Gov. Kasich Signs Sweeping Ohio Budget Moments Before Deadline

COLUMBUS, Ohio -- Just hours before a midnight Thursday deadline, Ohio Gov. John Kasich signed into law a nearly $56 billion state budget that contains broad policy changes for the state, after vetoing a provision that would have given the state first dibs on repurchasing state prisons sold to private developers.

The 3,262-page bill privatizes five state prisons, overhauls Medicaid, eliminates Ohio's estate tax in 2013, bans most abortions in public hospitals, and ties teachers' pay more closely to student achievement.

"We promised Ohioans a new way and a new day, and we're delivering," Kasich said. He signed the two-year spending plan on the eve of a new fiscal year after striking the prison language and six other items.

In his veto message, Kasich said he thought the state guarantee would dramatically decrease the value of the prisons and raise costs. Kasich also struck a provision requiring the Ohio Lottery to list how much it gives to education, and restored wording allowing schools to screen children's body mass index to combat obesity.

He planned to further discuss the budget Friday and take questions when he meets with legislative leaders at the governor's residence.

"This is the one they said couldn't be done," he said as he used multiple pens in his ceremonial Statehouse office to sign the document.

Speaking at an earlier event in Findlay to mark the spinoff of Marathon Petroleum Corp., Kasich touted that he kept his campaign pledge not to raise taxes while coming up with a balanced budget.

The measure keeps in place an $800 million cut in the personal income tax that went into effect in January.

"There's a tremendous amount of change," Kasich said earlier Thursday. "I would argue this bill is the most comprehensive piece of legislation Ohio has passed in modern times."

The first-term Republican faced an estimated $8 billion budget shortfall when he took office in January. Improved state revenues have put the gap closer to $6 billion.

Kasich and other legislators have contended that such a shortfall forced them to make changes to how the state operates and to trim how much money is directed to agencies, schools and local governments.

Critics, however, argue his plan makes such drastic reductions in funding to school districts and local governments that teachers and police will be laid off and residents will end up taking a financial hit as local tax increases get passed.

Cities, townships and other local governments will see a drop of more than $1 billion during the next two years through a combination of cuts to state funding and changes to the tax money they get.

While state aid to schools increased by roughly $400 million, it will not be enough to compensate for losses under new tax policies and with the end of a nearly $900 million federal economic stimulus program for Ohio.

Among other changes, the measure prohibits hospitals and other facilities receiving state funds from performing elective abortions. It also provides tax credits for investors in Ohio businesses and expands eligibility for Choose Ohio First college scholarships for residents who attend Ohio colleges and universities

"Budget are awfully boring things until you take a look at what we've done," Kasich said at the Findlay event.

The legislation was passed Wednesday along party lines by the Republican-controlled Ohio House. The GOP-led Senate passed the measure Tuesday, with one Republican voting against it.

At a separate, private ceremony Thursday, Kasich also put his pen to several other measures, including a bill to allow certain gun owners to take concealed firearms into bars and other places where alcohol is served. He also signed a measure to open the state parks and other lands to oil and gas drilling.