State appropriation limit mires budget in recessionary conditions
Posted April 18, 2019 in Press Releases
An arbitrary spending cap the General Assembly imposed on itself over a dozen years ago shouldn’t stand in the way of needed state investment in public services today, Policy Matters Ohio said in a new report.
In 2006, massive opposition from all over Ohio led proponents to withdraw a constitutional amendment that would have restricted investment in state and local public services. Instead, lawmakers enacted a “State Appropriation Limitation” (SAL) which restrains growth in most state General Revenue Fund (GRF) dollars.
“The State Appropriation Limit can rise by 3.5 percent a year, but once every four years it is ‘recast’ based on current year spending,” explained report co-author Wendy Patton, Senior Project Director of Policy Matters Ohio. “The periodic recast prevents rebound from recession and locks in underinvestment. For example, if the SAL had simply been increased by 3.5 percent a year without a recast, the state could invest up to $12.7 billion more in the 2020-21 budget.”
A research memo written by the Ohio Legislative Service Commission in 2006 noted the SAL is likely unenforceable by the courts. A challenge hasn’t been necessary: lawmakers appropriated less than the SAL cap by hundreds of millions or even billions of dollars in most years, failing to make needed investments in Ohio’s people by improving schools, maintaining parks, making college affordable, stemming the addiction epidemic and supporting other essential public services.
“Ironically, because the appropriation limit is figured based on recent spending levels, the state’s underinvestment in past years is becoming a choke collar on the upcoming budget,” said Policy Matters Research Director Zach Schiller, report co-author. “The SAL should be suspended or repealed so we can make the investments Ohioans need.”