Living within our means. Investing in what matters.
Speaker Husted, President Harris, Leader Beatty and Leader Fedor, Lt. Governor Fisher and statewide elected officials, members of the General Assembly and the Supreme Court, distinguished guests, First Lady Frances Strickland, and my fellow Ohioans...
Let us begin these proceedings with a moment of silent reflection to honor the thousands of brave Ohioans who have served and are serving in the military, especially those who are in Afghanistan and Iraq, and those who have suffered injuries in these conflicts.
I am pleased to stand before you as the governor of the great state of Ohio.
We may have come here today from flatlands or foothills, from the banks of great rivers or the shore of a Great Lake, from a quiet village or a bustling city. But even in its glorious differences, Ohio is one state, and we are one people.
We love Ohio for all that it's been. For all that it is. And for all that it can be if we work together for the common good.
So I ask you to join me in embracing the challenges before us.
Join me in declaring an ambitious vision for our state.
Join me in staking a claim on Ohio's future.
Let me tell you that the state of our state is resilient. The state of our state is full of promise. And, my friends, the people of our state are ready to reject the status quo. They are ready to embrace transformational changes that will bring even better days ahead.
Ohio is the heart of our nation - with unique strengths in distribution and logistics and agriculture. Ohio is the heart of innovation - with world class universities, research hospitals, and a revolutionary commitment to new technology.
There should be no doubt. Ohio can thrive and Ohioans can thrive. Our people and our companies made the products of yesterday, and are making the products and providing the services of tomorrow.
But we must be open to new ways of doing things and new ways of thinking. The strategies and ideologies of the 20th Century will not make us strong in the 21st Century. As a writer once observed, "The things that got us here will not get us there."
The priority of my administration is to keep and create jobs that grow from Ohio's strengths and that are worthy of Ohio's workers.
Ohio can take the lead in the national and international economies.
And here's just one example. Ohio has everything it takes to become a center of advanced energy technology. We have energy resources, technical know-how, manufacturing experience, and logistical advantages.
Next-generation energies - biofuels, fuel cells, clean coal, and renewable sources such as wind - offer us the opportunity to create jobs, support our farmers, reduce our dependence on foreign oil producers, and be responsible stewards of our environment.
That's why my administration will coordinate an almost 1 billion dollar investment in energy programs, to ensure energy will be an economic development leader in Ohio.
Over the next four years we will target 250 million dollars per year in tax exempt bond cap allocation to leverage billions of additional investment dollars in energy projects. We will broaden our Third Frontier investment. We will develop energy projects across technologies and across the state, and in doing so attract new investments and new jobs for Ohio.
Ohio will embrace new industries, new technologies, and a new economy. But our greatest strength will always be our people.
That's why I am seeking to expand and improve our job training programs. This can be done without any new dollars from our budget - by simply using funds available from the federal government that have gone ignored.
The Federal Government's Workforce Investment Act helps states provide job training. We're 51st in making use of those funds.
Those resources can be put to use to provide demand-driven job training. Training targeted toward the jobs of the future, and available to meet the needs and fit the schedules of busy Ohioans.
Now we all believe in the importance of a good work ethic. It's a crucial quality our young people need to succeed in life. But, let's be candid, it's difficult to develop a good work ethic without work.
Consequently, I'm proposing that the Department of Job and Family Services develop a grant program to encourage job training and job creation for young people in low income communities.
Participating employers will receive funds to support the training and wages of a young employee.
In the process, we can reach thousands of young men and women. Helping them get their foot in the door today and opening new doors for them in the future.
Transforming Ohio's economy will require a partnership.
That's why I have launched a new initiative called Advantage Ohio, a top to bottom review of state regulations to eliminate contradictory and obsolete rules. In the process, we will make it easier for companies to do business in Ohio while protecting the health and safety of our people.
As we embrace new ideas, we must acknowledge that our budget situation makes the challenges we face all the more daunting.
There is belt tightening ahead and it's not a pleasant thing to do...Especially when we're already dealing with shortfalls.
And so we face a choice.
We can take the easy route. We can continue divvying up our shrinking resources and spreading them around so that everybody is mildly satisfied while nothing is actually accomplished.
Or, we can make very tough choices. We can seek cuts, and savings where possible, enabling us to make meaningful investments which will lead to a transformed Ohio.
