COVID-19 Alert - May 5, 2020

Governor Announced FY 2020 State Budget Cuts:

• Governor DeWine explained the profound impact that COVID-19 has had on Ohio’s economy, nothing that prior to the pandemic, the state’s economy was strong and state revenues were significantly ahead of projections. 

• In Ohio, we have a two-year budget cycle. Each fiscal year runs from July 1st to June 30th, and we are now starting the 11th month of our 24-month budget cycle. The Ohio Constitution requires our state budget to be balanced at the end of each fiscal year. 

• In the month of April, revenues took a dramatic downturn and estimates indicate a $776.9 million budget deficit by June 30, 2020. (For perspective, the $776.9 deficit is roughly equal to the state’s monthly spend on primary and secondary and higher education). 

• Governor DeWine announced that he will not withdraw funds from the Budget Stabilization Fund (“rainy day fund”) to balance the budget over the next two months as he anticipates the rainy day fund will need to be used in the next fiscal year, and possibly the fiscal year after.

• In order to address the anticipated budget deficit and meet the Constitutional requirement to balance the state’s budget, Governor DeWine announced $775 million in cuts for the current fiscal year ending June 30, 2020. The cuts will be made in the following areas:

  • Reduce Medicaid spending: $210 million

  • K-12 education foundation payment reduction: $300 million

  • Reduce other education budget line items: $55 million

  • Higher education reduction: $110 million

  • All other agencies cuts (except Ohio Department of Rehabilitation and Corrections): $100 million

• Since 86.2% of the state budget is distributed as subsidies for education, Medicaid, local government and education, these are the areas where most of the cuts will occur.  9.4% of the state budget is used for the operations of state government and 4.5% goes toward debt service.

• Governor DeWine explained that his previous orders to state agencies remain in effect and prohibit hiring, pay raises and promotions, non-essential travel and non-essential purchases. 

• Office of Budget Management Director Kim Murnieks will provide further details on these cuts tomorrow - Wednesday, May 6.

Re-Opening Announcements from Industry Advisory Groups:

• Governor DeWine received reports from the various industry re-opening advisory groups making recommendations on how to re-open restaurants and bars, hair salons and daycares.  He is currently reviewing the plans and hopes to make announcements on Thursday about the re-opening of these businesses. 

COVID-19 CareLine Reminder:

• Ohio Department of Health Director Dr. Amy Acton reminded viewers that the state set up a mental health care line to assist struggling Ohioans during the crisis. The CareLine is available 24/7 at 1-800-720-9616.