DeWine Cutting $775 Million From State Budget
Gov. Mike DeWine is making $775 million in cuts to Ohio’s budget over the next two months, as the coronavirus pandemic takes a "profound" impact on the state's economy.
Medicaid and education are the top items on the chopping block. DeWine's plan reduces Medicaid spending by $210 million, K-12 foundation payment by $300 million, $55 million from other education budget items, $110 million from higher education spending, and $100 million for all other agencies.
The cuts take effect immediately.
"We cannot go onward as if this was a normal period of time," DeWine said Tuesday at his daily coronavirus update press conference.
As of Tuesday, the Ohio Department of Health reports 20,969 total cases of COVID-19 in the state, and 1,135 deaths. That's an increase of 495 new cases in the last day, and a higher-than-average increase of 79 new deaths.
According to the governor, Ohio has seen a revenue swing of $1 billion in a span of just two months. By the end of February, state revenues for the fiscal year to that point were ahead of estimates by over $200 million. Just two months later, in April, revenues plummeted to $776.9 million below estimates.
"That is the most dramatic swing I can ever recall," Lt. Gov. Jon Husted said.
Those shortfalls are expected to continue for the foreseeable future, even as Ohio begins the process of restarting the economy. The state on Monday allowed offices and manufacturers to open again, although many remain voluntarily closed. Retailers are slated to follow on May 12, and an announcement on bars, restaurants, barbershops and other businesses is expected in the next week.
The plan does not include tapping into Ohio's $2.7 billion Rainy Day Fund just yet, DeWine said, a move some state lawmakers and local officials say should be made immediately. Instead, DeWine said he's looking to keep the budget balanced for the next few months.
"We are going to need that money, that Rainy Day Fund, for next year and possibly for the year after," DeWine said. "This rain is not a passing spring shower. It could be, and we don't really know, but it could be a long, cold, lingering storm."
DeWine said he consulted with legislative leaders on the cuts.
"These are basically our decisions, but everything we do in regard to the budget, we work on with the state legislature," DeWine said.
While he acknowledges that education cuts will be painful, especially for the state's most vulnerable students, the governor said the state's goal is to prevent more dramatic cuts in the future. Funding for wraparound services will continue.
"We do not intend to reduce essential services to people who have been hurt by this pandemic," DeWine said.
No cuts are planned for the state prison system. DeWine said a big part of the prison budget goes toward staff, and the pandemic has exacerbated existing staffing issues inside the prison system. Thousands of inmates and hundreds of officers have tested positive for COVID-19.
Existing state agency freezes on hiring, pay increases and promotions will remain in place. The state's travel freeze will also continue, except for staff providing direct emergency response. Agencies are being told to immediately stop new requests for contract services, and suspend purchasing authority for non-essential services.
State budget director Kim Murnieks is expected to provide more details on the state's cuts Wednesday.