A story from the AP says, the dire economic prediction came as Strickland also announced that Ohio's next two-year budget, which begins July 1, faces a projected $7.3 billion deficit, fueled in part by declining wages.

To a state whose manufacturing sector has shrunk and whose population has stagnated, the revelation that wages are set for a historic plunge felt like yet more dismal news. But experts are divided on how exactly to view the decline. Is it an omen that paychecks are soon to be slashed, or simply an indication of what most Ohioans already know: In this economy, their dollar buys less.

According to the Bureau of Labor Statistics, declines in real wages _ dollars earned at work, adjusted for inflation _ are most often tied to the Consumer Price Index, or CPI, a market basket of goods and services that the average person consumes each month.

When there's a price increase of something in the basket _ food, gas, electricity or electronics, for example _ the buying power of the dollars consumers earn go down.

Ohio builds its state budget every two years on two main taxes: the personal income tax and the sales and use tax. Both are closely linked to the strength of consumer buying power.

"CPI doesn't really affect your income. If you made $1,000 last year, and you make $1,000 this year, your tax will be the same," said Tom Zaino, a former state tax commissioner who now heads the Columbus office of the McDonald Hopkins law firm. "At the same time, you aren't going to feel like you have as much money the next year because things cost more."

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