A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2020  
Issue: April 2020  
Highlights  
Ross Miller, Chief Economist  
March GRF tax revenue was $159 million below the estimate published by the  
Office of Budget and Management (OBM) in August 2019. Revenue from both the  
sales and use tax and the personal income tax (PIT) was below their respective  
estimates, not surprisingly, in light of the societal changes made in response to the  
COVID-19 crisis. Despite the weak revenue performance for the month, GRF tax  
revenue remained above estimate, by almost $90 million, for FY 2020 through  
March.  
Time lags are an important factor underlying the fact that March tax revenue  
was not weaker than it was. LBO economists expect April GRF tax revenue  
performance to be considerably worse, but the speed with which events are  
changing makes it extremely difficult to quantify the effects those events will have  
on revenues. The Tracking the Economy article in this months edition includes a  
preliminary analysis of the most recent economic forecast received from IHS Markit  
as compared with the economic forecast used to forecast Ohios FY 2020-FY 2021  
GRF tax revenue during the budget process last year. LBO economists have been in  
regular communication with economists at IHS Markit, who are working to keep up  
with the changing circumstances due to COVID-19 and their implications for the  
economy.  
Through March 2020, GRF sources totaled $24.90 billion:  
Revenue from the sales and use tax was $77.4 million (1.0%) above estimate;  
PIT receipts were $39.9 million (0.7%) below estimate.  
Through March 2020, GRF uses totaled $26.42 billion:  
Program expenditures were $200.5 million (0.8%) below estimate;  
GRF Medicaid expenditures were above estimate by $136.8 million (1.2%);  
Spending in all other program categories was below estimate except Other  
Education, for which spending was above estimate by $3.1 million.  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
In this issue...  
More details on GRF Revenues (p. 3), Expenditures (p. 13),  
the National Economy (p. 35), and the Ohio Economy (p. 38).  
Also Issue Updates on:  
Federal Grants Related to COVID-19 (p. 21)  
Coronavirus Relief Fund (p. 23)  
Education Stabilization Fund (p. 24)  
Temporary Increase in Federal Medicaid Reimbursements (p. 24)  
Unemployment Compensation During the COVID-19 Emergency (p. 25)  
Ohio Physician and Allied Health Care Workforce Preparation Task Force (p. 27)  
Infant Mortality Rate Decrease (p. 28)  
Research Incentive Third Frontier Funding (p. 29)  
RecoveryOhio Law Enforcement Grants (p. 30)  
HUD Grants for Homelessness Assistance Programs (p. 30)  
Facial Recognition Task Force (p. 31)  
State Library Board Support of Census 2020 (p. 32)  
Hemp Program Licenses (p. 32)  
Increase in Appropriation for Tourism Promotion (p. 33)  
Budget Footnotes  
P a g e | 2  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of March 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on April 1, 2020)  
State Sources  
Actual  
Estimate*  
Variance Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$128,963  
$622,516  
$751,479  
$130,400  
$689,100  
$819,500  
-$1,437  
-$66,584  
-$68,021  
-1.1%  
-9.7%  
-8.3%  
Personal Income  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Estate  
$416,522  
$12,232  
$73,552  
$29,816  
$19,456  
-$2,286  
$41,733  
$4,943  
$0  
$4,181  
$3,907  
$2,573  
-$457  
$438,800  
$9,400  
$72,400  
$32,400  
$97,800  
$0  
$33,500  
$1,600  
$0  
$4,800  
$3,700  
$3,200  
$0  
-$22,278  
$2,832  
$1,152  
-$2,584  
-$78,344 -80.1%  
-5.1%  
30.1%  
1.6%  
-8.0%  
-$2,286  
$8,233  
---  
24.6%  
$3,343 209.0%  
$0 ---  
-$619 -12.9%  
$207 5.6%  
-$627 -19.6%  
-$457  
$10  
---  
---  
$10  
$0  
Total Tax Revenue  
$1,357,662 $1,517,100 -$159,438 -10.5%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$24  
$30,333  
$11,104  
$41,461  
$0  
$27,073  
$10,695  
$37,768  
$24  
$3,260  
$409  
---  
12.0%  
3.8%  
Total Nontax Revenue  
$3,693  
9.8%  
Transfers In  
Total State Sources  
Federal Grants  
$0  
$0  
$0  
---  
$1,399,123 $1,554,868 -$155,745 -10.0%  
$609,997  
$618,648  
-$8,651  
-1.4%  
-7.6%  
Total GRF Sources  
$2,009,120 $2,173,516 -$164,395  
*Estimates of the Office of Budget and Management as of August 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 3  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2020 as of March 31, 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on April 1, 2020)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance Percent FY 2019**  
Percent  
$1,158,208 $1,113,300 $44,908  
$7,010,689 $6,978,200 $32,489  
$8,168,897 $8,091,500 $77,397  
4.0% $1,078,723  
0.5% $6,700,379  
1.0% $7,779,102  
7.4%  
4.6%  
5.0%  
Personal Income  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Estate  
$6,006,883 $6,046,800 -$39,917  
$1,258,419 $1,219,300 $39,119  
-0.7% $6,072,488  
3.2% $1,200,251  
-1.1%  
4.8%  
-1.6%  
-5.4%  
2.5%  
$617,088  
$258,200  
$335,930  
$1,685  
$610,200  
$261,600  
$331,000  
$200  
$6,888  
-$3,400  
$4,930  
1.1%  
-1.3%  
1.5%  
$626,849  
$272,923  
$327,588  
$1,485 742.7%  
$31 5360.2%  
$128,097  
$100,848  
$29,061  
$39,587  
$39,049  
$6,614  
$111,600 $16,497  
$100,000 $848  
$40,000 -$10,939 -27.3%  
14.8%  
0.8%  
$117,377  
9.1%  
-3.2%  
-28.1%  
0.7%  
3.7%  
-21.3%  
$104,200  
$40,432  
$39,297  
$37,658  
$8,400  
$42,800  
$37,800  
$7,700  
$0  
-$3,213  
$1,249  
-$1,086 -14.1%  
-$364  
$48  
-7.5%  
3.3%  
-$364  
$48  
---  
---  
$1,456 -125.0%  
$32  
$0  
47.7%  
Total Tax Revenue  
$16,990,042 $16,900,500 $89,542  
0.5% $16,628,083  
2.2%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$77,002  
$51,142  
$91,453  
$219,597  
$55,000 $22,002  
$47,173 $3,969  
$71,915 $19,538  
40.0%  
8.4%  
27.2%  
26.1%  
$55,153  
$52,250  
$66,262  
$173,665  
39.6%  
-2.1%  
38.0%  
26.4%  
Total Nontax Revenue  
$174,089 $45,508  
Transfers In  
$76,431  
$68,570  
$7,862  
11.5%  
$83,039  
-8.0%  
2.4%  
3.3%  
2.7%  
Total State Sources  
Federal Grants  
$17,286,070 $17,143,158 $142,912  
$7,614,467 $7,524,202 $90,265  
$24,900,537 $24,667,360 $233,177  
0.8% $16,884,786  
1.2% $7,371,973  
0.9% $24,256,759  
Total GRF SOURCES  
*
*
Estimates of the Office of Budget and Management as of August 2019.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 4  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean J. Botomogno, Principal Economist  
Overview  
The Ohio economy abruptly decelerated in the second half of March as the state took  
progressively more stringent measures to slow the COVID-19 outbreak. The Governor issued an  
emergency declaration on March 9, 2020, and various public health orders followed, including a  
stay-at-home requirement. March GRF sources fell relative to estimate by $164.4 million (7.6%).  
Almost half of this March variance was due to an expected, timing-related negative variance of  
$
78.3 million in the foreign insurance tax. The rest was largely due to the pandemic measures  
previously mentioned. This performance decreased the YTD positive variance of GRF sources to  
233.2 million (0.9%) above the August 2019 OBM estimates, down from a cumulative positive  
$
variance of $397.6 million at the end of February. Despite the monthly revenue shortfall, YTD  
positive variances for all GRF categories continued at the end of the third fiscal quarter as follows:  
2
tax revenue ($89.5 million, 0.5%), federal grants ($90.3 million, 1.2%), nontax revenues  
(
for the month of March and for FY 2020 through March, respectively. GRF sources consist of both  
federal grants and state-source receipts, such as tax revenue, nontax revenue, and transfers in.  
$45.5 million, 26.1%), and transfers in ($7.9 million, 11.5%). Tables 1 and 2 show GRF sources  
Chart 1, below, shows cumulative YTD variances of GRF sources each month through  
March 2020.  
Chart 1: Cumulative Variances of GRF Sources in FY 2020  
(
Variances from Estimates, $ in millions)  
$500  
$400  
$300  
$200  
$100  
$0  
-
-
-
-
$100  
$200  
$300  
$400  
Jul-19  
Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20  
Federal Grants Tax Revenue Total GRF Sources  
1 This report compares actual monthly and year-to-date (YTD) GRF revenue sources to OBMs  
estimates. If actual receipts were higher than estimate, that GRF source is deemed to have a positive variance.  
Alternatively, a GRF source is deemed to have a negative variance if actual receipts were lower than estimate.  
2 Federal grants are typically federal reimbursements for Medicaid and other human services  
programs.  
Budget Footnotes  
P a g e | 5  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Among measures designed to help consumers and businesses weather the impact of  
the COVID-19 pandemic, H.B. 197 of the 133rd General Assembly authorized the Tax  
Commissioner to delay various state tax payments during the period of the Governors  
emergency declaration. In response to enactment of the bill, the Tax Commissioner authorized  
an extension of the deadline to file state income taxes until July 15, matching the extended  
3
deadline for federal returns. Both reduced economic activity and the tax payment delay are  
likely to substantially curtail GRF revenue from the PIT in the final months of this fiscal year;  
reduced economic activity is expected to reduce sales and use tax receipts and revenue from  
the commercial activity tax (CAT) during those months. H.B. 197 also authorized the Director  
of Budget and Management to make a transfer as needed from the Budget Stabilization  
Fund (BSF) to the GRF in order to make up any FY 2020 revenue shortfall; the current balance  
of the BSF is about $2.69 billion. The transfer is subject to the approval of four members of the  
Controlling Board.  
