A brighter future for all Ohioans

Wendy Patton | Will Petrik | Michael Shields | Piet van Lier

Government works best when it works for all of us. After years of policies slanted in favor of the wealthy few and big corporations, the American Rescue Plan Act (ARPA) will rebuild after the pandemic recession from the ground up instead of the top down. It will help families pay the rent, feed their kids, fix the car and resume their lives. It will allow local governments, schools, colleges, transit agencies and other public employers to rehire laid-off workers, re-open recreation centers, put buses back on the streets and teachers back in the classroom. The ARPA will provide targeted relief to those who have been hurt most by the pandemic and those who have been harmed by years of policies that prioritize the wealthy at everyone else’s expense.

Across Ohio, an estimated $31 billion in federal funds (see Appendix) will provide stimulus checks for people of middle and modest income; enhanced unemployment insurance for those whose jobs have yet to come back; money for public transit, schools, universities and college students; hospitals and health care centers; child care and other essential workers, and more. The federal bill contains $360 billion for state and local governments and Ohio, the 7thlargest state, will get the 7thlargest share of those funds. The state government will receive $5.6 billion and Ohio’s local governments will get $5.4 billion, to be spent by December 31, 2024.[1]

As much as this seems, it is not enough to repair the damage done at the state level. Over the past 15 years, lawmakers have eliminated major business taxes and passed income tax cuts that in most cases benefitted the state’s wealthiest — mostly white — residents. Today, Ohio collects $7 billion less a year for public services than we would under the tax laws of 2005.[2] This left the state with struggling schools, unaffordable college, a broken public health system, strapped local governments and insufficient social services. On top of that, Ohio’s lawmakers give out $9 billion a year in tax breaks, many for special interests, which grow every year without sufficient scrutiny or evaluation.[3] The ARPA will send the state of Ohio $5.6 billion in flexible funds which will help policymakers sustain services and rebuild from the pandemic and recession. However, this funding cannot make up the full loss Ohio has experienced from decades of tax cuts favoring the wealthy at the expense of shared services and investments.

Lawmakers must use ARPA funds to stem the pandemic and help families get back on their feet. Then, they must use the funds to set Ohioans up for future success by restoring public services. This money can help fix the state’s unconstitutional school funding system, reduce the shamefully high rates of Black maternal and infant mortality, boost the supply of affordable housing, upgrade and expand public transit, ensure wireless access for all families and businesses, and eliminate the sources of lead that poison so many Ohio children. Our recommendations address only some of Ohioans’ urgent needs. These proposals alone would use the full $5.6 billion, so great is the damage from decades of unfair and harmful tax cut policy. ARPA funds, if spent well, can jump-start our recovery, while lawmakers develop a better, more fair revenue system to sustain these improvements and build an Ohio for everyone.

In this paper, Policy Matters Ohio focuses on the flexible ARPA funds that will come directly to the state for restoration and rebuilding. The new law allows state and local governments to spend these funds addressing the negative economic impacts of the pandemic, including budget shortfalls, layoffs and cuts to services. The money can be used to provide increased pay for essential workers, prevent cuts to government services, and make investments in water, sewer, or broadband infrastructure. ARPA funds cannot be used to offset revenues lost to tax cuts nor to restore pension funds.[4]

The state will receive $5.6 billion that can be used until December 31, 2024. If lawmakers spent the funds equally, year-over-year, it would add $1.6 billion in each of the next three fiscal years (2022, 2023 and 2024), about 2% of Ohio’s roughly $80 billion annual budget.[5] Up-front investments to recover from the pandemic and recession will likely use up much of the aid quickly.

