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Ohio Handles One Budget Shortfall, But Another Deficit Is Looming Soon

OBM Director Kim Murnieks testified on the state budget before the House Finance Committee in March 2019.
Karen Kasler
OBM Director Kim Murnieks testified on the state budget before the House Finance Committee in March 2019.

Using three quarters of a billion dollars in cuts and some reserve cash and federal Medicaid funding, the state of Ohio has staved off a budget deficit for the fiscal year that ends on June 30. But there’s a huge shortfall ahead for the year that begins on July 1.

With tax revenue predicted to be down by more than 9 percent from the projections that created the state budget last year, budget director Kim Murnieks estimates the deficit for next fiscal year is just over $2.4 billion.

That means a hiring freeze, no pay or step increases for non-union state workers, who will also have 10 furlough days, and cuts in agency directors’ salaries.

“We are already taking action to close that gap. But a significant portion of closing that gap will be continuing to contain our overall staffing costs for state government," Murnieks said.

Union leaders are expected to start negotiations with the state on Monday. Gov. Mike DeWine has said he expects to tap the state’s $2.7 billion rainy day fund at some point, but not yet.

And Murnieks also said if there were another significant outbreak of coronavirus in Ohio, that could would potentially impact the economy even harder and lead to a greater shortfall than the slow recovery that’s being predicted now.

“Kind of an economic model that looks sort of like a Nike swoosh. It is possible if there is an additional outbreak of coronavirus, then our economic model could look more like a W with another significant downturn," Murnieks said.

Gov. Mike DeWine has said he doesn't want to have to cut K-12 schools, higher education or Medicaid, which took the brunt of $775 million in cuts he ordered last month. But he has ruled out a tax increase as a possibility to deal with a deficit.

Copyright 2020 The Statehouse News Bureau. To see more, visit The Statehouse News Bureau.

Karen is a lifelong Ohioan who has served as news director at WCBE-FM, assignment editor/overnight anchor at WBNS-TV, and afternoon drive anchor/assignment editor in WTAM-AM in Cleveland. In addition to her daily reporting for Ohio’s public radio stations, she’s reported for NPR, the BBC, ABC Radio News and other news outlets. She hosts and produces the Statehouse News Bureau’s weekly TV show “The State of Ohio”, which airs on PBS stations statewide. She’s also a frequent guest on WOSU TV’s “Columbus on the Record”, a regular panelist on “The Sound of Ideas” on ideastream in Cleveland, appeared on the inaugural edition of “Face the State” on WBNS-TV and occasionally reports for “PBS Newshour”. She’s often called to moderate debates, including the Columbus Metropolitan Club’s Issue 3/legal marijuana debate and its pre-primary mayoral debate, and the City Club of Cleveland’s US Senate debate in 2012.
Karen Kasler
Contact Karen at 614/578-6375 or at kkasler@statehousenews.org.