My budget reflects tough choices.
It's a budget that does two things above all else. We live within our means. And we invest in what matters.
For the biennium, under my budget, of the 18 cabinet departments that rely on general revenue funds:
2 departments will absorb a cut.
9 departments will make do with funding that does not keep up with inflation.
While the remaining 7 departments will receive reasonable budget increases.
In the first year of my budget, general revenue spending will actually shrink, and over the two year span of the budget total spending will increase a modest 2.2 percent annually.
That's lower than the growth rate in House Bill 66. In fact, it's lower than any budget in the last 42 years.
So as we ask for sacrifice, we must demonstrate responsibility. Wastefulness and giveaways can no longer be tolerated.
That's why my budget eliminates the Ed Choice voucher program.
It limits the Student Choice Grant for students attending private colleges to those with a financial need.
It eliminates financial aid for students in proprietary for-profit schools not in the Board of Regents system.
It limits the discount on the state sales tax provided to large retailers.
It ensures that the Commercial Activity Tax applies broadly and equally across all sectors of the economy including the petroleum industry.
It captures for Ohio the full sales tax revenue generated from residents of other states who come here to buy motor vehicles.
It prevents shipments of untaxed cigarettes into our state - a dubious practice that hurts small business people, especially in border communities.
And there are many more examples in this budget where we will make cuts and find savings. Collectively, these decisions allow us to invest in what matters.
Now, for those tempted to cave in to the special interests, who will come asking you to restore this item and that loophole, my message to you is this: It's time for shared sacrifice.
It's time to come together in common purpose, and work for the common good.
And state government should set an example. To make the best use of the funds available, my administration is initiating the Ohio Government Accountability Plan.
The essence of the plan is to clearly state priorities, establish performance agreements with agency directors showing how they will pursue those priorities, and, then, measure the outcome to find out what worked and what didn't.
We will create a vision for economic competitiveness and apply it across all state programs. Every department, not just the Department of Development, will be evaluated in part by its ability to keep, attract, and create jobs worthy of Ohio's workers.
Let there be no confusion, even in the face of budget cuts, we in Ohio are not sounding the retreat. Far from it. What we do now will strengthen our state and strengthen our future.
But, it will not be easy.
"Opportunity," as Thomas Edison once said, "is missed by most people because it is dressed in overalls and looks like work."
And that's exactly what's ahead of us. Work.
Work to improve our schools.
Work to increase access to health care.
Work to prepare Ohioans for the jobs of the future.
And the opportunity to make Ohio stronger and healthier, now and for generations to come.
We were sent here to listen to the people and to each other. We were sent here to work together. We were sent here to leave this state in better shape than we found it.
That is our responsibility. That is our opportunity. That is our work.
Because the problems of the uninsured are our problems.
The struggles of a laid off worker are our struggles.
The future of a school child is our future.
And, let me add, the failure to fix what is broken, the failure to strengthen what is working, the failure to imagine what is possible, that, would be our failure.
I think, for the most part, we agree on the destination. We may differ about which route to take, but we must move forward. We can no longer sit stalled by the side of the road.
We must squarely face the most pressing problems in our state.
There are 156,000 children in Ohio without health insurance. And that's 156,000 too many.
Many of the parents of those children live with fear each day. Fear of a broken bone or a bout with bronchitis that will not only bring pain to their child, but will bring bills that destroy their family's budget.
Let me be plain: this is wrong. And we can make it right.
My budget will make access to affordable health coverage available for every single child in Ohio, and every young person up to the age of 21.
Under my proposed budget, we will offer State Children's Health Insurance Program coverage to Ohio children whose parents make up to 300 percent of the federal poverty line. In a family of four, for example, that's coverage for every child in every household whose family makes less than $62,000.
And for those who exceed that income limit but still lack insurance, we will provide those families an opportunity to buy into Medicaid coverage for their children.
We will also expand Medicaid eligibility for low income working parents up to 100 percent of poverty and coverage of pregnant women up to 200 percent of poverty.
And for Ohioans with severe disabilities who want to work but who are afraid of losing their Medicaid coverage if they become employed, we will allow those individuals to work and to maintain coverage by buying into Medicaid.
