Ohio Budget Basics

Operating Budget – The Governor is required to submit, and the legislature is required to pass a balanced budget every two years. This budget spends the state’s revenue, funding most agencies through a single piece of legislation. The operating bill is typically introduced early in the year (March 15 is the deadline in years when a new Governor takes office) and passed before July 1, the start of the State’s fiscal year. Separate bills are introduced to spend transportation and workers compensation funds on a slightly modified timeline.

The budget represents the singlemost important policy statement the legislature makes. Embedded within the spending levels are decisions about which programs are priorities and receive funding, and which are cut or eliminated. Further, whie it is primarily a funding mechanism for government, the budget typically includes hundreds of changes to the Ohio Revised Code, enacting a variety of policy changes, ranging from increases in the speed limit, what time alcohol can be sold, to the number of snow days that schools are allowed each year.

Because it contains an appropriation, the operating budget is subject to the Governor’s line-item veto authority, allowing for the removal of any provision with which the Governor disagrees. Provisions appropriating money are effective immediately upon the bill’s passage. Other language changes in the bill are typically effective ninety days later.

Capital Budget – Also passed every two years, this budget makes appropriations for capital expenditures using revenue derived from issuing bonds backed by the State’s general revenue. State borrowing is limited by a constitutional limit of 5% of general revenue, and Ohio is very close to approaching this limit. For Fiscal Years 2011-2012, the Strickland administration estimated that only $1.8 billion would be available for borrowing – making the upcoming capital bill one of the smallest in recent memory.

Typical expenditures funded through the capital budget include most state construction and facilities improvement projects, such as improvements to state office buildings, park facilities and prisons. Also included in most bills are a number of “community projects”, earmarked funds for parks, libraries, museums, sports venues and other goodies for local governments. The Governor and members of the legislature spend months sifting through requests from officials from around the state, and decide which will make it into the final bill. News reports indicate that legislative leaders are throwing into doubt whether there will be a capital bill for fiscal years 2011 and 2012, denying local communities a perk they look forward to, and reducing the gain in employment that comes from these projects.

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