Ohio ranks in middle of states for long-term budgeting

- February 4, 2014
   

This new report finds that Ohio has some good budget-planning practices, but is lacking in areas. On the positive side, Ohio’s monthly tracking of budget and tax activity and fiscal notes for legislation help stabilize services and improve government efficiency. But lawmakers should address the need for tax expenditure review and forecasting of long-term fiscal impacts.

For immediate release
Contact Wendy Patton, 614.221.4505
 
Read the full report
Download press release (1 pg)
Download Ohio fact sheet (2 pp)

 

Some good practices in place, but report finds room for improvement

Ohio has some budget-planning tools that make government effective and help maintain services during tough economic times, according to a report from the Center on Budget and Policy Priorities, a non-partisan research organization based in Washington, D.C. But some practices could be improved.

“Ohio’s monthly tracking of budget and tax activity and fiscal notes for legislation help stabilize services and improve government efficiency,” said Wendy Patton of Policy Matters Ohio. “We need to improve by setting up a review process for tax expenditures and forecasting long-term fiscal impacts beyond the current two-year budget.”

The report ranks the states according to whether and how well they make use of 10 key fiscal planning tools, which fall into three broad categories:

  • A detailed roadmap of the budget’s immediate and future impacts on the state’s fiscal health; 
  • Standards and oversight to guarantee that analyses of budget impacts are professional, credible, and prepared without political influence;
  • Mechanisms that trigger needed changes during the budget year.

Ohio ranks 24th among the states in long-term fiscal planning practices with a score of 5.5 out of a possible 10. The state got high marks for well-designed, non-partisan fiscal analysis of the Legislative Service Commission; for its monthly tracking of revenues and expenditures; for regular and for accessible reviews of pension funding by independent authorities. 

Ohio falls short in other areas, however, and should: implement a current service budget that estimates the cost of maintaining current levels of public services in terms of quality and quantity and accounts for the erosion of inflation; initiate longer-term (five-year) forecasting of fiscal impacts; and adopt a formal process for managing tax expenditures. By taking these steps, Ohio’s lawmakers can avoid shortsighted decisions that do long-term damage to the state’s budget and economy. Better planning can ensure that government delivers important services like health care and education in a way that’s effective and efficient.

“Better planning encourages policymakers to take the long view, one that considers a state’s future workforce, population, and infrastructure needs,” said Elizabeth McNichol, senior fellow at the Center on Budget and Policy Priorities and report co-author. “A state’s budget decisions today on services like education and infrastructure affect both the state and the nation for years to come.” 

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The full report can be found at: www.cbpp.org/cms/index.cfm?fa=view&id=4085.

A fact sheet for Ohio is available here: www.cbpp.org/files/2-4-14sfp-factsheets/OH.pdf.

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