Ohio budget work begins with questions about Medicaid and suggestion of income tax cut
Months of work on the two-year state budget is under way with the first hearing on the spending plan before the Ohio House Finance committee.
Gov. Mike DeWine’s budget director Kim Murnieks took questions for more than three and a half hours, on areas ranging from education to tax revenue to the differences between the administration's forecast and the one developed by researchers who work for state lawmakers.
Rep. Bob Peterson (R-Washington Court House) told budget director Kim Murnieks there’s a lot to like in this $87 billion budget, but noted there’s no personal income tax cut.
“I look forward to working with you and my colleagues to find a way to put some stronger, greater tax cuts in as we discussed last week — that would be fun," Peterson said.
Murnieks said the tax relief in the budget includes the elimination of the sales tax on baby products and a $2,500 per child tax deduction, but no changes to the income tax structure.
“But we know that there is an ongoing desire to continue to ensure that that is not a barrier for economic development, and we look forward to continuing to have those discussions," Murnieks said.
The personal income tax is the state’s second largest source of revenue, forecast to bring in more than $10 billion this fiscal year.
The budget also includes a change for Medicaid, the largest single chunk of the two-year $87 billion state budget, supporting some 3.3 million Ohioans. Medicaid rolls that grew during the pandemic will start shrinking as people lose that coverage.
The federal government will end the COVID-19 public health emergency in May. Murnieks said that means people making above the income limits who couldn’t be removed from the Medicaid rolls during the pandemic will be.
“Our budget estimates that about 200,000 people who are currently on the Medicaid rolls would be redetermined to no longer be eligible and would leave the rolls over the course of this two year period," Murnieks said.
That’s about 6% of Ohio’s Medicaid recipients, and wouldn’t happen all at once.
The budget also expands Medicaid for children and pregnant women up to 300% of the federal poverty level, or $74,580 in income for a family of three.
Murnieks also said the six-year phase in of the school funding plan adopted in the last budget, often referred to as the Cupp-Patterson plan, is still on target with the funding in this budget. There's more than $14 billion for traditional public schools and charter schools in this spending plan.
The forecasts from the Office of Budget and Management and from the Legislative Service Commission are close. That's in contrast to the last budget released in 2021, when LSC predicted almost a billion dollars more in tax revenue over the two-year budget than OBM did, along with $90 million less in Medicaid spending.