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Report: Tapping Rainy Day Fund May Not Hurt Ohio

May 23, 2017

Ohio Governor John Kasich watches his administration’s first official transfer into the state’s rainy day fund in July 2013.
Credit Ohio Public Radio

Some state officials have talked about tapping Ohio's 2 billion dollar rainy day fund to help with the budget and combat the opioid crisis.

A national group has studied the impact of using rainy day funds in troubled budgetary times. Ohio Public Radio's Karen Kasler reports.

Ohio’s tax collections are $773 million below estimates for this fiscal year. The Pew Charitable Trusts looked into what might happen to a state’s credit rating when revenues are short. Jonathan Moody with Pew said in a scenario like Ohio’s when the rainy day fund was used, there was not only no credit rating hit, but the chances of a downgrade decreased.

 

“Lawmakers shouldn’t be afraid to tap their reserves during a period of downturn if that’s what the reserve is for, and as long as they’re taking the other steps that they should to try to mitigate the effects of a downturn.”

 

Moody says those steps vary, but likely would include spending cuts or tax increases.