The sluggish national economy is taking a toll on Ohio's economic outlook, and Gov. TedStrickland said Monday that the state could face a budget shortfall of $640 million before thefiscal year is over.
Strickland and Budget Director J. Pari Sabety said the state's 2010-2011 operating budget couldalso be in the red by as much as $7.3 billion.
The outlook was based on current economic and revenue indicators.
SPECIAL SECTION: Financial Crisis | EXTRA: ReadStrickland's Letter To Obama
Strickland said that he had planned to meet with President-Elect Barack Obama to ask for federalhelp.
The state's income tax collections have dropped $1.4 billion over three years, the worst since1972. Projected sales tax collections in 2010 will be a half-billion dollars less than thisyear, 10TV's Kurt Ludlow reported.
"These are serious circumstances," Strickland said. "They are the result of a collapse ornear collapse of our national economy."
The state's $800 million rainy day fund will likely need to be emptied and budget cuts along theorder of 10 percent or more are likely, Ludlow reported.
"There will be shared sacrifice," Strickland said. "But we also recognize that historicopportunities lie on the other side of our current economic challenges."
Strickland said that every Ohioan needs to know the truth, that the state is facing anunprecedented economic crisis.
"This is not an effort to alarm or exaggerate," Strickland said. "We're trying to be ascandid and as transparent as we can be."
The state has already cut $1.3 billion from the current budget, laid off 3,000 employees andclosed two state mental hospitals.
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