Fed aid aimed at virus should not be used for other shortfalls
Ohioans received very bad news about the state government budget last Tuesday. Because of the COVID-19 crisis, state revenue for the fiscal year to date has been nearly $750 million below what had been expected, Gov. Mike DeWine reported.
Kudos to DeWine and legislators, however, for spending restraint when they were preparing the two-year budget. Less than two months ago, the general revenue budget was more than $233 million ahead of projections, because of conservative budgeting by the governor and lawmakers.
Business closures have chewed through that cushion and more, however. Last week DeWine revealed a $775 million spending cut, in order to keep the budget balanced. More reductions, which will affect state services including public schools, may be ahead.
Business closures because of the coronavirus epidemic have hurt many Buckeye State residents badly. The state’s unemployment rate stands at about 18 percent. More than a million people are on the state’s unemployment rolls.
Revenue to fund the state budget relies on a healthy economy. Tough times mean less money flowing into Columbus.
Still, Ohio is weathering the downturn better than some free-spending states — again, because the original budget was based on conservative estimates of revenue. Not every state has benefited from fiscal restraint.
It is essential that the federal government, from which about $2.9 trillion in emergency funding related to COVID-19 already is flowing, do something to repair the damage to state government budgets.
By that we do not mean that Congress should bail out free-spending states with longstanding problems such as deficits related to public employee pension funds. There should be no consideration of that. But helping to repair damage to state budgets caused by COVID-19 ought to be considered a priority.
Billions of dollars in federal aid already have been distributed to the states, but officials in many believe they are not permitted to use it to offset revenue lost due to the epidemic. Use of aid from Washington to plug budget holes caused by the virus — again, not those that would have existed anyway — is reasonable. Let us hope the federal government’s executive branch can allow that to happen. If not, Congress should revise the CARES Act to permit such use.