Ohio Budget Director Expects $3B Surplus Over Next Two Years
The state budget process began during the pandemic, when schools and businesses were closed, unemployment numbers were at double digits, and terrifying predictions of death tolls were circulating. A year later, the state and Ohioans are flush with federal COVID relief money, so the budget picture has changed a lot.
Gov. Mike DeWine’s budget director Kim Murnieks said she expects the state to have a surplus of $1.7 billion by the end of the fiscal year on June 30, and a $1.6 billion surplus in June 2022.
That’s $3 billion more than the deficit the state had predicted.
Murnieks had said last June that a major shortfall could be looming, and last summer she was concerned the effects of the pandemic might last years. She had presented a budget that was more conservative than estimates legislators had received from their researchers, but said a few weeks later that it appeared the conditions had improved such that the state's rainy-day fund might not need to be used, which DeWine had indicated was a possibility, but one he wanted to hold off on.
In her testimony on the new revenue numbers, Murnieks had a warning for lawmakers on the budget conference committee, who might want to increase the 2% tax cut in the House budget and the 5% cut in the Senate version.
“It is now even more important to carefully plan a portion of this budget as a one-time surge to address our citizens’ most pressing needs today, including the governor’s priority economic package and broadband and community infrastructure," Murnieks said. "Furthermore, given the uncertainties, OBM recommends that a significant portion of the additional revenue that we now forecast in this budget be carried forward in the state’s GRF [general revenue fund]as a buffer during these volatile times.”
While all sales tax revenue is up 8.6% year-to-date, Murnieks said she’s concerned that revenues from cigarette and alcohol taxes also remain well above estimates.
The Legislative Service Commission, which does research for lawmakers, had slightly lower revised numbers, but still totaling more than $2 billion more over the two-year budget.
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