State Auditor Mary Taylor predicted the governor and lawmakers will have to drastically cut spending or enact a massive tax increase in two years to plug a projected $8 billion hole in the 2012-13 state budget.

Taylor said yesterday that the use of one-time federal stimulus funds in the fiscal 2010-11 budget now being negotiated by lawmakers will help create a huge shortfall in the following two-year budget, which will be crafted after Gov. Ted Strickland's 2010 re-election bid.

"I don't think we can continue to ignore what '12 and '13 look like because we don't want to face the tough decisions now," said Taylor, a Republican.

Using tax and spending figures in Strickland's proposed 2010-11 budget, along with "modest" projections of growth in education, Medicaid and other high-priority areas, Taylor said the state will need $3.9 billion more in 2012 and $4 billion more in 2013 to balance the budget.

Unless the governor and lawmakers curb spending in the two-year budget that takes effect July 1, the options two years hence will be limited to even deeper spending cuts or big tax increases, Taylor said.

"I don't believe we can ignore it and pretend it doesn't exist," Taylor said. "Somebody needs to admit where we are going."

Strickland took the unusual step of calling a news conference last night to respond to Taylor after returning from a trip to Detroit to meet with the Big Three auto executives.

He said he doesn't think the $8 billion projection is accurate because it doesn't account for spending reductions the administration is seeking, although he didn't offer a different estimate.

But he challenged Republicans to say what cuts they would make, taxes they would raise or stimulus dollars they would refuse.

"It appears that Auditor Taylor and legislative Republicans are on the sidelines, lobbing criticisms about future budgets because they offer no real ideas to address the current challenges before us," the governor said. "I believe that Ohio leaders have a responsibility to say what they would do, not just what they oppose."

Strickland argued that he is being responsible by using every dollar of federal stimulus money available to avoid drastic cuts in state services -- and that a tax increase now would make the deep recession worse in Ohio.

"Quite frankly, I think some people just don't get it yet," he said. "Maybe they don't understand the pain and the difficulty that even now is being experienced by so many Ohioans. I think I do, because I'm out there."

House Speaker Armond Budish, D-Beachwood, concurred: "It sounds like she's pushing for a tax increase now, and I think that is a wrong approach during these difficult times."

Taylor said she is not advocating a tax increase or budget cuts or opposing using federal stimulus money; those decisions are for lawmakers. She said she wants decision-makers to have the information they need.

Taylor's analysis shows that the state is on pace to spend about $63 billion in the 2012-13 budget, while collecting about $55 billion in revenue from taxes and other sources.

Strickland has proposed using nearly $7 billion in one-time money to balance the upcoming two-year budget, including tapping about $5 billion in federal stimulus money, draining the entire $948 million rainy-day fund, refinancing certain state debt to generate extra cash and other moves.

House Minority Leader William G. Batchhelder, R-Medina, said Taylor's analysis "should serve as an alarm as we more forward with discussions on the 2010-11 budget."

Echoing growing concern among lawmakers, Batchhelder said "legislators have not been able to obtain clear information from the Strickland administration."

"It has been apparent from the start that the use of one-time funds would take this state down a fearsome path. You cannot spend more than you take in and expect to have a balanced budget in two years when the federal funds are gone."

But Strickland and Budget Director J. Pari Sabety, who was grilled by Senate Republicans on the Finance Committee this week about the use of one-time money, insist it won't guarantee a tax increase or dramatic cuts in two years.

They argue that protecting spending for education and other priorities now, in addition to reforming Medicaid and other areas to reduce spending, will leave the state positioned to recover from the recession and deal with the next budget.

"I'm not suggesting that the natural growth in tax revenues will offset the extraordinary impact that the federal stimulus dollars are having on our state budget," Sabety told senators. "It's clear that our next biennial budget is going to require us to continue to make very difficult choices."

House plays Robin Hood

http://www.dispatch.com/live/content/local_news/stories/2009/04/17/edbudget17.ART_ART_04-17-09_A1_TMDJ34A.html?sid=101

The House Democrats' new school-funding plan shifts money from wealthier districts to poorer ones and also makes it abundantly clear that virtually the only new money districts will see over the next two years comes from one-time federal stimulus dollars.

Democrats kept the basic structure of Gov. Ted Strickland's "evidence-based" model but made a slew of modifications to address criticisms -- chief among them that his plan directed big money to some wealthier districts while cutting some of the poorest schools in the state by 2 percent.

The revisions, which would be phased in over 10 years, also give more favorable treatment to charter schools, grant flexibility to high-performing districts in meeting new mandates, and will quickly phase out calamity days, putting an end to students' annual winter prayers for snow.

"We do not stand here today and claim perfection," said House Speaker Armond Budish, D-Beachwood. "But it is better than the plan that came to us, and far better than the status quo."

Strickland said he supports the changes.

To shift money from rich to poor, Democrats adjusted an index number assigned to each district, giving property-poor districts a bigger lift and wealthy districts a bigger penalty. That number is multiplied by the new teacher-salary number in the formula, which Democrats increased by more than $4,000 to $49,914.

Property-wealthy districts also will not get the immediate burst of money Strickland gave them by dropping the local funding requirement from 23 mills to 20. Democrats instead will phase that down.

The revised plan also pulls $922 million in federal stimulus money for poor and disabled students out of the state funding formula and adds it on top of the formula amount, which is generally capped at an annual 1.9 percent increase. Strickland had set the cap at 16 percent.

Trimble Local in Athens County, one of the state's poorest districts, would have lost $136,000 under Strickland's plan, but it would gain $1.2 million under the House proposal. That includes more than $850,000 in one-time federal stimulus money for poor and disabled students.

Meanwhile, Columbus City Schools was slated to get the maximum increase allowable under Strickland's plan, totaling $78.3 million more over two years. The House plan drops that to $55.2 million.

The increase is significant, but only $3 million of Columbus' money comes from the state funding formula -- the other $52 million is from one-time federal stimulus money for poor and disabled students. That money comes with restrictions on how it must be spent, and it will disappear after two years.

David Varda, executive director of the Ohio Association of School Business Officials, said school officials could use stimulus money for special-education buses, software or "things that will support improvement in education but is not going to commit you to an ongoing cost."

When excluding one-time stimulus money for poor and disabled students, 31 of 49 districts in central Ohio would get less money over two years -- money they need to run the day-to-day operations of their districts.

When excluding the $922 million in stimulus money, 359 of the 612 Ohio districts get state formula funding cuts over the next two years. And even that "state" money includes $810 million in other one-time federal "stabilization" funds.

Republicans note the formula cuts state funding to charter and traditional schools by $130 million next year.

"This is the first time since the DeRolph school funding lawsuit was filed in December of 1991 that a legislative body is proposing a cut in state aid to schools," said Rep. Ron Amstutz, R-Wooster.

William L. Phillis, executive director of the Ohio Coalition for Equity and Adequacy, which pursued that lawsuit, noted that 36 states have cut education funding. He said the plan puts Ohio "on track for constitutional compliance."

"This is a moment in history that must be brought to fruition," he said, adding that he was optimistic lawmakers would see the plan through. He also said that phasing in the plan over a decade was not the same as the residual budgeting for which he had long criticized Republicans -- where schools were given what the state could afford, rather than what they need.

Republicans disagreed.

"A 10-year phase-in? Are you kidding me?" said Sen. Jon Husted, a Kettering Republican and former House speaker. "Second-graders will be graduated by then."

Rep. Stephen Dyer, D-Green, said a new school-funding advisory council would review the funding plan on an ongoing basis and recommend changes.

"Instead of taking the money we have and trying to distribute it, we're going to determine what Ohio's children need to succeed, and then we're going to fund it," he said in what was at times an emotional presentation.

House Democrats rewrite Strickland's school-funding plan

http://dispatch.com/live/content/local_news/stories/2009/04/16/aschools.html?sid=101

A massive shift of funding from more affluent school districts to those in poorer areas highlights Ohio House Democrats' revamp of Gov. Ted Strickland's school-funding plan.

The proposal unveiled today hits Ohio's wealthy suburban districts hard; all but Upper Arlington would get no new state money next year, and a 2 percent decrease the following year. Why Upper Arlington is the exception was not immediately explained.

Columbus schools would get no new state money the first year, and a 1.9 percent increase the second.

At the same time, many poorer districts that would have seen cuts during the initial years of Strickland's plan now will see modest increases in state funding.

"The poorer you are, you get vastly more state money," said Rep. Stephen Dyer, D-Green, head of the House panel that prepared the revamped plan.

However, the new plan would be phased in over 10 years, compared to the eight-year phase-in of Strickland's plan.

The difference is huge: The House plan would hardly change schools' current overall state funding level, roughly $5.9 billion a year, during the 2010 and 2011 budget years.

However, if the plan were fully phased in the cost would be $8.5 billion next year and $8.6 billion the following year.

