Is DeWine’s $1B recovery plan enough?

On the same day the Congressional Budget Office said that employment isn’t expected to return to pre-pandemic levels until 2024, Ohio Gov. Mike DeWine rolled out a twoyear state budget plan designed in part to help speed the recovery here.

DeWine proposed to state lawmakers a plan to spend about $1 billion to help Ohio businesses and communities recover from the COVID-19 pandemic.

He said savings from previous budget cuts and federal funding of other programs, including Medicaid, will cover all but $150 million of the proposed package that will come from direct federal coronavirus relief dollars.

And he said the plan avoids tapping the state’s $2.7 billion rainy day fund, and it comes with no tax increases (depending on how you characterize a $10 increase in vehicle registration fees and a $2 increase in vehicle title fees to raise $127 million a year to help support the State Highway Patrol).

Question: Is $1 billion enough? And can the money be disbursed quickly enough to revive the small businesses and their employees who were pummeled by the pandemic?

Though unemployment rates in Ohio’s metro areas have started to come down, the latest report from the Ohio Department of Job and Family Services shows the continued damage to the economy caused by the pandemic:

The Columbus metro area has lost 70,500 jobs during the past year, second only to the loss of 91,700 jobs in Cleveland. Cincinnati lost 51,500 jobs.

Akron, Dayton and Toledo have each lost more than 20,000 jobs.

The unemployment rates for the main city in each of the metro areas have been running higher than the overall average for the metro area, a reflection that the big cities in the state have been hurt worse by the job losses than the surrounding suburbs and rural areas.

Ohio’s unemployment rate was 3.3% in November 2019 and 13.7% in April during a pandemic peak. The state rate was 5.5% in December – 4.9% in Franklin County and 5.2% in Columbus.

And while the Congressional Budget Office projects that the U.S. economy will grow at a robust 4.6% annual rate this year, it also projects that hiring will lag as consumer spending returns and employers become more comfortable with adding workers.

Congress has spent $4 trillion to keep the economy stable since the pandemic shuttered schools, offices, restaurants, gyms and other businesses, leading to roughly 10 million job losses and an economic decline of 3.5% last year.

As a group of 10 U.S. Senators countered President Joe Biden’s proposed $1.9 trillion plan to contain the virus and stimulate the economy with a proposal of their own pegged at $618 billion, DeWine presented Ohio lawmakers with this plan for Ohio:

About $460 million would be used to support small businesses harmed by the pandemic, particularly bars, restaurants and entertainment venues, with $20 million budgeted for small businesses created during the pandemic.

About $200 million in grants would be for bars and restaurants, $150 million for other small businesses, $50 million for the lodging industry and $40 million for indoor entertainment venues.

And about $450 million would head to local communities, with $250 million going to expand broadband internet service to underserved areas and $200 million for local government infrastructure projects to help attract jobs.

The $250 million Ohio Residential Broadband Grant Program to expand access across the state in 2022 and 2023 would be unprecedented, and a welcome sight.

Approximately 1 million Ohioans live without internet access, The Dispatch found in a special report in October, and 80% to 90% of rural households (areas with 20 or fewer households per square mile) have no access to broadband.

Lt. Gov. Jon Husted has advocated for statewide expansion after visiting rural communities where siblings squabble over who gets to log in to online classes and parents don’t have the option of working from home.

“They can’t participate in the modern economy, the modern education system, the modern health care system without it,” Husted said.

Now, the Ohio House will vet the governor’s proposed budget, and in addition to the questions of whether the aid is enough and coming fast enough, there also is this big question: Will that dysfunctional body go along with a spending plan designed to speed the recovery in Ohio?