MANSFIELD— Local governments and authorities throughout Ohio are facing tough decisions in the weeks and months ahead. With the sharp drop in revenues across the state; public officials—city mayors, county commissioners, school superintendents, and others are eyeing budget reductions that may continue throughout the year.
Ohio Gov. Mike DeWine announced Tuesday he’s cutting $775 million from the state budget in the next two months because of revenue losses due to the pandemic. DeWine said the state went from running $200 million ahead in revenue estimates in February to the nearly three-quarter billion dollar drop last month.
Just to make it clear, DeWine’s new funding cuts exceed the three-quarter billion threshold—an action he believes to be necessary now, in order to avoid more severe cuts down the road.
· Medicaid: $210 million.
· K12 Foundation Payment Reduction: $300 million.
· Other education budget line items: $55 million.
· Higher education: $110 million.
· All other agencies: $100 million.
· Total cuts: $775 million.
Governor DeWine is cutting $775 million from the state budget, which will have a considerable impact on public schools.
Richland County schools take a hard hit
With nearly three million dollars in cuts looming ahead for Richland County schools, superintendents will need to adjust quickly as they prepare to enter into unchartered territory—safely educating children while living in a world plagued by the coronavirus.
MANSFIELD INITIATES BUDGET CUTS
In Richland County’s population center, the City of Mansfield projected a 20% loss in revenue due to the coronavirus and announced their initiation of cuts, directing the Mansfield Fire Department to reduce overtime and not to fill positions when personnel are scheduled off. City officials are saying the actions are necessary in order to prevent future layoffs. Safety services commands the largest share of Mansfield’s budget, providing funding for Police, Fire and 911 Communications.
TAP INTO RAINY-DAY FUNDS?
Local governments, although no longer closely rely on the state Local Government Fund; many do have “rainy day funds” or emergency stabilization funds. The State of Ohio has $2.7 billion in their rainy day account, while Richland County officials reported a rainy day fund amount of 1.3 million.
But the ability of cities to tap into these taxpayer-funded accounts tend to be highly politicized actions, historically split between the political parties. Democrats many times favor using the funds to save struggling budgets, while Republicans are typically disinclined in opening the piggy bank.
Both positions make sense—wanting to save money because you never know when the next big disaster might hit, yet at the same time, if there’s money in the account and it's needed right now in order to prevent downsizing, why not use it?
Which position outweighs the other depends on how much revenues are lost and what’s at stake.
Governor DeWine says he’s not tapping Ohio’s rainy day fund until the new fiscal year beginning in July. “Rainy day money will be needed later this year and next,” he said.
While the entire toll of COVID19 is not yet known and may not be for a while; it’s clear the coronavirus has wreaked havoc in our communities and has touched every corner of the world. Businesses have closed permanently, lives have been lost, and the future of the American education system is now in limbo.
We’re definitely in this together, Ohio.