State Ends Fiscal Year with Nearly $800 Million Surplus

State government finished the 2014 fiscal year with a nearly $800 million surplus, according to figures from the Office of Budget and Management.

Ohio’s fiscal year closed at the end of June. It marks the fourth consecutive year the state has ended with a surplus.

That there is a surplus is not a surprise.

State receipts at the end of May showed income tax collections alone were running more than $170 million ahead of projections. The complete budget report for June will be available next week.

But the bigger factor was that state spending, particularly for Medicaid, came in well below what had been projected, Keen said.

Lawmakers and the administration, in anticipation, tapped part of the extra money to help pay for some items included in legislation approved as part of the mid biennial budget review.

Among those items:

• The third phase of a three-year 10 percent cut in the state’s income tax rates, scheduled to take effect in 2015, was moved forward to this year, retroactive to Jan. 1.
• The small business income tax deduction implemented in the 2014-15 state budget was expanded for 2014 from 50 percent of income to 75 percent of their income up to $250,000.
• Increases to the state’s earned income tax credit for Ohioans with lower wages and to the standard deduction for those making less than $80,000 a year.

The budget surplus reflects the approach Gov. John Kasich’s administration has taken with its budgeting strategy, building spending plans based on conservative estimates of tax revenues.

Kasich came into office facing a budget shortfall that was widely reported as $8 billion. When he speaks publicly, Kasich often cites efforts to balance that budget and still reduce income taxes among his successes.

The state’s rainy day fund, for example, at one time was reduced to just 89 cents. It now has $1.5 billion, the maximum amount allowed.

The efforts are not without critics, though, who claimed the state balanced the budget on the backs of local governments and schools by shifting burdens and cutting funding.

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