Wednesday, June 16, 1999

Budget gains a new chunk

Ohio legislators get $300 million more to play with

Enquirer Columbus Bureau

        COLUMBUS — It only seems like state lawmakers are printing their own money.

        A panel of lawmakers hashing out a deal on the nearly $40 billion, two-year state budget found out Tuesday they have an extra $300 million to spend.

        While no decisions have been made, Republican legislative leaders say a sizable chunk of the better-than-expected tax collections will be pumped into public schools. They're also expected to argue over using some of the money to boost Cleveland's controversial private school voucher program.

        Both ideas are tied to Ohio Supreme Court rulings. The court ordered lawmakers to revamp the way public schools are funded. And it struck down the voucher program, which provides taxpayer-funded stipends for about 4,000 Cleveland children attending private and religious schools.

        Tom Johnson, a top adviser to Gov. Bob Taft and director of the state Office of Budget and Management, cautioned legislators not to spread the additional cash to pet projects.

        “We should exercise extra budgetary caution while we have unresolved school-funding litigation,” Mr. Johnson said after unveiling the latest budget projections.

        Funding schools is Mr. Taft's top priority, Mr. Johnson said. But the governor has abandoned his proposal to divert 100 percent of the state's budget surplus into school construction and technology.

        GOP legislative leaders signed off on giving schools about $416 million of the $654 million surplus for the year ending June 30. They demanded anything above that be used to fund a tax cut for individuals.

        “He sees the handwriting on the wall,” Mr. Johnson said.

        However, if the estimates Mr. Johnson provided don't change, most Ohioans actually will pay higher state income taxes next April than they did on this year's returns.

        Budget analysts expect about $238 million will be set aside for individual tax cuts this year, compared with $701 million the state gave back to taxpayers in 1998.

        That means a family of four earning $50,000 a year will receive about a third of the $126 tax cut from its 1998 tax return.

        The amount given back to taxpayers changes from year to year because lawmakers didn't permanently lower tax rates. As a result, the rate reduction goes up or down depending on the amount of the annual budget surplus.

        Lawmakers stress that tax rates still are lower than they were before the General Assembly started using surpluses to fund the tax cuts four years ago.

        “These changes reflect our emphasis on funding schools first,” said Scott Milburn, Mr. Taft's spokesman.

        As legislative leaders haggle over how to spend extra money in the budget for the two years beginning July 1, schools also will be at the top of the list.

        Senate President Richard Finan, R-Evendale, said he wants to use some of the money to raise caps on the amount of state aid schools can receive. Such a change would pump more money into the Cincinnati Public Schools and rapidly growing suburban districts.

        “Anything we could do in that area would be welcome,” Mr. Finan said.

        Republicans also are moving to revive the Cleveland voucher program in the education budget, al though there is a dispute about whether it should be expanded to sixth and seventh grades as students are promoted.

        State-supported universities, meanwhile, are pushing to eliminate tuition caps that limit them to raising student fees by 6 percent a year. The Senate initially abolished the caps, but many lawmakers want to keep them in place to keep college costs down.

        “These decisions should be left to university trustees,” said Roderick Chu, chancellor of the Ohio Board of Regents. “To keep colleges and universities from increasing tuition stifles the outcomes they can produce.”


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