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State budget comes out on top

Rebecca Zemmelman, For the Miami Student

The common perception, based on the everyday reports of the media, is that Ohio's debt is through the roof and its budget is unbalanced.

However, according to the monthly financial report of October and November from the Ohio Office of Budget and Management, Ohio is in fact slightly over its estimated savings and under our estimated spending.

December's numbers will not be released until next week, but David Pagnard, the Director of Communications at the Ohio Office of Budget and Management predicts that there will be no radical change in the numbers, and Ohio will still be slightly ahead of the estimations for this month as well.

According to OMB reports from October, the state has taken in $96 million more in taxes and spent $268 million less than estimated.

However, in terms of how this fiscal year will end, it is much too early to tell, according to Pagnard.

"The economy is so uncertain at this point. Any projection we would make at the state of the economy is so tentative. We are happy to see these results but at the end of the fiscal year, we will reassess," Pagnard said.

According to Pagnard, Ohio's economy is almost always a reflection of the National economy, which is why we hold our breath. The Fiscal year for Ohio begins on July 1 and ends June 30 of the following year, which means that this month marks almost the half-way point.

According to the OMB reports so far this year, it seems as if Medicaid is behind in payments in comparison to previous years. Pagnard explained that Ohio has changed the method of payment for Medicaid this year so it appears as if Ohio is behind, but he is certain that it will catch up by the end of the fiscal year.

With Ohio's extra money, the government has been able to return money, for the first time this year, to a rainy-day savings account in event of unexpected happenings. This fund had been drawn down to virtually zero over the past two years.

One could ask, where is all of the extra money coming from? Who has been affected? According to the Mayor of Oxford, Richard Keebler, the Ohio government is balancing the budget on the backs of the cities and townships of Ohio.

Oxford had to plan for a 50 percent reduction from state-local shared funds this year, according to Keebler.

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"They are escalating costs and not revenue, so instead of them cutting costs they can cut the distribution of taxes to the cities," Keebler said.

Another plan devised from the Ohio government was the abolition of estate taxes. The plan for this was to encourage people to stay in Ohio because their estate would not be taxed once they died; however this hurt the cities.

Estate taxes, on average for Oxford, accounted for $3.7 million, according to the Mayor. Oxford did not depend on this money, but certainly utilized it for capital improvements, according to Keebler.

According to Miami University junior political science major Libby Martin, in the past, it has been a trend that the state of the economy and the lack of a budget crisis can have a positive effect for incumbents during the election process.

"A solid control over the state budget could lead to a positive economic outlook for the public. This is important because the perception of economic stability is a large factor when it comes to the public's voting choices. If an incumbent is in office during an improving economy, then the public might choose to re-elect this candidate," Martin said.

So although the budget can certainly not be determined this early in the fiscal year, it is currently in a stable place. However, it is not to go unnoticed that this positive trend for the budget is producing negative effects for the cities of Ohio.