And we are working with the insurance industry to expand available options for individuals who can't afford coverage. I am seeking permission from the federal government to use Medicaid funds for private health insurance premium assistance. This would help as many as 300,000 Ohioans - those earning up to 150 percent of the poverty level - pay for coverage that is otherwise beyond their means.
And here's a common sense investment we're going to make.
We will expand the PASSPORT program to provide essential in-home services to more vulnerable older Ohioans who need a little help with their medical needs or daily needs, but who do not require the constant care of a nursing home.
It's a popular program with seniors because it offers them dignity and choices. And because it works.
I inherited a waiting list for PASSPORT services when I took office. In response I issued a directive last week to open the PASSPORT program to everyone on that waiting list. And in my budget, I propose welcoming 5,600 additional participants to the program.
This is simply good policy - it meets a vital need for our seniors and for their families. And it saves taxpayers in the long run, because PASSPORT clients spend more time in their own homes and less time in nursing homes.
We must be committed to operating this program efficiently. I am troubled that Ohio has lost federal reimbursement dollars for PASSPORT by sitting on paperwork. That practice is over. Instead of months to file the paperwork, we'll have it out in weeks, and we'll receive more federal support in the process.
Let's talk about one of the best investments we can make - early childhood education.
If your interest is the economy, if your interest is our social health, if your interest is our physical health, if your interest is education - at any level, for any age - then you must care about early childhood education.
Those early years affect everything. Research shows a better start for our children ultimately means that there will be less crime and more college, less teen pregnancy and more home ownership, less welfare and more health.
A modest investment during a brief period of childhood leads to a lifetime of positive outcomes.
But while every child deserves a fair start on their way to school, too many of our children begin the race not only well behind the starting line, but facing in the wrong direction. We cannot afford to abandon those children who face a poverty of resources and a poverty of experiences. We must recognize the facts: we have a readiness gap that leads to an achievement gap that results in an outcome gap.
So let's fix it by increasing access to early childhood education.
Today we have a hodgepodge of confusing rules which makes it difficult for parents to take advantage of existing programs. For example, a child may be eligible for our Early Learning Initiative, but ineligible for subsidized child care.
We need one easily understood standard. In my budget, if a child's family is under 200 percent of the poverty level, that child will be eligible for any early care and learning program we have.
We also need to expand our public pre-school offerings. My budget provides a $10 million expansion of public pre-school, expanding the number of 3 and 4 year olds taught by 66 percent.
This is the first expansion of the program since 1989.
As we expand access, we must increase the quality of a child's educational experience as well.
My budget increases child care provider rates which will help attract and retain experienced and well-trained staff. And we will make funds available for professional development and training, the hiring of specialists in early childhood development, and interventions to promote school readiness.
And we will expand efforts to provide information and support to Moms and Dads.
Our Help Me Grow program serves families with children from newborn to 3 years old. As early as just a few weeks into their lives we offer an in-home visit from a nurse to help new parents in the crucial first days of a newborn's life. The program provides vital information and resources on health, safety, and development. In my budget, we will expand the program to reach thousands of additional children.
Even as we include our youngest children in our early childhood education system, we must work harder to see that our young adults don't find the door to higher education slammed in their faces by out of control tuition costs.
Today, the state spends less on instructional support for our universities than it did in 2000.
This defies common sense.
We know an educated workforce attracts jobs - economic forecasts show that more than 60 percent of new jobs will require a college degree. And yet, Ohio is 47 percent above the national average in public university tuition costs and 37th in producing college graduates.
My goal is clear and my budget sets the stage. In 10 years, we will increase the number of Ohioans with a college degree by 230 thousand, and we will increase the graduation rate among those who start college by 20 percent.
My budget sets two major initiatives to help make college affordable for every Ohioan.
First, I will establish a higher education compact between the state and our public colleges and universities which will result in lower tuition costs for our students. This compact will increase funding for the basic instructional subsidy by 5 percent next year. And by 2 percent more the following year.
To get their share of this historic funding increase, each public college and university must find ways to operate more efficiently.
And they must announce that there will be no tuition increase next year, and that tuition will increase no more than 3 percent the following year.
Think about that.
Instead of a tuition increase of 9 percent - and that's what we've averaged in Ohio since 1996 - there would be absolutely no tuition increase next year.
