Accelify Blog

Proposed State Budget Includes Cuts and Reforms for Medicaid, Education, Local Governments (OH)

March 30, 2011

Columbus — Highlights of Gov. John Kasich’s executive budget include the end of billions of dollars in federal stimulus dollars and other one-time monies, a resulting reduction in state funding for local governments and policy changes aimed at helping school districts, county commissioners and other public offices cope with cuts.

The governor has outlined general revenue spending of $26.9 billion in fiscal 2012 and $28.6 billion in fiscal ’13, increases of 1.1 perce nt and 6.4 percent, respectively.

Medicaid (medical and related services to needy Ohioans) and school funding (primary, secondary and higher) account for the largest percentage of total general revenue fund spending.

State Budget Director Tim Keen said the spending proposal does not include across-the-board cuts to agencies, though many have reduced their spending by 10-15 percent.

"I believe that this budget thoughtfully allocates limited resources," Keen said, adding, "You will not see the draconian cuts, the devastating cuts that so many of you have been predicting all this time."

Instead, Kasich and other administration officials said they balanced the budget through a combination of spending cuts and reforms in four major areas: Medicaid, public education, local governments and prisons:

* Medicaid: The executive budget calls for better coordination of publicly funded health services, including physical, mental and long-term care; increased funding for care of seniors and the disabled who want to remain in their homes rather than nursing facilities; and improvements to Medicaid reimbursement rules.

* Education: Kasich will push for changes to teacher licensing requirements; rewards for teachers who excel in the classroom and potential dismissal for those who are failing; increased scholarships and community school options over public schools.

The budget proposes increases of 2 percent and 1.5 percent, respectively, over the next two years for basic funding to schools, though overall funding levels will be lower because of the loss of federal stimulus and other one-time funds.

The governor a lso remains committed to reversing Gov. Ted Strickland’s evidence-based model for school reform, replacing it with a system that he said would put more funding into classrooms instead of toward administration costs.

"We intend to raise education in this state," he said. "We want more dollars in the classroom. We want teachers to be empowered, and we’re going to reward teachers. If they can produce a student who learns more subject matter in one year than the one year they were expected to learn, the teachers are going to get a bonus. We believe in rewarding success in our schools."

The budget also caps university tuition increases at 3.5 percent for the next two years; increases university faculty teaching loads; and calls for the establishment of three-year degree programs at state colleges and universities.

* Local Government: The executive budget would cut local government funds to $525 million in fiscal 2012 and $339 million in ’13. That compares to about $642 million in fiscal 2010 and $665 million estimated in the current fiscal year.

But Kasich and administration officials said the budget proposal does not include casino revenues that will be earmarked for local governments. And they proposed policy changes that would allow those offices to better control their costs.

For example, the governor wants to create a statewide public notice website, to replace much of the advertising currently required in newspapers of record.

Additionally, the executive budget calls for changes in state law to allow local governments to share services among different offices and/or centralize administrative functions, including purchasing, human resources and information technology. And the proposal w ould create a new pooled health insurance program to lower costs.

"Our big problem in Ohio is 200 years of years of accumulated bureaucracy," said Randy Cole, a policy adviser in the state’s Office of Budget and Management. " … When you look at all the schools, all the local governments, and combine them all together, it’s about 3,700 different entities. And they are tied to the dock with 200 years of red tape."

* Prison Reform: Kasich is backing sentencing reform already moving through the Ohio Senate that would move certain nonviolent and low-level offenders into rehabilitation programs.