The state’s tax revenue report for July was the first one showing gains in three months. But Ohio’s chief budget officer says she expects the economic effects of the pandemic to last for far longer than the pandemic does – perhaps years.
July’s income tax collections were boosted by the delayed tax deadline from April. And sales tax collections went up by 36% since June, fueled by pent up consumer demand, federal stimulus checks and an additional $600 a week in unemployment benefits.
But Office of Budget and Management Director Kim Murnieks said spending levels are headed back down and that extra $600 a week has expired. And Medicaid spending went up 12% since June and caseloads were up 6.7%. Murnieks said that’s in line with what was expected but that they’re planning for the worst.
"We expect that our state revenues may not return to calendar year 2019 levels until calendar year 2024 and perhaps beyond," Murnieks said.
Murnieks said the state is working with agencies on spending and still negotiating with its unions. But she expects to have to gradually spend the $2.7 billion in the rainy day fund over several years.
But Murnieks said she's still optimistic.
“We still expect this economic curve to look like a Nike swoosh with a dramatic downward trend that we’ve seen," Murnieks said. "We hope that we’ve been through the worst and that we’re now in that long, very slow recovery line that will take us several years."
Copyright 2020 The Statehouse News Bureau. To see more, visit The Statehouse News Bureau. 9(MDAxMzY2MjQ0MDEyMzcyMDQ5MzBhZWU5NA001))