Prioritizing use of funds

Ohio lawmakers must use the state ARPA funds to address the most pressing needs. First, they must control the COVID virus: slow hospitalizations, reduce deaths and prepare to do better in future public health emergencies. They must prioritize recommendations of the Minority Health Strike Force Blueprint to improve the health of Black and brown Ohioans so future health crises are less devastating in those communities.[6]

Second, the funds must help Ohioans who still struggle, whose jobs never came back, who still owe back rent, who worry about where their next meal will come from. More than 2 million Ohioans struggle to cover household expenses. About 475,000 are behind on the rent.[7] Ohio Attorney General Yost’s lawsuit to use this money for tax cuts is wholly inappropriate, given the widespread struggle and suffering of Ohioans.[8] People need help; the federal government sent funds for this purpose and it is state lawmakers’ job to use those funds responsibly.[9]

Remaining funds must be used to start to restore and rebuild. These funds can lay the groundwork for a fair and equitable school funding formula, expand broadband to unserved neighborhoods and communities and help people pay for wireless access. They can pay for the replacement of lead service lines to stop children from being poisoned. ARPA funds can help more students return to and complete a degree or certificate. These improvements will boost the quality of life for millions of Ohioans and create a brighter future for hundreds of thousands of children. But ARPA funds are for the short term. They can jump-start recovery, but it’s up to our elected representatives to maintain that recovery into the future. The investments the federal government helps with today must be sustained with a stronger, more fair state tax structure.

The need for expanded COVID treatment will persist, especially given the quickly mutating virus and some people’s reticence to comply with the measures necessary to control it: wearing masks, getting vaccinated. ARPA dollars ensure hospitals and health centers have the capacity to meet ongoing COVID-related health care needs and that health care is strengthened and made more accessible.

Separate from the $5.6 billion in flexible funding flowing to Ohio, The ARPA will fund vaccine distribution, testing, contact tracing, surveillance, and building the public health workforce.[10] Starting in April, 51 community health centers in Ohio will get a combined $160.7 million to pay for coronavirus vaccinations and other services for vulnerable populations.[11] The state will get an estimated $44 million through the Mental Health Block Grant and $52 million through the Substance Abuse Block Grant.[12] The ARPA allows states to extend Medicaid eligibility to pregnant women for 12 months postpartum, with federal matching assistance program (FMAP) funds. These funds — specific to health and health care — will help with immediate, targeted needs, but some of the $5.6 billion in flexible funding coming to Ohio should be spent to fill in the gaps in health care and public health services that are not addressed by these specialized grant programs.

The pandemic caused disproportionate illness and hospitalizations of Black, brown and Indigenous people.[13] The lawmakers should prioritize use of state ARPA dollars to implement the 34 recommendations of the Minority Health Strike Force Blueprint.[14] Uses of ARPA dollars on health and human services could include:

Rebuilding public health: Lawmakers should use state ARPA funds to restore Ohio’s public health system. Gov. DeWine himself called out the flaws of Ohio’s fragmented system and outdated information technology that hampered a coordinated response to the pandemic. Ohio ranks 4th lowest in the nation in state support of public health.[15] The outcomes of neglect may be counted in pandemic illness and death.

In 2019 the Ohio Partnership for Public Health evaluated the funding and needs of Ohio’s public health system, made up of 113 local public health departments. The partnership determined they are underfunded by $93 million annually and many lack basic capacity and capability.[16] State ARPA resources should fully fund the system, providing $93 million now and then ensuring the upgraded system is maintained into the future.

Implement the Minority Health Strike Force recommendations: Gov. DeWine convened the Minority Health Strike Force because of the high rate of illness and death in communities of color. ARPA funds give lawmakers the resources they need now to strengthen health of people communities of color. Here are some places to start:[17]

• Boost a medical workforce with people of color: One recommendation was to support the recruitment and retention of Ohioans of color in health care and public health professions. Lawmakers should provide funds to the Ohio Board of Regents and the Ohio Department of Health for grants and forgivable loans to support students of color in medical fields.
• Build health care infrastructure in underserved communities: The MHSF recommended funding for community-based health initiatives run and staffed by trusted representatives of communities of color. Lawmakers can start building that infrastructure by creating a state-level “Points of Access” program, based on the highly competitive federal program by the same name. ARPA funds could support four annual awards of $650,000 each for a period of three years. This initiative could fund 12 programs over five years at a cost of $25.4 million.
• Build accountability into the system: The Minority Health Strike Force Blueprint called for data collection and analysis to monitor progress on its recommendations. ARPA funding can operationalize and implement the blueprint with $5 million in the first year and $3 million a year thereafter, to maintain staffing, information technology and analysis.