Through nine months in FY 2020, the sales and use tax, the CAT, and the financial  
institution tax (FIT) exceeded their respective YTD estimates by $77.4 million, $39.1 million, and  
$
domestic insurance tax were also above their respective YTD projected revenues by $6.9 million,  
16.5 million, respectively. In addition, the cigarette tax, the foreign insurance tax, and the  
$
$
the kilowatt-hour excise tax, and $3.2 million from the alcoholic beverage tax.  
4.9 million, and $1.5 million. Those positive variances were partially offset by shortfalls of  
39.9 million from the PIT, $10.9 million from the natural gas consumption tax, $3.4 million from  
For the first time in FY 2020, monthly GRF tax revenues were significantly below  
estimate, in part, due to a timing-related shortfall for the foreign insurance tax. March GRF tax  
sources, which were 10.5% below anticipated receipts, contributed $159.4 million of the total  
GRF sourcesshortfall of $164.4 million noted earlier. For the remaining GRF categories, federal  
grants were $8.7 million (1.4%) below estimate, but nontax revenue exceeded anticipated  
revenue by $3.7 million (9.8%). No transfers in were made in March, as anticipated by OBM.  
Regarding specific tax sources, the foreign insurance tax posted a negative variance of  
$
78.3 million, which followed a surplus of $64.7 million in the previous month. So combined  
receipts in February and March were $13.6 million (7.6%) below the two-month estimate. In  
addition to that shortfall, the sales and use tax, the PIT, the kilowatt-hour excise tax, and the  
domestic insurance tax were below estimates in March by $68.0 million, $22.3 million,  
$
utility tax, and the cigarette tax posted positive variances of $8.2 million, $2.8 million,  
2.6 million, and $2.3 million, respectively. On the other hand, the FIT, the CAT, the public  
$
3.3 million, and $1.2 million, respectively.  
YTD GRF sources were $643.8 million (2.7%) higher than GRF sources in FY 2019 through  
March. Except for transfers in, which were $6.6 million below their FY 2019 level, revenue from  
the other categories grew relative to receipts in the previous year: tax sources, federal grants,  
and nontax revenue increased $362.0 million, $242.5 million, and $45.9 million, respectively.  
Growth in GRF tax revenue was mostly due to the sales and use tax ($389.8 million), the CAT  
($58.2 million), and the FIT ($10.7 million). On the other hand, receipts fell for the utility-related  
3 The extended deadline applies also to school district income taxes, certain returns and payments  
filed by pass-through entities, and municipal net profit taxes if they are administered by the Department  
of Taxation. Filing deadlines for other taxes have not been extended.  
Budget Footnotes  
P a g e | 6  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
taxes ($29.4 million), due to lower energy prices this year; the cigarette tax ($9.8 million), which  
is the normal trend; and the PIT ($65.6 million), due to two reductions made to withholding tax  
rates in the last 15 months. (The section below analyzing the PIT provides additional details on  
the rate cuts.)  
Sales and Use Tax  
The sales and use tax had been substantially below estimates only once (December 2019)  
this fiscal year. March sales and use taxes totaling $751.5 million were $68.0 million (8.3%) below  
anticipated revenue as a large number of stores and restaurants were shuttered when the  
emergency order and the stay-at-home requirement took effect. Both the nonauto and the auto  
portions of the tax had negative variances. Monthly receipts were also $23.3 million (3.0%) below  
receipts in March 2019. This monthly performance brought the YTD positive variance of the tax  
source down to $77.4 million (1.0%), from a cumulative positive variance of $145.4 million  
through February.  
For analysis and forecasting, revenue from the sales and use tax is separated into two  
parts: auto and nonauto. Auto sales and use tax collections generally arise from the sale of motor  
vehicles, but auto taxes arising from leases are paid at the lease signing and are mostly recorded  
under the nonauto tax instead of the auto tax.  
GRF revenue from the sales and use tax is expected to decrease significantly in the next  
several months, as Ohio citizens are to be confined to their homes and nonessential businesses  
are closed for several more weeks.  
Nonauto Sales and Use Tax  
March GRF receipts from the nonauto sales and use tax totaling $622.5 million were  
66.6 million (9.7%) below estimate and $30.3 million (4.6%) below revenue in March 2019. For  
$
the YTD, total receipts of $7.01 billion were $32.5 million (0.5%) above estimate, down from a  
cumulative positive variance of $99.1 million through February. YTD GRF receipts were also  
$
310.3 million (4.6%) above revenue in the corresponding period in FY 2019. Chart 2, below,  
shows year-over-year growth in nonauto sales and use tax collections in FY 2020. On a  
three-month moving average basis, revenue growth has been good, if uneven, in FY 2020.  
However, growth is likely to experience a sustained decline in the next several months. Though  
online purchases are substituting for some of the purchases that would have been made in  
stores, how consumers react to lost jobs and reduced wages, and how long businesses remain  
shuttered, will determine the extent of the overall decline in nonauto sales tax revenue.  
Budget Footnotes  
P a g e | 7  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 2: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Jul-19  
Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20  
Auto Sales and Use Tax  
Despite a collapse of showroom traffic in the second half of March, monthly auto sales  
4
and use taxes of $129.0 million were only $1.4 million (1.1%) below estimate. However, March  
receipts were $7.0 million (5.7%) above revenue in the same month last year. YTD GRF revenue  
from this source totaling $1.16 billion was $44.9 million (4.0%) above estimate and $79.5 million  
(
7.4%) above receipts during the corresponding period in FY 2019. Chart 3 shows year-over-year  
growth in auto sales and use tax collections. The growth rate in FY 2020 relative to FY 2019 has  
been positive throughout the fiscal year. However, similarly to the nonauto sales and use tax, the  
closure of auto dealerships and layoffs will negatively affect the auto sales tax in future months.  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
1
0.0%  
9.0%  
8.0%  
7.0%  
6.0%  
5.0%  
4.0%  
3.0%  
2.0%  
1.0%  
0.0%  
Jul-19  
Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20  
Feb-20 Mar-20  
4 Auto sales and use tax remittances were generally not affected until the last week of March.  
Budget Footnotes  
P a g e | 8  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
U.S. light vehicle sales (autos and light trucks) started 2020 on a strong note, reaching  
about 17 million seasonally adjusted annualized units in January and in February. However, as  
expected, nationwide sales dropped significantly in March 2020, tallying only 10.7 million units,  
with sales dropping across both autos and light trucks. Compared to sales in the same month a  
year ago, annualized seasonally adjusted units decreased by 38.5%. Unit sales of light trucks  
decreased by 38.1%, while auto sales were down 46.3%.  
Personal Income Tax  
Through March, YTD GRF receipts from the PIT of $6.01 billion were $39.9 million (0.7%)  
below projections, a deficit which was an increase from a cumulative shortfall of $17.6 million  
through February. Yearly GRF revenue was $65.6 million (1.1%) below revenue in the first three  
quarters of FY 2019 due to two reductions in withholding rates. Year-over-year growth in  
withholding receipts during the first half of FY 2020 was limited by a 3.3% reduction in  
withholding rates implemented in January 2019. Year-over-year growth in withholding receipts  
in the first quarter of 2020 was limited due to a 4.0% reduction in withholding rates effective  
January 2020. The more recent reduction was due to a 4.0% reduction in income tax rates for  
nonbusiness income enacted by H.B. 166. The OBM revenue estimates for FY 2020 incorporated  
the fiscal impact of this rate reduction for the January to June period.  
PIT revenue to the GRF is comprised of gross collections, minus refunds and distributions  
to the Local Government Fund (LGF). Gross collections consist of employer withholdings,  
5
quarterly estimated payments, trust payments, payments associated with annual returns, and  
other miscellaneous payments. The performance of the tax is typically driven by employer  
withholdings, which is the largest component of gross collections (about 81% of gross collections  
in FY 2019). Generally, larger than expected refunds could also greatly affect the monthly  
performance of the tax, and refund activity has influenced the shortfall in PIT receipts through  
the first three quarters of this fiscal year.  
March GRF receipts from the PIT were $22.3 million (5.1%) short of anticipated revenue  
and $48.6 million (10.4%) below receipts in the same month last year. The monthly revenue  
shortfall was largely due to refunds, which were $17.5 million above estimate, thereby boosting  
a negative variance of $4.9 million for gross collections. Payments with annual returns and  
miscellaneous payments had negative variances of $17.8 million and $2.7 million, respectively.  
Those negative variances were partially offset by positive variances of $13.6 million for employer  
withholding and $2.4 million for quarterly estimated payments.  
For the YTD, revenues from each component of the PIT relative to estimates and revenue  
received in FY 2019 are detailed in the table below. Gross collections were $64.0 million above  
projections. Employer withholding, quarterly estimated payments, and trust payments exceeded  
their YTD estimates by $57.4 million, $14.4 million, and $5.5 million, respectively. Those positive  
variances were offset by a shortfall of $13.5 million from annual return payments. Refunds and  
distributions to the LGF as a whole were $103.9 million higher than expected, thus resulting in a  
YTD shortfall of $39.9 million.  
5 Quarterly estimated payments are made by taxpayers who expect to be underwithheld by more  
than $500. Payments are due in April, June, and September of an individuals tax year and March of the  
following year. Most estimated payments are made by high-income taxpayers.  
Budget Footnotes  
P a g e | 9  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Compared to PIT components in FY 2019, an increase of $175.8 million in gross collections  
in FY 2020 was offset by a larger increase in refunds and LGF distributions totaling $241.4 million,  
yielding a decline of $65.6 million. In part, the increase in LGF distributions is due to an increase  
in the allocation of GRF tax revenue to the LGF. H.B. 166 included a provision in uncodified law  
increasing the allocation from 1.66% of GRF tax revenue to 1.68% during the current biennium.  
