Ohio has collected $350 million more than expected for the first 10 months of fiscal 2012, officials said this week.

In April, the state collected $84.5 million, or 4.1%, more than expected. The boost was driven by a 7% increase in income tax collections, officials said. 

Overall, Ohio could be on track to see a surplus of $500 million or more by the end of the fiscal year, according to some budget projections.

But top budget officials, including budget director Tim Keen, have warned that a lawsuit blocking a $1.2 billion deal to privatize the state’s liquor distribution system — which features a $500 million cash payment to the state’s general fund — could eat up any surplus.

Lawmakers are debating how to spend the additional money. House Republicans recently passed a bill that requires the General Assembly’s approval of how to spend surplus funds. Gov. John Kasich, who wants any surplus to be automatically deposited into the state’s rainy-day account, said he would veto the measure.

“If there is more money at the end of the year, it would be one-time money,” Keen was quoted as saying in local reports. “If we begin to spend one-time money, we’ll be in the same situation we faced in 2011 when we used significant one-time money for ongoing programs, and the governor is not supportive of that.”

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