Put health care first: Ohioans are less healthy compared to people living in other states.[18] ARPA resources can underwrite formation of an interdisciplinary team within the Ohio Department of Health to coordinate state agencies in addressing the “social determinants of health”: external factors that affect the health outcomes among different communities, neighborhoods and racial groups. This group should scrutinize all relevant bills introduced by the General Assembly to determine “health impacts,” just as the “common sense initiative” scrutinizes “business impacts.”[19]

Health coverage navigators: Lawmakers should use ARPA funds for outreach workers who can help people without employer-sponsored health insurance find health coverage, either public (Medicaid) or a combination of public and private through the Affordable Care Act insurance marketplaces. ARPA resources could also be used to rebuild the Benefit Bank, a software program food pantries used in the past to help their clients access health care coverage and other needed services.

Maternal and infant mortality: Maternal deaths are preventable. Lawmakers can take advantage of the ARPA extension of Medicaid coverage for post-partum women from 60 days to 12 months after child birth; federal Medicaid funds pick up two-thirds of the cost. State ARPA dollars should also be used to train and certify doulas — professionals who support women who are pregnant or are in their first year after giving birth — to reduce maternal deaths.

Infant deaths are preventable. Ohio’s successful HUB program, run by the Ohio Commission on Minority Health, was cut in 2020, but ARPA funds can replenish those cuts. The Ohio Minority Health Commission’s infant mortality grant program should be fully funded at $6 million annually to make sure more Ohio babies see their first birthday. Additional funds should be provided to communities working with the Ohio Department of Health through the Ohio Equity Institute.

There are many other ways lawmakers can use ARPA funds to improve Ohioans’ health and create a better public health infrastructure for the future. This should be a first priority for the use of the $5.6 billion in state funds.

The ARPA will help Ohioans get back on their feet and provide some immediate relief for children, adults and families. It will send hundreds of millions of dollars to the Ohio Department of Health and Human Services to help with the human toll of the pandemic and recession. Funds are provided to prevent and deal with child abuse, for emergency assistance, to help seniors with meals, to boost services for mental health centers, for child care and Head Start, and for emergency food and shelter. While the stimulus will provide welcome relief, the scale of suffering remains high, and the federal aid is only temporary. That’s why state lawmakers must make sure all of us, no matter what we look like or where we live, get enough to eat and have a roof over our head. State lawmakers must make new, meaningful long-term investments in public programs that create a foundation of stability, security and basic dignity for Ohioans. Here are some ways ARPA funds could do just that.

Support Ohioans who have been laid off: Ohio lawmakers need to direct resources to improve the state’s unemployment compensation (UC) system, which is funded through the Ohio Department of Job and Family Services (ODJFS). Federal dollars are the main source of funds to run the UC system, and Congress has provided support, but more is needed. The state must share that responsibility and add to the targeted federal dollars as needed so claimants are not left out in the cold.

Ensure all Ohioans get enough to eat: The ARPA will provide immediate relief for hundreds of thousands of children and adults in Ohio who struggle with hunger and food insecurity.[20] The roughly 1.5 million Ohioans who participate in the Supplemental Nutrition Assistance Program (SNAP) will continue to get an average of $28 more per month in July through September of 2021 to help put food on the table.[21] The increased SNAP aid means an additional $122 million will be spent in communities across the state as people buy food in local stores.[22] APRA also extended funds to ensure kids get regular school meals. If the Ohio General Assembly ends the state public health emergency under recently passed Senate Bill 22 before the pandemic is over, hundreds of thousands will lose food aid.[23] State ARPA dollars will be needed to close the gap in food pantries across the state.

Make sure Ohioans keep a roof over their heads: Over 2.7 million Ohioans are having trouble paying for household expenses and 475,000 Ohioans were not caught up on rent based on data collected between February and March 2021.[24] The ARPA sets aside an estimated $700 million to help Ohioans with rental assistance through the end of 2024[25] and an additional $465 million previously sent to the state by the CARES Act is currently moving as Senate Bill 110 in the General Assembly.[26] For context, this funding could mean each of the 475,000 Ohioans behind on rent could get $2,500 from ARPA and CARES Act funds combined. That is not enough to cover most people’s back rent. Additional use of the state’s discretionary ARPA funds can help fill the gap.

