Ohio officials have been drawing tight the state’s budgetary belt as they see revenue plummet due to coronavirus shutdowns. But hidden in the carnage is a pot of money they’ll have to use as they plan for the fiscal year that starts July 1.
Earlier this month, with April tax revenues far below what was budgeted, Gov. Mike DeWine announced $775 million in spending cuts for the remaining months of the fiscal year — $465 million to education, $210 million to Medicaid, and the remaining $100 million in cuts to be spread across other state agencies.
But a big chunk of the losses in April is revenue deferred, not lost. Because of the pandemic, the federal government in March pushed back the deadline to file income taxes from April 15 to July 15 and Ohio officials followed suit.
That means the state has pushed back by three months some revenue it still expects to collect. And early indications are that it’s a lot.
The Ohio Office of Management and Budget’s monthly report for April shows that tax payments for the month were $804 million below estimate, including $636 million in personal income tax payments. But while the state still expects those payments to be made, they will be offset by an estimated $248 million the state must pay in refunds once everybody files their tax returns.
While budget writers expect they’ll have this source of extra tax revenue to work with as they draft the FY 2021 budget, knowing how much is tricky, said OBM spokesman Pete LuPiba. It depends on what happens yet this month and next.
“The postponement of income tax filing and payment deadlines is expected to have a large impact on revenues during the final quarter of FY 2020,” he said in an email. “Anticipating the extent to which taxpayers will avail themselves of these postponed deadlines is very difficult: there is no precedent for this extensive of a postponement in the history of the Ohio income tax, to our knowledge.”