Compared to receipts in the corresponding period in FY 2019, YTD FY 2020 employer withholding  
6
receipts grew 2.0%, despite the reductions in withholding rates described above.  
FY 2020 PIT Revenue Variance and Annual Change by Component  
YTD Variance from Estimate  
Changes from FY 2019  
Category  
Amount  
$ in millions)  
Percent  
(%)  
Amount  
($ in millions)  
Percent  
(%)  
(
Withholding  
$57.4  
$14.4  
$5.5  
0.8%  
$136.9  
$40.0  
$3.2  
2.0%  
Quarterly Estimated Payments  
Trust Payments  
2.5%  
17.4%  
-6.2%  
0.2%  
0.8%  
7.3%  
9.3%  
-2.8%  
2.4%  
2.3%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
-$13.5  
$0.1  
-$5.9  
$1.5  
$64.0  
$98.8  
$5.1  
$175.8  
$221.5  
$19.9  
-$65.6  
Less Refunds  
6.6%  
16.2%  
6.7%  
Less LGF Distribution  
GRF PIT Revenue  
1.6%  
-$39.9  
-0.7%  
-1.1%  
The chart below illustrates the growth of monthly employer withholdings on a  
three-month moving average relative to one year ago. It shows both the actual change in  
withholding receipts in FY 2020 and estimated withholding receipts adjusted for the decreases in  
withholding tax rates. Payrolls are estimated to have grown about 2.3%, on average, in the first  
quarter of 2020.  
6 Withholding receipts consist of monthly employer withholding (about 99% of the total) and  
annual employer withholding.  
Budget Footnotes  
P a g e | 10  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 4: Monthly Witholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
9
8
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Actual  
Adjusted  
Fourth-quarter PIT revenue was estimated at $2.68 billion, nearly 31% of estimated  
7
receipts for the fiscal year. Thus, the extension of the income tax return filing deadline and tax  
payments to July 15 is likely to significantly reduce PIT receipts in the April-June period and shift  
some of those payments to FY 2021.  
Commercial Activity Tax  
March is not a big revenue month for the CAT. GRF receipts of $12.2 million were  
2.8 million (30.1%) above estimate, but $4.1 million (25.3%) below March 2019 revenue. The  
$
monthly performance of the CAT increased its YTD positive variance to $39.1 million (3.2%), up  
from $36.3 million at the end of February. FY 2020 GRF receipts totaled $1.26 billion, an amount  
$
58.2 million (4.8%) above revenue through March in FY 2019. As shown in the chart below,  
following a dismal second fiscal quarter in which the CAT was below both estimates and  
prior-year receipts, third-quarter GRF receipts were $16.4 million (3.8%) above estimate and  
$
revenue in FY 2020 has been driven throughout the fiscal year, in part, by a decline in tax credits  
and refunds claimed against the CAT. Through March, FY 2020 gross collections (i.e., all funds  
18.9 million (4.4%) above receipts in the corresponding period in FY 2019. The increase in GRF  
8
revenue) grew only 2.5% while refunds and credits fell 26.3%, resulting in a higher growth rate  
for the GRF.  
7 April estimated receipts are $1.26 billion of the total.  
8 A number of Ohios business tax credits can be claimed against more than one type of tax, but  
many are claimed against the CAT, which is imposed on the privilege of doing business in Ohio. In the first  
three quarters of FY 2020, refunds and credits totaled $83.6 million, $29.7 million below those in the  
corresponding period in FY 2019.  
Budget Footnotes  
P a g e | 11  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Under continuing law, CAT receipts are deposited into the GRF (85.0%), the School District  
Tangible Property Tax Replacement Fund (Fund 7047, 13.0%), and the Local Government  
Tangible Property Tax Replacement Fund (Fund 7081, 2.0%). Through three quarters in FY 2020,  
Fund 7047 and Fund 7081 received $192.5 million and $29.6 million, respectively. The  
distributions are used to make reimbursement payments to school districts and other local taxing  
units, respectively, for the phase out of property taxes on general business tangible personal  
property. Any receipts in excess of amounts needed for such payments are transferred back to  
the GRF.  
Chart 5: FY 2020 Quarterly CAT GRF Revenue  
Actual vs. Estimate and Prior Year ($ in millions)  
$60.0  
$50.0  
$40.0  
$30.0  
$20.0  
$10.0  
$
0.0  
FY 2020Q1  
FY 2020Q2  
FY 2020Q3  
-
-
$10.0  
$20.0  
Estimates  
FY 2019  
Cigarette and Other Tobacco Products Tax  
YTD revenue to the GRF from the cigarette and other tobacco products tax totaled  
617.1 million, $6.9 million (1.1%) above estimate, but $9.8 million (1.6%) below receipts  
$
through March in FY 2019. YTD revenue included $556.9 million from the sale of cigarettes and  
$
60.2 million from the sale of other tobacco products. Compared to FY 2019, receipts from  
cigarette sales fell $12.7 million (2.2%) while those from the sale of other tobacco products  
increased $2.9 million (5.1%). On a yearly basis, revenue from the cigarette and other tobacco  
products tax usually trends downward generally at a slow pace due to a decline of cigarette  
revenue, though receipts from the sales of other tobacco products increase yearly.  
H.B. 166 levied a tax of 10¢ per milliliter (or gram) of vapor product (depending on the  
form of the product). A vapor product is defined as any liquid solution or other substance that  
contains nicotine and is depleted as it is used in an electronic smoking product. The tax is to be  
paid by distributors beginning October 1, 2019. The taxation of vapor products is estimated to  
increase GRF revenue by $3.2 million in FY 2020, with most of the revenue occurring in the  
January to June period. The increase relative to FY 2019 revenue from the other tobacco products  
tax is due, in part, to the tax on vapor products.  
Budget Footnotes  
P a g e | 12  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of March 2020  
($ in thousands)  
(Actual based on OAKS reports run April 6, 2020)  
Program Category  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$666,101  
$197,026  
$10,456  
$654,289 $11,812  
1.8%  
-0.9%  
46.8%  
1.5%  
$198,870  
$7,121  
-$1,844  
$3,335  
Other Education  
Total Education  
$873,584  
$860,281 $13,303  
Medicaid  
$1,044,341 $1,008,007 $36,334  
$142,082 $109,652 $32,430  
$1,186,422 $1,117,658 $68,764  
3.6%  
29.6%  
6.2%  
Health and Human Services  
Total Health and Human Services  
Justice and Public Protection  
General Government  
$179,267  
$38,560  
$168,289 $10,978  
6.5%  
$45,315  
-$6,756 -14.9%  
$4,222 2.0%  
Total Government Operations  
$217,826  
$213,604  
Property Tax Reimbursements  
Debt Service  
$98,060  
$160,869  
$258,928  
$172,019 -$73,959 -43.0%  
$165,985 -$5,116 -3.1%  
$338,004 -$79,075 -23.4%  
Total Other Expenditures  
Total Program Expenditures  
Transfers Out  
$2,536,761 $2,529,547  
$4,500 $0  
$7,213  
$4,500  
0.3%  
---  
Total GRF Uses  
$2,541,261 $2,529,547 $11,713  
0.5%  
*September 2019 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2020 as of March 31, 2020  
($ in thousands)  
(Actual based on OAKS reports run April 6, 2020)  
Program Category  
Actual  
Estimate*  
Variance  
Percent FY 2019** Percent  
Primary and Secondary Education  
Higher Education  
$6,391,174  
$1,743,287  
$71,241  
$6,431,449  
$1,815,720  
$68,168  
-$40,275  
-$72,433  
$3,074  
-0.6% $6,330,706  
-4.0% $1,730,016  
1.0%  
0.8%  
Other Education  
4.5%  
$60,503  
17.7%  
1.0%  
Total Education  
$8,205,702 $8,315,336  
-$109,634  
-1.3% $8,121,225  
Medicaid  
$11,993,585 $11,856,744  
$136,841  
-$42,424  
$94,417  
1.2% $11,381,455  
5.4%  
10.7%  
5.8%  
Health and Human Services  
$1,106,555  
$1,148,978  
-3.7%  
$999,692  
Total Health and Human Services  
$13,100,139 $13,005,722  
0.7% $12,381,148  
Justice and Public Protection  
General Government  
$1,842,739  
$333,267  
$1,866,600  
$392,141  
-$23,860  
-1.3% $1,723,646  
6.9%  
17.4%  
8.4%  
-$58,874 -15.0%  
$283,887  
Total Government Operations  
$2,176,006 $2,258,741  
-$82,734  
-3.7% $2,007,533  
Property Tax Reimbursements  
Debt Service  
$1,003,351  
$1,261,803  
$1,098,023  
$1,269,693  
-$94,672  
-$7,890  
-8.6% $1,091,920  
-0.6% $1,276,519  
-4.3% $2,368,440  
-8.1%  
-1.2%  
-4.4%  
Total Other Expenditures  
$2,265,154 $2,367,716  
-$102,562  
Total Program Expenditures  
Transfers Out  
$25,747,002 $25,947,515  
-$200,513  
-$1,856  
-0.8% $24,878,346  
3.5%  
$668,120  
$669,975  
-0.3%  
$759,077 -12.0%  
3.0%  
Total GRF Uses  
$26,415,121 $26,617,490  
-$202,368  
-0.8% $25,637,423  
*
*
September 2019 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 14  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on April 7, 2020)  
Month of March 2020  
Year to Date through March 2020  
Actual Estimate* Variance Percent  
Department  
Medicaid  
GRF  
Actual  
Estimate* Variance Percent  
$981,212  
$946,641 $34,571  
3.7% $11,390,286 $11,257,888 $132,398  
1.1% $7,199,701 $7,339,504 -$139,803  
1.2%  
-1.9%  
0.0%  
Non-GRF  
$1,153,089 $1,140,560 $12,529  
$
2,134,301 $2,087,200 $47,100  
2.3% $18,589,987 $18,597,392  
