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The Buckeye Institute Identifies Nearly $3 Billion Ohio Can Use to Fight COVID-19 and its Impact

Apr 09, 2020

Columbus, OH – In a new policy memo, Policy Solutions for the Pandemic: Redirecting State Resources to Fight COVID-19 (see full text below or download a PDF), The Buckeye Institute identifies nearly $3 billion in Ohio’s bloated state budget that could be used to fight against the pandemic and its aftermath.

“Ohio families and businesses are suffering and they continue to sacrifice and make difficult choices during this public health and economic crisis,” said Greg R. Lawson, research fellow at The Buckeye Institute. “Ohio’s government must do the same by redirecting state spending, closing tax loopholes, and refocusing the state budget to address the urgent public health and economic concerns created by COVID-19. These changes will see Ohio through these trying times.”

This new policy memo builds on the recommendations The Buckeye Institute made in Policy Solutions for the Pandemic: How Ohio Can Fight the Impact of Coronavirus, which outlined immediate actions policymakers can take to ensure Ohio is ready to fight and recover from the pandemic. The Buckeye Institute’s recommendations can be found at:
www.BuckeyeInstitute.org/Policy-Solutions-for-the-Pandemic.

Ohio has adopted a number of Buckeye’s recommendations to boost the state’s health care system and support Ohio’s workers, small businesses, and economy. Ohio has:

  • Increased telehealth access and monitoring;
  • Extended universal recognition of out-of-state medical licenses to doctors and physician assistants;
  • Permitted pharmacists to test for COVID-19;
  • Enlisted medical and nursing students to support doctors and nurses fighting COVID-19;
  • Begun to eliminate unnecessary budget commitments;
  • Instituted a hiring freeze in state government; and
  • Allowed establishments with an existing liquor permit to sell and deliver alcohol on carryout menus. 

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Policy Solutions for the Pandemic
Redirecting State Resources to Fight COVID-19

By Greg R. Lawson
April 9, 2020

The Buckeye Institute’s Recommendation
Ohio should redirect state spending, close tax loopholes, and refocus the state budget to address the urgent public health and economic concerns created by COVID-19. Prudent cuts to a bloated budget could free up nearly $3 billion in Ohio’s fight against the pandemic and its aftermath.

Background
As The Buckeye Institute warned last year, Ohio’s budget is too bloated to withstand an economic downturn. Tragically, that downturn arrived with a pandemic that has ignited statewide layoffs, skyrocketing unemployment claims, and rapidly declining tax revenues that all coincide with new emergency spending for a public health system robust enough to meet the anticipated surge in COVID-19 patients. The CARES Act and the disaster declaration will provide federal assistance, but Ohio must have a balanced budget, which will require cutting nonessential spending and redirecting resources to the more immediate COVID-19 response. 

Governor DeWine has already embraced our recommendation to freeze nonessential state hiring, and he has directed state agencies that are not frontline COVID-19 responders to cut spending up to 20 percent, which will save approximately $1 billion. Unfortunately, Ohio will need even more belt-tightening to fight off this pandemic and limit its pernicious economic effects. Here is where to begin:

  • Adopt additional Piglet Book recommendations. Savings: $1.5 billion.  
  • Defer state parks repairs. Savings: $1 million.
  • Redirect half of H2Ohio spending. Savings: $86 million.
  • Redirect $125 million in education spending. Savings: $125 million.
  • Close tax loopholes. Savings: More Than $100 million.

Buckeye’s well-known Piglet Book identifies $2.5 billion that could be saved with more prudent spending choices, including more than $55 million spent unnecessarily on TourismOhio, the Ohio Arts Council, Ohio History Connection, and the Ohioana Library Association that the state could redirect to pandemic-related essentials. But even these savings will not keep pace with expected revenue losses and rising COVID-19 spending. 

Ohio may also need to reduce popular, worthwhile program spending such as the $172 million H2Ohio Fund to improve water quality. The immediate crisis calls for at least half of this fund—$86 million—to be redirected to public health. Similarly, the state should repurpose much of the well-intended $675 million slated for student wellness and success, inasmuch as $400 million is appropriated for the next fiscal year, and no less than $125 million of that should be redirected to COVID-19 response. Finally, as Buckeye has urged, Ohio should close multiple tax loopholes that cost the state more than $100 million that could be used in the response to COVID-19.

Conclusion
Ohio families and businesses are suffering. They continue to sacrifice and make difficult choices during this public health and economic crisis. Ohio’s government must do the same. Tough spending cuts, repurposed funding, and strategic tax reforms should all be used to see Ohio through these trying times.  

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Piglet Book® is a registered trademark of Citizens Against Government Waste and is used with their permission.