COLUMBUS — Saying immediate actions are necessary to keep the state’s budget balanced, Ohio Gov. Mike DeWine ordered hundreds of millions of dollars in cuts to state agencies.
“In the springtime, the impact of the COVID-19 pandemic on the global economy, and Ohio’s revenue, was dire. With this, reductions were made to the state biennial budget,” DeWine said. “With this executive order, we are finalizing current year budget reductions at $390 million across all agencies, which is less than the cuts implemented last year.”
At the same time, he ordered $160 million, which was previously withheld, to be released to state K-12 schools and $100 million to higher education.
“Because the cuts implemented today are less than last year’s reductions, OBM Director [Kimberly] Murnieks is authorized to allot the Department of Education an additional $160 million; and to the Department of Higher Education an additional $100 million of enacted fiscal year 2021 General Revenue Fund appropriations previously withheld,” DeWine said. “As many schools, colleges and universities return to in-person learning, it’s important that the funding be reinstated.”
Over the course of last year, DeWine ordered state agencies to cut spending and implement money saving options like salary cuts, a freeze on employee travel and hiring freezes. Those efforts saved around $775 million in the state’s General Fund for fiscal year 2020. Those are ongoing for fiscal year 2021.
DeWine’s current order for reductions does not apply to debt service, pension payments, building rent and some other expenses.
Ohio’s OBM release of December’s economic summary showed the state’s sales and use tax collections nearly 5% above its estimate, and over the course of the first half of the fiscal year, collections are 5.2% over state estimates.
In particular, auto sales tax revenues were 10.7% above December 2019, marking the seventh straight month auto sales tax exceeded the state’s predictions.
“As has been demonstrated since June, non-auto sales tax performance has been more exuberant than expected for an economy still in recovery and contending with an ongoing public health crisis,” the state’s December economic report said. “As the public and retailers have adapted to the health environment, consumption of goods has remained much stronger than would have been expected, even as infection rates increased over the last several months and as hundreds of thousands of Ohioans remain out of work.”