Home Budget & Tax News New Formula Would Reduce Ohio’s Take in Federal COVID-19 Relief Bill

New Formula Would Reduce Ohio’s Take in Federal COVID-19 Relief Bill

By J.D. Davidson

(The Center Square) – While the nearly $2 trillion federal COVID-19 relief bill awaits action in the U.S. Senate, Ohio leaders expressed concern the bill disproportionally and negatively would affect Ohio.

Speaking at Gov. Mike DeWine’s news conference Monday, Lt. Gov. Jon Husted said the package’s funding formula uses fourth-quarter 2020 unemployment rates rather than population to allocate money, essentially penalizing the state for its rate of recovery.

“There’s no doubt the plan provides significant additional relief funding for state and local governments. However, there is a provision in here that I want to raise an issue with,” Husted said. “It really puts Ohio, and a lot of states, at a disadvantage in doing this. We ask our senators to help fix this that will punish Ohioans for frankly going back to work.”

Husted said Ohio ranks 21st in the amount of state funding it would receive in the current proposal, but it would rank seventh if the proposal used the same population-based formula used to allocate funding in the Coronavirus Aid, Relief and Economic Security Act.

The state’s December 2020 unemployment rate of 5.5% means $800 million less in federal relief compared with population-based funding.

“It really punishes states who have been trying to do this right, the states that have tried to find a balance between protecting the health of its people form the pandemic and also protecting people’s economic health and manage this pandemic in a thoughtful way,” Husted said. “Doing things that put people back to work actually are going to cost us relief dollars that people who aren’t back to work actually need. We don’t think this is a fair way to do this.”

DeWine issued a joint statement over the weekend with governors from 22 other states opposing the formula.

“A state’s ability to keep businesses open and people employed should not be a penalizing factor when distributing funds. If Congress is going to provide aid to states, it should be on an equitable population basis,” the statement said.

According to the governors’ statement, 33 states will lose federal funding when compared with a population-based formula. Based on a report from House Budget Republicans, Georgia would lose $1.3 billion, the most of any other state, followed by Florida, Virginia and South Carolina, each of which would bring in more than $1 billion less.

The report shows California increases its federal share by $5.4 billion, while New York gains $2.1 billion, and New Jersey and Texas pick up $1.4 billion each.

Twenty-one of the 22 governors who signed the statement were Republican. Kansas Gov. Laura Kelly was the only Democrat.

 

Originally published by The Center Square. Republished with permission.

J.D. Davidson
An Ohio native, J.D. Davidson is a veteran journalist with more than 30 years of experience in newspapers in Ohio, Georgia, Alabama and Texas. He has served as a reporter, editor, managing editor and publisher.

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