-$7,405  
All Funds  
Developmental Disabilities  
GRF  
$54,079  
301,431  
355,510  
$53,127  
$951  
1.8% $518,197 $517,378  
$819  
-$26,060  
-$25,240  
0.2%  
-1.4%  
-1.0%  
$
$282,672 $18,759  
$335,800 $19,710  
6.6% $1,897,079 $1,923,139  
5.9% $2,415,276 $2,440,516  
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$8,319  
$16,729  
25,048  
$7,315  
$15,643  
$22,958  
$1,004  
$1,086  
$2,090  
13.7%  
6.9%  
9.1%  
$77,172  
$143,011  
$220,183  
$73,397  
$138,622  
$212,020  
$3,775  
$4,389  
$8,163  
5.1%  
3.2%  
3.9%  
Non-GRF  
$
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$732  
$924  
$3,842  
$4,766  
-$193 -20.8%  
-$1,145 -29.8%  
-$1,337 -28.1%  
$7,930  
$32,189  
$40,119  
$8,081  
$32,434  
$40,515  
-$151  
-$245  
-$396  
-1.9%  
-0.8%  
-1.0%  
Non-GRF  
$2,697  
$
3,429  
All Funds  
All Departments:  
GRF  
$1,044,341 $1,008,007 $36,334  
$1,473,947 $1,442,718 $31,229  
3.6% $11,993,585 $11,856,744 $136,841  
2.2% $9,271,980 $9,433,699 -$161,719  
1.2%  
-1.7%  
-0.1%  
Non-GRF  
All Funds  
$
2,518,287 $2,450,724 $67,563  
2.8% $21,265,565 $21,290,443  
-$24,878  
*September 2019 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 15  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on April 7, 2020)  
Month of March 2020  
Year to Date through March 2020  
Payment Category  
Actual  
Estimate* Variance Percent  
Actual  
Estimate*  
Variance Percent  
Managed Care  
CFC†  
$1,581,302 $1,548,654 $32,648  
2.1% $13,379,113 $13,179,842  
$199,271  
$89,014  
$158,964  
-$50,286  
$539  
1.5%  
1.9%  
4.7%  
-2.3%  
0.1%  
0.0%  
0.8%  
$558,671  
$447,160  
$253,827  
$79,980  
$241,664  
$0  
$548,770  
$9,901  
1.8% $4,689,676  
7.8% $3,576,262  
-5.6% $2,173,793  
$4,600,662  
$3,417,297  
$2,224,079  
$715,164  
Group VIII  
ABD†  
$414,627 $32,533  
$268,873 -$15,046  
ABD Kids  
My Care  
P4P†  
$85,153  
$231,231 $10,433  
$0 $0  
-$5,173  
-6.1% $715,702  
4.5% $2,017,558  
--- $206,121  
$2,018,158  
$204,482  
-$599  
$1,639  
Fee-For-Service  
ODM Services  
DDD Services  
$765,108  
$397,632  
$351,225  
$12,489  
$3,761  
$718,624 $46,484  
$388,012 $9,620  
$330,612 $20,613  
$0 $12,489  
6.5% $6,343,107 $6,435,754  
-$92,646  
-$63,996  
-$17,962  
-$9,747  
-$941  
-1.4%  
-2.0%  
-0.8%  
-1.5%  
-0.7%  
2.5% $3,193,148  
6.2% $2,346,548  
$3,257,144  
$2,364,510  
$669,444  
$144,655  
Hospital - HCAP†  
Hospital - Other  
---  
---  
$659,697  
$143,714  
$0  
$3,761  
Premium Assistance  
$99,713  
$99,537  
$176  
0.2%  
$840,503  
$859,244  
-$18,742  
-2.2%  
Medicare Buy-In  
$59,167  
$57,084  
$2,084  
3.7%  
$487,891  
$496,862  
-$8,971  
-1.8%  
Medicare Part D  
$40,545  
$42,453  
-$1,908  
-4.5%  
$352,612  
$362,382  
-$9,770  
-2.7%  
Administration  
Total  
$72,165  
$83,910 -$11,744 -14.0%  
$702,842  
$815,604 -$112,762 -13.8%  
$2,518,287 $2,450,724 $67,563  
2.8% $21,265,565 $21,290,443 -$24,878 -0.1%  
*September 2019 estimates from the Department of Medicaid.  
P4P - Pay For Performance.  
CFC - Covered Families and Children; ABD - Aged, Blind, and Disabled; HCAP - Hospital Care Assurance Program;  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 16  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
EMexlanpey Cearnter,dDiriecttorures9  
Ivy Chen, Principal Economist  
Overview  
For the YTD, GRF uses of $26.42 billion were below estimate by $202.4 million (0.8%). This  
negative variance decreased from the end of February due to a positive variance of $11.7 million  
for the month of March. This positive March variance would have been larger except for a  
timing-related negative variance of $74.0 million in Property Tax Reimbursements. Despite  
positive March variances in five of the nine program categories, all but two categories, Medicaid  
and Other Education, had negative YTD variances. YTD variances in GRF uses compared to  
estimates are shown in the preceding Table 4. The preceding Table 3 shows GRF uses compared  
to estimates for the month of March.  
Medicaids GRF expenditures were above estimate by $36.3 million for the month of  
March, increasing Medicaids YTD positive GRF variance to $136.8 million at the end of March.  
The following section gives more details about Medicaid GRF and non-GRF variances.  
Property Tax Reimbursements had the largest negative YTD variance of $94.7 million, due  
largely to a negative variance of $74.0 million in March. The second and third largest negative  
YTD variances were in Higher Education ($72.4 million) and General Government ($58.9 million).  
Both of these negative variances grew in March, by $1.8 million and $6.8 million, respectively.  
Three other program categories had negative YTD variances that were more than $20.0 million.  
All three of these had positive variances in March that reduced their negative YTD variances.  
These categories are: Health and Human Services ($42.4 million, falling by $32.4 million in  
March), Primary and Secondary Education ($40.3 million, falling by $11.8 million), and Justice and  
Public Protection ($23.9 million, falling by $11.0 million). These variances are discussed further  
in the following sections.  
GRF uses include both program expenditures and transfers out. Transfers out had a  
positive variance of $4.5 million in March due to a transfer of $4.5 million into the Information  
Technology Development Fund (Fund 5LJ0) to support the Office of InnovateOhio. This transfer  
was originally scheduled to occur in August.  
Medicaid  
GRF Medicaid expenditures were above their monthly estimate in March by $36.3 million  
(
(
3.6%), which caused the variance in Medicaid YTD expenditures to increase to $136.8 million  
1.2%) above estimate. Non-GRF Medicaid expenditures were also above their monthly estimate,  
by $31.2 million (2.2%), but remained below their YTD estimate by $161.7 million (1.7%).  
Including both the GRF and non-GRF, all funds Medicaid expenditures were $67.6 million (2.8%)  
above estimate in March and $24.9 million (0.1%) below their YTD estimate at the end of March.  
9 This report compares actual monthly and YTD expenditures from the GRF to OBMs estimates. If  
a program categorys actual expenditures were higher than estimate, that program category is deemed  
to have a positive variance. The program category is deemed to have a negative variance when its actual  
expenditures were lower than estimate.  
Budget Footnotes  
P a g e | 17  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Above estimate expenditures in March eliminated the majority of the YTD negative variance for  
all funds expenditures carried over from previous months of the fiscal year, although at the end  
of March, these expenditures still remained below estimate. The initial impact of the COVID-19  
pandemic has shown in Medicaid caseloads. Medicaid experienced an enrollment increase of  
more than 14,000 in March, which represents Ohio Medicaids largest one-month caseload  
increase in more than three years. However, caseload remained under the budget estimate by  
1
5,000 cases (0.53%).  
Table 5 shows GRF and non-GRF Medicaid expenditures for the Ohio Department of  
Medicaid (ODM), the Ohio Department of Developmental Disabilities (ODODD), and six other  
sisteragencies that also take part in administering Ohio Medicaid. ODM and ODODD account  
for about 99% of the total Medicaid budget. Therefore, they generally also account for the  
majority of the variances in Medicaid expenditures. ODM had a positive variance in March of  
$
negative variance. This is in contrast to the negative YTD variance of approximately seven times  
this magnitude which was seen in all funds ODM expenditures at the end of February.  
47.1 million, which brought YTD expenditures virtually equal to estimate, with a $7.4 million  
ODODD had a positive variance ($19.7 million) in March that decreased the magnitude of  
ODODDs negative YTD variance from $45.0 million (2.1%) at the end of February to $25.2 million  
(
1.0%) at the end of March. The other sixsister agencies Job and Family Services, Health,  
Aging, Mental Health and Addiction Services, State Board of Pharmacy, and Education account  
for the remaining 1% of the total Medicaid budget. Unlike ODM and ODODD, the sixsister”  
agencies incur only administrative spending. Job and Family Services had a $2.1 million (9.1%)  
positive variance in March, which increased its YTD positive variance to $8.2 million (3.9%).  
Table 6 shows all funds Medicaid expenditures by payment category. Expenditures were  
below their YTD estimates for three of the four payment categories. Administration  
(
(
$112.8 million, 13.8%) had the largest overall negative variance, followed by Fee-For-Service  
FFS, $92.6 million, 1.4%), and Premium Assistance ($18.7 million, 2.2%). Managed Care  
expenditures were above their YTD estimate by $199.3 million (1.5%).  
Expenditures in the Managed Care category experienced a positive variance of  
32.6 million (2.1%) in March, which increased the YTD positive variance to $199.3 million.  