The new approach also funnels federal stimulus money for poor and disabled students directly to districts; the administration's plan, critics said, commingled the state and federal money, which would violate federal rules and endanger future funding from Washington. That means virtually every district in Ohio would get more money the next two years when state and federal money is combined.

The modified plan keeps Strickland's proposal to eventually extend Ohio's school year by 20 days. The revamped proposal, however, scales back the governor's assault on charter schools.

"We will support the good charters that are educating our children," said House Speaker Armond Budish.

Those charters must be accountable, have transparent finances and meet performance standards, Budish said.

The House revamp includes a more accurate figure -- about $50,000 a year, without benefits -- in its funding formula for paying teachers. Strickland's plan, which claimed the average pay was $45,000, was widely derided for lowballing the amount.

"We do not stand here today and claim perfection," Budish said. "But it is better than the plan that came to us and far better than the status quo."

The House did not change elements of Strickland's plan involving the extension of Ohio's school year from 180 to 200 days, requiring all-day kindergarten, adding years to the time required for teachers to obtain tenure, improving teacher training, and changing standards to make it easier to fire teachers.

However, House leaders said districts that already are doing well educating their students will have greater flexibility in meeting state mandates.

Tea-party truth

http://dispatch.com/live/content/editorials/stories/2009/04/17/teatax.ART_ART_04-17-09_A10_BJDI9AM.html?sid=101

The thousands of Americans who gathered around the country for tax-protest "tea parties" on Wednesday voiced a welcome sentiment: Federal-government spending is out of control, and the tax burden required to pay for it will be crushing for generations.

With President Barack Obama's budget proposal promising a record $1.2 trillion deficit and the national debt north of $10 trillion, that's hard to dispute. Not since the idiosyncratic presidential campaign of H. Ross Perot in 1992 have the issues of taxes and deficits been so prominent.

Wednesday's protesters found plenty of supporters who share their frustration, but that may be because they took the easy path. Calling for smaller government and lower taxes is easy. Giving up the government programs those taxes pay for isn't.

Every government program exists because it's important to some group of people; in that sense, all Americans are part of the government-spending problem. Smaller government won't happen without pain.

The small-government-conservative movement, as some tea-party organizers are calling their effort, may include ideas about what government programs should be cut. But the movement will have to persuade a majority of Americans to go along with such ideas, and that's the rub.

And if Americans don't want to give up big government, then they have to face another problem: how to pay for it.

The tea-party movement will have done a service if it provokes a national debate on how to restore fiscal responsibility to the federal government. And any solution will have to be bipartisan. Both parties have helped sink the nation into debt. Obama, a Democrat, is proposing record deficits, but it was Republican President George W. Bush who doubled the national debt during his eight years in office.

Only when all Americans start talking about how much government they're willing to give up, and how much they're willing to pay for, will this problem be solved. And if it isn't solved, all Americans, regardless of party, will suffer the consequences.

Prison crowding proposal on hold?

http://dispatch.com/live/content/local_news/stories/2009/04/17/NEW_SENTENCE.ART_ART_04-17-09_B1_33DJ3SB.html?sid=101

Strickland's sentencing plan, along with a counterproposal by the Ohio Prosecuting Attorneys Association that focused primarily on relaxing drug-law penalties, may be shifted to another legislative committee to be considered separately -- and later.

That could spell trouble, both for the proposed sentencing overhaul and the state budget, which would spring another leak with the removal of cost savings, according to prisons chief Terry Collins.

"I hope that it doesn't happen," Collins said. "It's a very important piece of the governor's budget."

Collins said state prisons hold 51,062 inmates this week, just 200 under the all-time high.

"I'm quickly running out of space," he said. "This is a problem I have said many times is urgent and critical. Today, our prisons are safe and secure, but I keep telling everybody in this business, you're only as good as your last second."

State Rep. John Carney, a Columbus Democrat who is on a subcommittee reviewing the criminal justice part of Strickland's budget, said the two-year budget is too complicated to focus on important sentencing reforms.

He said a study committee will probably be proposed.

"We want to make a good-faith effort," Carney said, "to take a little more time to see whether what (the Department of Rehabilitation and Correction) has proposed is right or what the prosecutors has proposed is right, or something in-between."

That would suit John E. Murphy, executive director of the Ohio Prosecuting Attorneys Association. Murphy's group vigorously opposes the "earned credit" provision in Strickland's budget that would give inmates up to seven days a month credit off of their sentence if they are enrolled in certain prison programs.

"It ought to come out of the budget bill," Murphy said of the reform plan. "It deserves a little more attention. It will be lost in the shuffle."

As an alternative, prosecutors want to change state drug laws to eliminate mandatory prison sentences for trafficking and possession of chemicals for the manufacture of drugs except in the most serious cases. They also want to scale back some nondrug felonies to misdemeanors, including assaulting a school teacher, administrator or school bus operator without physical harm and illegal use of food stamps.

State Sen. Ray Miller, a Democrat from Columbus, said bumping out sentencing reform would result in unnecessary delay.

"This issue has been studied and discussed for a solid two years," Miller said. "When sentencing reforms were put in the budget, they had already been refined, I believed, to the point of acceptance."

Miller said he is sympathetic to the issues raised by county officials, but he is "more concerned about the staffing problems we have in our prison system. We're putting many of the correctional officers' lives in jeopardy."

The wild card here is Senate Bill 22, proposed by state Sen. Bill Seitz, a Cincinnati Republican. Seitz's bill includes most of the same provisions as Strickland's plan, except that it would grant five days of monthly earned credit instead of seven.

Stimulus watchdog to pounce on misuse

http://dispatch.com/live/content/local_news/stories/2009/04/17/INSPECTOR.ART_ART_04-17-09_B3_N2DJ3UL.html?sid=101

The former top lawyer for the Ohio Department of Health will be the state's top watchdog to ensure that $8.2 billion in federal stimulus money is properly spent.

Ohio Inspector General Thomas P. Charles announced yesterday that he has hired Winston M. Ford as deputy inspector general overseeing how Ohio spends its share of federal stimulus funding.

A state employee since 1996, he'll be paid $89,000 a year in his new job.

"He's going to be my MRI guy: monitor, research and investigate," Charles said.

Charles said he chose Ford because of his experience as a lawyer and a state employee. Admitted to the bar in 1991, Ford was hired by the state attorney general's office five years later.

Charles could not say how many people applied for the position, noting that he receives resumes all the time.

Ford's salary will come out of the $1.2 million that the inspector general's office is slated to receive from the stimulus bill over the next two years, Charles said.

He would like to retain Ford after the two years by adding him to his office's budget or seeking more stimulus cash.

Several other states, including California and Florida, have hired or are in the process of hiring stimulus watchdogs.

Last week, Ohio Auditor Mary Taylor announced that she will require state and local governments to report any stimulus money they receive and how they spend it. Taylor's office will conduct interim audits of the money along the way to make sure it's spent properly, according to a bulletin from her office to stimulus recipients.

Charles said his office expects to work closely with Taylor's, with the auditor keeping a close eye on spending and the inspector general pouncing on any allegations of wrongdoing.

"This is going to be a very transparent process," Charles said.

Medicaid plan tweaked

http://www.columbusdispatch.com/live/content/local_news/stories/2009/04/17/hospital_fees.ART_ART_04-17-09_B1_33DJ3SJ.html?sid=101

The prospect of reduced medical treatment and the loss of thousands of health-care jobs across Ohio because of a new state fee has apparently been reduced by a plan from House Speaker Armond Budish.

Hospitals have complained that the added charges will cost them $411 million over the next two years and lead to the loss of 6,800 jobs statewide. But the price tag would be slashed by two-thirds or more under Budish's proposal.

"Work remains to be done, but the speaker is to be commended for taking a stand to protect jobs and vital services throughout Ohio," said James R. Castle, president of the Ohio Hospital Association, in a statement.

The so-called franchise fee was included in Gov. Ted Strickland's two-year budget plan now under review in the legislature. The administration intends to use the revenue to help cover the state's share of Medicaid, the tax-funded health-insurance program for the poor and disabled.

Budish said yesterday that hospitals are too vital to Ohio's economy and well-being for the concerns to be ignored.

He actually is proposing to expand the fee advocated by Strickland; however, the speaker would allow hospitals to recover much of that money through increased payments for caring for Medicaid patients.

There is still uncertainty about the bottom line, but Budish said he believes hospitals would end up "$290 million better under my proposal."

The hospital association has calculated a slightly smaller benefit.

"Hospitals are huge economic generators for our state, and they provide part of the safety net we need to maintain," Budish said.

The speaker, who will insert his proposal in a revamped state budget bill, said he also is working with Ohio nursing homes to address concerns the industry has regarding a similar fee.

Strickland's budget plan would shift a portion of the state's Medicaid costs to the four largest providers of care: hospitals, nursing homes, facilities for the mentally retarded and managed-care companies.

The fees would generate an estimated $1.3 billion combined, revenue that would free up state funds for other uses and prevent cuts in Medicaid eligibility and services, administration officials say.

