Ohio ends fiscal year with $800 million surplus
7/2/2014COLUMBUS — Ohio ended its budget year with an as-expected surplus of nearly $800 million, money set aside to fund tax breaks and any unexpected Medicaid expenses resulting from the federal health care overhaul, the state budget director said Wednesday.
The state beat projections for the fourth consecutive fiscal year through spending cuts and better-than-expected tax revenues, budget director Tim Keen said. Overall, revenues lagged the previous year because of tax cuts in Republican Gov. John Kasich’s current two-year budget, he said.
Besides $300 million earmarked for a Medicaid reserve, the funds will pay for $76 million in tax credits for low- and middle-income Ohioans; $91 million in accelerated income-tax cuts; and $229 million for expanded income-tax breaks for small-business owners.
What’s left carries over to the new fiscal year that began Tuesday. The state rainy-day fund is at its target of 5 percent of prior-year revenues, so no additional money will be deposited there.
Keen said beating projections for four years running doesn’t indicate the state’s projections under Kasich have been overoptimistic, but that the state is managing its budget properly.
The surplus represents just 2.8 percent of Ohio’s $28.9 billion general revenue fund, so Keen said it’s a reasonable amount to have left over at the end of a fiscal year.
“We intend to produce slightly conservative economic and revenue forecasts,” he said. “And so our revenue estimates are about 1 percent over the estimate, the last couple of years we’ve come in about 2 percent over the estimate. In the grand scheme of things, that’s pretty good.”
Democrats, the minority party in both legislative chambers, have been critical in the past of the Kasich administration for holding back money that could be spent on other priorities.
Democratic State Rep. Mike Foley, a member of the budget-writing House Finance Committee, said Kasich achieved the surplus by cutting money from schools and local governments and also raised certain sales and property taxes.
“His tax shift and cuts, coupled with savings from embracing President Obama’s Medicaid expansion, means the state has more money — but at the expense of working and middle class Ohioans, and with the help of the federal government,” he said.