COLUMBUS — Gov. Bob Taft will ask lawmakers to pass a list of tax increases on business and financial services to help plug a $1.1 billion hole in the state budget.

        Mr. Taft will pitch the proposed tax increases, and ask for more “rainy day” money, in closed-door meetings with Republican lawmakers this morning. He's expected to discuss his budget-balancing plan during an afternoon news conference.

        Ohio's stagnant economy and the Sept. 11 terrorist attacks have combined to lower expected state tax revenues, creating an estimated $1.1 billion hole in the $44.9 billion two-year budget.

        Among the changes the governor is expected to support is a new sales tax on toll-free phone lines businesses offer customers, which could bring in up to $40 million this fiscal year. While the number would still be toll-free to consumers, businesses essentially would pay more to offer the service.

        Mr. Taft also will ask lawmakers to change the way complex financial trusts and passive investment companies are taxed. It was not clear Monday night how much more revenue these changes would produce.

        Also nestled in the proposal is a second push to let Ohio join a multistate lottery such as Powerball or the Big Game. Though spurned by lawmakers in the spring, Mr. Taft still supports it as an option that could bring in up to $40 million starting July 1, 2002.

        The governor also will push to spend up to $255 million in tax funds set aside for “rainy day” fiscal emergencies.

        Whether lawmakers or legislative leaders will support the changes is unknown. Senate President Richard Finan, R-Evendale, has been critical of any use of Ohio's $850 million rainy day fund.

        The changes come on top of 6 percent and 3 percent budget cuts that threaten state employee layoffs, shutting down up to four state mental hospitals and as many as three prisons.

        Even before the proposed budget cuts, state mental health agencies faced a $12-$15 million deficit, prompting expected layoffs of 211 state employees.

        With the Ohio Department of Mental Health short another $25 million for the 2003 fiscal year, advocates for the mentally ill fear the closing of institutions in Dayton, Toledo, Cambridge and Cleveland.

        Agency spokesman Sam Hibbs said that the three or four institutions to be closed have not been chosen yet.

        “(Director Michael F.) Hogan's been very clear responding that our sites have not been ruled in or ruled out,” said Mr. Hibbs.

        No decision will be made about which facilities will close until mid-December at the earliest, after a series of town meetings at each of the nine state hospitals.

        Gloria Walker, a Cincinnati resident and a board member for the National Alliance for the mentally ill, fears the impact hospital closings would have on patients and their families. If Cincinnati's Summit Behavioral Health Care Center shut down, some patients would be transferred miles away.

        The loss of corrections officers called up to serve in the National Guard and Army Reserve could compound the 3 percent cut for state prisons.

        Reginald A. Wilkinson, director of the Ohio Department f Rehabilitation and Corrections,said he has not yet decided which prisons should be closed.

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