CHICAGO - Ohio's revenue collections last month fell about $322 million short of budgeted estimates, putting more pressure on Gov. Ted Strickland and lawmakers to dip into the state's budget reserve to cope with what could grow to a nearly $1 billion deficit before the fiscal year ends June 30.

The announcement of the April revenue shortfall and warning that the total deficit for the current fiscal year could exceed $900 million came yesterday from budget director J. Pari Sabety, who said with just two months left in the current fiscal year the state has few options for closing the current-year shortfall.

Strickland issued a statement opening the door to use of the reserve, which currently holds $942 million, saying: "Addressing the challenges before us will require extraordinary collaboration and bipartisan consensus building among the state's elected leadership ... One possible solution to meet our constitutional obligation to end the fiscal year in balance is to utilize the state's budget stabilization fund."

Strickland has already cut nearly $2 billion from the current biennial budget to address previous revenue shortfalls and lawmakers have been focused in recent months on debating the proposed $54 billion budget for the next two-year budget cycle. The governor proposed dipping into reserves in the next budget, and the budget version approved by the House last week relied on reserve funds, so any move to use reserves now would leave a future hole.

Republicans responded to the shortfall news by saying it raises questions over the Office of Management and Budget's ability to provide accurate revenue estimates and shows the need for an independent budget office.

Strickland is a Democrat and the House is controlled by Democrats, while Republicans have a majority in the Senate. The governor's proposed fiscal 2010-11 budget eliminates a deficit of more than $7 billion through federal stimulus funds, cuts, and various one-time measures such as refinancing some debt and tapping reserves.

Ohio has a AA-plus and negative outlook from Fitch Ratings, a Aa1 and negative outlook from Moody's Investors Service, and a AA-plus and stable outlook from Standard & Poor's. Negative outlooks have been assigned due to the state's economic struggles and poor revenue collections.

Elsewhere in the region, officials in Wisconsin also warned that their state's red ink might worsen based on the latest revenue projections. The state also could face a cash-flow crunch by mid-summer of more than $1 billion.

Officials estimate that the current-year shortfall could grow between $600 million and $1.3 billion, above prior estimates to as much as $6.3 billion. Gov. Jim Doyle's administration declined to put a dollar amount on the estimates, as formal figures will be released later this month.

The Democratic governor has proposed eliminating the $5 billion deficit through spending cuts, federal stimulus dollars, and a series of tax and fee increases. Wisconsin's GO ratings are AA from Standard & Poor's, AA-minus from Fitch, and Aa3 with a negative outlook from Moody's.

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