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Ohio Senate, Gov. Strickland propose cuts to state stimulus plan

Posted on 6.30.09

 By CHUCK SODER



10:08 am, June 29, 2009

 

A bill that the state of Ohio passed a year ago to stimulate the economy is itself falling on hard times.

The Ohio Senate and Gov. Ted Strickland have proposed cutting hundreds of millions of dollars from the state’s $1.57 billion economic stimulus plan in an effort to balance the state’s budget for fiscal years 2010 and 2011, according to information from the governor’s office. Much of the money that would be cut is tied up in litigation between the state and the Ohio Tobacco Prevention Foundation.

The proposed cuts to the Ohio Bipartisan Job Stimulus Plan would affect efforts to fund high-tech innovation, internships and public works projects. If the cuts are enacted, the size of the state’s stimulus plan would be reduced by $330 million, or 21%, to about $1.24 billion.

The proposed cuts are but a few of many that the state is considering to help it erase what it projects will be a $3.2 billion budget deficit for fiscal years 2010 and 2011.

Both the Senate and Gov. Strickland in their proposed budgets have lopped off $100 million that would go to fund the development of biomedical products and the attraction of biomedical companies as well as $50 million for a similar effort related to products based on biological materials, said Amanda Wurst, a spokeswoman for the governor’s office.

They also both removed from their proposals $80 million that was to fund public works projects that would be executed by counties, municipalities and townships throughout the state. Under their proposals, $120 million in state stimulus money would remain committed to those programs during the two-year budget period.



Nonprofits push for tech support

The biomedical, bioproducts and public works money had been allotted to the Ohio Tobacco Prevention Foundation for smoking cessation programs in Ohio until the state reallocated the $230 million to the job stimulus plan. The foundation is suing the state for control over the money.

The governor’s plan involves reallocating the money again, this time to the Ohio Department of Job and Family Services. The department would use it to provide additional health care services such as dental and vision care for Medicaid recipients, more money for county child welfare offices and Medicaid coverage for children whose families earn between two and three times more than families that the federal government defines as poor, Ms. Wurst said.

“More Ohioans need the essential health care services that the state provides now more than ever,” she said.

The Senate version did not indicate how the funds might be used, said Maggie Ostrowski, spokeswoman for Senate president Bill Harris.

The Senate’s version of the budget also cuts the entire $100 million that was to go to an internship program via the state stimulus plan during fiscal years 2009 and 2010. Mr. Strickland’s proposal removed all but $5 million of the program’s money during those two years. The internship program still is slated to receive a total of $150 million in fiscal years 2012, 2013 and 2014.

Two nonprofits that assist and advocate for health care companies, BioEntperise Corp. and BioOhio, have been urging legislators to restore support to the biomedical and bioproducts programs.

The two sectors are areas where the state could establish strengths that could lead to long-term economic benefits, especially because the state has laid the foundation for such growth through investments it has made through its Third Frontier program, said Baiju Shah, president of BioEnterprise, which focuses on Northeast Ohio companies.

“You’ve planted the seeds, you’ve nurtured them, you’ve watered them, but you’re not harvesting the crop,” Mr. Shah said.

Ms. Wurst, of the governor’s office, emphasized that cuts needed to be made somewhere.

“It’s not a matter of the worthiness of the programs,” she said. “It’s a matter of not having funds available.”

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