Tuesday, June 28, 2011

How will Ohio's new budget affect average citizens? | Cincinnati.com | cincinnati.com

For Mamie Jackson of Evanston, the $55.7 billion two-year state budget that Ohio legislators are to approve this week could mean the difference between staying in her own house or having to move to a nursing home.

But to Juanita Albright, a waitress at Hathaway restaurant in downtown Cincinnati, the budget is for all practical purposes a non-issue in her life. With a modest annual income barely enough to have to pay Ohio income taxes, Albright will be largely unaffected, financially at least, by how state officials cut programs, reorder priorities and shuffle around billions of dollars in a voluminous document totaling nearly 5,000 pages.

The contrast in those two real-world experiences vividly underlines how the state budget's expansive reach will touch Greater Cincinnatians' lives in ways ranging from minuscule to world-changing.

Working toward a June 30 deadline, state legislators this week will make some final adjustments on a fiscal road map for the next two years affecting hundreds of programs and services that intersect with millions of lives.

How the budget impacts individuals will vary significantly according to their particular life circumstances.

Families with children in school or college, for example, will feel the budget in ways, financial and otherwise, that childless couples will not.

Those dependent on social safety-net programs for essential day-to-day needs also have reason to view the budget debate as not simply an arcane discussion playing out in Columbus, but as a political drama with tangible, sometimes painful, effects on their lives. The same can be said of people with older parents needing regular medical and other care.

Teachers will be watching to see whether a merit pay provision is part of the final budget. Unions and employers will be similarly vigilant about language governing public construction project bids and prevailing wages.

"The budget will affect many of our lives but not always in the same way or to the same extent," said Wendy Patton, a senior associate at Policy Matters Ohio, a research organization that defines its mission as advocacy for "a more fair, prosperous, sustainable and inclusive Ohio."

"I'm not sure there are any real winners, but the ... loss certainly could be heavier for some than others," Patton added.

Budget will have varying impact on people across the state

For many, the budget will bring a hit to the pocketbook, reductions in services or both - changes that for some could mean life-altering adjustments.

Such is the case with Jackson. The 91-year-old doesn't want to leave the Evanston house where she has lived for four decades, but might have to if the state's Passport program is cut, eliminating the in-home help with meals, housekeeping and transportation that has kept her out of a nursing home.

The potential impact from another key portion of the budget would be less stark, but hardly inconsequential, for the Bissmeyer family of Springfield Township.

Like thousands of families throughout Ohio, the Bissmeyers probably would have to dig deeper to pay for college if a son who now is a junior at St. Xavier High School decides to attend Ohio State University.

One budget provision would allow state universities to increase tuition by up to 3.5 per cent annually, and few doubt that most will raise fees over the next two years to help offset the anticipated loss of tens of millions of dollars in taxpayer support. OSU, where tuition, mandatory fees and room-and-board will total about $19,000 a year this fall for in-state students, expects to lose more than $60 million in operating funds under the budget.

Social-service recipients such as Danielle Harper, 29, may feel the budget's effect in the form of longer waiting time for benefits.

Harper, who receives $360 a month in cash assistance and $260 in food aid, is unemployed and the primary caregiver of her two young sons and the three boys of her younger sister, a housekeeper at University Hospital. The sisters and their children share a three-bedroom Downtown apartment to cut expenses.

Since the start of the recession in December 2007, Hamilton County's Job and Family Services agency has reduced its staff by more than half, from 1,650 to less than 800.

Hamilton County estimates that the state budget will mean a 10 to 15 percent cut in a variety of social services, while demand for these services has exploded.

Delivery of services and aid that once took 10 days to process now routinely takes 30 days, a timetable that could be slowed further after the state budget cuts staff by perhaps an additional 10 to 15 percent, according to county Job and Family Services officials.

Moira Weir, Hamilton County JFS director, said her agency continues to look for ways to become more efficient. She said caseworkers are doing more telephone interviews and having more email communication with clients. She said Hamilton County is open to ideas of regionalization of services, working potentially with surrounding counties, to provide core services of food and cash assistance.

