When the CARES Act passed last month, a large, $4 billion plus was slated to come to Ohio. There was a catch, though. It had to be spent on direct, non-budgeted, COVID-related expenses.
However, there is a huge need in replacing the lost revenue Ohio and local officials are feeling now that businesses are essentially at a standstill. Last month, state revenues were down $164.4 million from estimates, but remember that Ohio's stay at home order wasn't issued until March 22. So expaect a much greater fall off for this and future months.
The latest $450 billion federal bill that passed yesterday was supposed to have a provision in it allowing states and local governements to have flexibility on how that CARES Act money would be spent. In other words, allowing it to be used to fill the gaping revenue holes blowing away state, local and school budgets.
However, at the last minute, that flexibility provision was eliminated.
That means the $4 billion plus coming to the state from the CARES Act cannot be used to fill revenue holes for states, local governments or schools.
While that may mean we finally get statewide broadband access or something similar -- a new spend necessitated by COVID-related closures -- it would ignore the revenue shortfalls states, cities and schools will see.
How does this hurt kids?
Because we're starting to see stories about districts preparing for massive cuts next year. When you add the continuation of the hotly contested school voucher expansion, and places like Middletown are looking at millions of dollars in budget cuts next school year -- numbers that will only grow given the depth and breadth of this economic hit.
Now, Senate Majority Leader Mitch McConnell is suddenly concerned about budget deficits (mind you he did the previous stimulus bills and a $1 trillion tax cut without mentioning such concerns). If that holds, then the fourth round of stimulus money -- which everyone was banking on filling state budget revenue shortfalls this and and next budget cycle -- may be in jeopardy.
And if we don't have a fourth stimulus (education groups are seeking $200 billion nationally), then we could be looking at crippling school cuts that would make the 2011 cuts seem like a little finger splinter.
By way of perspective, during the 2010-2011 school year, more than 1 out of every 4 dollars the state sent to school districts was federal stimulus money. And this state revenue hole may be even bigger than the one from the Great Recession.
So you could be looking at 25-35% state budget cuts for schools. In some districts that can't raise much local revenue, that kind of funding loss would lay waste to communities, forcing some districts to consider closing, merging, or seeking other drastic measures. The hardest hit districts would be in Ohio's poor, rural communities -- Trump Country. Would Trump leave his core consitutency hanging out to dry during an election year?
But all who are concerned about kids must insist that whatever happens, states, local governments and schools have what they need to provide the services our families and kids need during this crisis. Playing political games at the height of this pandemic is political malfeasance of the highest order.
There now must be a fourth round of stimulus. And that money must be made available to states to fill the yawning chasm that will be created in their revenues next cycle, which for Ohio starts next year.
Call your member of Congress and our Senators. And tell them you want your kids to be as important to them as Wal-Mart and United Airlines.
And do it yesterday.