Medicaid provides health care to nearly 2 million Ohioans. Costs are split between the state and federal governments.

Advocates for nursing homes and hospitals, which would contribute the bulk of the revenue, say they don't mind paying fees to help the state draw down federal matching funds provided they recover the money through increased payments for services.

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Cleveland Plain Dealer (return to top)

Auditor Taylor predicts 2012-13 budget will be $8 billion in the hole; Gov. Strickland decries "partisan gamesmanship"

http://blog.cleveland.com/openers/2009/04/auditor_taylor_predicts_201213.html

COLUMBUS - Wading into a hot-button topic among Republican state lawmakers, State Auditor Mary Taylor released an analysis finding that the next state budget in 2012-13 might be as much as $8 billion in the hole.

The lone Republican holding statewide office, Taylor offered an unprecedented prediction Thursday morning about how sustainable the 2012-13 budget will be after about $6 billion in federal and state one-time money being used to help balance the next budget has been spent.

Taylor's estimate dovetails nicely with claims made by Republican lawmakers that Democratic Gov. Ted Strickland's current budget proposal is setting up lawmakers to raise taxes two years down the road by relying so heavily on one-time money.

Strickland issued a sharp response, saying that if Taylor and other Republicans are advocating tax increases or severe cuts now, they should come out and say so.

Taylor said her analysis shows that "the use of one-time money, with no other decision being made to close that gap or fill the hole, we're going to have a deficit in 2013. What we're projecting is nearly $8 billion over a biennium."

She said she isn't trying to score political points against Strickland as much as she felt obligated to study the matter after questioning what future budgets might hold in comments she made following the release of the Democratic governor's budget.

Taylor said she used Strickland administration estimates on tax revenue growth that would net an additional $1 billion in 2012-13. She said the administration is estimating spending growth in the next budget of about 6 percent total, which is based on historical trends.

Strickland's top budget officials have refused to offer detailed projections for 2012-13 other than to estimate that revenues will grow about $1 billion. That has raised eyebrows because two years ago the administration took great pride in coming up with a complete four-year forecast, but this year's projections don't peek into the spending side at all for 2012 and 2013.

The governor didn't seem to buy Taylor's assertion that her announcement wasn't politically motivated, and he challenged her to come up with an alternative to using the stimulus funds in the budget.

"Auditor Mary Taylor appears to be advocating for tax increases or severe service cuts at a time when too many Ohioans are struggling to make ends meet," Strickland said in a statement. "I continue to believe that increasing taxes on Ohioans during this national economic downturn would deepen the effects of the recession in Ohio and hurt, rather than help, Ohio families striving to emerge from this recession.

"That's why I have proposed a fiscally responsible, sustainable budget that lives within our means while continuing to invest in education, health care and job creation to strengthen Ohio's economy. In the midst of these historic economic challenges, we have worked to avoid severe reductions to the vital health and safety services that Ohioans rely upon every day. In fact, more Ohioans than ever are turning to the state for basic safety net services because of the uncertain economy.

"If we put aside heated rhetoric and partisan gamesmanship, there emerges a simple truth about federal stimulus resources. Without them, more Ohioans would lose jobs, fewer Ohioans would have access to health care, teachers would be laid off, tuition would increase, prisons would be forced to close, mental health and other important community services would be cut, and fewer Ohio jobs would be created."

Ohio House Democrats unveil their education budget

http://blog.cleveland.com/openers/2009/04/ohio_house_democrats_unveil_th.html

COLUMBUS -- House Democrats on Thursday unveiled their plan to pay for public schools in Ohio, taking a Robin Hood approach that shifts dollars from rich districts to poor ones.

The rewrite of Gov. Ted Strickland's proposed budget puts the state on track to finally have a school funding system that meets constitutional standards, Democrats said.

But Republicans doubted that the plan would fix the disparities that have plagued Ohio's system, and they questioned how it would be paid for down the road.

The plan would deliver no extra money for schools above Strickland's plan but seeks to divide the pie differently, driving more money to low-property-wealth districts at the expense of wealthier suburban districts.

Democrats did this by applying weights for low-property-wealth districts to a number of costs, such as teacher salaries, tutor salaries, summer programs, enrichment materials and family and community outreach counselors.

The plan would phase in over six years a change designed to lower the share of funding expected to be raised by local districts; Strickland had proposed a two-year phase-in.

Strickland praised his fellow Democrats for improving his plan and offering constructive criticism.

"The result is a significantly strengthened plan to transform education in Ohio," Strickland said in a prepared statement.

House Speaker Armond Budish, a Beachwood Democrat, said the plan would help ensure that children across Ohio receive a good education no matter what their parents' ZIP codes.

"The status quo is not acceptable," he said.

The plan would take 10 years to be fully funded, up from the eight years that Strickland planned -- even though lawmakers are working on a budget that covers only the next two years. State aid increases to all districts would be capped at 1.9 percent in each of the two years.

Democrats separated $922 million in federal stimulus money that had been mixed into Strickland's plan. Republicans were quick to point out that pulling out the federal money shows that the plan actually decreases state funding to schools by $113 million over the two years.

"It looks like a continuation budget to me, where they are holding on for now and saying the rest will come later," said Senate Finance Chairman John Carey, a southern Ohio Republican whose chamber will put its own mark on the budget when the House is done.

"They are trying to use this federal stimulus money to make it over a funding hump, and I don't think it's something that is going to work out long term," said Rep. Bill Batchelder, a Medina Republican who heads the House GOP caucus.

Democrats also want to change Strickland's plan by increasing aid to charter schools and lifting a ban on for-profit charter schools. The plan would not force education reform mandates on districts during the first year of the budget, which would be considered a "planning" year.

Bill Phillis, head of the Coalition for Equity and Adequacy, the group of more than 400 school districts that has won four Ohio Supreme Court rulings finding Ohio's school-funding system unconstitutional, heaped praise on the changes.

"This plan puts Ohio on the track to constitutional compliance," Phillis said. He added that future lawmakers who don't follow the path laid out by this class would be punished by voters.

Batchelder wasn't so sure. "There's no way to predict what future legislators will do," he said. "That's not real-world stuff."

With many Northeast Ohio districts on spring break, school officials were unavailable for comment about the changes. And it may take awhile to figure out where they stand.

Terry Ryan of the Thomas B. Fordham Institute thinks it's good that high-performing districts and charter schools would gain more flexibility in the plan. But he's skeptical about the evidence behind the funding model. For example, smaller class sizes will cost more, but there's no guarantee students will achieve more as a result, he said.

"I have a hunch the Senate will have a lot of questions about the bill, the biggest being how we pay for it when the federal stimulus money is gone," Ryan said.

Ohio high-speed rail gets push from Obama plan

http://blog.cleveland.com/openers/2009/04/ohio_highspeed_rail_gets_push.html

WASHINGTON -- High-speed passenger trains that traverse Ohio are still a dream, but the concept got closer to reality Thursday with a White House endorsement of rail corridors it says could transform United States travel.

President Barack Obama and top transportation officials proposed routes that could run from Cleveland to Toledo before heading to Chicago, and from Cincinnati to Indianapolis and then to Chicago. Another route could run between Cleveland, Columbus, Dayton and Cincinnati.

The Obama rail plan, while providing billions in federal funding, requires communities, states and regional groups such as the Midwest Regional Rail System to lead the way in planning. But the proposed $250 million Cleveland-Cincinnati corridor already has state approval to seek funding.

The Cleveland-Cincinnati trains would go up to 79 mph -- nowhere near the 150 mph of advanced high-speed trains -- and be operated by Amtrak. Amtrak is conducting a feasibility study on the corridor that should be complete by fall.

"The conventional speed route is the needed first step," said Scott Varner, spokesman for the Ohio Department of Transportation. "You have to start there and grow from that."

Democratic U.S. Sen. Sherrod Brown said studies have indicated 16,700 new jobs could be created in Ohio by expanding passenger rail service, in addition to tens of thousands of construction jobs.

"It is the right thing to do for our mobility and our environment," U.S. Transportation Secretary Ray LaHood said of Obama's ambitious rail plan.

Vice President Joe Biden, appearing with Obama and LaHood at the White House, said high-speed rail will "pull people off the road, lowering our dependence on foreign oil, lowering the bill for our gas in our gas tanks."

Obama's 2010 budget calls for $1 billion annually for five years for high-speed rail, while the economic stimulus plan already passed by Congress provides another $8 billion. The Federal Railroad Administration will begin distributing the grants to states by late summer, the White House said.

"What we're talking about is a vision for high-speed rail in America," said Obama, noting that France, Spain, China and Japan are miles or steps ahead of the United States on rail.

"Imagine whisking through towns at speeds over 100 miles an hour, walking only a few steps to public transportation, and ending up just blocks from your destination," the president said, facing an audience of state transportation directors, including Ohio's Jolene Molitoris. "Imagine what a great project that would be to rebuild America."

