Current State Budget Overview (2004-2005)
The 2004-2005 biennium budget bill (HB 95) was signed into law by Governor Taft. The bill went into effect at midnight, June 30, 2003. In signing the bill, the Governor imposed his veto power on a number of measures in the bill, but none of them affected library funding.
In calendar year 2001, the Library and Local Government Support Fund began to experience some decline in growth. Although the LLGSF provided more funds in 2001 than in 2000, the growth rate of the fund slipped. This mirrored the economic trends in the country.
In June 2001, the state passed the FY ’02 – ’03 biennium budget, which reflected growing concerns over the economy. The budget froze the LLGSF at 2000 distribution levels, and diverted money from the LLGSF to fund OPLIN. It became clear in the first months of the ’02 – ’03 biennium budget that economic conditions were worse than originally predicted, and that income tax revenues, along with many other revenue streams, were way below estimates. This impacted library funding in two ways: (1) the primary revenue source was dramatically eroding; and (2) the drop in revenue was putting pressure on other areas of the state budget.
In response to this declining revenue the Governor reduced the budgets of many state agencies. In December 2001, the Ohio General Assembly passed legislation (H.B. 405) that changed much of the budget bill they passed just six months earlier. One of the changes was to the LLGSF. It was clear that the freeze imposed in the original budget was actually providing more money to public libraries than the permanent law formula that earmarked 5.7% of the personal income tax to the LLGSF. H.B. 405 funded the LLGSF with a monthly allotment that essentially mirrored the allotments made in 2000. Twice each year, however, the Ohio Department of Taxation was directed to review those allotments and determine if the libraries received more under this freeze than they would have received if they had been left at the permanent law funding level. If libraries had received more under the freeze, the ODT would deduct that “overage” from the LLGSF. In three of the four reviews in the past two years, libraries did receive more under the freeze, and those funds were deducted.
The decline in the economy continued throughout the rest of the biennium. Early in 2003, it was apparent that even with the steps taken in previous budget corrections bills, the budget was still out of balance. Ohio’s constitution does not allow the state to operate without a balanced budget. To respond to this continuing budget problem, the Ohio General Assembly passed another budget corrections bill, H.B. 40. Among other cuts included in this legislation, was providing permission to the Governor to cut the LLGSF by an additional $10.6 million prior to June 30, 2003 if the budget was still not balanced. The Governor has made the decision to deduct $9.7 million. This meant that there was no LLGSF distribution to public libraries in July 2003.
The ’04 – ’05 biennium budget (H.B. 95) began with the Governor’s proposal to return public library funding to it permanent law percentage of 5.7% with a 2% growth cap. This proposal also funded OPLIN through the LLGSF for the first year of the biennium but returned it to the General Revenue Fund in the second year of the biennium. Shortly after the introduction of the budget bill, the Chair of the House Finance Committee told the representatives of the three local government funds that the Speaker of the House Larry Householder was looking at dramatically reducing the local government funds, including the LLGSF, or eliminating them altogether. This was confirmed several weeks later in meetings with the Speaker and in two separate interviews with the Speaker reported by the Cleveland Plain Dealer and National Public Radio. There has been some speculation that the Speaker never really intended to eliminate the local government funds but was trying to stir up public support for a tax increase by threatening popular local services like public libraries. Whatever the motive behind the announcement to eliminate the local governments, it was important that public libraries show their strength. The libraries were very successful in sending a strong message to the General Assembly. Had libraries not demonstrated their importance in their communities, legislators would have believed that more dramatic cuts in library funding would have been acceptable.
In the final version of the budget passed by the Ohio General Assembly each county will receive the same amount of LLGSF that was credited to that county in 2002, PRIOR TO THE OPLIN REDUCTION.
