Two votes at a late night Ohio Senate session saved Ohio schools $851 million and six months of budgetary nightmare.
The senate voted 17-15 late Thursday night to approve a compromise which delays a tax break in order to prevent a $851 million education funding cut six months into the fiscal year -which would strike a $18.6 million blow to Ohio University's already fragile budget.
The deal, which next passed 54-42 through the Democrat-controlled House of Representatives and is expected to be signed by the governor, involves allowing a proposed delay in income tax reductions in order to fill a budget hole left by the absence of slot machine revenue.
In his budget proposal for fiscal years 2010-11, Gov. Ted Strickland approved the installation of 17,500 video terminal slot machines via executive order and counted on the revenue from those machines to balance his $50.5 billion budget. But, in September, the Ohio Supreme Court ruled that Strickland had over stepped his bounds, and voters must give the thumbs up before the slot machines can be installed at seven racetracks across the state.
Strickland has struggled to convince Senate Republicans to support delaying a scheduled tax break, which they argue would amount to a tax increase.
Five senate Republicans agreed on Wednesday to back the delay, after Democrats added a support for a pilot program to reduce the costs of state construction projects to the bill. Strickland has previously said that if no deal was reached by Dec. 31 he will be forced to impose cuts to education funding.
I deeply appreciate the support of the education and business communities for the common sense solution to temporarily postpone the last phase of income tax reductions
said Strickland of the potential deal in a statement Thursday. With bipartisan cooperation we are making steady progress toward a new more competitive Ohio.
But partisan politics would have mounted to more than penny-pinching for Ohio's colleges and universities.
It would have been all hands on deck
said Becky Watts, OU's chief of staff to President Roderick McDavis.
Watts added that the cuts would be twice as drastic, because the university would have to cut the full $18.6 million during the second half of the fiscal year.
In addition to cut to current funding, OU would have been forced to stomach an additional $18.35 million budget cut next year.
It was definitely a worst case scenario
we've all had our fingers crossed
Watts said, adding that OU budget planners have yet to discuss scenarios for amputating about 2.6 percent of the university's $684 million budget.
(If no deal is reached) we will have to come together really quickly - reaching out to all of the senates and other constituent groups - to figure out how to make this work
Watts said.
Even with statehouse leaders approving the deal, and avoiding immediate cuts to education funding, the governor could still slice funding in if sales tax revenues do not meet projections.
Last fiscal year, Strickland slashed $700 million from his 2008-09 budget last February, but left higher education funding largely unscathed. Through a series of budget cuts, Strickland erased about $2 billion from his original budget, but left the primary source of college funding - the state share of instruction - untouched.
Funding for higher education comprises $3.2 billion of the current state budget, about $170 million less than the 2008-09 budget. Strickland also lifted the statewide tuition freeze this year, allowing schools to increase costs for the first time in three years.
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Wesley Lowery
