Ohio's Gov. DeWine cuts state budget

Ohio's Republican governor, Mike DeWine, has come in for well deserved criticism from conservatives for his lockdown policies.  But the governor is doing one thing right: he's cutting the state's $32.4-billion budget, which by law has to be balanced, by $775 million.

This is the direct result of the precipitous drop in the state's income and sales tax receipts upon which much of Ohio's budget relies.  The income and sales tax sources are obviously dependent on employment and commercial activity, and both have been severely diminished by the lockdown.

Here is where the cuts are coming from, according to the Plain Dealer. 

The cuts include $300 million reduction in K–12 public school funding, $210 million from Medicaid and $110 million from college and university funding, DeWine said.

DeWine said all state agencies will see their budgets cut, adding up to $100 million, except for the state Department of Corrections, which operates the prisons.

DeWine is not tapping the state's $2.7-billion rainy day fund at this time, saying it will be needed in the future.  True enough, as the fiscal year ends on June 30, which means that Ohio will enter the next budget year needing to address another revenue shortage.  This seems like a prudent approach.  Liberals disagree.  The leftist Policy Matters Ohio says that instead of the cuts, the rainy day fund should be used and tax breaks for businesses should be eliminated.  Yes, that's the ticket for recovery: kick small business when they're down.  Nonetheless, DeWine is likely to get his way on the budget, as Republicans have strong majorities in both houses of Ohio's Legislature. 

It should be noted that DeWine's proposed cuts fall more heavily on the Democrat constituency than the Republican one.  This is not out of any vindictiveness on DeWine's part.  By any measure, the man is a moderate.  Rather, it's because when government budgets need to be significantly cut, that's where the money is.  The Democrats are the party of government, after all.  

It will be interesting to see how other states handle the hits their budgets will take as a result of the Wuhan virus.  I suspect that the blue states will run to Washington while the red ones will mostly try to address the problem as best as they can.  We'll know soon enough.

Ohio's Republican governor, Mike DeWine, has come in for well deserved criticism from conservatives for his lockdown policies.  But the governor is doing one thing right: he's cutting the state's $32.4-billion budget, which by law has to be balanced, by $775 million.

This is the direct result of the precipitous drop in the state's income and sales tax receipts upon which much of Ohio's budget relies.  The income and sales tax sources are obviously dependent on employment and commercial activity, and both have been severely diminished by the lockdown.

Here is where the cuts are coming from, according to the Plain Dealer. 

The cuts include $300 million reduction in K–12 public school funding, $210 million from Medicaid and $110 million from college and university funding, DeWine said.

DeWine said all state agencies will see their budgets cut, adding up to $100 million, except for the state Department of Corrections, which operates the prisons.

DeWine is not tapping the state's $2.7-billion rainy day fund at this time, saying it will be needed in the future.  True enough, as the fiscal year ends on June 30, which means that Ohio will enter the next budget year needing to address another revenue shortage.  This seems like a prudent approach.  Liberals disagree.  The leftist Policy Matters Ohio says that instead of the cuts, the rainy day fund should be used and tax breaks for businesses should be eliminated.  Yes, that's the ticket for recovery: kick small business when they're down.  Nonetheless, DeWine is likely to get his way on the budget, as Republicans have strong majorities in both houses of Ohio's Legislature. 

It should be noted that DeWine's proposed cuts fall more heavily on the Democrat constituency than the Republican one.  This is not out of any vindictiveness on DeWine's part.  By any measure, the man is a moderate.  Rather, it's because when government budgets need to be significantly cut, that's where the money is.  The Democrats are the party of government, after all.  

It will be interesting to see how other states handle the hits their budgets will take as a result of the Wuhan virus.  I suspect that the blue states will run to Washington while the red ones will mostly try to address the problem as best as they can.  We'll know soon enough.