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Ohio's Tax Revenues Dropped Precipitously In April, As DeWine Slashes Budget

Office of Budget and Management director Kimberly Murnieks gestures during the news conference rolling out the FY 20-21 budget in March. Standing alongside are Gov. Mike DeWine (left) and Lt. Gov. Jon Husted.
Karen Kasler
/
Ohio Public Radio
Office of Budget and Management director Kimberly Murnieks gestures during the news conference rolling out the FY 20-21 budget in March. Standing alongside are Gov. Mike DeWine (left) and Lt. Gov. Jon Husted.

Ohio's tax revenues for April finished $866.5 million below estimates, the Office of Budget and Management announced Wednesday.

Earlier this week, Gov. Mike DeWine outlined budget cuts that would total about $775 million, in order to balance budget issues caused by the coronavirus pandemic.

The state's sales and use tax revenues were down 24% ($236.7 million) from estimates, while income tax revenues dropped 50.5% ($635.7 million). More than 1 million Ohioans have been put out of work in the last two months.

DeWine's cuts include a $300 million reduction in money allocated to K-12 schools. On Wednesday, the state released a new chart detailing the cuts for each school district.  The budget reductions depend on the overall wealth of the district, ranging between 0.6% to 2.6%, some in the tens of millions of dollars.

Columbus City Schools, the state's largest school district, received a $10 million cut.

Kimberly Murnieks, direct of the Office of Budget and Management, says they tried to align the cuts with a district's ability to adjust.

"We tried to find a measure, a formula whereby we could ensure that those with the least capacity to adjust to a reduction were those that had the least amount of reduction applied," Murnieks says.

Medicaid will see a spending cut of $211 million. Murnieks says the details are still being worked out with the Department of Medicaid, which will then need initial approval from the Center for Medicaid Services (CMS). She says a large portion of those cuts will be implemented through managed care rate changes.

"It's not a cut that will impact the ability of individuals to either be enrolled in Medicaid or to access services, especially during the pandemic," says Murnieks.

As DeWine explained, most departments in the state will see a budget cut in the next two months. Medicaid and K-12 education spending represent the largest cuts in dollar amounts because they're the biggest chunks of the overall General Revenue Fund budget.

The state prison system is another large budget but will not see a funding reduction. DeWine says that budget depends on the prison population and adds that the prison system still needs money to implement mitigation efforts to fight the coronavirus.

The cut to Medicaid represents a 1.4% reduction to the program's GRF budget. The $300 million cut to the K-12 education fund is a 4.3% reduction to its budget in the GRF.

While most tax revenue was down dramatically, the budget report showed increases for cigarette and tobacco taxes (20.5%) and alcohol taxes (24.4%).

Andy Chow is a general assignment state government reporter who focuses on environmental, energy, agriculture, and education-related issues. He started his journalism career as an associate producer with ABC 6/FOX 28 in Columbus before becoming a producer with WBNS 10TV.