$
Through the fiscal year, the largest factors which have contributed to this positive YTD variance  
have been positive monthly variances in the Covered Families and Children (CFC) and Group VIII  
categories. Managed Care rates, which are legally required to be actuarially sound, increased in  
January, and according to ODM, these rates are approximately 3% higher than those that were  
estimated for use in the budget for the final six months of the fiscal year. In addition, the positive  
variances for Group VIII have been influenced by higher than expected caseloads. For the first  
nine months of FY 2020, the average monthly managed care caseloads for Group VIII were 1.7%  
(9,274 cases) above estimate.  
Property Tax Reimbursements  
The negative YTD variance in Property Tax Reimbursements of $94.7 million (8.6%) was  
due primarily to this categorys expenditures being $74.0 million below estimate in March.  
Property tax reimbursement funds are disbursed upon the request of county auditors. The timing  
of these requests may vary from that assumed in the OBM estimate. The negative YTD variance  
in Property Tax Reimbursements is expected to narrow in the next few months.  
Budget Footnotes  
P a g e | 18  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Higher Education  
The Higher Education category was under its YTD estimate by $72.4 million (4.0%) at the  
end of March. For the month of March, this category was under estimate by $1.8 million. As  
reported in the last issue of Budget Footnotes, expenditures from two line items have been  
delayed since December. These two items are listed below with their negative YTD variances  
indicated in parentheses:  
235535, Ohio Agricultural Research and Development Center ($28.0 million);  
235511, Cooperative Extension Service ($18.8 million).  
Once agreements between the Department and these organizations are finalized, these negative  
variances should be reversed.  
In addition to these, most other line items in this category were also under estimate for  
the YTD. These items include 235438, Choose Ohio First Scholarship, ($9.8 million) and 235563,  
Ohio College Opportunity Grant, ($5.3 million). Expenditures in these two items are dependent  
on when the Department receives requests from higher education institutions, so they often  
have timing-related variances.  
General Government  
The General Government category had a negative YTD variance of $58.9 million (15.0%)  
at the end of March and a negative variance of $6.8 million for the month of March. The March  
variance was largely the result of a negative monthly variance of $5.0 million in item 700417, Soil  
and Water Phosphorus Program, in the Department of Agriculture budget. With this March  
variance, this item is now $15.0 million under estimate YTD. The largest negative YTD variance in  
this category is $24.9 million in item 775470, Public Transportation State, in the Department of  
Transportation budget. The variances in both of these items were due to delays in payments for  
these programs.  
Health and Human Services  
The negative YTD variance in the Health and Human Services category fell by $32.4 million  
in March, from $74.9 million (7.2%) to $42.4 million (3.7%).  
The Ohio Department of Job and Family Services (ODJFS) is largely responsible for the  
positive March variance in this category. ODJFS had a positive variance of $30.3 million in March  
that partially offset this agencys negative YTD variance at the end of February, leaving a negative  
YTD variance of $3.5 million at the end of March. Item 600523, Family and Children Services, had  
the largest positive variance in March of $24.3 million, changing its YTD variance from a negative  
$
14.0 million to a positive $10.4 million. In addition, item 600535, Early Care and Education, had  
its eighth positive monthly variance in March ($4.5 million), bringing its positive YTD variance to  
20.8 million. These positive YTD variances were offset by negative YTD variances in most other  
items, especially item 600450, Program Operations, which had a negative YTD variance of  
$
$
19.2 million at the end of March.  
The Ohio Department of Mental Health and Addiction Services (OMHAS) continues to  
have a significant negative YTD variance ($20.1 million at the end of March), despite a positive  
variance of $4.9 million for the month. As reported in prior issues of Budget Footnotes, this  
negative variance is primarily from expenditures in October.  
Budget Footnotes  
P a g e | 19  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Also contributing to the negative YTD variance in this category was the Department of  
Health (DOH), which had a negative YTD variance of $9.5 million at the end of March. This YTD  
variance was a result of an accumulation of negative monthly variances for most months of the  
fiscal year, including a negative variance of $1.2 million for the month of March. DOHs variances  
are spread out over most of its line items.  
The agency in this category with the third highest negative YTD variance is the  
Department of Veterans Services (DVS), which had a negative YTD variance of $6.4 million at the  
end of March. This variance is primarily from item 900321, VeteransHomes, which pays the  
operating costs of the states two veteranshomes.  
Primary and Secondary Education  
The Primary and Secondary Education category had a positive variance for the month of  
March of $11.8 million, which decreased this categorys negative YTD variance to $40.3 million  
(
0.6%). The positive variance in March was mainly due to positive variances in items 200437,  
Student Assessment, and 200550, Foundation Funding, of $7.9 million and $3.4 million,  
respectively. As reported in prior issues of Budget Footnotes, these items often have  
timing-related variances. These positive monthly variances partially offset negative YTD variances  
in these items. The YTD variances at the end of March for these items were a negative  
$
17.4 million for item 200437 and a negative $7.9 million for item 200550.  
Justice and Public Protection  
The Justice and Public Protection category had a positive variance for the month of March  
of $11.0 million, which decreased this categorys negative YTD variance to $23.9 million (1.3%).  
The positive variance in March was due to a positive variance of $23.8 million in the Department  
of Rehabilitation and Correction (DRC), which increased DRCs positive YTD variance to  
$
24.6 million. This positive March variance was partially offset by negative variances in most  
other agencies, especially a negative variance of $7.7 million for the Public Defender that should  
be reversed in future months as it was due to a delay in county reimbursements. The Public  
Defenders YTD variance was a negative $6.5 million. Other significant negative YTD variances in  
this category were for the Department of Public Safety ($14.7 million), the Attorney General  
(
Court ($7.6 million).  
$10.7 million), the Department of Youth Services ($8.3 million), and the Judiciary/Supreme  
Budget Footnotes  
P a g e | 20  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
Federal Government Increases Funding for Several Program  
Grants to Address the COVID-19 Pandemic  
Melaney Carter, Director  
In March, Congress passed three acts to allocate additional federal funding to states for  
several programs to address the COVID-19 pandemic. These three acts are: the Coronavirus  
Preparedness and Response Supplemental Appropriations Act (signed March 6), the Families First  
Coronavirus Response Act (FFCRA, March 18), and the Coronavirus Aid, Relief, and Economic  
Security (CARES) Act (March 27). The following table shows preliminary estimates, provided by  
Federal Funds Information for States (FFIS), of Ohios allocations for formula grants in these three  
acts. Most of the grants provide additional funding to existing programs. Exceptions include the  
Coronavirus Relief Fund (CRF) and the education funds. These are described in more detail in the  
following two Issue Updates articles.  
Federal Grants Related to COVID-19 ($ in millions)  
Federal Agency  
Treasury  
Program  
Ohio Estimate  
$4,532.6  
$105.2  
$489.2  
$381.3  
$116.6  
$38.4  
Coronavirus Relief Fund  
Governors Fund  
Education  
Elementary & Secondary School Fund  
Higher Education Fund  
Child Care and Development Block Grant  
Community Services Block Grant  
Head Start  
$29.8  
Children and Families  
Low Income Home Energy Assistance Program  
Child Welfare Services  
$12.6  
$1.7  
Family Violence Prevention  
Congregate and Home-Delivered Meals  
Supportive Services  
$0.9  
$26.4  
$7.3  
Community Living  
Family Caregivers  
$3.6  
Centers for Independent Living  
$2.6  
Budget Footnotes  
P a g e | 21  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Federal Grants Related to COVID-19 ($ in millions)  
Program  
Federal Agency  
Ohio Estimate  
$0.8  
Protection of Vulnerable Older Americans  
Centers for Disease Control (CDC) States Grants  
Poison Control Centers  
$33.0  
Disease Control and  
Prevention  
$0.2  
Health Resources and  
Services  
Community Health Centers  
$46.1  
Labor  
Unemployment Compensation Administration  
Justice Assistance Grants  
$27.6  
$24.4  
$22.3  
$9.3  
Justice  
Emergency Food Assistance (TEFAP) Commodities  
TEFAP Administration  
Agriculture  
Supplemental Nutrition for Women, Infants, and Children  
Manufacturing Extension  
$11.4  
$2.3  
Commerce  
Emergency Food and Shelter  
Emergency Performance Management  
Community Development Block Grant (CDBG) Local  
CDBG State  
$8.3  
Homeland Security  
$2.9  
$63.7  
$27.3  
$48.6  
$42.6  
$30.0  
$22.6  
$0.8  
Homeless Assistance Local  
Housing and Urban  
Development  
Homeless Assistance State  
Public Housing Operating  
Tenant-Based Rental Assistance  
Housing Opportunities for Persons with AIDS  
Urbanized Area Formula  
$297.0  
$78.4  
$72.4  
$26.3  
State of Good Repair  
Transportation  
Nonurbanized Area  
Growing States  
Budget Footnotes  
P a g e | 22  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Federal Grants Related to COVID-19 ($ in millions)  
Federal Agency  
Program  
Ohio Estimate  
$12.8  
Election Security  
Independent Agencies National Endowment for the Humanities  
National Endowment for the Arts  
$0.8  
$0.5  
Total  
$6,660.8  
Federal Government Establishes Coronavirus Relief Fund  
Melaney Carter, Director  
The federal government established the CRF in the CARES Act. The CRF provides  
150 billion to state and local governments. Funds are to be available within 30 days of  
$
enactment. FFIS estimates that Ohios share of this funding is $4.53 billion. Up to 45% of that may  
be issued directly to local governments in Ohio with populations exceeding 500,000, leaving at  
least $2.49 billion as the state government share.  
These funds are restricted in use to necessary expenditures incurred due to COVID-19  
during the period March 1, 2020, to December 30, 2020, that were not accounted for in the most  
recently approved budget. OBM is requesting appropriations totaling $226.7 million for  
expenditures through April 27 at the April 13 Controlling Board meeting. OBM intends to create  
the Ohio Coronavirus Relief Fund (Fund 5CV1) for these expenditures. The table below shows the  
requested appropriations by agency.  
