Ohio’s economic forecast falls nearly $777 million short of initial estimates due to COVID-19 crisis
CLEVELAND, Ohio (WOIO) - Gov. Mike DeWine said Ohio’s economy is expected to fall $776.9 million short of initial estimates made at the start of the fiscal year due to the loss of state tax revenue during the coronavirus pandemic.
The Governor said Ohio’s economic forecast was actually $200 million above estimates in February.
“Prior to the onset of the coronavirus, Ohio’s economy was strong and the budget was on track,” the Governor said during Tuesday’s briefing.
That initial figure decreased exponentially as the coronavirus pandemic impacted Ohio, the United States, and the rest of the global economies.
To help with the estimated budget shortfall, Gov. DeWine said the state will have to make $775 million in cuts over the next two months.
“Making difficult budget cut decisions now will help us down the road and will help us while we continue our discussions for the next fiscal year,” the Governor added.
- Medicaid spending to be reduced by $210 million
- $300 million reduction in funding for kindergarten through 12th grade education
- $110 million reduction in funding for higher education
- $55 million reduction in funding for other educational line items
- $100 million cuts from all state agencies, with the exception of the Ohio Department of Rehabilitation and Corrections.
“These decisions were not easy,” Gov. DeWine stated. “We did not make them lightly, but they are necessary.”
Additionally, Gov. DeWine ordered a hiring freeze in March for all state agencies that are directly involved with COVID-19 relief.
The Governor said he has no intentions for the fiscal year of 2020, which ends at the end of June, to dip into the “Rainy Day Fund." The budget supplement was established by former Gov. John Kasich and is believed to have over $2.6 billion in reserves.
“We are going to need that money, the ‘Rainy Day Fund,’ for next year and possibly the year after,” Gov. DeWine said.
A detailed look at the outline of cuts, including how public schools will be impacted, should be available on Wednesday from Ohio Budget Director Kim Murnieks, according to the Governor.
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