While Ohio’s revised biennial budget offers a chance for reform, lawmakers have missed some opportunities to make the budget even better, a top Ohio think tank research analyst told lawmakers.
In prepared testimony to the Ohio Senate Finance Committee, Greg R. Lawson, a research fellow at The Buckeye Institute, said Substitute House Bill 96 “offers modest belt-tightening, some policy improvements, and a number of missed budget improvement opportunities, including its failure to address tax expenditures or close tax loopholes while adding a series of new earmarks.”
In prepared testimony, Lawson told lawmakers: “Ohio must remain fiscally responsible. Significant growth in Medicaid and education spending—the two largest budget items—could prove especially dangerous to the state’s long-term fiscal health and make it difficult, if not impossible, to maintain pro-growth tax policies like those adopted in the last budget. Economic uncertainty brought on by residual inflation, looming trade wars, and federal spending cuts only exacerbate the concern.”
Medicaid spending in Ohio is a hot topic at the moment. State Rep. Mike Dovilla, R-Berea, has called the Ohio Department of Medicaid’s response to questions about how the agency complies with federal law and stewards the state’s Medicaid funds “troubling,” saying improper payments have possibly resulted in more than $6.3 billion in “improperly disbursed benefits.”
Lawson noted that “Medicaid consumes more than half of Ohio’s general revenue fund spending, with an unsustainable growth rate that will soon crowd out other priorities and jeopardize pro-growth tax reforms. Fortunately, House Bill 96’s substitute version adopts several innovative guardrails to program spending.”
Guardrails include authorizing “rigorous eligibility audits” using credible third-party data, mandating annual audits of administrative costs and total expenditures of Medicaid-managed care organizations, and improving the Joint Medicaid Oversight Committee’s oversight.
The Buckeye State’s burgeoning budget has sparked a range of opinions, with dozens of people testifying in favor of and opposed to the budget proposal.
In prepared testimony to the Ohio Senate Finance Committee, Rick Carfagna, the senior vice president for government affairs for the Ohio Chamber of Commerce, told lawmakers that Republican Gov. Mike DeWine’s Executive Budget and the House-passed version “make numerous investments towards making Ohio a safe and vibrant destination to live, work, study, raise a family and operate a business.”
Chad Aldis, the vice president for Ohio policy at the Thomas B. Fordham Institute, said in prepared testimony that the budget presents “a critical opportunity to address persistent structural issues in school funding, strengthen school choice, bolster literacy and numeracy, and improve career readiness across the state.”
Jennifer Hogue with the Ohio School Boards Association called on lawmakers to replace a cash balance provision with one mandating that districts adopt a cash balance policy “setting a floor and ceiling tailored to their district’s unique circumstances,” she said.
“The Ohio House added language that requires county budget commissions to reduce local funding for districts with a cash balance or carryover of more than 30%,” Hogue said in prepared testimony. “This could lead to massive cuts in student programs or force schools to put a levy on the ballot sooner than expected.”
Hogue said cash balances are not a savings account or an emergency fund — “just the money needed to keep things running.” Hogue said lawmakers in the state House presented the change as property tax relief, but added that the change would “force districts to seek levies much more often,” and added: “While we are open to reform, we cannot support measures that limit local control or compromise a district’s ability to meet the needs of their students,” Hogue added. “Any changes must protect the stability and predictability of school funding. We welcome ongoing collaboration to ensure reforms are fair to taxpayers and preserve the educational opportunities all Ohio students deserve.”