Said Stu Nicholson, spokesman for the Ohio Rail Development Commission, an independent commission within the Ohio Department of Transportation: "You can't help but feel good about this."

Ohio's Varner said the state will work with its congressional delegation and state lawmakers to continue the push to get money for the Cleveland-Cincinnati corridor.

Obama's rail strategy calls for train corridors of 100 miles to 600 miles, with the Ohio components included in what was described as the "Chicago Hub Network." Other routes would run throughout the country, with a higher concentration of rail in the East, Midwest and South.

New watchdog named to monitor stimulus spending in Ohio

http://blog.cleveland.com/openers/2009/04/new_watchdog_named_to_monitor.html

Winston Ford, formerly general counsel for the Ohio Department of Health, will now monitor how the state manages its billions in federal stimulus dollars.

Ford began work this week as a deputy general inspector. He will oversee and monitor how state agencies distribute the funds, review contracts for projects and investigate any allegations of wrongdoing, said Inspector General Thomas Charles.

Ohio expects to receive at least $8 billion in federal stimulus money. Because the amount is large, it is one of 16 states targeted by the federal government for additional oversight on how it handles the money, Charles said. So a deputy inspector general position was created so the state could provide its own oversight. Charles said several other states, including California, have created similar positions.

Ford was raised in New York and earned his law degree in 1991 from Case Western Reserve University. He has worked for the state since 1996, when he joined the Ohio Attorney General's office. He has been at the Ohio Department of Health since 2004 and has been general counsel for that agency since October, 2007. Charles said he will earn $89,000 a year.

Anyone who wants to file a complaint regarding alleged wrongdoing involving stimulus funds may download a copy of the complaint here.

Ohio House Speaker Armond Budish to alter hospital fee in proposed budget

http://blog.cleveland.com/metro/2009/04/ohio_house_speaker_armond_budi.html

COLUMBUS -- Ohio's hospitals appear to have won a battle over the proposed state budget -- but perhaps not the war.

House Speaker Armond Budish, a Beachwood Democrat, said Thursday that he plans to revamp a portion of the budget, increasing a proposed fee on the hospitals but offsetting that increase by funneling more money back to the hospitals through the federal Medicaid program. The fee would be based on how much a hospital spends annually.

"The speaker's proposal gets hospitals closer to the goal," said James R. Castle, president and chief executive of the Ohio Hospital Association. "Work remains to be done, but the speaker is to be commended for taking a stand to protect jobs and vital services throughout Ohio."

The association has been fighting Gov. Ted Strickland's proposed budget, which includes the fee that is expected to raise $1.27 billion in 2010 and $1.37 billion in 2011.

The hospitals have said that Strickland is trying to balance the state budget on their backs and that the governor's plan will cost them $411 million over the two-year budget and lead to 6,800 layoffs across the state. According to the association, Budish's plan would cost the hospitals $127 million.

Budish disagrees with the association's numbers, saying that Strickland's plan would cost the hospitals $340 million, while his plan would cost only $50 million.

Budish is also proposing to eliminate a requirement that the hospitals accept patients from Medicaid managed-care plans the hospitals do not have contracts with.

Taxpayer group smells pork in Ohio

http://blog.cleveland.com/openers/2009/04/taxpayer_group_smells_pork_in_1.html

The budget watchdog group Citizens Against Government Waste released it's yearly 2009 Congressional Pig Book this week, citing several Ohio projects as examples of egregious "pork-barrel" spending.

The report combed through 2009 spending bills to find money for pet projects known as "earmarks" that were requested by individual members of Congress. It found the number of nationwide earmarks declined by 12.5 percent from 2008 figures, but the total tax dollars spent to fund them increased from $17.2 billion to $19.6 billion.

It cited Alaska as the state with the highest per-capita amount of pork - $332.34 per resident - while Ohio ranked 42 with $19.05 per resident.

"Everyone in Washington has promised a new era of transparency and restraint in earmarks, from President Obama to the leaders of both parties in Congress," the group's president, Tom Schatz, said in a press release. "Sadly, the hard numbers from the 2009 appropriations bills tell a different story."

Earmark defenders say the process lets members of Congress channel money to needed projects that will help their districts.

"I direct my top priorities to projects that provide for economic development, improved health care, better education, renewable energy and to improve the quality of life for my district," said Niles Democratic Rep. Tim Ryan, who sponsored several projects the group decried as "pork."

Northeast Ohio projects singled out in the report included:

* $6,422,625 for six projects for clients of the PMA lobbying firm, which has been raided by the FBI. The projects included a $951,500 earmark by Ryan that would help Kent-based AlphaMicron Inc. develop a film for commercial and residential windows that would improve energy efficiency by varying the amount of light the window admits. Sen. Tom Coburn (R-Okla.) offered an amendment to strip the PMA earmarks from the Omnibus Appropriations Act, but his effort failed by a vote of 43 to 52.

* $95,000 by then-House Labor/HHS Appropriations Subcommittee member Ralph Regula (R-Navarre) for the Canton Symphony Orchestra Association to use for teacher training and curriculum development. CAGW said the orchestra should use its own money for that purpose.

* $9,452,500 for 14 projects for bike paths and trails, including: $475,000 by Regula for a pedestrian/bicycle recreation trail over the Tuscarwaras River and along the Ohio and Erie Canalway Recreation Trails in Stark County; and $332,500 by Sen. George Voinovich (R-Ohio) and Ryan for the Ohio Greenway bike trail in Warren.

Pay prudently at universities

http://www.cleveland.com/opinion/index.ssf/2009/04/pay_prudently_at_universities.html

At a time when frugal Fortune 500 companies are looking hard at every penny, it's not unseemly to ask the same thing of Ohio's colleges and universities.

Unfortunately, though, the natural constituency that would most favor cost-cutting at universities is in no position to push for it: Students eager to attend Ohio State University, for example, are thinking about majors, football tickets, dorm arrangements and such, not about the 1,756 employees who earn between $100,000 and $200,000 or the 285 who earn more than $200,000.

To be fair, OSU President Gordon Gee (base salary $802,125) has reasons for the payroll. He insists that a world-class university has to hire the best and pay them accordingly.

But with top executives from other walks of life in the unemployment line, shouldn't the cost of world-class come down at least a little?

Ohio's colleges and universities must do all they can to hold down labor expenses at all times, but especially when a recession is putting the squeeze on students, their parents and the taxpayers.

Although not all high salaries are outlandish on their face, Wall Street has made Americans suspicious about executive pay. A system heavily dependent on tuition and the good will of the public ought to be particularly sensitive to that.

Ohio's institutions of higher education should be reviewing their balance sheets to make sure that salaries make sense, and trimming where appropriate.

At Ohio State, Gee recently froze executive raises and bonuses and slipped money into student scholarships. Good for him, but it's not enough.

As Ohio's colleges and universities pump students and taxpayers for more money, it's only fair and ethical that they make sure that administrative compensation is right on the money. It's an issue that shouldn't be ignored.

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Cincinnati Enquirer (return to top)

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Associated Press (return to top)

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Dayton Daily News (return to top)

Revised school plan keeps all-day kindergarten, funds poorer districts

http://www.daytondailynews.com/news/dayton-news/revised-school-plan-keeps-all-day-kindergarten-funds-poorer-districts-84553.html

House Democrats did a major makeover of Gov. Ted Strickland’s K-12 funding plan by shifting money from wealthy districts to the poor ones, postponing plans to add 20 days to the school year, and taking longer to phase in many of the changes.

House Speaker Armond Budish, D-Beachwood, and state Rep. Steve Dyer, D-Green, heralded the plan as a major step forward. “We do not stand here today and claim perfection,” Budish said. “But it is better than the plan that came to us and far better than the status quo.”

House Democrats found fault with Strickland’s funding formula that would have meant as much as 16 percent increases in state funding for some wealthy districts and nothing for many poor districts.

And federal authorities told the state that it couldn’t roll $922 million in stimulus money intended for low-income and disabled students into the overall funding pool and count it toward the state’s share. The House plan accounts for federal stimulus money separately.

House Democrats said their plan redistributes state money more equitably.

The House kept Strickland’s plans to require all-day kindergarten beginning in 2010, make it easier to fire under-performing teachers, and extend the time it takes to reach tenure.

House Democrats also kept the plan to give local taxpayers a break by reducing the amount of local property taxes that go toward schools from 23 mills to 20 mills. But the new plan phases it in over six years instead of two.

The plan supports charter schools that perform well but cuts funding for online schools, Democrats said. About 24,000 of Ohio’s 88,000 charter students attend online.

Bill Sims, chief executive of the Ohio Alliance for Public Charter Schools, said he is disappointed to find that charter schools in academic emergency or academic watch would not qualify for additional funds, even though charter schools serve a disproportionate number of economically disadvantaged students.

The changes are expected to be incorporated into a substitute version of the state budget bill, due out next week.