"We don't know what's going to happen for sure with the budget, but we have been trying to manage the cuts we think are coming. The bottom line is we don't shut our doors. More people are coming to us for help," she said.

At the other end of the spectrum, some - those without school-age children, without aging parents needing assistance and who themselves draw little if any direct aid from the state in their personal or professional lives - will find that the fiscal 2012-13 budget could leave them better off.

A 4.2 percent state income tax cut that took effect Jan. 1 will keep more money in their pockets, as will - for those fortunate enough to benefit from it - the budget's planned elimination of the state's estate tax in 2013. Although the income tax cut is separate from the budget itself, many Kasich staffers and state legislators speak of the two as part of the same narrative, one that tells the story of Columbus' net effect on Ohioans' wallets.

Currently, Ohio's estate tax is imposed on estates worth more than $338,333, a relatively low threshold that affects many middle-class families. The tax - 6 percent of the amount over $338,333 up to $500,000 and 7 percent beyond that - means that a $500,000 estate pays $9,700 and a $1 million estate, $44,700.

Cuts will be deep, and no one is safe

But even most individuals who retain more dollars that once would have flowed to Columbus are unlikely to be untouched by the budget's fallout.

Statewide, nearly $2 billion in cuts to schools and local governments could leave many municipalities facing several equally unattractive options: live with reductions in the wide array of services now financed at least partly with state dollars, or raise local taxes to fill the gap.

Assuming that elected officials will view tax hikes as the more onerous - and politically hazardous - alternative, Policy Matters Ohio's Patton predicts that this week's budget vote will produce powerful aftershocks in city halls and school boards around the state.

"What we normally think of as being local services will be impacted by state votes," Patton said. "Fewer roads will be paved, fewer potholes fixed. We'll see cities laying off police and fire, longer emergency response times. If you've got kids in schools, the likelihood is you'll be affected through how that child's classroom experience changes."

Gene Krebs of the Greater Ohio Policy Center, a former Republican state representative and Preble County commissioner, argues that local officials need not limit their budget reactions only to the unpalatable either-or choice of cutting services or raising taxes.

Gov. John Kasich has made it clear that he views the budget as an opportunity to transform government by prodding local bodies to share or consolidate services. By leaving local governments with less money to spend, thereby encouraging them to search for more efficient ways to deliver services, the state budget is accelerating that debate, some legislators and others say.

Krebs, though, is not enthused by local officials' initial response. Rather than aggressively pursuing options for cutting expenses by sharing services, city leaders have been loudly complaining that the state budget will force them to make unpopular decisions and school administrators seem to be "hunkering down" amid talk of the need to go to the ballot with more levies, he said.

"How this ends up affecting Bob and Betty Buckeye depends on what happens in phase two," said Krebs, whose group promotes policies intended to improve the state's economy and quality of life.

"Many have been saying that the governor's objective is to force changes by starving the beast. But the beast is not going to starve. So far, it looks like the beast is just going to go into hibernation. We're hearing a lot of the same old talk."

Change can't some soon enough for Albright, whose potential savings from the state income tax cut would not even cover one day of parking in a Downtown garage for her job as a server at Hathaway's in the Carew Tower Arcade.

A 37-year-old divorced mother of three from Carthage, Albright makes $3.70 an hour plus tips, and her annual state income tax bill amounts to about $80. A 4.2 percent tax cut thus would save her only about $3.36 a year - less than her $5 daily parking tab.

Albright had been studying to become a nurse practitioner at Hocking College in Nelsonville and Southern State Community College near Hillsboro, but had to leave when she defaulted on a $400 student loan.

If Ohio could help her complete her education, "I know I could get a good job as a nurse practitioner; and then, yes, I'd be paying taxes to the state,'' Albright said. "But right now, I couldn't even afford to pay for the textbooks, much less tuition."

And an extra $3.36 in her wallet, she knows, isn't going to bring that dream closer anytime soon.

Reporters Howard Wilkinson, Cliff Peale and Mark Curnutte contributed to this story.

Source: http://news.cincinnati.com

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