Dramatic pay cuts for state employees and huge fee increases for hospitals and nursing homes are among the biggest hits in Gov. Ted Strickland's proposed state budget.

The administration announced yesterday that the governor will ask nearly all state employees to take pay cuts of up to 6 percent to save as much as $200 million in the next two years. Reductions would be based on salaries; the lowest-paid employees would be exempt.

Meanwhile, Ohio hospitals would pay $598 million in the two-year budget period because of a new hospital franchise fee, and nursing homes would cough up an additional $285 million under a near doubling of the nursing-home "bed tax."

A statewide coalition of nursing homes has been running television advertisements for a week urging viewers to call Strickland and urge him not to cut funding to nursing homes.

The statewide association representing hospitals said yesterday that the impact of the proposed fee is unclear.

State Budget Director J. Pari Sabety stressed that all workers -- including the governor and her -- would be subject to pay cuts.

Union leaders representing many state employees say the administration needs to explore other options, such as paring a "bloated" midmanagement bureaucracy.

"While we understand that the governor is asking all employees to share in the pain by recommending across-the-board cuts in pay and benefits, our members are already on uneven ground," said Andy Douglas, executive director of the Ohio Civil Service Employees Association, which represents 35,000 state employees in clerical, prison, health-care, trade and information-technology jobs.

"The rank and file has been cut far more than middle managers in recent years. First consideration should be given to reducing the management bureaucracy."

An analysis by the association last year of some of the state's largest agencies found "a massive and costly management structure that averaged three front-line workers to every manager."

Speaking after a tour of Centennial High School in Columbus yesterday, Strickland said: "This is a real economic crisis that we're facing. There are Ohioans who have no job at all now. There are Ohioans who are losing their homes. There are Ohioans who are losing their health care. And I think it is incumbent upon me and other state employees (to) rally around the current need for shared sacrifice."

Nursing-home operators said the proposed increase in the bed tax, coupled with a planned reduction in the rate the state pays nursing homes to care for Medicaid patients, would have negative consequences.

"This proposal is devastating and likely to bankrupt some facilities and cause more facilities to further reduce skilled-nursing services," said Alan Melamed, spokesman for the Skilled Nursing Care Coalition.

Strickland also proposed charging hospitals a new franchise fee.

"The economy is bad for the state, but the economy is just as bad for hospitals," said Tiffany Himmelreich, spokeswoman for the Ohio Hospital Association.

When the proposed fee is coupled with a planned 5 percent increase in the rate the state pays hospitals for caring for Medicaid patients, the net cost to hospitals would be $200 million, Himmelreich said. Without the new franchise fee, hospitals were told that they would face a 15 percent cut in Medicaid payments, she said.

Dispatch reporter Mark Niquette contributed to this story.

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