Historically, the General Revenue Fund (GRF) budget has received the lion’s share of attention during biennial budget debates; but to get the full fiscal picture, it is necessary to review overall spending which includes billions of dollars in non-GRF funds.

GRF spending in Gov. Kasich's budget proposal decreases by 5.1% in FY18, but increases by 2.3% in FY19, for a total GRF budget of nearly $67 billion over the course of the two years.

However, the total appropriations growth rate, including all funds, exceeds expected inflation and is projected to increase 4.4% in FY18 and 1.8% in FY19. These increases equal an overall spending package of $144.2 billion over both fiscal years. The biggest single driver of increased overall spending is Medicaid and its expansion. Costs for Medicaid will total $56.9 billion or 39.5% of all state spending.

The budget’s continued heavy reliance on federal dollars is a cause for serious concern. Federal dollars account for nearly 31% of all GRF and makes up a significant non-GRF source of Medicaid funding. With the significant uncertainty surrounding future federal policy coupled with spending changes that could occur in Washington, any reduction of federal funds to Ohio could blow a massive hole in Ohio’s total budget.

To better prepare for potential reductions in federal funds, the possibility of a recession, and, in general, to more adequately right-size Ohio's government, policymakers need to:

• Go through the budget, line item by line item, and reduce appropriations that are well above historical spending patterns.
• Stop funding programs through tax dollars that would be better funded by private business or philanthropy.