DeWine releases two-year Ohio budget, with lots of spending and family-focused benefits
The two-year state budget Republican Gov. Mike DeWine previewed in his State of the State speech yesterday is officially out. The plan spends nearly $87 billion over two years, but DeWine’s budget office says it’s a conservative and fiscally responsible plan.
Office of Budget and Management Director Kim Murnieks said the plan includes one-time investments like $2.5 billion in the newly announced All Ohio Future Fund for large economic development sites around Ohio. And it includes ongoing commitments, such as the Fair School Funding Plan started two years ago and an expansion of income based EdChoice private school vouchers.
“We only spend one time dollars on one time expenses, and we ensure that ongoing priorities are accounted for in the ongoing budget plan," Murnieks said.
Murnieks notes the budget estimates 2% tax growth in the first year because of the possibility of a recession and 5% in the second year.
As usual, Medicaid is the biggest chunk of the budget. But Murnieks said spending will slow after the federal COVID public health emergency ends this spring and people determined to no longer be eligible will be removed from the Medicaid rolls, which grew during the pandemic.
"Restrictions from doing eligibility redeterminations in this spring, they are being phased out by the federal government," Murnieks said. "And so we expect Medicaid enrollment to peak in the June/July time frame of this year and then begin declining as we work with counties to reassess eligibility. We have accounted for that in this budget plan because at the same time that eligibility redeterminations are beginning, the additional federal match, the enhanced FMAP, is being phased out by the federal government over calendar year 23. And so we have accounted for that."
The budget also creates a new Department of Children and Youth, funded with $2.2 billion each year. DeWine said in his State of the State speech it will consolidate programs from six different state agencies and focus on physical health of mothers and children, the mental health needs of kids, children in foster care and early childhood education.
"It is intended to be a more efficient way of administering those crucial supports for our young children," Murnieks said. "So it moves the programs and therefore the people from the agencies across the government where they currently are into that single department of children and youth."
Some other budget highlights:
- elimination of the state sales tax on baby products, which is estimated to cost the state $16 million
- $2500 per child state tax deduction, which is not refundable
- $300 million investment in career tech programs
- $40 million for training Ohio law enforcement officers
- additional $3,000 for each economically disadvantaged student in charter schools
- increases per-pupil facilities funding for all charters from $500 to $1000
- $5,000/year scholarship for high school graduates in the top 5% of their classes who go to Ohio colleges/universities
- increasing funding for the Local Government Fund and for libraries from 1.66% of general revenue fund tax revenue to 1.7%
- $100 million per year for low income housing tax credits
- $200 million total for single family housing tax credits
$28.5 million to reimburse counties for indigent defense costs
But there’s no cut in the state income tax, which Republican lawmakers have said they want. Democrats have said they wanted to see more spending that leads to better outcomes in affordable housing, education, and health care, and more in early childhood development and expanded services for kids in school.
The budget must pass the House and Senate and then the changes each chamber made worked out by the end of June so it can be sent to DeWine's desk for his signature.