Increase affordable housing options: The Minority Health Strike Force emphasized the need for more safe, decent and affordable housing. In 2018, Ohio had 44 affordable rental units available for every 100 households with extremely low incomes.[27] State ARPA funds can expand affordable housing options across the state by boosting the Ohio Housing Trust Fund by $20 million each year.

Help parents get back to work and make child care affordable: Thousands of working mothers have left the workforce; lack of child care is now their third most reported reason for not working, after layoffs and furloughs due to less business.[28] The ARPA will provide Ohio with $500 million for child care assistance and $800 million to help stabilize child care providers through the end of 2024. Lawmakers should supplement the $500 million for child care assistance with state ARPA funds and expand initial eligibility for publicly funded child care to 200% of the federal poverty level.[29]

Essential worker pay: Lawmakers should use state ARPA funds for a $300 million grant program for frontline essential workers, following six states that used CARES Act money to create such programs. Michigan approved $100 million in hazard pay for first responders, additional funds for one-time $500 teacher bonuses, plus a $2-per-hour raise for 85,000 direct care workers which, if made permanent as the governor recommended, will cost an annualized $360 million.[30] Virginia spent $73 million to award $1,500 bonuses to 43,500 home health workers.[31] New Hampshire paid out $68 million in $300-per-week bonuses to frontline health care workers from April through June, then extended the program.[32] Pennsylvania issued $50 million in grants to 639 employers to support 41,587 workers with $1,200 payments. Had the state been able to make grants to all eligible applicants, it would have cost $300 million.[33] Vermont awarded $50.5 million in two rounds; the first round supported 15,650 workers.[34] Louisiana’s hazard pay reached over 100,000 workers (with 114,000 pending) by enabling workers to apply on their own behalf, instead of granting the funds through employers.[35] Ohio should allocate $300 million in funds, consistent with Pennsylvania’s grant requests and Michigan’s executive budget proposal for direct care workers alone, to award $1,200 payments to each worker, and enable workers to apply on their own behalf.

Boost funding for legal services: Many people are behind in rent; preventing homelessness is becoming more urgent. The MHSF recommended state funding to prevent eviction by expanding legal services including legal representation, landlord-tenant mediation, and emergency financial assistance. Lawmakers should use state funds to boost Ohio’s Legal Aid system with ARPA funds to provide such legal protection to vulnerable Ohioans, and to fund programs based on Cleveland’s “Right to Counsel Cleveland” program.[36]

For too many years Ohio lawmakers have passed tax cuts and tax breaks that mostly benefit the wealthy and corporations while shorting essential public services. Today the needs are far greater than the $5.6 billion in ARPA aid coming into the state. Lawmakers must carefully prioritize and target rebuilding that can make an immediate difference in the lives of Ohioans: providing better schools and a greater opportunity for higher education; better, more convenient public transit; ensuring lead is not in the water children drink; ensuring every household has affordable access to the internet; taking steps to end mass incarceration and halting the pervasive problem of wage theft, which affects hundreds of thousands of Ohioans. The ARPA is not big enough to set all things right, but it can start the change. Over the next four years, Ohio lawmakers must build a better, stronger and more equitable revenue system so improvements made with ARPA funds can be maintained and expanded into the future.

K-12 education: Ohio’s school funding system relies so heavily on local property taxes and has such little relationship to the actual cost of educating a student that the Ohio Supreme Court ruled it unconstitutional 24 years ago. State lawmakers never fixed it. The American Rescue Plan will send $4.5 billion directly to Ohio’s schools to ensure control of the virus through the fall as children get vaccinated and help repair the learning gap. Beyond that, lawmakers can use state dollars in the next budget and beyond to help fund the new “Fair School Funding Plan,” a bipartisan plan passed last year by the Ohio House of Representatives to fix Ohio’s unconstitutional system. There is funding now to start phase-in of the new plan; ARPA funds can help fill any gaps in this budget that may emerge.

