Is Ohio’s sky falling?

Facing a projected $7.3 billion state deficit in the next two years, Gov. Ted Strickland recently gave Ohio agencies that receive state general revenue funds a homework assignment - determine how their services would be affected if state funding was cut by 25 percent.

The answers weren't encouraging. Among the possibilities was a $2 billion reduction in the Ohio Department of Education's fiscal year 2010 budget; possible layoffs at Department of Job and Family Services offices; restricted access to the Ohio Department of Aging's PASSPORT nursing home alternative program; closure of some Ohio Department of Mental Health programs; layoffs and program reductions at the Ohio Department of Health; and elimination of 5,237 positions at the state Department of Rehabilitation and Corrections.

"The exercise provided a comprehensive look at how these agencies would fare if cuts were made, but it does not reflect any funding decision that has been made by the governor's office," said Keith Dailey, spokesman for Gov. Strickland's office. "These scenarios will also assist the governor in applying for aid from the federal government as they illustrate what those cuts would mean to Ohioans."

Deep budget cuts would be felt all the way from Columbus to Marietta, as state money is used by a variety of agencies and institutions in Washington County.

Washington County Health Commissioner Kathleen Meckstroth said agencies like the Ohio Department of Health understand the 25 percent cut is just a potential scenario, but such a move would have some local effect as it would require reductions in programs like the Bureau for Children with Medical Handicaps.

"That could be a real problem for the children served by this program," Meckstroth said. "And BCMH not only covers children, but also adults with cystic fibrosis and hemophiliacs. We currently serve a total of 177 BCMH clients in this county.

"But this state also needs to do a better job of leveraging federal health funds," she said. "Ohio is currently ranked 46th in the nation for receiving federal health dollars."

A spokeswoman for U.S. Rep. Charlie Wilson, D-Ohio, said on Wednesday the congressman was circulating a letter seeking support from other members of the Ohio delegation to temporarily increase federal assistance to the state's Medicaid program.

"October 2008 marked the 10th consecutive month of Medicaid caseload growth in Ohio, and since December 2007, the caseload has grown by more than 80,000 cases. That's a 5 percent increase," said Hillary Wicai Viers, with Wilson's office.

U.S. Sen. Sherrod Brown, D-Ohio, was also working for relief through federal Medicaid assistance.

"Increasing the federal government's Medicaid percentage would help free up more of the state's resources," said Brown spokeswoman Meghan Dubyak.

"The senator's office is also working on identifying 'shovel-ready' projects that (would) benefit Ohio through an employment stimulus package," she said. "Sen. Brown has also spoken with President-elect Obama and is very hopeful that something will be done to assist the state as we begin the year with a new Congress in place."

Ohio Rep. Jennifer Garrison, D-Marietta, said it is important to note that the predicted deficit comes from "a lack of revenue, not from over-spending."

Like other states, she said, Ohio's economy is contracting.

"People are spending less so the state receives less taxes and that creates a lack of revenue," she said.

"The governor has been cutting back on the current budget to make sure we don't spend money that we don't have," she said. "And we're continuing to make cuts where we can."

Garrison said the governor has already cut more than $1 billion from the state budget and state agencies will likely be asked to make some cuts from their budgets - but probably not at the 25 percent level.

"The governor will be evaluating all the service agencies we have in Ohio," she said.

Garrison said she would be surprised if the administration suggests any tax increase to try to cover the deficit.

On Friday, Strickland announced another $640 million in adjustments to keep the state budget balanced. That makes a total of $1.9 billion that the governor has cut from the current biennial budget.

"I believe that taking this action today is necessary to make sure the state budget remains balanced and agencies have time to plan," Strickland said on Friday.

The governor's office said the adjustment plan includes a 5.75 percent across-the-board reduction in state agency spending levels while "holding harmless" key programs.

Dailey said Strickland recently outlined the state's financial situation with Obama and Rahm Emanuel, the Illinois congressman tapped as Obama's chief of staff.

"(Emanuel) has indicated that they have heard the governor and understand Ohio's situation," Dailey said.

In addition to announcing the current budget adjustment on Friday, the governor said he believed the federal government will help Ohio and other states.

"It appears clear that the federal government will include aid to states in any economic recovery package," Strickland said. "While we do not yet know what the full scope of that aid will be, we believe it is reasonable to plan for an increase in federal Medicaid funding."

But Rep. Jimmy Stewart, R-Athens, the new senator-elect for the state's 20th Senate District, warned that any federal assistance would likely be temporary.

"Even if the feds do come through to assist the state it will only be one-time money," he said. "There will still be long-term issues, and it will not solve the problem for future budgets.

"I've served on the House finance committee and have seen some tough budgets - it's never easy. And there are always a number of deficit projections that can change continually," Stewart said. "The actual deficit could be considerably less or it could be more.

"I'll be interested to see what program cuts the governor will propose when he presents his budget in February," he said.

After Strickland presents the 2009 biennial budget, the budget bill will work its way through the House and Senate before it is finally passed by both houses, usually in June.