NCPA - National Center for Policy Analysis


July 13, 2009

Ohio's budget is in fiscal crisis with legislators and the governor attempting to cover a $3 billion shortfall between revenue and spending.  That's a significant amount of money, but it's not an insurmountable problem, Marc Kilmer, a policy analyst with the Buckeye Institute.

Policymakers could begin to cover the gap if they consider the following recommendations, says Kilmer:

Eliminate the Department of Development:

  • This corporate welfare agency hasn't helped Ohio's economy and few would miss it if it were eliminated entirely.
  • Savings: $157 million over two years.

Move away from Medicaid institutional care:

  • Unlike most other states, Ohio relies on expensive institutional care like nursing homes for its Medicaid recipients (most recipients prefer cheaper alternatives like in-home care over nursing homes).
  • Savings: $400 million per year.

Reform Medicaid Florida-Style:

  • Medicaid offers low-quality, high-cost care and it takes up a large portion of the budget; reforms enacted in Florida provide Ohio lawmakers an excellent roadmap for tackling this difficult issue.
  • Savings: $1.5 billion per year.

Education funding should follow the student:

  • If the state implemented a plan where the dollars followed students to whatever school they choose, it would lead to a better education for students as well as savings to the taxpayers.
  • Savings: $500 million per year.

Increase state employee health insurance premiums:

  • On average, state employees pay 15 percent of the premiums for health insurance; their private sector colleagues pay roughly 20 percent and state employees should pay the same.
  • Savings: $57 million over two years.

Eliminate non-vital agencies:

  • The Ohio Arts Council, the Cultural Facilities Commission, the Commission on Minority Health, e-Tech Ohio, the Commission on Hispanic/Latino Affairs, and the Ohioana Library Association may serve certain special interest groups well, but in this budget crisis the services they provide are hardly vital.
  • Savings: $111 million over two years.

Source: Marc Kilmer, "Ten Ways to Reform the State Budget," Buckeye Institute, July 6, 2009.

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