On Monday, Gov. John Kasich unveiled his $63.3 billion two-year biennial budget for Ohio. Below is a preliminary analysis based upon documents released by the Governor’s office. Slashing Revenue, Implementing the Affordable Care Act One of the biggest changes proposed in this budget is reducing the state income tax by $2.1 billion, a reduction that gradually will be phased in over the next three years. This reduction disproportionately favors wealthier Ohioans and strips the state of much needed revenue.
Additionally, Kasich’s budget includes a reduction of the state sales tax from 5.5 percent to 5 percent, but extends the tax to cover services and “other economic activity.” These tax cuts continue to be funded on the backs of local communities who saw the state’s Local Government Fund slashed in the last biennial budget. Because of those cuts, we continue to see localities put levy after levy on their ballots as they struggle to maintain adequate safety forces and education funding. Separately, to the surprise of many, the Governor included Medicaid expansion in his budget.
Approximately 366,000 Ohioans will now be covered by health insurance under this extension, a component of the Affordable Care Act, also known as “Obamacare.” Higher Education ComponentsIn terms of higher education funding, the proposed budget calls for slight increases each year – about 0.6 percent in Fiscal Year 2014 and about 2.3 percent in Fiscal Year 2015. However, this is less of an increase and more of a restoration of funds.
In the Governor’s last budget, he cut higher education funding by nearly 11 percent in Fiscal Year2012, and added back in less than four percent in Fiscal Year 2013. The proposed budget also calls for continuing to restrain tuition and general fees for undergraduates to no more than the greater of two percent over what the institution charged in the previous academic year or two percent of the statewide average cost, by sector (which we believe means the four year institutions versus the two-year community colleges).
As anticipated, the State Share of Instruction (SSI) formula is being changed from one based primarily on enrollment to one based primarily on course and degree completions. The Kasich administration is trying to “incentivize” colleges to improve their outcomes. OCAAUP has concerns about what unintended consequences might accompany this plan, like pressure being placed on faculty to pass students, or administrators overriding faculty-given grades.
We must not compromise quality of education and disguise it as student success. Over the last few weeks, rumors had surfaced that the budget might include policy to standardize and increase workload for full-time faculty, as Kasich had included such provisions in his last preliminary budget; however, there was no mention of faculty workload in what has been released so far. Again, this is a preliminary analysis based upon the material released by the Governor’s office yesterday.
The state budget process lasts nearly five months, so there are pieces bound to shift as it undergoes the legislative process. We will keep you updated throughout the process.