According to the memo, the state was anticipating an $850 million shortfall of projected state revenues due to a Supreme Court ruling that denied the governor’s authority to introduce video lottery terminals (VLT) at Ohio racetracks without voter approval.

Following the court’s ruling, Gov. Strickland proposed a plan to close that gap by delaying the implementation of the final year of a five-year planned reduction in the Ohio personal income tax. The Ohio Senate and the Ohio House of Representatives passed House Bill 318 -- a compromise version of the governor’s plan -- on Thursday, Dec. 17.

"The passage of this bill is very good news for us," McDavis said. "Had our state leaders failed to reach a compromise, Gov. Strickland would have been forced to make reductions to elementary and secondary education on Jan. 1, 2010."

Those reductions would have dropped the state of Ohio below the K-12 funding threshold required for eligibility to received federal stimulus funds through the American Recovery and Reinvestment Act (ARRA). Without the ARRA funds, McDavis explained, the state would have been forced to cut State Share of Instruction (SSI) to universities, resulting in a cut of more than $18 million to Ohio University’s Athens campus both this year and next year and cuts of more than $3 million to regional campuses this year and next.

These cuts would have resulted in mid-year expenditure reductions immediately and would have deepened the cuts in SSI next year to $29 million at the Athens campus instead of the $11 million reductions the university already expects.

McDavis also shared that the members of the Budget Planning Council (BPC) have submitted their recommended budget planning assumptions for fiscal year 2011. The president is reviewing and evaluating these recommendations and expects to reach a decision during winter quarter.

Click here to read the full memo.