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Is Ohio racing toward a financial cliff?

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By William Hershey, Staff Writer Updated 10:34 PM Tuesday, July 14, 2009

Even before Gov. Ted Strickland signs the budget the legislature approved, analysts are warning that Ohio could be headed off a financial cliff just two years from now.

Lawmakers balanced the $50.5 billion two-year budget they sent to Strickland with spending cuts, projected money from video slot machines, one-time federal stimulus cash and delaying debt service.

But Rick Yocum, president of the Ohio Public Expenditure Council, said on Tuesday, July 14, that two years from now the state could face a shortfall as high as $8 billion unless more programs are cut, taxes are raised or the economy makes an unexpectedly quick and robust recovery.

“I feel like the state is an automobile traveling at 100 miles an hour toward a cliff that’s five miles away and we’re all confident that when we get there, there’s going to be a bridge,” said Yocum, whose nonpartisan, business-supported research group provides budget and tax information to community and political leaders.

The problem, said Yocum, is that he doesn’t think there’s a bridge: “We’re going to be lucky if the cliff has not collapsed and we’re just four miles away.”

State Rep. Vernon Sykes, D-Akron, chairman of the House-Senate budget conference committee, disagreed with Yocum. Fixes in the current budget buy time, said Sykes.

“We’re hopeful that we’re going to bottom out soon and start back up, progressing in growth which will increase tax revenues,” he said.

Sykes acknowledged that a speedy recovery isn’t guaranteed.

“It’s a possibility that the economy will get worse and we’ll be challenged as leaders even more so to try to take additional measures to help us bridge that gap,” Sykes said.

Keep reading: Budget critics say tough decisions still loom

Contact this reporter at (614) 224-1608 or  whershey@DaytonDailyNews.com.

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