Ohio Gov. Ted Strickland will attend a National Governors Association meeting in Philadelphia with President-Elect Barack Obama and Vice President-Elect Joe Biden on Tuesday.
Strickland's office said that the governors will discuss the unique challenges facing the states during the current economic turmoil and ways that the federal government can provide direct assistance. Strickland's office said he will join the other governors for a press briefing following the closed meeting.
On Monday, Strickland held a press conference at the statehouse with Budget Director J. Pari Sabety to announce that Ohio is facing not only a budget deficit in the current fiscal year, but is also projected to face a deficit of more than $7 billion in the upcoming 2010 to 2011 operating budget.
Strickland sent a letter to Obama discussing the economic turmoil in Ohio as it relates to the federal government.
"As you know, most states are facing the same economic challenges the national economy is facing," Strickland wrote to Obama. "Our economies are deteriorating rapidly with almost all states either in a recession or at risk of one. In Ohio, we are projected to see a reduction in wage and salary income for the first time ever."
Strickland told Obama that most governors were facing significant revenue shortfalls.
"In Ohio, even though we have already made nearly $1.3 billion in budget adjustments this biennium and most agency spending levels have been reduced to 87.25 percent of their originally budgeted levels, we are still facing a projected shortfall of $640 million in 2009," Strickland wrote. "Ohioans have sacrificed and have been resilient in the face of the cuts taken thus far. However, additional cuts would be devastating as we are trying to provide basic safety net services during this recession and to stimulate the economy."
Strickland told Obama that in the next two years Ohio will confront the most serious erosion in revenues it has experienced in the last 40 or 50 years.
"At flat funding for fiscal years 2010-11, Ohio is projected to have a $7.3 billion deficit," Strickland wrote. "And even if we fund each agency at 90 percent for FY10-11, which in and of itself would mean cuts to important services Ohioans depend upon and decreased investments in initiatives that stimulate the economy, Ohio would still have a $4.7 billion deficit for the coming biennium."
Strickland made several suggestions to Obama with regard to his work with Congress that the Governor said would help to avoid drastic cuts in state services.
These recommendations included:
- "$100 Billion in Block Grants to the States: Unless federal resources are provided, the severe nature of current and future shortfalls states are facing will have devastating consequences on core services states provide, including education (early care through higher education), healthcare, vaccinations, food safety, and other vital public health and safety net services. Giving states block grants to ensure that these basic services are not compromised and that states can continue to invest in education at all levels is a critical part of any recovery package.
- $ 3.2 Billion in Additional TANF Funds to the States: With this recession, there is no doubt that more families will need basic assistance, and it is TANF that allows states and counties to meet these families' basic needs. However, many states, including Ohio, will not have enough TANF resources to assist our neediest families in each of the coming years. Since the establishment of the TANF program 13 years ago, there has not been an increase. Additional TANF funds will help with the economic challenges low income families all across this nation are facing. And as states are dealing with revenue shortfalls, the state match to pull down these federal funds should be waived. Additionally, because there are currently fewer jobs available, penalties as a result of TANF work requirements should also be waived during this time of recession.
- A Recovery Package is Needed Immediately: Many governors must introduce their budgets in January and February 2009. Assistance is needed immediately if we are to avoid budgeting for and beginning to execute even more painful reductions. I am encouraged by the leadership of Speaker Nancy Pelosi and Senate Majority Leader Harry Reid and their commitment to move legislation quickly, and it is my hope that you could enact a recovery package your first week in office."
Strickland told Obama that he was hopeful that by the time he takes office, Congress will have passed legislation to aid the auto industry, calling the financial assistance to General Motors, Ford and Chrysler "vital."
"Immediate financial support is critical to ensure continued, stable employment throughout the automotive supply chain," Strickland wrote. "This support is also critical for the many other businesses and state and local governments most at risk from the industry's potential financial collapse. The failure of General Motors, Ford Motor Company or Chrysler Corporation would cascade through parts suppliers, materials industries, and technology companies that support the automotive market and, in turn, the services industries that are tied to all those businesses."
Strickland wrote that no national economic recovery is possible without strong states.
"I have no doubt that Ohioans, with their resolve and creativity, will do their part and come together in extraordinary partnerships to meet the challenges before us," Strickland wrote. "It is with this collaborative spirit and resolve that I write this letter asking for your partnership. I stand ready to work with you and your incoming administration on this challenge."
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