This plan will benefit over 400 thousand students currently enrolled in our public colleges and universities, and will send a strong message to those planning for college.
Even with the compact in place, there will still be a gap between the cost of a college education and what many Ohio students and families can afford.
My second major initiative aims to fill that gap.
To do this, we will continue the full implementation of the Ohio College Opportunity Grant for all the public and private colleges in the Board of Regents system. This will provide assistance to families with incomes up to 75 thousand dollars per year - helping more than 100 thousand students pay for their education.
Next, we will partner with the business community and the Ohio College Access Network to attack the remaining gap between a student's resources and the cost of college through private fundraising.
Our higher education system will be stronger - indeed it will actually become a system, unified in purpose - with the creation of a cabinet level Chancellor of Higher Education.
I appreciate the efforts of legislators to help redefine this position. And I appreciate the decision of the Board of Regents to appoint Eric Fingerhut - who I think will be an outstanding Chancellor today and will only become more effective in the future.
If we do this right, education will feed the economy. Success will bring more success. And the beneficiaries of our efforts will not only be students in the classroom, but all Ohioans.
And as we seek improvements in higher education, and early childhood education, we will not abandon our constitutional responsibility for primary and secondary education.
To be sure, the legislature, previous administrations, local school boards, educators and our students have achieved significant progress in our schools.
SAT scores and ACT scores top the national averages. Proficiency tests reveal that our students exceed the national average in reading, in math, and in science. Our high school graduation rate is up 8 percent over the last 8 years.
President Harris, Speaker Husted, Leader Fedor, and Leader Beatty, you and your colleagues are to be thanked for the role you've played in improving Ohio's schools. But there's much work left to be done.
Too many Moms and Dads, and too many of our teachers can still say, without fear of contradiction, that their districts lack the resources necessary to provide their students with the quality education they deserve as citizens of Ohio.
We can do better.
And under my budget plan we will.
My proposals do not solve all the problems of our schools, but they represent a major advance toward providing adequate and equitable funding for our primary and secondary schools.
To begin, we must create a better system for knowing what we're getting for our money. My budget addresses that need with a pilot project in which participating school districts will adopt a standard fiscal reporting system. In the second year, the Board of Education will be required to implement this transparent accounting system in every district in the state. This will finally let us see exactly where our money goes and what it accomplishes.
And just as we must closely and realistically track local spending, we must accurately acknowledge the full contribution the state makes to local schools. Currently we don't include the full range of tax relief - which is real cash for local schools - when we calculate the state's share of education spending. My budget will change that as well.
A true accounting of education spending reveals that less than half of local school funding currently comes from state resources.
Under my plan, our investment in schools will bring the state's support for local school districts to nearly 54 percent in 2009. This likely reflects the largest percentage contribution of state resources to local school districts in the modern history of Ohio.
How do we do this?
First, we increase the amount of foundation funding per student by 3 percent in each of the next two years.
Second, we focus our aid formulas to put the emphasis on meeting students' needs. In the process, many districts will receive additional funds, and no school district, not one, loses any state funding from what they have today.
Third, over two years, we will increase parity aid by more than 7 percent. And to ensure that that aid has the greatest effect, we will target the money to the 60 percent of districts most in need rather than spread it out among the 80 percent of districts as is now the practice.
Fourth, we will increase poverty based assistance by 22 percent over the biennium - adding both flexibility for schools in how they use the funds and the expectation that they demonstrate results.
And, finally, my budget will authorize securitizing Ohio's tobacco settlement funds for approximately 5 billion dollars.
Armed with those resources, we will help firm the financial foundation of our school systems for at least a generation.
With 2.2 billion of that money, we will meet all current commitments of the school facilities commission. Within five years, every dollar will be in the hands of local school districts as they create facilities of the future.
The remaining resources - just over 2.8 billion dollars - will allow us to forego issuing bonds that are currently scheduled for the next three years.
As a result of not incurring this debt, avoiding principal and interest payments, 250 million dollars in general revenue funds will be made available each year for the next 20 years.
We will dedicate that yearly savings to the largest targeted property tax cut in the history of Ohio by expanding the Homestead Property Tax Exemption.
For those over 65, and the disabled, regardless of income, this will mean no property tax, not one penny, on the first $25,000 of value in their homes.
