food banks, to medical care for the poor, and to low-income child care subsidies.
“We aren’t out of this recession yet, and there are a lot of people hurting. And you don’t help the economy when you have people who are suffering because of decisions to spend money on things or put money in the bank.”

But perhaps the most concerned budget expert is former Senate Republican caucus budget director Neil Clark. While he says he likes the idea of taking care of debt and shoring up the rainy day fund, he’s still concerned about long-term budget estimates.

“Because as we’re having these debates and cutting various institutions and groups, these discussions aren’t including the likelihood that these revenue numbers and expenditure numbers just aren’t right.”

Some groups have already laid claim to a chunk of any surplus – nursing homes have asked for $100 million to offset cuts in their funding.