BUDGET BAD FOR OHIO’S FUTURE

On July 13, the General Assembly approved House Bill 1—the state operating budget for fiscal years 2010-2011.  After weeks of negotiations and heated debate between the Governor, House and Senate about several key policy areas, as well as a proposal to put slot machines at Ohio’s horse tracks, the budget was sent to the Governor. While I appreciate the hard work and long hours put in by many of my colleagues to reach a consensus, I voted against the bill, because I believe it is bad for our schools, bad for Ohio families and bad for the financial stability of this state.
           On June 19, Governor Strickland unveiled a “balanced budget framework” for fixing an estimated $3.2 billion hole in state revenue over the next two years. The plan included $2.4 billion in cuts to state programs and services and, despite his repeated opposition to gambling, an expansion of the Ohio Lottery to install video lottery terminals, or VLTs, at Ohio’s seven horse-racing tracks to raise $933 million. The controversial proposal led to a stalemate in the budget process that pushed negotiations past the June 30 deadline and forced the Legislature to pass three seven-day continuing budgets to keep state government running.
           The Governor insisted that he needed legislative approval to implement his VLT plan. Senate President Bill Harris, on the other hand, countered that any expansion of gambling in Ohio should go before voters, who have rejected gambling initiatives four times since 1990. However, President Harris maintained that if the Governor wanted to move forward with VLTs without a vote of the people, he had the authority to do it through executive order like he did when he expanded the Lottery last year to include Keno at bars and restaurants.
           Concerned about the impact that the Governor’s VLT plan could have on Ohio’s schools and the future of our state’s budget, the Senate organized public hearings earlier this month to gather information and study the issue. Testimony from the Strickland Administration, Lottery officials, horse track owners, representatives from the horse racing industry and other stakeholders revealed a number of major questions and concerns.
            For instance, the VLT language that was presented to the Senate included a “claw-back” provision that would have allowed track owners to recoup $455 million in license fees if a separate casino ballot issue passes in November. There were also concerns raised that the Administration’s revenue estimates for VLTs were too generous, legal challenges could delay implementation of the Governor’s plan and track owners were being handed a lucrative gambling monopoly, while the racing industry was getting shortchanged in the deal. In fact, the CEO of MTR Gaming, which owns Scioto Downs in Columbus, estimated that the track could turn a $30 million profit with the addition of video slots. At the same time, two horsemens’ groups testified that the four percent return proposed for horseman under the Governor’s slots plan was too low compared to other states.
           In response, President Harris proposed placing a constitutional amendment on the ballot in November to allow Ohio voters to decide on the VLT issue. The amendment’s language addressed many of the concerns that arose during the Senate’s VLT hearings, and also included a provision to require that VLT licenses be competitively bid. However, the Governor quickly rejected this commonsense proposal.
           The back and forth between the Governor and the Senate continued for several days until, on July 10, the Governor finally determined that he could move ahead with his VLT plan through executive order. At the Governor’s request, House Bill 1 included language that sets parameters for placing slot machines at Ohio’s horse tracks.
           I voted against HB 1 because the Governor’s plan is poorly-constructed and the VLT language included in the budget is too broad and still leaves a number of questions left unanswered. For instance, while I received phone calls from horse enthusiasts and representatives from Ohio’s agriculture community urging support for VLTs at racetracks, the Administration’s VLT plan is still inadequate and unclear about how much revenue would be directed for purses, trainers, riders, breeding programs and other areas of the horse-racing industry.
           I also opposed HB 1 because it is bad for Ohio’s local school districts. The final version of the bill implements several aspects of Governor Strickland’s evidence-based school funding model. While he touts his plan as an “unprecedented investment in Ohio schools” that will “transform Ohio classrooms,” there is little about the Governor’s proposal that is “unprecedented” or “transformative.” Under his plan, 427 school districts are projected to receive less state aid in fiscal year 2010 than they received in fiscal year 2009, and 333 districts are projected to receive less state support in fiscal year 2011 than they received the previous year.
          The proposal also places costly new mandates on local school districts without additional state support and relies heavily on one-time federal money for education over the biennium. The Governor promises billions of additional dollars over the next decade to pay for his education reforms, but he has yet to identify a way to pay for it.
          In addition, I voted “no” on HB 1, because the bill implements several health insurance mandates that could significantly drive up costs for small businesses and Ohio consumers.  These include an expansion of Ohio’s open enrollment program that could raise insurance premiums for average Ohioans, a requirement that private insurance companies offer coverage for dependent children up to age 28 and a mandate that certain businesses provide “cafeteria” health insurance plans for their employees.
          At a time when Ohio families and businesses are struggling, the Governor’s plan is not the budget to turn around Ohio and grow jobs. This budget is defined by lofty promises from the Strickland Administration—the promise of additional funding for schools, the promise of millions of dollars in gambling revenue from VLTs—and is weakly held together by billions in one-time federal and state money. I could not support a proposal that makes future funding unpredictable for our local school districts, raises costs on businesses and families and sets our state up for failure in two years.

I encourage you to contact me with any questions, thoughts or concerns, or if you need assistance working with a state government agency. You can write me, Senator Steve Buehrer, Ohio Senate, Statehouse, Columbus, Ohio, 43215, or contact me by phone at (614) 466-8150. In addition, I can be reached by email at SD01@senate.state.oh.us.