Earlier today, Gov. Mike DeWine unveiled his administration’s proposed state budget for the next biennial period, covering fiscal years 2021 and 2022.
Contained in the proposed budget are a number of proposals designed to assist businesses still struggling from COVID-related fallout. The centerpiece of his budget proposal is a $1 billion package he’s calling the “Investing in Ohio Initiative.” The $1 billion initiative provides $460 million to assist small businesses and $450 million in targeted community investments.
The $460 million “Sustaining Our Businesses” package prioritizes relief for industries that have been hit especially hard by the pandemic and provides:
- grants of up to $30,000 to bars and restaurants;
- $10,000 grants to businesses that qualified for the state’s Small Business Relief Grant program but who have yet to receive assistance;
- grants of up to $30,000 for the hotel and lodging industry;
- grants of up to $30,000 for indoor entertainment venues like movie theaters and bowling alleys;
- grants of up to $10,000 for new businesses that had just been established when the pandemic hit in March 2020
The “Enhancing Our Communities” investment package focuses on boosting local infrastructure projects and includes $250 million for expanding broadband access.
In addition, the budget recognizes the significant workforce challenges the pandemic has caused by proposing funding for an additional 5,000 technology-focused credentials through the existing TechCred Program – an innovative program strongly supported by the Ohio Chamber that was just created in the last budget bill, enacted in 2019 – allocating $15 million for upskilling in economically challenged areas of the state, and $16 million to help high school juniors and seniors earn the credentials needed to move from the classroom to the workforce to meet the needs of unfilled jobs.
Equally important, there are no new taxes in the budget proposal. The Governor stated at his news conference that he would protect against any tax increase. This is welcome news. Last budget cycle the Governor’s proposal contained no significant changes to the tax code, but the legislature proposed significant changes to the tax code, altering the Business Income Deduction (BID). The changes to the BID were eventually narrowed and then abandoned in subsequent legislation. Hopefully, in this cycle, the tax code remains intact throughout the legislative process.
Overall, the fiscal year budget request is $85.4 billion for fiscal year 2022 and $85.8 for fiscal year 2023. The FY 2022 number is a 1.8% increase over the current year and the FY 2023 budget is only one-half percent increase compared to the 2022 request.
The components of the Investing in Ohio Initiative are all one-time spending programs, the funding for which will come from federal CARES Act money previously authorized by Congress, budgetary savings from various prior budget cuts, and the refinancing of state debts. The proposal contains no plans to tap into the Budget Stabilization (“Rainy Day”) Fund, which currently has a balance of almost $2.8 billion.
The proposal will now be drafted into legislation and will be introduced as a House bill in the next couple of weeks. After weeks of hearings the bill will modified and sent to the Ohio Senate for review and deliberation.
In a statement to the media, Ohio Chamber of Commerce President & CEO, Andy Doehrel, applauded the effort to craft a budget that focused on economic recovery and one that positions Ohio to rebound strongly once the COVIS-19 public health pandemic is subdued. Here is a link to the full statement.
Once the budget bill is introduced, the Ohio Chamber will examine the proposal in detail, discuss it with our policy committees, and continue to update you with information about its progress. The initial news of no new taxes is good news, but we will need to continue to advocate for that position as the legislature begins it work.