COLUMBUS — Ohio saw increases in its both its revenue and its general fund spending this year, and lawmakers also turned to tax hikes in a bid to increase revenues, a new report shows.
Ohio’s fiscal trajectory aligned with that of many other states in the country, according to an analysis from the National Association of State Budget Officers (NASBO). The group’s review reveals states’ general fund spending is projected to increase by 4.8 percent in fiscal 2020.
Ohio saw a decrease in its personal income tax rate and a more substantial tax increase with the state’s gas tax hike. In July, Ohio’s gas tax increased by 10.5 cents per gallon, which officials estimate could bring in an additional $865 million per year.
“Ohio’s general fund spending and revenue growth reported in the survey align fairly closely with the trends we’re seeing nationally,” said Kathryn Vesey White, NASBO’s director of Budget Process Studies.
“In recent years, we’ve seen a number of states take action to strengthen their transportation funds, and Ohio reported in this survey on the successful enactment of a motor fuel tax increase to provide additional funding support for transportation,” White said. “Like many states, Ohio has also made tremendous progress replenishing its rainy day fund since the Great Recession.”
The Buckeye State boasts a rainy day fund of nearly $2.7 billion, according to state numbers.
In a recent column, state Sen. Dave Burke, R-Marysville, said state lawmakers have “consistently decreased the individual state income tax.” He notes income taxes have decreased by nearly 50 percent since 1984 and by almost 30 percent since 2006.
“Even after all these reductions, Ohio is still revenue rich,” said Burke, who has proposed a resolution that would require a two-thirds majority of the General Assembly to pass an income tax increase. “Spending is at record levels, the rainy day fund has never been higher and Ohio’s economic condition continues to improve.”
In fiscal 2019, Ohio received $33 billion in tax revenues. The state took in $35 billion from non-tax revenues and $4 billion from other sources.
Meanwhile, state tax officials identified at least $20 million in additional sales tax revenues following the passage of House Bill 166, the state’s 2020-21 operating budget. The law authorizes the state to collect sales tax from out of state sellers and “marketplace facilitators,” particularly those who make and enable online sales.
“Ohio saw its general fund revenue collections come in above budget projections in FY 2019, as did 45 other states,” White added. “On the spending side, like most states, Ohio was able to put additional budgetary resources into K-12 and higher education, as well as other core government services, in FY 2020.”
Todd DeFeo is a contributor to The Center Square