Higher education: Tuition is too high. Financial aid is too low. Student debt is crushing. Worse, institutions withhold transcripts over intuitional debt, blocking re-enrollment and employment opportunities. The ARPA can help.

An estimated $1.1 billion in ARPA funds will go directly to Ohio’s colleges and universities, a significant share of which must be given in grants to students. The portion remaining with institutions will help with COVID-related expenses and revenue loss, and prevent cuts to student services, but will not address years of eroded funding. State ARPA dollars can help rebuild to expand opportunity:

• Boost state share of instruction for public institutions of higher learning: For years, state lawmakers have underfunded classroom instruction, driving up tuition at Ohio’s public institutions. Discretionary state ARPA funds totaling at least $100 million each year could ensure funding for the state share of instruction keeps up with inflation over the next three years and begin to make up for years of underfunding. Discretionary ARPA dollars should be targeted to prevent tuition increases at the state’s public community and technical colleges, which have long been an entry point for Ohioans who want to upskill after a recession.
• Rebuild and restructure financial aid: Lawmakers never fully restored the deep cuts they made to financial aid in the last recession. Today, the typical community college student is not eligible for the Ohio College Opportunity Grant (OCOG), the state’s primary fund for need-based aid. They should be. Ohio’s students face high costs and get little grant aid; as a result, they bear high student debt burdens. Restoring funding for OCOG to the $250 million appropriated in fiscal years 2008 and 2009 would cost an additional $40 million in the next biennial budget.
• Discharge student debt: Recent guidance from the U.S. Department of Education empowered institutions to use their grants to discharge unpaid student debt so students can resume their studies.[37] Given Ohio’s punitive approach to institutional student debt, its connection to transcript withholding and the downward trend in enrollment at most Ohio schools, the state can use ARPA funds to help colleges and universities take advantage of this opportunity. ARPA funds could also underwrite a statewide debt-navigator program to help students and former students make their way through the complexities of borrowing and repaying education debt. Language drafted to amend the lawmakers’ budget proposal requests only $1 million a year to establish a navigator program, while the Ohio Attorney General’s office holds more than $735 million worth of institutional student debt that it is trying to collect.
• Create a school-to-college pipeline in communities of color: State government should invest discretionary ARPA funds in initiatives that increase the number of Ohioans of color with advanced degrees, such as pipeline programs that transition K-12 students into college and retention interventions to help first-generation college students complete their programs.

Public transit: Over five years ago, the Ohio Department of Transportation (ODOT) found unmet demand for an additional 37 million public transit rides in Ohio. ODOT’s Transit Needs Study found $192.4 million was needed to purchase the necessary vehicles and infrastructure to meet demand.[38] State lawmakers have not acted on those recommendations and insufficient local revenues have caused service cuts and increased fares. Ohio’s public transit agencies will receive ARPA funds directly from the Federal Transportation Administration, but not enough to both restore their obsolete fleets and boost operations. The problem is particularly acute in communities of color. The Minority Health Strike Force called for improved access to public transportation and better connection of communities of color to health care, jobs and education. The state should focus its discretionary ARPA funds on capital investment to support local transit authorities and work with them to implement this recommendation of the strike force blueprint.

Lead poisoning: Lead poisoning is a serious public health threat — especially to children — in urban and rural communities across the state. The 2020-22 State Health Improvement Plan prioritizes reduction of lead poisoning, a chronic disease often caused by lead paint in older homes and water lines that contain lead.[39] The problem of lead poisoning in Ohio is immense: The Cleveland health department alone has a goal of raising $90 million to address the problem. Lead poisoning is not unique to Cleveland; it is pervasive in communities in Ohio.[40] Lawmakers should use ARPA funds to implement the recommendations of the State Health Improvement Plan and the strategies developed by the Governor’s Lead Advisory Task Force to protect Ohio’s children from lead poisoning. There are existing programs to which funds can be immediately directed for quick action: the Ohio EPA’s Drinking Water Assistance Line and the Ohio Lead Poisoning Prevention Fund.