April 13 Controlling Board Requested Appropriations for Ohio Coronavirus Relief Fund  
Agency  
ALI  
ALI Name  
Purpose  
FY 2020  
Administrative 100671 Coronavirus Relief - DAS 5,000 ventilators  
Services  
$109,000,000  
Public Safety  
763691 Coronavirus Relief - DPS Personal protective  
equipment  
$50,000,000  
$39,000,000  
$28,664,000  
Health  
440674 Coronavirus Relief -  
DOH  
Coronavirus testing and  
medication  
Adjutant  
General  
745632 Coronavirus Relief - ADJ Temporary medical facilities  
and allowance for 600  
members put on active duty  
Total  
$226,664,000  
Budget Footnotes  
P a g e | 23  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Federal Government Establishes Education Stabilization Fund  
Melaney Carter, Director  
In addition to the CRF, the CARES Act established the Education Stabilization Fund. This  
fund consists of the Governors Emergency Education Relief Fund, the Elementary and Secondary  
School Emergency Relief Fund, and the Higher Education Emergency Relief Fund. FFIS estimates  
that Ohio will receive a total of $975.7 million through these three funds, including $105.2 million  
for the Governors fund, $489.2 million for the Elementary and Secondary School fund, and  
$
381.3 million for the Higher Education fund.  
The Governors fund is to be used to provide emergency support to primary and  
secondary schools, higher education institutions, and other education-related entities that have  
been impacted the most by COVID-19. Ninety percent of the Elementary and Secondary School  
fund is to be distributed to local schools in proportion to the funding they receive under Title I,  
which is distributed primarily based on a schools economically disadvantaged enrollment. The  
remaining 10% is to be used by the Ohio Department of Education (ODE) to address issues related  
to COVID-19. The Higher Education fund is to be distributed directly to institutions of higher  
education, 75% based on enrollment of Pell Grant recipients and 25% based on other enrollment.  
Institutions are to use the funds for costs related to changes to the delivery of instruction due to  
COVID-19 and must use at least 50% of their funds to provide emergency financial aid grants to  
students for expenses related to the disruption of campus operations due to COVID-19.  
Medicaids Federal Reimbursements to Increase During COVID-19  
Emergency  
Nelson V. Lindgren, Economist  
The second act passed by Congress, the FFCRA, increases the federal medical assistance  
percentage (FMAP) by 6.2 percentage points for certain Medicaid expenditures incurred after  
January 1, 2020, and throughout the duration of the COVID-19 emergency.10 To qualify for the  
increase, a state must do the following: (1) maintain eligibility standards or procedures that are  
no more restrictive than those in place on January 1, 2020, (2) not charge premiums that exceed  
those in place on January 1, 2020, (3) provide testing, services, and treatments including vaccines,  
specialized equipment, and therapies related to COVID-19 without cost-sharing requirements,  
(
period, and (5) not require local political subdivisions to pay a greater portion of the nonfederal  
share of expenditures than was required on March 11, 2020.  
4) provide continuous coverage to individuals enrolled onto the program during the emergency  
11  
10 The increased FMAP is available for each calendar quarter occurring during the emergency. The  
U.S. Secretary of Health and Human Services declared COVID-19 an emergency on January 31, 2020. Thus,  
the increase is available for qualifying expenditures incurred on or after January 1, 2020, through the end  
of the quarter in which the emergency ends.  
11 States cannot terminate Medicaid coverage for individuals enrolled onto the program during  
the emergency period unless the individual voluntarily terminates eligibility or is no longer a resident of  
the state.  
Budget Footnotes  
P a g e | 24  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
The Medicaid program is jointly funded by states and the federal government. The federal  
share for most Medicaid expenditures is determined by a states FMAP, which is calculated  
annually for each state using a formula established in federal statute.12 However, there are  
exceptions to the regular FMAP formula for certain services and populations. In general, the  
6
.2 percentage point increase applies only to those Medicaid expenditures subject to the regular  
FMAP and not to expenditures made for these exceptions. As a result, the increase does not apply  
to administrative expenditures or service expenditures for the expansion population under the  
Affordable Care Act (typically referred to as Group VIII), among others. Ohios FMAP is 63.02%  
from October 1, 2019, through September 30, 2020. Thus, Ohios FMAP will temporarily increase  
to 69.22% because of the FFCRA.  
Ohio Expands Unemployment Compensation During COVID-19  
Emergency  
Nicholas J. Blaine, Budget Analyst  
On March 16, 2020, the Governor issued Executive Order 2020-03D to expand flexibility  
for unemployment compensation during a state of emergency resulting from COVID-19. The  
executive order allows otherwise eligible workers to receive benefits if unemployed due to a  
1
3
mandatory COVID-19 quarantine, waives the one-week waiting requirement, and waives the  
work-search requirement for quarantined workers. On March 25, 2020, the General Assembly  
passed H.B. 197 to enact these changes with one difference. Under H.B. 197, the Director of Job  
and Family Services has the authority to waive the work-search requirement for all workers  
1
4
instead of only those quarantined. For most nonpublic employers, the additional benefits will  
be charged to the mutualized account within the Unemployment Compensation Fund (the fund).  
Under normal circumstances, benefits are paid by the respective employers account and then  
an employers tax rate is adjusted for the next year as a result. However, benefits charged to the  
mutualized account within the fund do not affect an employers tax rate. Public employers,  
including the state and political subdivisions, will need to reimburse the fund for the additional  
benefits paid on their behalf, as they do for all benefits. More information about COVID-19s  
impact on benefits can be found on the ODJFS website: www.jfs.ohio.gov.  
Besides these state efforts, the federal government has enacted legislation to expand  
unemployment benefits during the COVID-19 emergency. On March 27, 2020, the President signed  
the CARES Act into law. The CARES Act provides assistance to statesunemployment compensation  
programs and expands eligibility for additional benefits, which are subsidized by the federal  
government through the end of the calendar year. Among other things, the CARES Act creates  
pandemic unemployment assistance (PUA) to provide support to workers who do not typically  
qualify for unemployment (such as self-employed workers and independent contractors) and to  
12 The statute considers a states per capita income for the three most recent years relative to the  
nations per capita income over the same time period.  
13 The quarantine must be requested by a medical professional, local health authority, or  
employer and not a self-quarantine.  
14 All changes will remain in effect until the state of emergency concludes or December 1, 2020,  
whichever comes sooner.  
Budget Footnotes  
P a g e | 25  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
assist those who exhaust their benefits.15 The CARES Act also provides supplemental benefits of  
$
600 per week through July 31, 2020. These supplemental benefits would be in addition to the  
benefits an individual who is eligible to receive unemployment benefits would qualify for under  
Ohio law. PUA recipients are also eligible for these supplemental benefits. All PUA and  
supplemental benefits, along with administrative costs, will be paid fully by the federal  
government. In addition to this legislation, the FFCRA, signed by the President on March 18, 2020,  
provided grants for administration. FFIS estimates Ohios grant will total $27.6 million. This act also  
provides full federal funding for extended benefits, instead of the normal 50% federal share.  
The number of claimants applying for unemployment benefits rose significantly over the  
last month from 7,000 for the week of March 8 to March 14 to 274,000 for March 22 to March 28.  
The table below shows the number of advance unemployment claims filed by Ohioans in recent  
weeks, according to data provided by the U.S. Department of Labor (DOL). The first confirmed  
COVID-19 cases within Ohio were reported on March 6.  
Initial Unemployment Claims in Ohio and United States, March 1April 4*  
United States  
Claims % Increase  
200,375  
Ohio  
Week Ended  
March 7  
Claims  
6,545  
% Increase  
--  
--  
March 14  
March 21  
March 28  
April 4  
251,416  
2,920,160  
6,015,821  
6,203,359  
25.5%  
1,061.5%  
106.0%  
3.1%  
7,046  
196,309  
274,288  
224,182  
7.7%  
2,686.1%  
39.7%  
-18.3%  
*Claims data are not seasonally adjusted.  
At the end of February 2020, the fund had a balance of $1.18 billion. If the fund were  
depleted, the Governor or the Governors designee (the Director of Job and Family Services in  
Ohio) could request an advance from the U.S. DOL that would allow the state to continue to  
provide benefits. The average weekly benefit was about $394 at the end of February.  
Unemployment insurance is a federal and state partnership for income maintenance during  
periods of involuntary unemployment that provides partial compensation for lost wages to eligible  
individuals. State law classifies employers into one of two categories: contributoryand  
reimbursingemployers. Most nongovernment employers are contributory employers, which pay  
unemployment insurance taxes to the fund on a quarterly basis, and most public employers and  
nonprofits are reimbursing, which repays the fund for any benefit provided to employees. More  
information about the states unemployment compensation system can be found in the  
LSC Members Brief, Financing Unemployment Benefits Federal Loans to Cover Shortfalls.  
15 PUA benefits will be available to eligible individuals from January 27, 2020, through December 31,  
2020. An individual will be eligible for retroactive benefits and can access benefits for a maximum of 39 weeks.  
Budget Footnotes  
P a g e | 26  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Task Force Issues Recommendations to Address Health Care  
Workforce Challenges in Ohio  
Edward Millane, Senior Budget Analyst  
In early March, the Ohio Physician and Allied Health Care Workforce Preparation Task Force  
released a report of its findings and recommendations from the seven meetings it held from last  
August through February of this year. Created by H.B. 166, the task force was established to study,  
evaluate, and make recommendations with respect to health care workforce needs in Ohio.Over  
3
0 members from various groups, including representatives from the State Medical Board, medical  
school deans, hospital administrators, physician and nursing associations, and federally qualified  
health centers, participated in the discussion. The report highlights numerous existing efforts and  
initiatives among state agencies, higher education institutions, regional commissions, and various  
private sector and health care organizations that are addressing health care challenges throughout  
the state. The task force identified three main challenges regarding Ohios health care workforce:  
(
1) a shrinking labor pool due to aging providers and the supply of individuals in the education  
pipeline, (2) an inability of the workforce to grow fast enough to meet demand given changing  
medical conditions and modes of service delivery, and (3) geographic gaps in the distribution of  
health care providers. Generally, the task force made the following recommendations while noting  
that further data collection and information sharing is necessary to better explore the main  
challenges facing Ohios health care workforce:  
1
2
. Data availability and transparency. The task force recommends the Health Professions  
Data Warehouse (HPDW), a collection of data used to enhance health care workforce  
forecasting, policy, development, and research, be completed with input from the  
Department of Administrative Services, InnovateOhio Platform, health professional  
licensing boards, and other appropriate stakeholders. Also, data available in the HPDW  
should be made available to the public to facilitate sharing and transparency.  
