New data shows the good, the bad, and the ugly of Ohio government finances

The U.S. Census Bureau’s Annual Survey of State Government Finances, released this month for the years 2023-2024, reveals the good, the bad, and the ugly of the seventh most populous state.

The Good

Ohio continues to demonstrate strong fiscal discipline, according to the survey, especially compared to other states with comparable population sizes. The state achieved near-perfect balance, collecting $98.3 billion in total revenue while spending $97.2 billion — a slight surplus signaling stability.

Most impressively, outstanding debt stood at just $3.1 billion, equating to roughly $264 per resident for a population of about 11.8 million. This remarkably low burden stands out nationally, where many larger states carry debt in the tens or hundreds of billions. Ohio’s conservative borrowing approach reflects prudent management, earning praise for keeping long-term obligations minimal compared to high-debt peers such as California and New York.

Corporate Activities Tax resulted in $2.15 billion in revenues, while corporate net income taxes remained low – just under $1 million collected – spurring economic growth that resulted in approximately 3,667 new jobs across 25 developments as of March 2026.

The Bad

Ohio relies heavily on federal support, via “intergovernmental revenue” — mostly federal aid — accounting for $37.8 billion, or about 38% of total revenue. This dependence exposes the state to risks from changes in federal policy or funding cuts. On the tax side, sales and gross receipts taxes dominated at $25.2 billion, nearly 65% of total taxes collected, while individual income taxes brought in $11.3 billion.

The Ugly

Public welfare spending, driven largely by Medicaid and related programs, consumed $40.2 billion — more than 41% of total expenditures and a notably high share compared to national averages. This heavy focus on social services and welfare programs reflects ongoing demographic and economic pressures in the state, but crowds out other priorities like infrastructure or education, the state’s second-highest expenditure at $28.1 billion.

In a corresponding report from the Ohio Auditor for fiscal year 2023, federal compliance costs – amid $45 billion in administered funds – were flagged for errors. Issuing an unmodified opinion on the state’s basic financial statements, Auditor Steve Faber noted a material weakness in internal control over financial reporting and several compliance findings—primarily in Medicaid eligibility, subrecipient monitoring, and grant administration.

According to both reports, Ohio’s high reliance on federal aid poses structural challenges to funding core state needs independently. As welfare costs for programs like SNAP have jumped by 71% in the last year alone, the state may face budget strains amid new federal cost-sharing rules.

As previously reported, Ohio lawmakers are currently working to tackle the state’s 9% error-rate — noted by Faber as an internal weakness — as a new federal law will soon take effect that holds states accountable for misallocated federal funds.

Overall, Ohio’s financial reports have shown restraint in debt and balance, setting it apart from states of similar size for its fiscal responsibility. Yet, the data’s two-year lag time neither accounts for bigger government spending requests made by DeWine in his final State of the State, recent increases in welfare programs, nor federal compliance shifts.