Ohio an example to other states in weathering fiscal storm: Policy brief

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Despite curfews, business closings and a springtime shutdown, Ohio still serves as an example for other states as the country continues to battle economic downtowns during the COVID-19 pandemic, according to a policy brief released this week.

The Buckeye Institute, an independent research and educational institution in Columbus, also said the state should continue to cut spending and avoid tax hikes as part of the brief, A Case Study from the Heartland: Ohio’s Tax Collections Reveal Danger from Big Government Bailout.

“Ohio policymakers have set an example for other states to follow – prudently cutting the budget when the pandemic threatened fiscal solvency and preparing for hard times by building up the rainy day fund,” said Logan Kolas, an economic policy analyst with the Economic Research Center at The Buckeye Institute and the brief’s author. “As lawmakers in Columbus look to Ohio’s next budget, they should continue to cut unnecessary spending, and, most importantly, avoid tax increases that would harm Ohio’s economic recovery.”

A key during the pandemic has been the state’s higher than expected tax collections. While down since the start of the virus restrictions, those collections have fallen off as much as anticipated, and Ohio’s rainy day fund remains intact.

Tax collections are off just 2.3% compared to 2019 and have been even with or ahead of 2019 each month since June.

Kolas also said some states may need federal aid as cases continue to surge, he believes that aid should be targeted and revised.

“With tax revenues performing significantly better than expected in Ohio and across the nation, many federal proposals to bailout state and local governments should be revised downward,” he said, adding lawmakers in Washington should “reconsider how much aid state and local governments really need to weather this fiscal storm and make sure that any federal aid remains appropriately tailored to meeting those needs.”





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