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OBM Announces Actions to Control Personnel Costs
This includes cost savings days and additional measures
The following statement can be attributed to the Ohio Office of Budget and Management (OBM) Director Kimberly A. Murnieks:
The State is facing a significant budget shortfall caused by the COVID-19 pandemic and the resulting impacts to Ohio’s economy. On May 5, 2020, Governor Mike DeWine announced actions to balance the fiscal year 2020 state budget. Fiscal year 2021 is projected to remain significantly below original budgeted estimates. OBM has updated fiscal year 2021 revenue projections and the COVID-19 pandemic will continue to negatively impact tax revenue such that available revenue receipts and balances in the GRF will be approximately $2.5 billion less than budgeted. Details regarding the updated fiscal year 2021 revenue projections will be included in the OBM Monthly Financial Report to be released on June 10.
Given the current economic situation resulting from the COVID-19 pandemic, it is necessary that Ohio state government implement immediate additional measures to reduce expenditures by state agencies, boards, and commissions, as planned personnel expenditures for fiscal year 2021 are unsustainable. Therefore, in accordance with Executive Order 2020-19D, Department of Administrative Services (DAS) Director Matthew Damschroder and I will be ordering certain cost savings measures for fiscal year 2021.
Pay and Step Freeze: We are requesting that the General Assembly adopt an amendment to institute a pay freeze and a freeze on step advancement for exempt employees for fiscal year 2021.
Mandatory Cost Savings Days: We are instituting a mandatory cost savings days program for fiscal year 2021 for exempt employees. This will be accomplished by reducing exempt employees’ bi-weekly wages for each pay period throughout the year in an amount equivalent to 80 hours (10 days) of unpaid leave, for an approximate 3.8% pay reduction.
Cabinet Directors: Cabinet director salaries will be reduced by 4 percent.
Unions: We have asked the organizations representing the State’s collective bargaining employees to come to the table by June 15 to discuss ways to reduce bargaining unit personnel costs.
Additional Measures: The State will continue to operate under the hiring freeze already in effect, again with exceptions for those staff providing direct response to the COVID-19 situation. All existing budgetary control restrictions will continue. OBM and DAS will continue to partner to identify personnel and cost containment strategies to balance the state budget and preserve our ability to provide services to Ohioans.