COLUMBUS — Ohio lawmakers who helped solve a budget crisis last year learned Thursday that the state is going broke again.

        Saying they underestimated the recession's impact, Gov. Bob Taft's top two money men predicted the state's $44 billion budget will fall more than $1.2 billion short by June 2003. Budget Director Tom Johnson and Tax Commissioner Tom Zaino blamed the deficit on plummeting state income and corporate tax revenues.

Gov. Taft

        “The recession in Ohio is longer and deeper than anticipated,” Mr. Zaino said. “Ohio has lost 50,000 jobs, 40,000 of which were in the manufacturing sector.”

        Just last December Mr. Taft and majority Republicans agreed to a $1.5 billion budget-balancing bill. That plan raised some taxes, cut spending and let Ohio join the Big Game multistate lottery.

        At stake for Ohioans are additional tax increases, which may include some higher business taxes Gov. Bob Taft proposed last year but Senate Republicans shot down.

        Rough estimates of the new deficit have floated around the General Assembly for weeks. Thursday's official numbers start a second round of budget talks that will be far tougher politically than the first.

        While lawmakers face more pressure to pass those increases, they will face business interests well armed from last year's budget battles. Most legislators also must convince voters to re-elect them this November.

        Mr. Johnson estimates Ohio will finish $500 million in the red on June 30, the end of the fiscal year. He projects another $750 million deficit in fiscal 2003.

        State law requires the budget be balanced at the end of each business year. That means at least $500 million must be cut or replaced by June 30.

        Lawmakers are likely to spend some of the $602 million left unspent in the state's $1 billion rainy day fund. More spending cuts at state agencies also are likely.

        House Speaker Larry Householder, R-Glenford; Senate President Richard Finan, R-Evendale; and Mr. Taft have all ruled out blanket increases in state income and sales taxes.

        The governor, however, has refused to rule out increases to smaller business taxes and exemptions.

        Options discussed but discarded last year include:

        • An income tax on trusts.

        • A sales tax on toll-free phone numbers.

        • A tax on sales between different branches of corporations.

        • Another proposal to suspend a tax deduction on business' net losses.

        Estimates from last year show these changes would help the state raise an extra $294 million through 2003.

        Mr. Finan rejected those options as potential solutions.

        “We've done this twice now and it's been off the table,” Mr. Finan said. “Three strikes and you're out.”

        State Rep. Jim Trakas, R-Independence, said he believes tax increases must be discussed. He said more cuts to state agencies should be made first.

        “We truly haven't cut all of the fat out of the bureaucracy,” he said. “No one can say we are down to the muscle and bone of state government.”

        Mr. Trakas said lawmakers also should look for unspent funds in state agency budgets and at delaying state contracts that have not been awarded.

        A proposal that would put video slot machines at Ohio's racetracks also has informally re-emerged as an alternative to tax increases. But Mr. Taft, who said he opposes putting casinos at racetracks, has threatened to veto it.

        Democrats, who refused to vote for the last budget-balancing bill, criticized Republicans for not making a permanent fix months ago.

        “We advocated opening the budget back up in December, and instead they passed a Band-Aid approach to the problem,” said House Minority Leader Dean DePiero, D-Parma. “I think this administration dropped the ball. We should have talked about this four months ago.”

        Mr. Zaino and Mr. Johnson said the governor is expected to publicly discuss a new budget-balancing plan next week.

        As lawmakers begin a new search for more money, neither man was willing to say the state's financial outlook will improve or that the current deficit won't get worse.

        “I don't believe we can guarantee anything,” Mr. Johnson said. “These are the best estimates we can give.”

Ohio treasury runs dry - again
Girl's surgery now possible through generosity of many
Radical surgery has benefits, risks
Roach won't quit job, wants to tell his side
Jurors convict mother
Big-city transplant aims to be rural county sheriff
Butler sees casino on riverfront
Courtney Hennessy, 11, dies from tumor
Cow traded for pop-art gift
Faithful return to the Steps
Insurance firm offers new plan
Norwood schools buy Shea Stadium
Profiling talks inch forward
Three injured when van collides with SUV
Tristate A.M. Report
Vasectomy cost topic of lawsuit
HOWARD: Some Good News
SMITH AMOS: Settlement
WELLS: Police computers
Hamilton death ruled a homicide
Recycling halted for 6 townships
Warren mayors back hospital move
Judge lectures Traficant after he made comment
Police chief accused of staging shooting
Experts ready to study loss of foals
Florida wins the race for horse designation
Kentucky News Briefs
Ky. House alters legislators' retirement plan
Ky. Senate tightens truck-driving licensing
Man sues Owensboro diocese, claiming '60s abuse by priest
Paducah quadruplets to celebrate their first birthday in good health
Power plant bill loses steam
Senate OKs bill to study tournaments
State senator explores office
Teacher raise argued