. Recruitment, placement, and retention. The task force recommends focusing on the  
recruitment, placement, and retention of health care learners to increase the volume and  
availability of qualified health care workers addressing major health challenges  
throughout the state. Strategies should be implemented in rural and other underserved  
areas through innovation, clinical exposure to underserved settings, and programs  
addressing educational costs and reimbursement.  
3
. Educational pipeline opportunities. The task force recommends all educational institutions  
and training providers enhance their involvement in efforts to create affordable, accessible,  
and innovative opportunities for students, including underrepresented minorities, who  
may want to enter, or up-skill from within, the health care workforce.  
4
. Serving all Ohioans. The task force recommends developing or enhancing targeted  
strategies that focus efforts on serving people living in health professional shortage areas  
and other geographically underserved population areas of the state to make sure that all  
residents of Ohio have the ability to achieve their full-health potential. Strategies should  
include investigating practice methods, population health management, practice style,  
and payment methods.  
The full report is available online at the Ohio Board of Nursings website at  
www.nursing.ohio.gov.  
Budget Footnotes  
P a g e | 27  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Ohio Infant Mortality Rate Decreases in 2018  
Jacquelyn Schroeder, Senior Budget Analyst  
On February 25, 2020, DOH released its 2018 Ohio Infant Mortality Report, which found  
1
6
that Ohios infant mortality rate for all races decreased from 7.2 in 2017 to 6.9 in 2018. Ohios  
goal is to attain a rate of 6.0 or lower for every race or ethnic group. The white infant mortality  
rate has met this goal since 2014, although the rate did increase slightly from 5.3 in 2017 to 5.4  
in 2018. Neither the infant mortality rate for Hispanics nor blacks has achieved this goal.  
However, both rates experienced a decrease from 2017 to 2018 going from 7.2 to 6.1 for  
Hispanics and from 15.6 to 13.9 for blacks. The overall decrease in the infant mortality rate is  
largely due to a decrease in the number of neonatal deaths (deaths during the first 27 days of  
life). This is especially true for the black population, which saw a decrease in neonatal deaths of  
2
5% from 2017 to 2018. Deaths during the neonatal period are often attributed to preterm birth,  
low birth weight, congenital anomalies, or health problems experienced by the mother before  
and during pregnancy. Neonatal deaths account for about two-thirds of all infant deaths.  
Prematurity-related conditions are the number one cause of infant mortality followed by  
congenital anomalies.  
The state has taken numerous steps to address infant mortality over the past several  
years. Current efforts include increasing access to home visiting programs. These programs  
provide in-home services to pregnant women, mothers, and children up to age three, and provide  
new parents with skills to keep their children healthy and to improve school-readiness. In  
addition, there have been numerous efforts focusing on areas with high risk of infant mortality.  
An example of a targeted effort usesneighborhood navigatorsin nine of the most high-risk  
counties and metropolitan areas to identify at-risk pregnant women and connect them to  
healthcare and other necessary social services. Approximately 60% of all infant deaths and 90%  
of black infant deaths occurred in these nine counties in 2018, which include the following:  
Butler, Cuyahoga, Franklin, Hamilton, Lucas, Mahoning, Montgomery, Stark, and Summit.  
To read the report in its entirety or to learn more about Ohios efforts to reduce infant  
mortality, please refer to DOHs Infant and Fetal Mortality Reports page on its website  
(www.odh.ohio.gov).  
DHE Awards Research Incentive Third Frontier Funding  
Jason Glover, Budget Analyst  
In January, the Department of Higher Education (DHE) announced Research Incentive Third  
Frontier awards to nine universities and a childrens hospital. Of the approximately $5.6 million  
awarded for the FY 2020-FY 2021 biennium, $2.0 million supports research for reducing infant  
mortality, $1.9 million supports research on cybersecurity programs and initiatives, and  
$1.8 million supports research on opiate addiction issues. The awards ranged from almost $97,000  
to nearly $1 million. The recipients and award amounts are listed in the table below for each type  
of issue. DHE indicates that project findings are expected to be reported by the end of FY 2021. The  
Research Incentive Third Frontier Program aims to enhance the basic research capabilities and  
promote new research strengths at Ohios universities in order to strengthen academic research  
16 The infant mortality rate is the number of infant deaths in the first year of life per 1,000 live births.  
Budget Footnotes  
P a g e | 28  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
that contributes to economic growth. The program rewards institutionssuccesses in attracting  
external research funds by fractionally matching those external funds obtained during the previous  
year. The awards are supported by the proceeds of Third Frontier bonds.  
Research Incentive Third Frontier Funding Awards for Selected Issues, FY 2020-FY 2021  
Institution  
Project Description  
Infant Mortality Research  
Award  
Cleveland State University  
The Ohio State University  
Identification of economic, household, and  
neighborhood factors linked to infant mortality  
$982,322  
Comprehensive resources toolkit  
$441,146  
$266,642  
Bowling Green State University Research on comprehensive risk assessments and care  
pathways  
Mount St. Joseph University  
Total  
Patient education outreach mobile application  
$309,308  
$1,999,418  
Cyber Security Research  
University of Cincinnati  
The Ohio State University  
University of Dayton  
Establish Ohio Cyber Range Institute regional programming  
centers  
$997,502  
$409,846  
$277,201  
Cybersecurity research testbeds for vehicular, internet-  
connected object, and manufacturing platforms  
Initiatives involving workplace training on cyber-attack  
awareness, cyber expertise sharing, and Dayton Cyber  
Range workforce development  
Ohio University  
Educational initiatives to improve cybersecurity  
awareness and training  
$225,161  
Total  
$1,859,710  
Opiate Addiction Research  
Nationwide Childrens Hospital  
Risks of relapse among adults in remission  
$499,998  
$475,535  
$442,741  
$252,819  
Bowling Green State University Predictive models for identifying risk factors  
Wright State University  
Prescription-tapering training for primary care providers  
Cleveland State University  
Patient-specific risk patterns for substance use disorder  
and withdrawal  
Case Western Reserve University Geographic context of opiate use to inform intervention  
strategies  
$96,837  
Total  
$1,767,930  
Budget Footnotes  
P a g e | 29  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Drug Task Forces Awarded $2.1 million in RecoveryOhio Law  
Enforcement Grants  
Maggie West, Senior Budget Analyst  
On February 3, 2020, Governor DeWine announced the award of $2.1 million in  
RecoveryOhio Law Enforcement grants to 27 existing drug task forces serving 51 Ohio counties.  
These grants will support task force efforts to identify high-level drug traffickers, dismantle large  
drug trafficking organizations, interrupt the flow of money and drugs from Mexican cartels, and  
prevent the sale of illegal narcotics to those with a substance use disorder. Grants ranged from  
$
9,040 (Crime Enforcement Agency of Ashtabula County) to $240,641 (METRICH Drug Task Force  
serving Ashland, Crawford, Hancock, Huron, Knox, Marion, Morrow, Richland, Seneca, and  
Wyandot counties), with the average award totaling $77,166.17  
RecoveryOhio was commissioned by Governor DeWine in 2019 to make treatment  
available to Ohioans in need, provide support services for those in recovery and their families,  
offer direction for the states prevention and education efforts, and work with law enforcement  
to provide resources to fight illicit drugs at the source. The initiative received GRF funding in  
H.B. 166, with an appropriation of $9.75 million in each of FY 2020 and FY 2021. The appropriated  
amounts were earmarked as follows:  
Up to $3.4 million per year to create narcotics task forces focusing on cartel trafficking  
interdiction;  
Up to $3.25 million per year to establish a narcotics intelligence center;  
Up to $2.5 million per year to provide funding to task forces to build and strengthen  
partnerships with local law enforcement; and  
Up to $600,000 per year to collaborate with the Department of Administrative Services’  
Office of Information Technology to develop, enhance, and maintain a uniform records  
management and data intelligence system for the task forces.  
Ohio Awarded $112.6 million to Support Homeless Programs  
Under HUDs Continuum of Care Program  
Shannon Pleiman, Senior Budget Analyst  
In January and March, the U.S. Department of Housing and Urban Development (HUD)  
awarded a total of $112.6 million in grants under the Continuum of Care Program to support  
3
06 homelessness assistance programs in Ohio. Of this amount, $101.1 million was awarded to  
2
77 existing projects and $11.5 million will support 29 new projects. The goal of the program is  
to promote a communitywide commitment to end homelessness. Homelessness prevention and  
assistance services in Ohio are coordinated by eight urban federally designated entitlement  
counties, referred to as Continuums of Care (CoC) and the Balance of State CoC, which represents  
the other 80 counties. The table below displays grant funding awarded for existing and new  
projects by Ohio CoC.  
17 A complete list of task forces, award amounts, and counties served can be found at:  
www.recoveryohio.gov.  
