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Monday, February 12, 2007

Ohio's Economy And Budget: Slow Growth, State Surplus

COLUMBUS (TDB) -- The monthly economic report Gov. Ted Strickland receives on state spending shows Ohio has a chance of ending its 2007 fiscal year with a $246 million surplus. It also projects the private job market will stabilize, meaning an end the era of mass layoffs. But there is no hiring boom in the picture.

The latest data show tax revenues are running slightly ahead of expectations, and spending is nearly $683.5 million, or 4.1%, below what was budgeted. Health care expenditures are nearly $500 million under estimates -- accounting for most of the black ink that landed on the guv's desk in the Office of Budget and Management's financial summary. So far, Ohio has collected $93.3 million more in taxes than projected.

As for the overall economic picture in Ohio, the report says labor markets are "stabilizing" but its sees no comeback for the manufacturing sector, which shrunk by 17,000 jobs in 2006. But the tone wasn't bleak, and there was a strong suggestion that maybe things have bottomed out. This would get Strickland's term off to a positive start; he wouldn't be under the dark clouds that dogged Republican Bob Taft, who left office last month with fewer Ohioans working than in 2001.

"In a sign that labor markets are stabilizing, mass layoffs declined sharply in 2006. After rising by 30.3% in 2005, the number of claimants in mass layoffs in Ohio decreased by 29% in 2006, according to the U.S. Department of Labor," Strickland's budget experts reported. They also gave the governor this news -- Ohio should add jobs in 2007.

"Total employment is projected to increase by 0.5% in 2007, according to Global Insight, as a general economic recovery overtakes continued weakness in manufacturing. The fastest growing sectors in terms of employments are projected to be professional and business services, education and health services and leisure and hospitality. Ohio employment is projected to grow at a compound annual rate of 0.6% during the next five years, led by other services, construction and natural resources," the report said.

The full text of the report is HERE.

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