Could ODJFS Need An Additional $194 Million to balance their Budget?

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As reported by John Spinelli over at the Columbus Government Examiner it seems that John Kasich’s budget could possibly be $194 million in the hole.  As of March, the state of Ohio has borrowed over $2.5 billion in interest free loans from the Federal government to help pay unemployment compensation benefits to workers who lost their jobs through no fault of their own. The great recession drove so many unemployed workers on to the public rolls that the Federal government had to step in so that Ohio could continue to pay claims because the unemployment fund was broke.

In early February when President Obama introduced his proposed budget it included a provision that would have extended the interest free loans for another year to states who had borrowed them.  Since then though President Obama’s budget has been held up in political gridlock on the hill and now no one is certain if the interest free loans will be included in whatever agreement is reached. When ODJFS originally put their budget recommendations together for Governor Kasich the interest payments were not included, when pressed on the matter though it seems now that Jobs and Family Services is planning on having to fork over $71 million on September 30th and $122 million a year later.

“And no, those amounts were not included in the proposed executive budget because at the time the budget was written, it appeared that a federal remedy was likely for states in situations like ours. Now that a federal remedy is appearing less likely, we are working with OBM to identify non-GRF sources of funding,” Terez said.

This development will pose a whole new serious of questions for the Kasich administration centering around how to find $193 million in non-GRF sources to fill this gap.  Or as I like to say, what haven’t we sold yet that we can get some quick cash for discussion?

Of course, lets hope that selling another state asset off is the worst that happens and this Governor doesn’t decide to go the way of our neighbors up north.  The new Republican Governor of Michigan decided that the best way to balance his budget was by reducing the maximum amount of weekly claims a worker could file from 26 weeks to 20, the lowest in the nation. At a time when over 250,000 people in this state are currently on unemployment taking money out of the pockets of people who most need it, and the ones who put it back into the real economy quicker than anyone else, seems like a poor idea. But for some reason I don’t think this administration probably agrees with me.

Angela Terez of ODJFS said “to our knowledge that suggestion has never been proposed in Ohio, although we imagine that all options will be on the table as discussions ensue over the next several months.”

So, to review, when faced with a $7.7 billion dollar budget hole, and an additional $194 million soon to come, all options are on the table.  For this Governor those options seem to include breaking the backs of public employee unions, cutting funding to public education, bleeding local governments dry, and possibly looking at cutting unemployment compensation.

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  1. ODJFS Needs Upwards of $300 Million to Balance Budget | Ohio Budget Watch
  2. Plain Dealer agrees, Kasich budget is at least $193 million in the hole | Ohio Budget Watch

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