Mary Taylor warns of huge budget deficit in the future

http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/ohiopolitics/entries/2009/04/16/state_auditor_mary_taylor_spen.html

State Auditor Mary Taylor spent weeks crunching state budget numbers and came up with a hypothetical and scary number: $7.97 billion in red ink by June 2013.

Taylor, a certified public accountant, warned that the two-year state budget in the works right now is built on about $5 billion in one-time federal stimulus money and cash management maneuvers. When that money dries up and the demand for services marches on, Ohio’s budget will be facing a giant hole, she said.

Developing a state budget forecast is not a typical duty of the auditor. Taylor, who is the only Republican among the five statewide executive officeholders, sidestepped questions about whether this was politically motivated by saying her staff often helps local governments with forecasts and budgets.

“Quite frankly, it was to answer my question and what others have about where we’ll be in 2012 and 2013,” Taylor said.

Taylor used revenue projections provided by the Strickland administration and then assumed annual growth in Medicaid, education funding and other state expenses. She also assumes that programs that get federal stimulus money this year will continue to be funded by the state after the federal money is gone.

It’s unlikely that the state would see $8 billion in red ink by June 2013. The Ohio Constitution requires a balanced budget so state leaders would be required to make spending cuts before they ever got to the end of the two-year budget cycle.

Strickland gives Morgan plenty to read

http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/ohiopolitics/entries/2009/04/16/strickland_gives_morgan_plenty.html

Gov. Ted Strickland released another 1,444 pages of documents to state Rep. Seth Morgan, R-Huber Heights, to satisfy his public records request regarding the governor’s school funding plan.

That’s on top of the 7,117 pages already released. And the governor’s spokeswoman said there is more coming.

Morgan filed records requests in March, seeking the basis for Strickland’s school funding plan. When Strickland didn’t respond completely, Morgan filed suit in the Ohio Supreme Court on April 6.

Strickland’s attorneys argue that a timely response depends on the scope of the documents sought, not on Morgan’s urgent need for the information. They also said immediate release of 8,700 e-mails might risk violating other laws. And they complained that Morgan has expanded his already broad records request to maintain an illusion that Strickland hasn’t complied with the request.

High-speed rail in Ohio: “Three-C” closer to reality

http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/ohiopolitics/entries/2009/04/16/highspeed_rail_in_ohio_threec.html

President Barack Obama Thursday announced a plan to use $8 billion in stimulus money and another $5 billion over five years to boost high-speed rail in the United States.

That could be good news for proponents of the so-called “Three-C” corridor, a route between Cleveland, Columbus and Cincinnati.

In making his announcement, Obama said that the first grants for high-speed projects and upgrades to existing high-speed rail could be awarded as soon as this summer. He identified 10 routes, including a “Chicago Hub” that included Chicago, Milwaukee and a handful of other midwestern cities including Cleveland, Columbus and Cincinnati.

That announcement was great news to Sen. Sherrod Brown, D-Ohio, who is among the backers of the “Three-C” route.

“Passenger rail service would create jobs and economic growth at a time when our state needs both,” he said.

His office reports that expanding passenger rail service in Ohio could ultimately create 16,700 permanent jobs, in addition to tens of thousands of construction jobs and generate more than $3 billion in development near stations.

The Federal Railroad Administration has already designated the “Three-C” and a route from Cleveland to Toledo as High-Speed Rail Corridors. The current proposal would use 260 miles of existing track to reach 5.9 million Ohioans, almost 60 percent of the state’s population.

Brown Wednesday sent a letter to Transportation Secretary Ray LaHood urging him to devote federal stimulus funds toward passenger rail service in Ohio. Brown urged LaHood to allocate at least $1 billion in economic recovery funds for designated high-speed rail corridors, like the “3C” corridor, that do not currently have passenger rail service.

What do you think of the idea?

Calamity days to be taken away

http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/ohiopolitics/entries/2009/04/16/calamity_days_to_be_taken_away.html

Ohio’s school kids may be a little less jubilant the next time they get a snow day when they find out they’ll just have to make up the day later in the year.

On Thursday, April 16, House Democrats unveiled their revisions to Gov. Ted Strickland’s K-12 funding plan. Rather than embracing Strickland’s call to add 20 school days to the 180 days currently required, House Democrats decided to take away calamity days.

School districts currently get five calamity days each academic year - missed days that do not have to be made up. That number will shrink to three calamity days beginning next fall and two days the following academic year and one in following years.

State Rep. Clayton Luckie, D-Dayton, who used to serve on the Dayton Public Schools board, said it’s a way of adding class time without costing more money.

Martin Gottlieb: Can Mike DeWine stoop to conquer with AG job?

http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/opinion/entries/2009/04/16/martin_gottlieb_can_mike_dewin.html

Not often you see a former United States senator run for an office lower than governor. But it’s a good bet that former Sen. Mike DeWine will run for attorney general of Ohio next year.

Events are coming together in a certain way for the local guy who has been the Greene County prosecutor, Gov. George Voinovich’s man on law enforcement issues (as lieutenant governor), and a member of the Senate Judiciary Committee, which oversees the U.S. attorney general’s shop.

For one thing, he loves the work of an attorney general, knowing it well and knowing others who have loved it.

(While you’re betting, you can also bet that he would have loved to be U.S. attorney general if his friend John McCain had been elected president. He would have been seriously considered, having not only the right resume but the right McCainian reputation for working across party lines, as well as for political cleanliness.)

Meanwhile, opinion among Ohio’s Republican insiders is coalescing around the view that the best ticket for the party would have former Rep. John Kasich for governor, former Rep. Rob Portman for U.S. Senate, and De-Wine for attorney general.

The Republicans don’t love the idea of putting somebody at the top of the ticket who lost in 2006, as DeWine did in his bid for Senate re-election. They are thinking the public is looking for somebody who is somehow “new.”

Of course, Kasich has been around forever. But he is not associated with the George W. Bush years or with recent party debacles at the polls. Yes, that’s a strained definition of new, but everything’s relative.

The same insiders see DeWine as a very strong candidate for attorney general — notwithstanding 2006 — given his very specific qualifications, his name-recognition and his enormous list of Republicans who have contributed money to him in the past.

They see Democrat Richard Cordray as probably strong enough to beat a generic challenger: some state legislator who is known in only one community. And they see DeWine as nongeneric.

Another factor pushing DeWine toward AG is that Gov. Ted Strickland is looking particularly strong for next year. It’s dangerous to make that judgment this early. But potential candidates have to make their decisions early about statewide offices.

What’s known is that elections for governor don’t depend as much upon the state of the economy as elections for, say, president, and that Ohio has a strong tradition of re-electing governors.

The only modern exception was Democrat John Gilligan, who lost narrowly to a former governor, Jim Rhodes, after raising taxes and closing state parks. Ted Strickland is, as of now, no John Gilligan.

If you’re Mike DeWine, and you would like to be governor — he’s 62, and he made clear when he came back from Washington that he’d like to be governor — how do you pursue the goal?

Is it better to run in 2010, and risk becoming a two-consecutive-time loser in big races? Or do you try to erase the 2006 loss with a win for AG? That would get him back on the state scene, so that he’s not yesterday’s news. And it would allow him to think ahead to the next governor’s race, which might be better for Republicans, with Strickland out.

Running for a lower office than one has held is not unheard of. Ohio’s higher education Chancellor Eric Fingerhut ran for the state legislature after losing for re-election to Congress. He wasn’t the first to do that. It seems to have worked out for him.

Since being governor of California, Jerry Brown has been mayor of Oakland and is now attorney general. He seems to prefer both those jobs to hosting a talk show, which he’s also done.

If DeWine doesn’t see the state attorney general slot as beneath the stature of a former U.S. senator, that’s a tribute to his modesty. He didn’t let the whole Washington thing go to his head.

But going for AG could also be what’s right for him, the only way to prevent his loss in 2006 — which was largely about his party — from ending his political career and the dream of being governor.

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Akron Beacon Journal (return to top)

Salvage operation

http://www.ohio.com/editorial/opinions/43083757.html

Wednesday arrived and departed without House Democrats unveiling their changes to the governor's plan for repairing the state's broken formula for funding public schools. State Rep. Stephen Dyer of Green, the Democratic point man in the effort, explained that lawmakers want to make sure their work is accurate, requiring ''additional diligence in the calculation and review process.''

Good thinking, and a lesson that Ted Strickland would have been wise to apply. As it is, the governor talked at length about the virtues of transparency and openness. (He still does!) Yet he and his team operated in virtual secrecy as they pulled together the details of the plan. Why play things so close to the vest? To avoid premature sniping? Well, they've invited something worse. The plan has been the object of considerable and warranted criticism, from Republicans and others, all reflecting the governor's failure to subject the proposal to the appropriate vetting.

Perhaps Dyer and his colleagues will salvage the effort. They have their eyes on correcting the deepening inequities, many wealthier districts receiving double-digit percentage increases while poorer districts get a comparative pittance. They appear determined to get straight the amount of money necessary to cover teacher salaries. They want to be clear about the new money flowing to schools.

