Business owners, retirees, investors and economists are all watching the extreme volatility in the U.S. economy following President Trump’s sweeping tariffs. State officials are also monitoring it, because Ohio has to have a balanced two-year budget. What happens in the next few weeks could dramatically affect the budget negotiation process.
However the economy goes – freefall or boom – it affects Ohio’s state budget, which uses economic forecasts to estimate the amount of revenue the state will bring in over the next two years.
The budget proposed by Gov. Mike DeWine in early February estimated total tax revenue of $28.4 billion in the current fiscal year, which is 1.8% over the previous year. The Office of Budget and Management estimates tax revenue of $29.6 billion in fiscal year 2026, which is 4.1% over projections for this fiscal year, and $30.6 billion in fiscal year 2027, a growth rate of 3.2%.
OBM also cautioned about possible downsides that tariffs, "both those imposed by the U.S. and any retaliatory tariffs imposed by other countries, could push prices higher, reigniting inflation, and pushing consumer spending lower than predicted in the December baseline scenario."
DeWine noted monthly economic reports have been good recently. A preliminary report for March issued by OBM on Monday showed tax revenue was 2.6% ahead of projections. But he noted the need for a balanced budget.
“If we have a downturn in the economy, if that's what happens, then certainly that's going to impact our budget," DeWine told reporters Monday morning. "We'll just have to see where we go. But certainly we are impacted in our state budget, what money we have for education, what money we have for all kinds of things certainly depends upon how good the economy is doing."
DeWine ordered $775 million in budget cuts in 2020 when the COVID pandemic triggered a global recession. Budget cuts also came in when Republican former Gov. John Kasich faced a billion dollar shortfall in 2017. The Great Recession had Ohio facing a projected shortfall of around $7 billion in 2009, Democratic then-Gov. Ted Strickland plugged that by cutting the budget, emptying the rainy day fund and using federal stimulus dollars.
