Ohio Budget Cuts Funding for Higher Ed Initiatives

Funding for higher education initiatives fell victim to Ohio's budget woes as legislators worked to fill a projected $3.2 billion deficit. The enacted budget signed into law earlier this month by Gov. Ted Strickland cuts spending by $2.5 billion and leverages $5 billion in federal stimulus funds, according to the governor's office.

Earlier this year, Gov. Strickland asked lawmakers to continue for a third year the tuition freeze at all public universities. Funding for this request was not included in the final budget, and as a result, universities and colleges are allowed to raise tuition by 3.5 percent each of the next two years. Two schools, Ohio State University and Cuyahoga Community College, announced they would maintain level tuition for the upcoming year despite the cuts.

Also left out of the enacted budget was a new co-op and internship program that would have provided training for individuals seeking employment in biotechnology, bioscience, or other high-skill fields. The program was part of the state's stimulus plan passed by lawmakers in 2008 (see the Feb. 13, 2008 issue of the Digest). However, lawmakers left out of the final budget the first $100 million of the five-year, $250 million program, reports the Associated Press. Cutting the internship program and state aid to higher education gave lawmakers $270 million to put toward other programs, the article states.

Additionally, all financial assistance was eliminated for the Ohio College Opportunity Grant, according to a news release by the Ohio Association of Career Colleges and Schools. The grant provides income-based funding for students enrolled at career colleges.

The enacted budget does include funding to continue the Choose Ohio First Scholarship, a scholarship program created during the 2007 legislative session to increase the number of graduates in science, technology, engineering, mathematics and medicine (STEMM) field. The program is slated to receive $12.9 million FY10 and $15.8 million in FY11. The program requires a 1:1 match from higher education institutions. An additional $5 million is included each year for STEM initiatives at the Department of Education.

The total general revenue fund for the Ohio Department of Development (ODOD) is $76.75 million in FY10 and $92.2 million in FY11. ODOD appropriations include $15.8 million each year for the Thomas Edison Program, which supports a network of incubators and tech-centers to support startup technology companies.

The budget maintains funding for the state's Third Frontier Initiative, a tech-based economic development strategy that aims to expand Ohio's technological strengths and promote commercialization. For the Third Frontier R&D fund, $61 million is allocated each year, which includes $55 million each year for Third Frontier R&D projects and $6 million each year for R&D taxable bond projects.

Created in 2002, the Third Frontier Initiative is set to expire in 2012 unless renewed. Gov. Strickland announced last week his intention to call the legislature back into session to discuss putting the issue on the ballot this fall, which must be done before Aug. 5, reports the Columbus Dispatch. House Speaker Armond Budish, D-Beachwood, has said he is willing to reconvene the House for a vote if an agreement on the details can be reached. However, Senate President Bill Harris, R-Ashland, voiced concern that there is not enough time to prepare the issue for the ballot and effectively campaign to pass it, the article states.

The budget also includes an increase in the cap for the Technology Tax Credit to $45 million, up from $30 million, to enable investors to continue receiving a tax credit by investing in Ohio-based technology companies. The current cap was expected to be reached earlier this year.

The 2010-11 budget is available at: http://www.legislature.state.oh.us/BillText128/128_HB_1_EN_N.pdf.