There remains much to recommend about the thrust of the governor's plan. The evidence-based model is sound, if still in its early stages and open to adjustment. Here is an opportunity still to decide what is required for an adequate education and then mobilize the necessary resources to deliver the result, the complete overhaul of school funding ordered by the Ohio Supreme Court, first in 1997.

Unfortunately, the energy and focus of the Ted Strickland who pledged to turn around Ohio, who cut a bold profile in his recent State of the State address, has appeared to fade. Those 20 days added to the school year (in line with the international norm) may be punted to a commission. A commitment to all-day kindergarten, another essential element to advancing Ohio, will likely be fudged.

What happened to the vigorous argument for altering teacher tenure and dismissals? For the creation of a teacher residency program? How frustrating to watch the governor's office fumble in its response to critics (and allies). More, a governor who once argued in a friend-of-the-court brief that the current funding system ''should not be tolerated on the premise that the state will come up with something better when the economy recovers'' has been practicing his own brand of ''residual budgeting.''

Listen to the governor, Dyer and others, and the impression is plain: They seem most concerned with their ''political viability,'' as Bill Clinton once put it, even at the expense of fighting for the resources and changes urgently needed to move Ohio forward.

School funding confronts reality

http://www.ohio.com/news/willard/43151822.html

COLUMBUS: There were no surprises Thursday when House Democrats rolled out their changes to Gov. Ted Strickland's new school funding plan except that the phase-in would take a decade rather than eight years.

This raises an important question.

In light of the fact that Strickland, Democrats and even the Ohio Supreme Court have criticized Republicans for using residual budgeting, or only the money available to fund schools, why is phasing the governor's plan in over eight to 10 years any different?

In both cases, the schools are not getting the money from the state that they need to educate Ohio's 1.8 million children, but there is an important distinction.

For decades, Ohio's governors and state lawmakers, Republican and Democrat, never examined the true cost of educating a child.

Instead, during hearings on two-year state budget proposals, state leaders would determine how much money they had to spend on schools, combine that with estimates from local property taxes in each district, and develop a ''basic aid'' number.

This was also called the guarantee, meaning at a minimum that amount would be available on a per-pupil basis to each school district. A majority on the Ohio Supreme Court, in four rulings, understood the guarantee was meaningless. It was a number created in that eerie dimension residing somewhere between science and voodoo known as politics.

Based on evidence

Strickland and House Democrats, led by state Rep. Stephen Dyer, D-Green, are determining the cost of educating a child using an evidence-based model.

Yes, you can argue the fine points of the model, the ingredients in the education soup so to speak, even the tweaking done initially by the governor and now House Democrats to figure out how much each school district should and will receive in the next two years and thereafter.

But it is more difficult to take issue with their overall approach.

Strickland and House Democrats are providing the public with two different sets of funding numbers for each school district. There is a funding list showing the money each district will receive if their plans are passed by the legislature and signed into law. Call this the reality list.

At the same time, Strickland and now the House Democrats have put out lists showing how much money each district would receive if the formula was not phased in, but fully funded immediately. This is the dream list.

No one ever pinpointed the true shortfall in state funding on a district-by-district basis for education before.

Here's the jaw dropper: The difference between what Strickland and House Democrats plan to spend in the next two years and the figure arrived at by using the evidence-base model approach is close to $3 billion annually.

While Strickland and lawmakers are taking a different, more science-based approach, this budget still provides little comfort or relief for the school districts, students, parents and local property owners that have waited 12 years for a fix since the first Supreme Court ruling.

Dreams vs. reality

So we have an unconstitutional funding system under the old formula and we have a hugely underfunded potentially constitutional system under the new plan.

Dyer and his colleagues in the House made a series of changes to Strickland's original plan, including redirecting more funding to property-poor school districts, and properly spending $922 million in federal stimulus dollars for impoverished and special education children.

Strickland's plan inappropriately spread $922 million across all districts until the federal government sent messages to follow the rules.

But House Democrats, in essence, redivided the funding pie instead of finding any new or additional funds for education.

House Republicans immediately criticized the plan for reducing state aid to public schools by $130 million in the budget's first year and then providing a slight increase of $17 million in the second.

State Rep. Ron Amstutz, R-Wooster, said in a news release that ''this is the first time since the DeRolph school funding lawsuit was filed in December of 1991 that a legislative body is proposing a cut in state aid to schools. It is disappointing and shocking that after all of the rhetoric Ohio's school children are losing out.''

Republicans are right

The Republicans are right. Strickland put no new state funding in education in his budget, but masked the absence by improperly injecting the federal stimulus dollars across the board.

Blame the economy, blame the recession; the facts speak for themselves.

House Minority Leader William Batchelder, R-Medina, said ''this is clearly a case of residual budgeting. In fact, their own documents show they have underfunded their plan by almost $3 billion per fiscal year. The revisions will turn most of the proposal into promises to fund and implement much later.''

Batchelder is correct to say the formula is underfunded, but for the first time in Ohio history, including all the years the minority leader and Amstutz and so many others were putting together and voting on spending plans for education, the proposal on the table is not the result of residual budgeting.

And albeit a small distinction at this point, it is an important step forward for this state.

Diebold sees future in service

http://www.ohio.com/news/break_news/43151872.html

GREEN: When Diebold Inc.'s leaders looks to the future, they don't see as much of a corporate emphasis on making things such as the company's ubiquitous ATMs and safes.

Instead, even as Diebold celebrates its 150th anniversary this year, the company looks to focus increasingly on providing high-tech, sophisticated and safe outsourcing services for the financial industry and others.

''Service is the heartbeat of the company,'' said Tom Swidarski, president and chief executive officer. On Thursday, he kicked off what was called ''Diebold's Integrated Services Symposium'' before customers, industry analysts, media and other guests at the company's global headquarters in Green, where it employs about 1,000 people.

Diebold is ramping up what it calls ''Integrated Solutions'' that go far beyond the basics of designing, building, installing and servicing automated teller machines.

The company's specially staffed monitoring centers can provide high-tech building security, diagnose and repair ATMs remotely, manage computer networks and building climate control, among other things, to and from anywhere around the world. Swidarski said Diebold is taking what he calls a ''holistic'' approach in developing products and services after holding discussions with corporate customers.

''It really talks about the future of where we're taking the company,'' Swidarski said. ''It is an absolute growth initiative for us.''

Where service brought in 51 percent of the company's nearly $3.2 billion in revenue in 2008, with the balance coming from its ATMs and other products, Swidarski said the goal is to have service make up 75 percent of revenue in seven years or less.

''We are definitely moving down that track,'' he said. ''This is the long-term strategy we've discussed.''

That's not to say Diebold is neglecting its ATMs.

The company's latest technology for the banking machines is intended to make things easier and faster for both the financial institutions and their customers.

The newest incarnation — in Diebold parlance, it's an ''intelligent depository module'' — doesn't require a customer to use an envelope to make a check deposit. Instead, a person just needs to slip a properly filled-out check into the correct slot on the ATM and push on the touchscreen a couple of times to confirm the transaction. The ATM then prints out a receipt that includes a facsimile of the check you just put into the machine, giving you visual proof the transaction took place.

You can also deposit cash — up to 100 bills of various denominations — into Diebold's newest ATMs without using envelopes and have the money accurately and safely handled.

But Diebold is looking beyond hardware to make an impact, said Greg Steffy, senior director for integrated solutions.

He and others have held 15 symposiums nationwide to demonstrate Diebold's abilities and to listen to customer needs and wants, he said.

Diebold's ATMs continuously monitor their own health, with the system capable of predicting when a problem will occur. When a problem does come up, or software needs patched or upgraded, the intent is to do the work via remote.

The goal is to reduce the number of times a person has to travel to do a service call, reducing expenses both for a bank and for Diebold.

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Toledo Blade (return to top)

Strickland budget plan criticized by auditor

http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20090417/NEWS24/904170343

COLUMBUS - Gov. Ted Strickland's heavy dependence on one-time money in his proposed budget means lawmakers could face a budget hole as wide as $7.9 billion two years from now, the state auditor warned yesterday.

Auditor Mary Taylor made the announcement the same day that House Democrats proposed revamping the governor's formula to fund K-12 education over the next two years, a move that dramatically shifts more aid toward poorer districts and delays some elements of the governor's proposed reforms.

Ms. Taylor projected that the use of one-time federal stimulus aid, the draining of Ohio's budgetary reserves, and projected growth in Medicaid, debt service, and property tax relief could put state revenues and spending out of balance by fiscal years 2012 and 2013.

"We cannot continue to push our problems off until tomorrow, because the huge shortfall we project for 2010 and 2011 won't go away simply by ignoring it," said Ms. Taylor, a Republican. "We need to get ongoing spending in line with ongoing revenues. That will require action and tough decisions."

