Coronavirus: What does $775 million budget reduction mean for Ohio?

UPDATE @ 10:50 p.m.: Gov. Mike DeWine and Lt Gov. Jon Husted announced during Tuesday’s daily press conference that because the state has taken a major financial hit from the coronavirus pandemic, there will be a $775 million budget reduction in General Revenue spending for the remainder of the fiscal year.

This reduction includes multiple cuts in the area of education.

Tuesday evening, Dayton Public Schools Superintendent Elizabeth Lolli responded this way: “The Dayton Public Schools are saddened by the governor’s announcement to cut public school funding. During this pandemic, reduction of funding for any school widens the equity gap that has become so evident in recent weeks. This is very unfortunate news for students across Ohio.”

Another superintendent, who declined to be identified by name, told News Center 7′s Sean Cudahy, “it would be premature for me to have a conversation about this until I have more firm numbers and have time to evaluate what this means for us in regards to our budget.”

Paul Leonard, a former lieutenant governor and now Wright State political science professor, said, DeWine’s announcement could have area school districts looking to pass more tax levies.

“When the state starts cutting money and it affects things like school...a lot of the time the government looks to the taxpayer,” he told Cudahy. “The taxpayer is not working, so I’m not sure the taxpayer can spend more money or pay more money in taxes,” Leonard said.

The governor explained he will not tap into the “rainy day fund,” as the end of 2020 financial year ends June 30, and the state wants to save the fund for that time.

Just how much of a financial hit has Ohio taken?

  • The state is below budget by $776.9 million. This is close to a billion-dollar change since February, when the state revenues were ahead of budget by more than $200 million.

What does this budget cut mean for the state?

  • Medicaid spending reduced by $210 million
  • K12 Foundation: $300 million
  • Other education budget line items: $55 million
  • Higher Education: $110 million
  • All other agencies: $100 million
  • State agencies will continue to operate under the travel freeze, with exceptions for those staff providing direct response to the emergency.
  • DeWine has ordered a freeze on pay increases and promotions of unclassified and exempt staff, and a freeze on new contract series for the state.
  • All agencies in the state are taking cuts, with the exception of the Department of Rehabilitation and Corrections.

"I have asked every agency director to continue to identify savings in their budgets for the remainder of this fiscal year and next fiscal year,” DeWine said.

“If we don’t make these cuts now, the cuts we’ll have to make next year will be more dramatic.”

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