COLUMBUS, Ohio – Ohio has more than $2 billion remaining from the massive pile of federal pandemic relief cash sent here by Democrats in Washington, D.C. last year, and Gov. Mike DeWine is trying to figure out what to do with it.
With approval from state lawmakers, DeWine already has OK’d spending roughly half of the $5.4 billion it will get under the American Rescue Plan Act, signed by Democratic President Joe Biden in February 2021, shortly after he took office.
Any new ideas DeWine might have likely won’t get approved until November, when the state legislature is back in session. But smaller requests might go through the state Controlling Board, a spending panel that includes state legislators.
Some of the examples of what Ohio’s previously spent ARPA money will go to:
-More than $1.4 billion to pay back an advance Ohio got in 2020 from the federal government to help keep the state’s unemployment compensation fund solvent.
-$500 million for economic development projects in 32 Eastern Ohio counties considered to be part of Appalachia. The DeWine administration will award the money in grants in response to specific proposals, favoring projects that focus on revitalizing downtown areas, promoting on revitalizing downtown areas, workforce training and improving community health.
-$250 million for water and sewer infrastructure projects, announced last July.
-$250 million for public safety agencies — $175 million in grants for local law enforcement, with relatively few restrictions on how it can be spent, and another $75 million for wellness programs for first responders. DeWine, who’s running for re-election, took the opportunity to quip he was “re-funding the police” when he announced the funding last December.
-$100 million in local school safety grants, included in the state capital budget DeWine signed earlier this week.
-$85 million to help train students to work in psychiatric and other behavioral healthcare centers
-$18 million in payments to in-state meat processors.
-$4 million for the Ohio Expositions Commission, the agency that plans the annual state fair in Columbus.
DeWine said this week that possible uses could include even more funding for water/sewer infrastructure and broadband internet expansion in underserved areas. Local government requests for water and sewer funding exceeded the $250 million DeWine had set aside, while the federal rules for one $268 million pot of money in the state’s ARPA funds seem to be written to target broadband expansion, according to the governor’s office.
But because the federal funds are one-time money, DeWine said he wants to be sure whatever the state does with it doesn’t create a future budget hole.
“We’re open to ideas on how to best spend this money in a prudent way, but also in an imaginative way that will have long-term benefits,” DeWine said on Wednesday. “This is a thoughtful process that we invite people to participate in, and there’s nothing written in stone about where this money will go.”
The ARPA was congressional Democrats response to the coronavirus pandemic, and President Joe Biden signed it into law in February 2021, shortly after taking office. In addition to the $1,400 in direct payments it gave to individuals, it also gave $350 billion for state and local governments, in what Democrats described as help recovering from the negative fiscal effects of the pandemic.
DeWine opposed the bill and said he would have voted against it. But that hasn’t stopped him from spending the billions it’s given Ohio and touting what he’s done with it on the campaign trail.
The bill gave governments flexibility in how to spend the money, other than barring them from using it to pay down debt. Democrats tried to block states from using the money to cut taxes, but a federal judge struck down the provision after Republican Ohio Attorney General Dave Yost sued.
The state is getting another $2.7 billion from ARPA in a second wave of funding, and has until the end of 2024 to decide what to do with it. The money then must be spent by the of 2026.
Outside of the ARPA money, the state is flush with cash after its tax receipts have exceed expectations by more than $2 billion. That’s in addition to the state’s maxed-out, $2.7 billion rainy day fund, which DeWine avoided tapping during the coronavirus pandemic.
The state government has so much money that DeWine earlier this week said he’s considering using its cash reserves to pay for much of this year’s $3.5 billion capital project budget, instead of borrowing money and paying interest like it normally would.
As advocacy groups have eyed the state’s growing money stash, state officials have heard no shortage of ideas of how to spend it. For example, the Ohio Association of Foodbanks went public this week with their request for $183 million, including $50 million to buy food and replenish their depleted food stores, depleted by the ongoing retail shortages and supply-chain disruptions, and another $133 million for more long-term needs, like upgrading food bank facilities.
The foodbank association was part of a larger coalition of businesses, religious groups and other policy advocates that in October requested DeWine spend $391 million in ARPA money on affordable housing.
Lisa Hamler Fugitt, executive director of the Ohio Association of Food Banks, said her members are seeing increased demand as some poorer Ohioans budgets are stretched thin by higher prices for housing, food and gas. Economic conditions are worsening, she said, although there’s a major difference between now and say, the Great Recession.
“The big difference between then and now was that the state was broke then. Everything was stretched,” she said. “But there’s a lot of money out there. And when I say unprecedented piles of cash reserves, [The Pew Research Center] has backed this up.”
And leaders from the Ohio Civil Service Employees Association, the state’s largest public-employee union whose 27,000-plus members include prison guards and healthcare center workers, have asked that DeWine use the money to pay a bonus to state workers.
The OCSEA recently lost an arbitration case seeking emergency pay from work members did during the pandemic. Responding to DeWine’s solicitation for ideas, OCSEA President Chris Mabe said during a rally outside the Ohio Statehouse on Friday: “Well, we’ve got 27,000 ideas for you. Invest in the people that kept the state alive and provided essential services during the pandemic.”
Ideas also have come from the political realm. Nan Whaley, the former Dayton mayor who’s the Democratic nominee to challenge DeWine in the November election, has proposed spending the more than $2 billion to give $350 to each individual Ohioan for what she called inflation rebate checks. The checks would go to anyone who got direct federal stimulus payments.
“Ohioans are hurting right now, and whether it’s gas being over $5 a gallon or the increase in the price of groceries or rent, costs are increasing and the governor has the ability to do something to make a difference now and help these costs for Ohioans,” said Courtney Rice, a Whaley campaign spokesperson.
And the Buckeye Institute, a conservative think-tank in Columbus, has suggested that Ohio use $600 million in the remaining ARPA money to replenish the state’s unemployment compensation fund to its pre-pandemic levels.
“Especially now given the current economic headwinds seems like the most prudent use of the dollars,” said Rea Hederman, the Buckeye Institute’s executive director.
But other ideas from the Buckeye Institute target long-standing conservative policy priorities: school choice and local government consolidation. One idea suggests using the federal funds to expand existing K-12 student savings accounts that could be used on educational expenses, including private-school tuition, tying the proposal to the loss of classroom learning kids experienced during the pandemic.
Or, in light of the tax-base hit some big cities are expected to face given the pandemic’s role in changing commuting habits, it’s proposed the state could fund grants that incentivize cities to reform their local tax structure and consolidate services with other local governments.
Matt Mayer, a conservative public policy analyst in Ohio, said the DeWine administration should consider using the money to cut taxes. Doing so, he said, would put the state on the road to eventually eliminating its income tax, a long-standing goal of Mayer and other state conservatives.
“That would put a little bit of money into everybody’s pocket in order to cover that additional tank of gas or bag of groceries they’re going to have to buy and in the long-term, when Ohio is back on its feet it’s in a better place,” he said.