The $7.9 billion projection was Ms. Taylor's worst-case scenario. A more conservative estimate, which assumes flat spending across all of state government, put the deficit at $4.9 billion.

Holding a rare evening press conference, Mr. Strickland shot back last night after returning from discussions with the Big 3 automakers in Detroit. He challenged Ms. Taylor and Republican legislative leaders to say what taxes they would raise or services they would cut as an alternative to using federal stimulus money.

"This is 2009," he said. "I'm working on the 2010-2011 budget, and I'm being asked to tell everyone what I'm going to do to craft the budget for 2012 and 2013 … We are in the midst of a serious, serious recession. I'm trying to deal with problems as I am confronted by them."

The governor stopped short of taking a no-new-taxes pledge for the 2012-2013 biennium, but he said tax hikes would not be his preference.

"I want us to deal with this by growing our economy," he said.

A two-year budget must be adopted before the start of the next fiscal year on July 1. The governor's proposal is currently pending in the House, where fellow Democrats yesterday offered what they characterized as improvements to the governor's proposed K-12 reforms.

Whatever passes in the House is likely to change again as it moves through the Republican-controlled Senate. The governor said he supports the Democratic changes.

The House Democratic plan would limit funding increases to school districts next year to 1.9 percent of what they received this year. It would also guarantee that no district would receive less in the first year than it currently receives and no less than 98 percent of that in the second year.

The state would spend roughly $5.9 billion each of the two years.

Despite dropping enrollment, Toledo Public Schools would receive better treatment under the House Democrats' plan.

Counting federal stimulus dollars, the district would receive an 8.5 percent increase in the first year before being hit with a 1.8 percent cut in the second. Mr. Strickland's plan would have flat-funded Toledo the first year and cut aid by 2 percent in the second.

House Democrats would also phase in many reforms over 10 years as opposed to the eight Mr. Strickland proposed. The plan would factor a higher amount of teacher pay into the funding formula, and would gradually lower from 23 mills to 20 the amount that the formula assumes school districts are levying in local property taxes.

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Youngstown Vindicator (return to top)

U.S. Rep. Tim Ryan spent more than he raised so far this year

http://www.vindy.com/news/2009/apr/16/us-rep-tim-ryan-spent-more-than-he-raised-so/?newswatch

YOUNGSTOWN — Among the five U.S. House members who represent the Mahoning and Shenango valleys, U.S. Rep. Tim Ryan is the only one to spend more campaign money than he raised during the first three months of the year.

Ryan of Niles, D-17th, raised $88,702.71 and spent $125,149.09 from January to March, according to campaign finance reports filed recently with the Federal Election Commission.

Because the fund had $271,517.15 in it as of Dec. 31, Ryan’s congressional campaign committee had $235,070.77 on hand as of March 31.

Ryan, whose congressional district includes portions of Mahoning and Trumbull counties, is considering whether to remain in the U.S. House or run as Gov. Ted Strickland’s lieutenant governor. If he doesn’t seek re-election, he cannot transfer money out of his federal campaign fund to a state fund.

Ryan contributed $10,000 to the Ohio Democratic Party and $2,000 to Lt. Gov. Lee Fisher, who’s running for a seat in the U.S. Senate.

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Other News (return to top)

HOUSE GOP BLASTS REVISED EDUCATION PLAN, STRICKLAND ENDORSES, EDUCATION GROUPS OFFER CAUTIOUS SUPPORT

Gongwer

House Democrats' education proposal generated tentative approval Thursday from some education groups, accolades from Gov. Ted Strickland, concerns from charter schools and withering criticism from House Republicans.

While the measure (HB 1*) proposes a modest state funding increase for school districts, House Republicans honed in on the overall decrease for education, when proposed cuts to charter schools are taken into account.

In a news release entitled "House Democrats Cut School Funding," Republicans noted that overall state money spent on schools would decrease by $130 million in fiscal year 2010. A $17 million in FY 2011 is still $100 million less than current $6.58 billion total.

"This is the first time since the DeRolph school funding lawsuit was filed in December of 1991 that a legislative body is proposing a cut in state aid to schools," Rep. Ron Amstutz (R-Wooster) stated. "It is disappointing and shocking that after all of the rhetoric, Ohio's school children are losing out."

The GOP caucus said Gov. Strickland's original proposal included federal stimulus funding in state share to mask the overall reduction.

"It is obvious that there were inherent flaws in the governor's proposed education funding model," Rep. Seth Morgan (R-Huber Heights) said. "The governor made a promise to solve school funding and his plan did anything but."

House Minority Leader Bill Batchelder (R-Medina) criticized Democrats' decision to delay implementation to 10 years.

"This is clearly a case of residual budgeting," he said. "In fact, their own documents show they have underfunded their plan by almost $3 billion per fiscal year. The revisions will turn most of the proposal into promises to fund and implement much later."

Gov. Strickland issued a statement lauding House revisions to his plan, which he said maintain the "evidence-based model" while ensuring a realistic and flexible transition phase.

"My administration also took note of constructive criticism and, working together with members of the legislature, the education and business communities, and other stakeholders, we improved upon our core plan," he said. "In short, we listened. The result is a significantly strengthened plan to transform education in Ohio."

Separately, a trio of statewide education associations issued a statement expressing cautious optimism about changes the House made to Gov. Strickland's education plan. The organizations have not taken an official position on the budget, but have been working with the legislature to revise the measure.

"We are working on a product that will represent major progress in making the system better for students," Jerry Klenke, executive director of the Buckeye Association of School Administrators, said. "Today is an important milestone."

Ohio Association of School Business Officials Executive Director David Varda said the groups recognize economic realities would not permit a full phase-in in one biennium.

"Expectations should not be unrealistically high as to increases in state aid over the next two years - in fact one might have expected to see cuts that other states have experienced," he said. "We commend Gov. Strickland for choosing to hold to his promise to change the way we fund and operate schools, regardless of the current economic conditions."

Ohio School Boards Association Executive Director Richard Lewis said he was pleased with the House's "positive improvements to the foundation laid by the governor."

"We have been fortunate to work closely with the governor and the Primary and Secondary Education Subcommittee in the House to arrive at some good solutions to problems encountered with the original proposal," he said.

Bill Sims, CEO and president of the Ohio Alliance for Public Charter Schools, expressed concern about revisions to the Education Challenge Factor designed to drive funding to high-poverty areas. The measure was previously called the IQ Index.

"I'm concerned that this new formulation under the ECF limits these resources to schools in continuous improvement or better, which completely flies in the face of the new U.S. Secretary of Education's prescriptions and warnings that public schools need to improve teacher effectiveness by placing the best teachers in the most challenging schools and by intervening effectively in chronically low-performing schools," he said in a statement.

On a percentage basis, charters have almost twice as many disadvantaged students as district schools across the state, he said.

HOUSE EDUCATION PLAN SLOWS FUNDING FORMULA IMPLEMENTATION, REVEALS MORE MODEST INCREASE IN STATE SPENDING

Gongwer

House Democrats offered a glimpse Thursday of revisions to Gov. Ted Strickland's education plan that are designed to allay widespread criticism over funding cuts to poor schools, the use of federal funds, and mandates on district operations.

House rewrites to education provisions of the biennial budget (HB 1*) will shift money from wealthy suburban districts toward poor ones and slow down implementation of the new funding formula, Speaker Armond Budish (D-Beachwood) said during a news conference.

Under the plan, total state funding for schools would increase 0.6% in fiscal year 2010 to $5.98 billion and decrease 0.4% in FY 2011 to about $5.96 billion, according to House documents detailing individual school district allocations.

However, nearly $1 billion in federal economic stimulus funds bring total school spending to about $6.35 billion in FY 2010, a 6.8% increase over the current fiscal year. In FY 2011 the total drops about 0.4% to $6.32 billion.

Rep. Steve Dyer (D-Green), chairman of the House Finance & Appropriations Primary & Secondary Education Subcommittee, said the plan retains the same overall education appropriation total that Gov. Strickland proposed. However, the original plan commingled some $922 million in federal Title I and IDEA money with state funds.

The House measure would extend implementation of the new "evidence-based model" for school funding from eight to 10 years. If fully phased-in during the upcoming biennium, the plan would cost the state $8.5 billion in FY 2010 and $8.6 billion in FY 2011. (Fully Phased-in Spreadsheet)

Speaker Budish said changes to the measure would address problems that caused the Ohio Supreme Court to rule the current system unconstitutional.

"For years the governors and legislatures of this state have failed to come up with a fix," he said during the news conference. "We do not stand here today and claim perfection, but its better then the plan that was handed to us and it is far better than the status quo."

Rep. Dyer said the proposal would boost the state share of school funding from about 50% to 61% when fully implemented.

Bill Phillis, executive director of the Coalition for Equity and Adequacy in School Funding, who took part in the presentation, said the economic recession made a more rapid approach unworkable. He said 36 states were reducing funding for education.

