Kimberly Murnieks, Director of the Office of Budget and Management, who is the Chief Financial Officer under the leadership of Governor DeWine testified on June 17, 2021, on Amended Substitute House Bill 110, the fiscal years 2022 and 2023 Biennial Operating Budget.
In her testimony she referenced:
- Ohio’s economy is quickly rebounding to a firm pre-pandemic position.
- The Ohio unemployment rate continues to decline, falling from 5.6 percent in December 2020 to 4.7 percent in April. Ohio has also had a remarkable decrease in unemployment insurance filings. As of the week ending May 29, 2021, total unemployment insurance claims were 74 percent less than during the peak week of filings in April 2020, and initial filings are down more than 50 percent since the last week in December.
- There has also been a dramatic drop in the number of employers considering layoffs in the near future.
Ohio’s strong revenue recovery has been supported by the passage of additional federal stimulus packages in December 2020 and March 2021. The spending by Ohioans as they received stimulus funds resulted in sales tax revenues for April and May combined that were 20.1 percent higher than estimated. Through eleven months of the current fiscal year 2021, General Revenue Fund (GRF) tax revenues are $1.170 billion, or 5.2 percent, above estimate.
The forecasts for fiscal years 2022 and 2023 were revised upwards. Total GRF baseline tax revenue is now estimated to be $26.5 billion in fiscal year 2022, an upward revision of nearly $1.7 billion from the original forecast. For fiscal year 2023, total baseline tax revenue is estimated at $27.2 billion, reflecting a $1.6 billion increase from the Blue Book baseline forecast.
Once the adjustments for fiscal year 2021 income tax revenue for the amounts received in fiscal year 2021 that would ordinarily have been received in fiscal year 2020 (because of the postponement of last year’s annual return filing date), total GRF baseline tax revenue growth in fiscal 2022 is forecasted to be 4.3 percent, slowing to 2.9 percent in fiscal year 2023.
“This budget is carefully constructed to allocate one-time resources to one-time expenses and to allocate recurring revenues to ongoing programs. In light of this updated forecast, it is even more crucial that we keep a close eye on our budget’s structural balance. It is vital that our decisions avoid creating a “budget cliff” two years from now,” said Kimberly Murnieks, Director of the Office of Budget and Management in her testimony.
“It is clear that Ohio’s strong measures to address the COVID-19 pandemic head-on – both from a health and budget standpoint – worked. We must stay focused on the long term to maintain a structurally balanced budget so Ohio’s people and communities – and our state economy – continue to surge ahead,” she continued in her testimony.
NFIB joined with Ohio’s other five major business organizations to issue a joint statement of support for the DeWine Administration’s proposal to refrain from spending all of the nearly $2 billion GRF surplus that is estimated in each of the 2022 and 2023 fiscal years. This proposal was suggested by Kim Murnieks, Director of the Office of Budget Management, during her testimony to the legislature’s House Bill 110 Conference Committee.
The Ohio Business Roundtable, Ohio Chamber of Commerce, NFIB Ohio, Ohio Manufacturers’ Association, Ohio Farm Bureau, and the Ohio Council of Retail Merchants issued the following statement:
“Ohio has emerged from the pandemic in stronger than anticipated economic standing, however, the long-term impact on our state’s economy is still unknown. For that reason, we support the DeWine Administration’s proposal to exercise fiscal restraint with the sizeable surplus that is estimated in the updated budget forecasts for the biennium.
“Although our fiscal indicators appear strong, as outlined today by Director Murnieks’ budget testimony, we believe the numbers may not be indicative of the entirety of the economic consequences that our state may face in the coming months and years. Furthermore, these positive estimates can largely be attributed to the actions taken to reduce spending during the pandemic, meaning this surplus should be treated as one-time money much the same as the American Rescue Plan stimulus. It is wise to be judicious with the excess money that the state will be receiving in order to provide time for the economy to fully stabilize. Doing so will allow us to better identify the best—and most impactful—course for investing this money.
“We applaud the General Assembly and the DeWine Administration for their careful deliberation on this matter.”
You can view a PDF of the full testimony of Kimberly Murnieks, Director of the Office of Budget and Management.
You can also view a PDF of the joint letter from the six major business groups in Ohio, including NFIB.
