Ohio Actually Preparing For Recession Ahead Of Time

Gov. Ted Strickland has asked his agencies to look into offering employees early retirement incentives to save money in light of a potential recession and continued state budget problems.
Agencies were told Jan. 7 to begin looking at ways to trim their work force by offering to purchase additional years of service for long-term classified, primarily union, employees, allowing them to retire early.
The agencies would need to demonstrate savings before extending the voluntary buyouts, although in some cases the offers would be mandatory because of state law and union agreements.
In the memo from J. Pari Sabety, Strickland's director of the Office of Budget and Management, it appears the administration is contemplating closing some state institutions or laying off relatively large numbers in state departments.
Keith Dailey, Strickland's spokesman, said no decisions have been made on either idea.
''The governor is prepared to make the tough choices that may have to be made overtime,'' Dailey said.
He said the cost-saving option is being extended to all state government, and the governor shared the contents of the memo at a recent Cabinet meeting.
''This is guidance to the agencies. It is the how-to. It's updated guidance and something that's been in discussion at OBM for several months,'' Dailey said.
The state's economy is facing significant challenges, in large part because of the slumping housing market and rising energy costs, so the governor is monitoring the budget day to day, Dailey said.
''We're expecting slower growth in '08 than we had in '07 and the governor is committed to living within our means,'' Dailey said.
No timeline has been given to agencies to submit plans and the governor does not have a specific dollar amount in mind for savings, Dailey said.
Developing a plan
Under the proposal, state agencies would need to develop plans for mandatory and voluntary buyouts. OBM would review each agency's proposal, and notify the Public Employees Retirement System (PERS) of approved plans.
The OBM would receive reports starting six months after the early retirements begin that would outline details of a department's payroll before and after the downsizing.