Contained in the monthly financial report issued for October from Strickland's Office of Budget and Management (OBM) was the startling statistical news that for three consecutive months, starting in July, Medicaid caseloads have exceeded the estimate. Moreover, OBM's forecast for the remainder of the biennium (through June of 2009) is steeper than anticipated. Not only were October's spending on Medicaid, the federal/state health-insurance program for Ohio's poor, elderly and disabled, $34.6 million or 3.2 percent higher than Strickland's budget had planned for but year-to-date disbursements were $12.6 or 0.3 percent above estimates.

In 2005 when Ohio was controlled top to bottom by Republicans, Taft, with a willing Legislature at his side, sought to tackle the "Medicaid Monster," which accounted for about $49 billion or 37 percent of the budget, by throwing about 700,000 low-income adults off the Medicaid train. Taft said that if Ohio didn't rein in Medicaid spending it would "squeeze" other state spending, including aid to schools.

Advocates for the targeted population said that not only would about two million Ohioans suffer but that any reductions in Medicaid spending would be felt else where in the form of higher health insurance premiums, and that service provides like dentists and doctors would no longer provide services because their reimbursement rate, which hadn't increased in years, weren't keeping up with costs.

In published reports by the Columbus Dispatch (CD), one here and one here, Ohio's failing economy was cited state officials as the reason for pulling back on Strickland's proposed Medicaid spending.

In the first news article, a spokesman for the Ohio State Medical Association (OSMA) again made the case that doctors need higher reimbursements if they are to continue to participate in the Medicaid program.

"It's becoming harder and harder for physicians to stay in the Medicaid program when the reimbursements don't keep pace with practice expense and inflation. Tim Maglione, OSMA, CD

The Ohio Dental Association (ODA) also weighed in on Strickland's abrupt change in course, saying the change will only force patients to seek medical help in emergency rooms, which will only cost more than through the Medicaid program.

"I'm not saying I'm feeling double-crossed...But we had met with candidate Strickland and we had met with the administration. ...We had assurances."

"They're people of goodwill making difficult decisions. But this is penny-wise and pound-foolish." David J. Owsiany, ODA, CD

Strickland, speaking through his chief communication's bodyguard, said the rapid rise in caseloads was the reason for not following through on assurances made to provider groups, but a reassessment will be made with each monthly financial report. The cost to restore dental coverage for eligible Ohioans, slated to start January of 2008, was about $15 million.

Strickland's wait and see approach was endorsed by the Ohio Senate Finance Committee chairman, Republican John Carey of Wellston in southern Ohio. Carey, a strong advocate and legislative soldier for Taft's curtailment policy in 2005, said its better now to stay the current course than go forward with program adjustments only to have to scale back later.

"Medicaid is a huge issue in the budget. We were fairly successful in containing the growth in the last budget. It's always concerning when you see Medicaid costs go up because it impacts the rest of the budget." Sen. Carey, CD

JOB POLL SHOWS CONFIDENCE LEVEL AT LOW TIDE

Lead off language in the Ohio OBM financial report for October provided a very mixed if not confusing economic summary for the nation and the state. Higher energy prices and rising mortgage loan payments were cited as two primary reasons for an economic prognosis that painted a dour picture of Ohio's economy as essentially being stalled in the face of worsening condition for the nation itself.

Showing more evidence that Ohioans think things are getting worse for the state, the Ohio Employment Report, a monthly index of Ohio employee confidence conducted by Harris Interactive for Spherion Corporation,  said those surveyed thought the economy was getting weaker.

-- Half of workers (50 percent) believe that the economy is weakening, an increase of 13 percentage points from September.
-- Fewer workers are optimistic about the number of jobs available, with only nine percent saying they believe that more jobs are available, a 10-percentage-point decrease from the previous month.
-- Fifty percent of workers are confident in their ability to find a new job, a decrease of nine percentage points from September.

OHIO'S ECONOMIC SCORECARD SHOWS MORE ERRORS THAN HITS

The Oho OBM report said "Ohio employment decreased in September and remains below the level at the start of the year" but employment year-to-date is down by 3,900 jobs." Hot spots for job growth were Columbus and Akron while cold spots were Youngstown-Warren-Boardman, Lima and Mansfield.

The manufacturing sector, a strong suit for Ohio for over a century, has taken big hits since the inception of NAFTA and during the Bush Administration. Manufacturing purchasing managers, the inside group most knowledgeable about trends, was said by the report to have "delivered the most lackluster report on business conditions in October in a year, indicating that manufacturing activity has slowed abruptly in the past four months."

In the category of construction, national trends, it said, were also evident in and around Ohio into early October. According to the Cleveland Fed, "Residential builders reported a slight rise in cancellations, which they attributed to buyers having difficulty qualifying for mortgage loans, and commercial contractors reported that business remained steady on a year-over-year basis."

OBM's analysis also said single-family housing starts fell 10.2 percent to the lowest monthly level since March 1993 and the three-month moving average of 1.00 million units at an annual rate was the slowest pace of single-family construction since June 1992. The low during the 1990-91 recession was 0.70 million units reached in March 1991 - the final month of recession.

Total housing starts decreased 30.8 percent in the U.S. and 34.8 percent in the Midwest during the twelve months ending in September, the report noted, adding that The National Association of Home Builders announced an eighth straight monthly decrease in its survey of homebuilders in October. Taken together, the report said the latest statistics point toward the seventh consecutive double-digit percentage decline in investment in residential structures during the fourth quarter.

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. He now serves as the OhioNews Bureau Chief for ePluribus Media Journal.

If ePluribus Media readers have a news tip or story idea about Ohio politics or government, contact the OhioNews Bureau at: ohionews@www.epluribusmedia.org