That's a tax cut, a property tax cut for one in every four Ohio homeowners.
How does this help our schools?
Well, the state will replace the tax revenues lost due to the expansion of the Homestead tax cut. In other words, schools will have local property tax dollars replaced with state dollars.
Paying for our local schools is a responsibility that has been largely borne by local property tax payers. Many have argued, and the DeRolph decision agreed, an education system primarily dependent on the wealth of the local community is inherently unfair. Because where you grow up in Ohio should not determine where you end up in life.
With this plan we ease the burden on some of our most vulnerable property taxpayers and we strengthen the financial base of our schools.
Let me underscore, by 2009 the state will provide almost 54 percent of the funding for our local schools. That would be the highest level of state funding for local schools in the post-DeRolph era.
With additional funding, with additional parity aid and poverty based assistance, and with the Homestead property tax cut, we are making the biggest single advance toward an equitable education system in our state's history.
A generation of Ohio students will benefit. And so too will parents. And taxpayers.
But this is possible only by making the tough decisions I spoke of earlier.
Even as we stabilize the funding foundation of our schools, we must reinvent the mission and performance of our education system.
Today, the goal is not to outshine Pennsylvania, or Indiana, or Kentucky. We must set high standards to prepare our young people to compete with the world, to win in the Global economy.
We must build educational systems that are fluid enough for creativity and innovations, and agile enough to adapt to the demands of our changing state and world.
We will weigh seriously the recommendations of experts - including a recent report from Achieve that was commissioned by the state Board of Education and financed by the Gates Foundation.
Their recommendations include:
Placing more responsibility with, and expectations on, our school principals in their role as instructional leaders.
Giving teachers more opportunity to learn and collaborate with their colleagues on effective teaching methods.
Using achievement and proficiency tests as a means of helping students move to higher levels of learning, and not just as a means of sorting and labeling students and school districts.
And they pointed out the unfairness of demanding more and more of our public schools while demanding less of charter schools supported with public tax dollars.
I believe the standards gap between our traditional public schools and other schools receiving public money is so glaring that we must act immediately. My budget imposes a moratorium on new charter schools and prohibits for-profit management companies from running charter schools. My budget eliminates the voucher program except for the means-tested voucher initiative in Cleveland.
I am also requiring that we closely monitor all charter schools to determine if they meet educational and fiscal standards of accountability.
As we take on questions of reform, as we take on questions of funding, the goal must be absolutely clear. We will have public schools that serve our children's needs. All of our children.
I ask you to work with me today, tomorrow, and every day. So that together we can build an education system that every Ohioan is proud of.
As my Lt. Governor, and my great economic development director, Lee Fisher often says, "our success will depend on our willingness to make strategic investments in the unbreakable link between educational achievement and economic prosperity."
I am well aware, the process does not end with these proposals, it begins.
President Kennedy often told of the general who asked a gardener to plant a sapling for him. The gardener objected that the kind of tree the general chose would grow slowly, and would not reach maturity for 100 years.
So the general replied, "Well, in that case, there is no time to lose; plant it this afternoon."
Let me close today by speaking directly to the mother who knows her child will get sick, as all children do, and asks if she will be able to afford treatment.
And to a worker who sweats through a shift all day, then sits through a class at night, and asks if a better job awaits his efforts.
And to a grandparent who treasures his home, but worries that his health or his property taxes could push him out the door, and asks only for a chance to stay put.
And to all who listen to our challenges and ask if we can meet them.
With wisdom and the determination to make tough choices and invest our resources wisely:
We can improve access to health care, offer affordable coverage to every child in Ohio, and in-home assistance to seniors who need it.
We can bolster Ohio's economy by building a more skilled and more educated workforce and capitalizing on our strengths.
We can reduce the burden on taxpayers while making our school funding more equitable. In other words, we can make Ohio schools constitutional, functional, and exceptional.
Because with the dawn of each day, there is hope of a new Ohio. Shaped by our people, forged by our ideas, and fueled by our ambitions.
Join me in a shared commitment to this standard: that with the dawn of each day, there comes a better Ohio, a stronger Ohio.
Proverbs tells us: "Hope deferred maketh the heart sick." But, my friends, now is the time for hope. A new day is coming. A new Ohio awaits us.