State Budget In The Black

Fiscal year end, June 30 Ohio's budget solidly in the black. Tax receipts are up 2.5% over last year's tax receipts, a strong signal that Ohio's economy is improving, even with rate reductions for income and sales taxes that took affect at the beginning of the fiscal year. The majority of Ohio's tax receipts come from income, sales and business taxes.

The strong revenue results are from personal income up 2.2%, which account for 45% of the total tax revenue. Sales tax revenue lags last year's revenue down 5.9% which account for 41% of the total tax revenue and is counter to increases in personal income. High gas and energy prices apparently are causing consumers to shift their spending dollars from goods that have sales taxes to gasoline which does not have sales taxes. (No sales taxes on gasoline in Ohio, Ohio has a 26 cent per gallon tax, which is an excise tax dedicated to a separate transportation budget for road and bridge construction and repair)

Spending grew only one tenth of one percent over last year's spending, a significant change from previous spending levels, while still increasing funding for education. Nearly $831 million dollars was added to the rainy day fund, bringing the balance to $1.011 billion, which was totally depleted several years ago from $1.3 billion

Under current law budget surpluses will replenish Ohio's Budget Stabilization Fund, (BSF) "rainy day" up to 5% of the prior year's spending, which would be almost $1.3 billion. When the BSF is fully funded at 5%, then the remaining surplus is returned to taxpayers through the Income Tax Reduction Fund.

Fiscal Year End, June 30, 2006, General Revenue Fund Sources

($ in thousands)

	Actual	Estimate	Variance	Percent	FY 2005	Change
TAX REVENUE

Auto Sales	$936,363	$967,000	-$30,637	-3.2%	$1,064,107	-12.0%
Nonauto Sales & Use	$6,431,881	$6,513,900	-$82,019	-1.3%	$6,763,023	-4.9%
Total Sales & Use Taxes	$7,368,244	$7,480,900	-$112,656	-1.5%	$7,827,130	-5.9%

Personal Income	$8,786,395	$8,673,900	$112,495	1.3%	$8,598,871	2.2%
Corporate Franchise	$1,054,901	$952,600	$102,301	10.7%	$1,051,620	0.3%
Public Utility	$176,171	$146,600	$29,571	20.2%	$104,102	69.2%
Kilowatt Hour Excise	$325,308	$315,700	$9,608	3.0%	$339,817	-4.3%
Total Major Taxes	$17,711,020	$17,569,700	$141,320	0.8%	$17,921,539	-1.2%

Commercial Activity Tax	$185,082	$143,500	$41,582	29.0%	$0	---
Foreign Insurance	$248,797	$243,600	$5,197	2.1%	$242,856	2.4%
Domestic Insurance	$170,318	$172,900	-$2,582	-1.5%	$171,364	-0.6%
Business & Property	$19,092	$26,400	-$7,308	-27.7%	$25,196	-24.2%
Cigarette	$1,084,142	$1,013,200	$70,942	7.0%	$577,671	87.7%
Alcoholic Beverage	$57,546	$57,500	$46	0.1%	$56,821	1.3%
Liquor Gallonage	$33,370	$32,600	$770	2.4%	$32,173	3.7%
Estate	$54,070	$62,100	-$8,030	-12.9%	$60,381	-10.5%
Total Other Taxes	$1,852,417	$1,751,800	$100,617	5.7%	$1,166,462	58.8%

Total Tax Revenue	$19,563,437	$19,321,500	$241,937	1.3%	$19,088,002	2.5%

NONTAX STATE-SOURCE REVENUE

Earnings on Investments	$107,281	$65,000	$42,281	65.0%	$34,986	206.6%
Licenses and Fees	$73,904	$69,200	$4,704	6.8%	$70,601	4.7%
Other Revenue	$190,973	$186,700	$4,273	2.3%	$158,535	20.5%
Nontax State-Source Revenue	$372,157	$320,900	$51,257	16.0%	$264,121	40.9%

General Revenue Fund Spending, Ending June 30, 2006

($ in thousands)

						Percent
PROGRAM	Actual	Estimate	Variance	Percent	FY 2005	Change

Primary & Secondary Education (1)	$6,728,374	$6,850,751	-$122,377	-1.8%	$6,651,144	1.2%
Higher Education	$2,343,984	$2,338,448	$5,536	0.2%	$2,333,745	0.4%
Total Education	$9,072,358	$9,189,198	-$116,840	-1.3%	$8,984,889	1.0%

Health Care/Medicaid	$9,260,644	$9,650,123	-$389,479	-4.0%	$9,446,178	-2.0%
Temporary Assistance to Needy Families (TANF)	$356,740	$356,740	-$1	0.0%	$356,739	0.0%
General/Disability Assistance	$0	$0	$0	---	$23,069	-100.0%
Other Welfare (2)	$549,059	$639,919	-$90,860	-14.2%	$443,872	23.7%
Human Services (3)	$1,231,571