CHICAGO — Ohio faces a budget shortfall that could reach $1.9 billion in fiscal 2009, according to a state fiscal forecast released yesterday.
The shortfall is due to deterioration in the state’s economy, the housing and job markets, and lower-than-expected tax collections.
An earlier forecast projected a surplus of $56 million on revenue of $28.4 billion for fiscal 2009, which starts July 1. For 2008, analysts had projected a surplus of $799 million — which has now dipped to $111 million under the new forecast.
Under various scenarios, the shortfall could be limited to $733 million if revenue growth is low, $1.3 billion if growth is zero, and $1.9 billion if a recession occurs, according to the revised forecast.
Gov. Ted Strickland ordered lawmakers yesterday to draft plans to begin making cuts in state agencies. The state carries a $1 billion reserve fund, but Strickland said he favors cuts over dipping into that fund, according to reports.
“The governor is prepared to make the decisions he’ll need to make. He plans to manage the situation very aggressively,” said spokesman Keith Dailey.
The state’s constitution requires it to end the biennium with a balanced budget.
