Budget Report Shows Steep Drop In April Tax Revenue

May 6, 2020

Ohio's budget report shows revenues came in below estimates for the sales tax, auto tax, and personal income tax.

Gov. Mike DeWine announced Tuesday budget cuts that would total about $775 million, including a $300 million cut in dollars allocated to K-12 schools.

On Wednesday a new chart detailed the cuts for each school district.  The budget reductions depend on the overall wealth of the district, ranging between .6% to 2.6%, some in the tens of millions of dollars.

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," says Murnieks.

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, mostly every department 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%).