Governor Bob Taft
Riffe Center, 31st Floor
Columbus, OH 45215

Dear Governor Taft,

As you know, Speaker Householder has encouraged members of the House to "keep our powder dry". Many members have been amenable to that advice while patiently waiting for credible evidence that there is, indeed, a $720 million revenue deficit. As of today, I have yet to see any evidence that supercedes the January report issued by the Office of Budget and Management that says that we have a small surplus.

According to that report, the GRF revenues for the first half of FY'03 were $145.1M below anticipated revenues. During the same time period, Ohio's expenditures were $147.7M less than expected. Thus, according to the report, the net result is that we are $2.6M in the black for the first half of FY'03; not $720 M in the red.

Total GRF spending has increased 4.7% over FY'02, yet the press consistently quotes you as saying that state spending has been "cut to the bone" and that taxes on cigarettes and alcoholic beverages must be raised, immediately. I, respectfully but heartily, disagree for two reasons. First of all, smoking cigarettes and drinking alcoholic beverages are legal activities for adults; targeting this pool of people to carry an additional burden is social engineering via taxation.

Secondly, based on the published OBM report, it appears that an imaginary crisis has been created. Why? Perhaps to condition the public to accept a "solution" that they would otherwise find repugnant: additional taxation. To manage the backlash, it is not unheard of for advocates to prescribe a remedy that far exceeds the desired objective: ask for a $4 billion dollar increase in taxes when only $2 billion is wanted, thereby allowing some participants to claim that they were successful in cutting taxes (even though an actual increase has been achieved).

Some members have discussed whether the manufactured crisis is simply the fulcrum to re-activate the pro-gambling agenda, for some segments of the population, gambling may be more palatable than a hefty tax increase.

Members have also discussed the likelihood that Third Frontier commitments may have been made predicated on the expectation that the voters will pass the measure. However, if the issue fails, then the money accrued by the proposed tax increase would ensure availability of funding with which to carry out any agreements that have been made. The same rationale could be applied to the promotion of a state sales tax increase. On that note, please be advised that I oppose an increase in sales tax in principal, but also because it is a double whammy to taxpayers when local governments piggyback on to it.

Furthermore, the press has reported that your office intends to cut spending for daycare by reducing the eligibility threshold. However, House Bill 40, the so-called corrections bill and carrier for the cigarette and alcoholic beverage tax hikes, is also the vehicle to abolish the current rate structure with a payment ceiling. The bill also makes provision for the development of an enhanced ceiling, a menu of ceilings, agency authority to prescribe the amount, duration, and scope of benefits, and the ability to increase the FPL eligibility from 185% to 200%. That is not a description of cutting a program to the bone.

Now, solely for the purposes of discussion, I will accept the deficit figure of $720 million. The Executive Order Budget Reduction ($121.6M) leaves an outstanding balance of $598.4M. Adopting your proposal to accelerate sales tax collections ($288M) leaves the balance at $310.4M. And, finally, using Unclaimed Funds ($35M) and Non-GRF rotary funds ($21.4M) leaves us with a $254 M between now and the end of the Fiscal Year - still with the possibility of tapping into the $65M Rainy Day fund, if need be, thereby bring the deficit down to only $189M.

If each of the 99 members of the House, pinpoints $2M in wasteful state spending and that money is deducted from the budget of the agency that wasted taxpayers money, we could find $189M in a heartbeat. For example, recently, the Controlling Board approved nearly $500,000 for posters, brochures, door-hangers and coloring books to educate people about the West Nile virus. The Department of Education spent $1.2M for radio, TV, and billboards to educate the public about new "standards" for school children. I've found my $2M. Certainly, both Health and Education are flush with funds if they are spending taxpayer's money in such a cavalier manner and it isn't hard to imagine that we could find $189M by parking state vehicles, limiting travel, conferences, and institutes, etc. etc. And, if that doesn't do it, then we might carefully review the LSC printout that shows that the Department of Education is sitting on $3 billion, twenty-five million, six hundred fifty-three thousand., seven hundred seventeen dollars in unspent and unencumbered funds; surely we could find $189 M there!

In short, I do not support your plan to increase taxes in the correction budget or the FY'04-05 biennial budget. State government has a spending problem, not a revenue problem, but even if we did have a revenue problem - when the patient is sick, the doctor doesn't bleed the patient.

Respectfully,

DIANA M. FESSLER Rep79@ohr.state.oh.us