The measure would identify the cost of a high quality education and end the practice of "residual budgeting," he said. "They are putting Ohio on the track for constitutional compliance."

Rep. Dyer said the House made several changes to drive more money to poor school districts. (Summary of House Revisions)

The new "Educational Challenge Factor," which replaces the Instructional Quality Index, puts more weight on local property wealth and would apply to more areas of the funding model, such as tutors, summer remediation, and enrichment funds.

No changes would be required of districts in the first year and the state superintendent will establish an implementation timeline with state and local school officials, he said. Generally, mandates will be less prescriptive for more highly performing school districts.

The House proposal also reverses Gov. Strickland's proposal to ban for-profit charter school operators, Rep. Dyer said. The entities would continue to be funded under the same model as traditional public schools, as they were in the governor's proposal, but they would be eligible for federal stimulus funding.

Charter schools that serve high poverty students would also benefit from application of the Education Challenge Factor to their funding formula, he said. The plan includes financial incentives to encourage greater cooperation with school districts and directs an advisory council subcommittee to recommend additional ways to boost collaboration.

Other changes included in the House measure would:

* Increase the teacher salary figure to $49,914 based on the median with an additional 14% for benefits.

* Lower minimum district size for rural areas and guarantee a principal for every school.

* Phase-in the required local contribution from 23 to 20 mills over 6 years, starting with 22 mills this biennium.

* Phase-in minimum student-teacher ratios from 19:1 for the first two years, which is the current average, to 15:1 over six years. The measure would not mandate classroom size, but serves as guidance for overall staffing levels.

* Maintain the eventual goal of extending the school year, but phase-out calamity days in the short run and direct the School Funding Research and Advisory Council to recommend future changes.

* Provide a transportation supplement for poor rural districts to ease the transition to a new transportation formula.

* Guarantee state funding at 100% of FY 2009 levels and at least 98% of FY 2010 funding the following year.

* Require all-day kindergarten in the fall of 2010, but offer waivers to school districts facing capacity issues.

* Provide funding for gifted staff in every building and resources for gifted student identification testing, and additional enrichment funds for activities, field trips and opportunities to districts with the greatest need.

* Use corrected 2006 special education funding weights and restore related programs like Parent Mentors and School Psychologist Interns.

* Fund career tech education and joint vocational school education in the same manner, by providing 1.9% increases over current funding levels.

* Restore funding for Education Service Centers to 2009 funding levels.

STRICKLAND SLAMS STATE AUDITOR'S CLAIMS THAT PROPOSED BUDGET IS 'UNSUSTAINABLE'

Gonwer

Republican State Auditor Mary Taylor's assertion that Democratic Gov. Ted Strickland's $54 billion biennium budget package will create an $8 billion imbalance two years from now was met with a sharp rebuke and a question Thursday from the state's top officeholder.

"What taxes would you increase or what services would you cut, rather than utilize the federal stimulus resources that rightfully belong to Ohio taxpayers?" Mr. Strickland asked.

Ms. Taylor prompted the query with the release of a "sustainability analysis" of the fiscal year 2012-2013 budget picture based on the administration's own estimates for tax revenue over the period as well as information gleaned from the FY 2010-2011 budget plan currently under review in the legislature (HB 1*).

If the current plan remains unchanged, she said in a news release, Ohio will face a $7.9 billion "shortfall" in two years, in part because Mr. Strickland's budget relies so much on federal bailout money.

"Ohioans deserve to know where our state is headed," Ms. Taylor said. "This budget should not pass in its current form without a full understanding of the serious, long-term consequences it will have for Ohio and our citizens."

Ms. Taylor's critique echoes the sentiment aired by Republican lawmakers who, during deliberations on the budget package, have repeatedly questioned the extensive use of federal stimulus funds.

House Minority Leader Bill Batchelder (R-Medina) welcomed the auditor's analysis, saying in a statement that she should be "recognized for her forward thinking."

"Since legislators have not been able to obtain clear information from the Strickland Administration, this analysis was much needed," he said. "It has been apparent from the start that the use of one-time funds would take this state down a fearsome path. You cannot spend more than you take in and expect to have a balanced budget in two years when the federal funds are gone."

Gov. Strickland, on the other hand, accused Republicans of focusing on complaints rather than concrete solutions. "Ohio leaders have a responsibility to say what they would do, not just what they oppose," he said.

"Auditor Mary Taylor appears to be advocating for tax increases or severe service cuts at a time when too many Ohioans are struggling to make ends meet," the governor said. "I continue to believe that increasing taxes on Ohioans during this national economic downturn would deepen the effects of the recession in Ohio and hurt, rather than help, Ohio families striving to emerge from this recession."

Ms. Taylor's analysis assumes spending will continue to rise in the 2012-2013 biennium by more than $1.8 billion, or 6.5%, in the first year and nearly $1.3 billion, or 4.2%, in the second year due to projected increases in the Medicaid entitlement and other programs. Revenues, absent federal stimulus funds, would drop almost $2 billion, or 6.7%, in FY 2012 and increase by $1.13 billion, or 4.2%, in FY 2013.

"We cannot continue to push our problems off until tomorrow, because the huge shortfall we project for 2012 and 2013 won't go away by simply ignoring it," Ms. Taylor said. "We need to get ongoing spending in line with ongoing revenues. That will require action and tough decisions."

Gov. Strickland said his plan reflects "a fiscally responsible, sustainable budget that lives within our means while continuing to invest in education, health care and job creation to strengthen Ohio's economy."

"If we put aside heated rhetoric and partisan gamesmanship, there emerges a simple truth about federal stimulus resources," the governor added. "Without them, more Ohioans would lose jobs, fewer Ohioans would have access to health care, teachers would be laid off, tuition would increase, prisons would be forced to close, mental health and other important community services would be cut, and fewer Ohio jobs would be created.

"If these are the actions that Mary Taylor and legislative Republicans are advocating for, they should come out and say so."

Rep. Batchelder said in an interview that Republicans have come up with alternatives only to see them ignored by the administration. "There are a number of things that we've already talked about," he said.

The minority leader pointed to legislation to consolidate agencies and streamline state government, which he said could save $1 billion a year. Republicans also want to target unnecessary spending in the $12 billion-plus annual Medicaid entitlement, Mr. Batchelder said.

"We obviously have to do a better job of policing Medicaid than we're doing," the lawmaker said. Much of the anticipated savings, he added, "have to do with efficiencies."

Rep. Batchelder also suggested that more stimulus money should be used to retrain workers and, as a result, bolster state revenues by increasing the taxpayer based with more employment.

At an evening news conference, the governor added to his earlier statement, saying Ohio needs its leaders to put aside partisanship and gamesmanship.

He said his administration months ago detailed the prospects of a $7 billion-plus shortfall, much of which was plugged by federal stimulus funds. "We did not sit on the sidelines, pointing fingers, laying blame," he said.

Those federal funds, he said, are being used to create jobs, keep tuition in check, maintain health care access and keep teachers in the classroom.

Now, he said Ms. Taylor and legislative Republicans are offering criticisms without offering suggestions. He called for critics to provide potential budgetary solutions, saying he was willing to work in good faith with officials who offer ideas to improve the budget.

"I'm not hearing a lot of positive messages about what should be done," he said, saying state officials have a "shared responsibility" to manage the state.

Mr. Strickland again said he doesn't feel a tax increase should be implemented, adding that such a change could harm the already-troubled state economy.

Detroit Trip: Separately, Mr. Strickland said he spent much of the day Thursday in Detroit, meeting with leaders of the Big Three automakers.

The governor said he got "encouraging news" from the executives, having discussed potential investments the companies may make in the state. Still, he acknowledged that the automakers face major challenges in a down economy.

"They assured me that they would be making no changes in their Ohio operations without talking with us and giving us a heads up," he said.

Mr. Strickland also noted that General Motors officials affirmed their commitment that a new model will be built in Youngstown.

While there, the governor did a little test driving as well. He said he drove a vehicle with a new Ford "eco charge" engine and a semi truck cab that is powered the same way a golf cart is.

CAPITOL SCENE: IG NAMES FEDERAL STIMULUS FUNDS INSPECTOR; BORGEMENKE JOINS UNIVERSITY OF AKRON

Gongwer

Inspector General Thomas Charles announced Thursday he has hired Winston M. Ford as deputy inspector general assigned to oversee the use of funds the state receives through the federal economic stimulus act.

The position was created through the enactment of the state transportation budget (HB 2*).

In the new role, Mr. Ford, most recently with the Ohio Department of Health, will monitor agencies' distribution of stimulus money, review contracts and investigate allegations of wrongdoing.

University of Akron-Borgemenke: Separately, the University of Akron has hired Scott Borgemenke, a former top legislative staffer, as associate vice president of strategy and finance, the Akron Beacon Journal reported.

Mr. Borgemenke was chief of staff for former House Speaker Jon Husted, and helped the House Republican caucus with its campaign efforts last fall.

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