Thursday, June 17, 1999
Ohio studies ways to spend budget surplus
Vouchers, tax cuts divide lawmakers
BY PAUL SOUHRADA
The Associated Press
COLUMBUS — Cleveland's school voucher program and talk of diverting more of the state surplus away from taxpayers' wallets have emerged as potential snags for lawmakers trying to work out differences between the House and Senate versions of the state's $40 billion budget.
New economic estimates released by state forecasters Tuesday mean that the House and Senate budget negotiators will have at least another $300 million to spend over the next two budget years.
The reports from the Office of Budget and Management and the Legislative Budget Office also indicate that better-than-expected tax receipts and lower-than-projected spending will leave the state with at least $220 million more than anticipated when the current fiscal year ends June 30.
Though surpluses are supposed to be used to lower state income taxes, Gov. Bob Taft and legislators from both political parties are already thinking up ways to spend the newfound money.
“There may be some talk along those lines,” said Rep. E.J. Thomas, R-Columbus.
But Mr. Thomas, chairman of the joint budget committee that began meeting Wednesday said he thinks most House Republicans think any extra surplus this year should go back to taxpayers.
The other $300 million is up for grabs, though, he said.
House and Senate Democrats want the money to be used to increase the basic state aid to primary and secondary schools, as well as the subsidies to public colleges and universities.
“We must spend this newly projected money on all Ohio students and not on individual programs that benefit certain interest groups,” said Senate Minority Leader Ben Espy, D-Columbus.
Mr. Espy seemed to be referring to vouchers.
Senate Republicans revived the program, which gives some low-income Cleveland families up to $2,250 to send their children to private schools, after the Ohio Supreme Court ruled it unconstitutional for procedural reasons last month.
But they limited it to students in kindergarten through fifth grade. Mr. Taft wants the program also to cover sixth- and seventh-graders.
Sen. Robert Gardner, a Republican conference committee member from Madison, so far is sticking to the Senate voucher language.
“My personal feeling is that we should leave it where it is, do a study and see if it's working,” he said.
Mr. Thomas, though, worried about disrupting the schooling of voucher students. A possible compromise would be to maintain vouchers for present students but not add additional kindergartners, he said.
Mr. Taft already persuaded law makers to earmark $415.7 million of this year's anticipated surplus for school building and technology aid. Lawmakers last year siphoned off an additional $200 million or so for schools, disaster relief and a new statewide radio system.
Without the diversions, taxpayers would see an even bigger tax break through a state law that requires unspent money to go into an income tax reduction fund that lowers the tax tables on an annual basis. The state has returned $1.3 billion through the fund over the past three years.
The tax cut totaled $701 million for returns filed this year, or about $126 for a family of four earning $50,000.
The drop-off has resulted in renewed calls by conservatives for a permanent income tax reduction.
“The state is looking for ways to spend money it didn't know it had,” observed Richard Leonardi, president of the Buckeye Institute, a free-market think tank based in Dayton.
“They should return it to its rightful owners, Ohio taxpayers.”
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