Balanced approach to solve the budget crisis.
Office of Budget and Management Director, Kim Murnieks, announced that Ohio will face a $2.5 billion budget shortfall next year as a result of the COVID-19 crisis. The Governor is looking at budget cuts to make up for the loss. After cutting $775 million from Ohio’s schools and health insurance services, Governor DeWine wants to make even deeper cuts over the next 12 months.
These cuts will be harsh on our students, seniors, and families struggling to make ends meet. It is time that Ohio’s legislature puts our people and communities first!
We cannot cut resources for our schools, public health, or community programs any further.
We encourage the Ohio Legislator and the Governor to adopt a balanced approach to balancing the budget. Three simple steps would provide us with the resources we need to solve Ohio’s most pressing barriers.
Step 1: Utilize the rainy day Fund: The Ohio Rainy Day Fund has $2.7 billion in it. The State of Ohio should immediately draw down $1.25 billion to prevent further cuts to education (both K-12 and higher ed) and offer rental and housing assistance to families struggling during the economic uncertainty created by COVID-19
Step 2: Close the LLC Loophole and other tax loopholes A Tax expenditure should be narrowly crafted for a specific purpose. The LLC loophole primarily benefits lawyers and wealthy passive investors with no intent of creating jobs. By closing the LLC loophole entirely, Ohio could see up around $1 billion. The Ohio House of Representatives adopted a proposal in 2019 that would cap the LLC loophole at $100K instead of $250,000 of income. This. change could still generate $400-500 million to offset upcoming budget cuts. Closing other loopholes that are poorly targeted will only improve the equity in our tax code and generate revenue.
Step 3: Reverse the last round of income tax cuts for the wealthiest individuals. Ohio has cut our income tax repeatedly since 2005 and Governor DeWine signed a $700 million tax cut in 2019. Reversing this 4% income tax cut on the wealthiest Ohioans will help to keep teachers in the classroom this fall.
Step 4: Demand Federal Relief. The first three steps are actions that Governor DeWine and the Ohio General Assembly can take to generate needed revenue to delay and reduce budget cuts. Although, as families are struggling to find work, childcare, and questions swirl about school re-openings, Ohio will need federal relief to make sure our budget cuts don’t worsen the economy and economic reality for hardworking Ohioans.