Message from Beth -- July 23, 2020
The State of Ohio finished Fiscal Year 2020 spending $865 million less than anticipated, driven largely but not entirely by $775 million in budget cuts in the wake of the coronavirus pandemic. Still, the coronavirus impacts were felt more severely in prior months as overall tax receipts for the fiscal year were below estimate by about $1.1 billion, or 4.6%.
Despite losing a significant amount of tax revenue due to the coronavirus pandemic and subsequent business closures, the state closed out Fiscal Year 2020 without dipping into rainy day funds.
State Budget Director Kimberly Murnieks said the overall figure for Fiscal Year 2020 was a little better than anticipated when the coronavirus pandemic first hit. See the Office of Budget and Management's Monthly Financial Report.*
The overall budget picture did help a little bit with the expected fiscal situation in Fiscal Year 2021, the director said. The biennial budget had assumed about $600 million in carryover from FY 2020 to FY 2021, and the administration expected it would have to spend that down. The June revenue coming in better than expected meant they were instead able to carry over even a little bit more than expected.
"That puts us on improved footing to start FY 21 but we are still very cautious of the situation," she said.
According to the Legislative Service Commission's Budget Footnotes the economy has started to ramp up slowly.
"Economic activity began to recover in May and June, after plunging in late March and in April," the report said. "The pace of activity remains far short of prepandemic levels and may now be threatened by a resurgence of COVID-19 infections and renewed shutdowns to limit its spread. Total employment rose in the latest two months, partly reversing the decline in the previous two months."
As always, if you have any questions, feel free to contact me.
*Source Gongwer News