Justice reform: The Minority Health Strike Force decried the mass incarceration of Black Ohioans, but the state lacks uniform data collection on sentencing to inform solutions. The Ohio Criminal Sentencing Commission, an affiliated office of the Supreme Court of Ohio, is setting up a new centralized data platform with initial funding included in the governor’s budget, but the effort should be greatly expanded so that a range of data can be collected. This is a good use of one-time ARPA funds to speed progress on the urgent issue of reducing Ohio’s problem of mass incarceration.

Broadband: State lawmakers should ensure all communities have sufficient internet access and bandwidth for education, business and telehealth activities. They can use state ARPA dollars to get started in a meaningful way. Half of the households in Ohio’s 32 Appalachian counties lack high-speed internet access; 27% of households in Cleveland had no internet access of any kind, including smartphones. It’s similar in other cities and towns. Buckeye Hills Regional Council has called for state lawmakers to establish a phased-in fund of $500 million to leverage federal dollars for Appalachian counties. That would be a good start, but insufficient, given the state-wide problem.[41]

Lawmakers are already working on this issue. House Bill 2 was passed on a bipartisan basis in the Ohio House of Representatives to fund a broadband grant program, and the proposal is being considered by lawmakers in the Senate. The grant program for broadband development would be funded at $20 million in 2021, $170 million in FY 2022 and $20 million in FY 2023. Far deeper investment is needed. The federal infrastructure funding is needed to address this vast need, but state lawmakers can augment the HB 2 grant program with discretionary ARPA dollars and other ARPA funds.[42] That money will help them dispatch immediate subsidies for households that cannot afford wireless and seed funds for broadband infrastructure in places where it does not exist.

Wage enforcement: Employers steal wages from an estimated 217,000 Ohio workers each year through minimum wage violations alone, ranking Ohio second among the nation’s 10 largest states in the share of workers reporting pay below the minimum wage.[43] This is underreported and underenforced: Ohio’s Bureau of Wage and Hour Administration had just five investigators and a supervisor in 2020. Ohio had 5.3 million people working in February 2020, and 5.6 million before COVID-19.[44]

The Economic Policy Institute has estimated that U.S. employers steal $15 billion from workers annually, an amount that exceeds the combined value of all property crimes ($12.7 billion).[45] In Ohio, minimum wage violations alone cost Ohio workers an estimated $600 million, about $2,800 for each affected worker. Ohio lawmakers should use the opportunity presented by the ARPA to fundamentally restructure wage theft enforcement to ensure all working people are paid for all the hours they put in. In addition to more inspectors, some of this money should go to the Attorney General’s office to create a dedicated workplace rights enforcement division as eight states have done, six in the last five years.[46]

The American Rescue Plan will help Ohio, communities, schools, transit agencies and many other essential public service entities meet the ongoing, expanded needs of the lingering pandemic and recession and to rebuild. The $5.6 billion the state gets in flexible funds to meet needs through the end of 2024 sounds like a lot of money, but it is only a fraction of Ohio’s roughly $80 billion annual budget. Lawmakers can use those funds to start the restoration and lay the groundwork for a better future.

In this paper we recommend that ARPA funds be used first to address gaps in health care needs and to stamp out the virus as must as possible. Lawmakers should prioritize funding of the 34 recommendations of the Minority Health Strike Force, which laid out a blueprint of how to strengthen the health of Black, brown and Indigenous Ohioans and prevent communities of color from bearing the brunt of illness and suffering in the next health emergency.

Second, funds must be used to help the millions of Ohioans in households where income and jobs have been lost: families that still struggle to pay the rent and put dinner on the table. ARPA funds can be used to make sure the basic needs of all Ohioans are met, and that all can live with dignity.

Finally, ARPA funds can be invested strategically to create more opportunity for all Ohioans, regardless of race, income level or where they live, as outlined in The People’s Budget: by ensuring quality education in all communities; safe communities for all people; economic dignity and stability for all families; a working health care system with access to health care in all communities, and caring for Ohio’s essential workers, with a focus on caregivers in child care and health care.[47]

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Budget PolicyCoronavirusEconomic StimulusMichael ShieldsPiet van LierWendy PattonWill Petrik