Here's What You Need To Know About DeWine Budget Plan Coming Friday

Ohio Gov. Mike DeWine has described much of what's in his children-first agenda ahead of Friday's unveiling of his first state budget recommendations to lawmakers.

And he's shown he is not afraid to spend some money.

In a series of events around Ohio in recent days, the first-year Republican detailed many of his priorities for Ohioans embedded in his $66 billion-plus spending plan for the two years beginning July 1.

The budget preview he has offered is heavy on boosting spending to benefit needy children, but it also contains initiatives to create jobs in low-income areas, address the deadly opioid scourge and protect Lake Erie and Ohioans' water supplies. This operating budget is separate from the state transportation budget, which contains DeWine's proposed gas tax increase now before the Senate.

The wish list DeWine hopes to sell to the fiscally cautious Republicans ruling the General Assembly is not timid. The additional spending outlined by DeWine thus far could reach nearly $445 million over the next biennium. To put that in context, it is nearly twice the increase in K-12 classroom funding between mid-2017 and mid-2019.

DeWine has pledged that his general revenue fund budget will contain no tax increases, but it is nearly certain not to seek any major reductions in income, sales or business taxes, either.

Unlike the transportation budget, which was in such a hole that DeWine proposed an 18-cent gas tax increase that has since been whittled down by the House, DeWine inherits an operating budget in decent financial shape to pursue his agenda.

In February’s revenue report, Ohio Budget Director Kim Murnieks projected that the state would end the current fiscal year June 30 with a $389 million surplus. DeWine has said he will not add money to Ohio's record-high $2.7 billion rainy day fund, but neither does he plan to draw down the amount.

Through eight months of the fiscal year, state tax collections are $503 million, or 3.4 percent, ahead of the prior year. Sales taxes (31 percent of state revenue) are running nearly 2 percent ahead of estimates while income taxes (25 percent of revenue) are 2 percent below projections.

What the governor did not address during his road trip were moves to reform the state's complex K-12 funding formula and potentially infuse it with more cash. School funding consumes a fourth of the budget.

Amid the flat-line budget enacted in 2017, and deprived of $5 billion in state income tax cuts enacted under former GOP Gov. John Kasich, overall funding for public schools crept up about 1 percent a year, with 77 percent of districts receiving two-year increases of less than 3 percent.

Regardless of what DeWine proposes, the House is expected to make significant changes to the funding formula based on months of work by a group of school officials led by Reps. Bob Cupp, R-Lima, and John Patterson, D-Jefferson. The two lawmakers are co-chairs of a House Finance subcommittee that will mold a plan seeking to tie funding to actual educational needs and costs.

“We’re going to work very hard to come up with a fairer and more easy-to-understand school funding formula,” said Speaker Larry Householder, R-Glenford.

Higher education leaders have joined the schools that send them their students in lobbying for more money. Public universities and colleges received no increase in basic state aid in the current budget. DeWine has talked of instituting a guarantee that student tuition will not increase during their four years in college.

DeWine also can be expected to propose changes to the single biggest item in the state budget: Medicaid, which covers health care for nearly 3 million impoverished and working poor Ohioans. The joint federal-state program received a $30.5 billion allocation in the current budget, with the state covering $10.5 billion. The governor has talked of instituting more wellness programs and additional work requirements for some. DeWine had to be dragged into supporting the Medicaid expansion to gain Kasich's support in last year's election.

Here's a summary of the two-year budget initiatives DeWine trotted out in his post-State of the State foray across Ohio, most of which are applauded by Democrats:

• Funding up to $900 million over 10 years for the new H2Ohio fund to help protect Lake Erie from farm-nutrient-fed algal blooms and preserve the quality of other waterways that feed Ohio water supplies.

• Adding $74 million annually for family and children services to help improve a system choked with foster children whose parents are addicted to opioids and other drugs.

• Spending $50 million to triple home-visitation programs in which counselors work with pregnant women and new mothers, babies and young children to help reduce infant mortality and improve school readiness.

• Providing an extra $24 million to cover the health-care needs of children poisoned by lead paint and setting aside $10 million in Medicaid funds to help abate lead in afflicted homes.

• Handing $22 million in new "crisis stabilization" funding to county mental health and recovery boards to spend on services such as respite care and transitional housing.

• Spending $7.5 million to create 30 more "specialty docket courts," typically "drug courts" that divert low-level offenders to local treatment instead of county jails and state prisons.

• Granting a 10 percent, nonrefundable state income tax credit to individuals who invest to build business and boost employment in job-hungry, low-income Opportunity Zones carrying federal tax incentives.

Dispatch reporter Jim Siegel contributed to this story.

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@RandyLudlow

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