Budget Footnotes  
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April 2020  
Legislative Budget Office of the Legislative Service Commission  
HUDs Continuum of Care Program Grants by Entitlement Community  
Entitlement Community  
(CoC)  
Funding for Existing  
Projects  
Funding for New  
Projects  
Total Funding  
Cuyahoga County  
Hamilton County  
Franklin County  
Montgomery County  
Summit County  
Lucas County  
$27,681,076  
$18,577,275  
$13,617,085  
$10,185,542  
$4,113,880  
$3,544,083  
$3,041,890  
$1,806,177  
$18,493,005  
$101,060,013  
$2,052,201  
$4,215,934  
$1,475,920  
$501,582  
$29,733,277  
$22,793,209  
$15,093,005  
$10,687,124  
$4,722,195  
$3,781,149  
$3,128,202  
$1,944,838  
$20,720,684  
$112,603,683  
$608,315  
$237,066  
Stark County  
$86,312  
Mahoning County  
Balance of State  
$138,661  
$2,227,679  
$11,543,670  
Total  
Attorney General Announces Facial Recognition Task Force  
Recommendations  
Jessica Murphy, Budget Analyst  
On February 20, 2020, the Ohio Attorney General announced recommendations of the  
9-member Facial Recognition Task Force created in September of 2019 and charged with review  
2
of the states facial recognition database. It found that, in each of the past three years, state and  
local criminal justice agencies conducted more than 95% of facial recognition searches, with the  
1
8
remainder performed by federal criminal justice agencies. All of the searches were found to be  
based on legitimate criminal justice purposes, most commonly, the investigation of identity theft  
and missing-person cases.  
The task force met eight times to discuss topics such as which images should be in the  
database, how the database should be audited, and racial and gender concerns associated with  
the accuracy and reliability of the technology. Following its review, the task force developed  
1
that balances public safety and privacy interests. The full report of recommendations is available  
on the Attorney Generals website.  
3 recommendations that advise the Attorney General on how to utilize the database in a way  
1
9
18 From January 1, 2017, through July 31, 2019, Ohios facial recognition database was accessed  
for 11,070 searches.  
19 www.ohioattorneygeneral.gov.  
Budget Footnotes  
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April 2020  
Legislative Budget Office of the Legislative Service Commission  
Ohios facial recognition database consists of more than 24.4 million photos from a  
variety of sources. Nearly 87% (21.2 million) of photos were provided by the Ohio Bureau of  
Motor Vehicles, with another 10% (2.4 million), or so, provided by the Ohio Supreme Court/Ohio  
Courts Network. The database is part of the Ohio Law Enforcement Gateway (OHLEG) operated  
2
0
by the Attorney Generals Bureau of Criminal Investigation. OHLEG is an electronic information-  
sharing network, allowing law enforcement agencies and criminal justice agencies to share data  
for the investigation and prevention of crime.  
State Library Board Commits $65,000 to Support Census 2020  
Dan Redmond, Budget Analyst  
The State Library Board will distribute approximately $65,000 in federal funds to public  
libraries to support Census 2020. These funds come from the Library Services and Technology Act  
LSTA) Program, which is funded through an independent federal agency, the Institute of  
(
Museum and Library Services (IMLS). Of these funds, the State Library Board will use $15,000 for  
marketing, including billboards, stickers, and other promotional materials, to direct people to  
local libraries where they can complete the census and $50,000 to provide iPads to libraries in  
counties that lack or have limited internet access. However, it is possible that plans change as a  
result of COVID-19, as some libraries have closed and supply chain disruptions have delayed  
delivery of the iPads.  
While Census 2020 will be the first time the census is conducted primarily online, 17.1%  
of Ohio households either lack internet access or only have a dial-up subscription according to  
the latest American Community Survey data. The State Library Board looked at census tract maps  
by population lacking internet connectivity (including cellular data) and population located more  
than five miles from a public library to identify areas of the state that may struggle to complete  
the census online. Most of these areas are in the Appalachian region. The State Library Board  
envisions the iPads as a more mobile and accessible option for census completion, enabling local  
libraries to bring them to community events or even homebound citizens.  
Department of Agriculture Begins Accepting License Applications  
Under Hemp Program  
Shannon Pleiman, Senior Budget Analyst  
On March 3, 2020, the Department of Agriculture began accepting license applications  
for individuals and entities to cultivate and process hemp in the state under the newly created  
rd  
Hemp Program. The Hemp Program was established by S.B. 57 of the 133 General Assembly  
and requires the Department to establish, with the U.S. Department of Agricultures (USDAs)  
approval, the Hemp Cultivation and Processing Program to monitor and regulate hemp  
cultivation and processing in Ohio. The USDA approved Ohios plan on December 27, 2019. The  
table below displays the different licenses and annual license fees. In addition, there is a  
nonrefundable $100 application fee for each license. Application and license fees are deposited  
into the Hemp Program Fund (Fund 5WJ0).  
20 Ohios facial recognition database is one of 22 applications and data sets that are a part of OHLEG.  
Budget Footnotes  
P a g e | 32  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Licenses Under the Hemp Program  
Annual License Fee per  
Growing or Processing Site  
License  
Cultivator  
$500  
$500  
Processor of raw grain  
Processor of raw fiber  
$500  
Processor of raw floral component  
$3,000  
$500  
Wholesale production for processing cannabinoids*  
Retail production for processing cannabinoids*  
$250  
*Cannabinoids can be processed for human and animal food, dietary supplements, and cosmetics and personal care products.  
The licenses are valid for three years so long as the annual license fee is remitted to the  
Department and in particular for the hemp cultivator license, an annual license update form is  
completed. The license fees will support the Departments administrative costs for the program,  
including personal expenses of the programs nine employees. Initial funding for the program  
was supported by a cash transfer of nearly $3.3 million in FY 2020 from the Controlling Board  
Emergency Purposes/Contingencies Fund (Fund 5KM0) to the Hemp Program Fund (Fund 5WJ0),  
which was approved by the Controlling Board on September 9, 2019.  
Development Services Agency Increases Funding for Tourism  
Promotion  
Tom Middleton, Senior Budget Analyst  
On March 9, 2020, the Controlling Board approved a request by the Development Services  
Agency (DSA) to increase appropriations for tourism promotion in FY 2020. The increase provides  
DSA with total appropriations of $11.95 million, a $1.95 million (19.5%) rise from the  
$
1
of TourismOhio, including marketing, advertising, and developing and publishing tourism  
10.0 million appropriated in H.B. 166. This is spent through Tourism Fund (Fund 5MJ0) line item  
95683, TourismOhio Administration, which pays for the payroll and operating costs of the Office  
materials.  
According to DSA, the increased funds will pay for (1) additional advertising, (2) rest area  
signage and materials, in partnership with the Ohio Department of Transportation, and  
(3) updates to the Ohio.org website. The table below shows how DSA plans to spend the  
appropriations in FY 2020 by type of expense. In total, 86% of the FY 2020 budget will be used  
for purchased personal services.  
Budget Footnotes  
P a g e | 33  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
TourismOhio Budget by Account Category, FY 2020  
Type of Expense  
FY 2020 Budget  
$10,274,922  
$912,987  
% of Total Budget  
Purchased Personal Services  
Supplies and Maintenance  
Personal Services (payroll)  
Equipment  
86.0%  
7.6%  
5.7%  
0.7%  
$683,323  
$78,768  
Total  
$11,950,000  
Since FY 2014, Fund 5MJ0 has received revenue through annual transfers from the GRF.  
Between FY 2014 and FY 2019, these cash transfers totaled between $10.0 million and  
$
FY 2020. As of March 18, 2020, the cash balance of Fund 5MJ0 was $25.9 million.  
10.4 million annually. H.B. 166 required the transfer of up to $20.0 million to Fund 5MJ0 in  
Budget Footnotes  
P a g e | 34  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
Philip A. Cummins, Senior Economist  
Overview  
The economic slowdown during the COVID-19 outbreak has stifled parts of the Ohio  
economy. Economic data are available only with lags, and the statistics usually reported in this  
space do not reflect the actual spread of COVID-19 in the U.S. or Ohio in recent weeks. In this  
months report, we have included more detail than usual on a few statistics that become available  
more promptly. Because of the fast-spreading COVID-19 pandemic, the near-term economic  
future appears particularly uncertain. For an update on the economic outlook as of late March,  
compared with that at the time the states current operating budget was enacted, please see the  
section at the end of this issue.  
In the week ending April 4, the unadjusted number of initial unemployment claims filed  
nationally was 6,203,359, following the previous weeks 6,015,821 claims, much higher than the  
2
17,557 average number of claims filed weekly during 2019. According to the manufacturing  
purchasing managers index (PMI), a survey conducted by the Institute for Supply Management  
ISM) covering the most recent month, aggregate activity in the industry declined during March.  
(
ISMs nonmanufacturing index (NMI) registered an increase in non-manufacturing economic  
activity during the month, despite the sharp cutbacks that other reports show took place in parts  
of the service sector. Both indexes were boosted by slower deliveries, ordinarily associated with  
improving demand but mainly due in March to COVID-19 linked supply problems. The  
U.S. economy shed a seasonally adjusted 701,000 nonfarm payroll jobs in March, and the  
national unemployment rate increased from 3.5% in February to 4.4% in March, according to the  
U.S. Bureau of Labor Statistics (BLS). Inflation adjusted gross domestic product (real GDP)  
increased by 2.3% in 2019, according to the most recent official data from the U.S. Bureau of  
Economic Analysis (BEA). During March, the Federal Reserve Boards Open Market Committee  
(
end of the range to zero, in response to changing conditions in the economy and labor markets.  
FOMC) cut the federal funds rate twice, by a total of 1.50 percentage points, reducing the lower  
Ohios economy added approximately 7,800 nonfarm payroll jobs in February, and the  
states unemployment rate remained at 4.1% in that month. In Ohio, real GDP grew 1.7% in 2019,  
0
.6 percentage point below the national growth rate. In March, the number of unemployed  
persons rose sharply with widespread layoffs to combat the pandemic. Initial unemployment  
claims in Ohio surged in the most recent weeks. Refer to the Issue Update article on the topic of  
unemployment compensation in this months edition of Budget Footnotes for a more  
comprehensive narrative on unemployment compensation trends and legislation, both  
nationally and in the state.  
The National Economy  
Nonfarm payroll employment, seasonally adjusted, decreased by 701,000 nationally in  
March, most notably in the leisure and hospitality industry (-459,000), which mostly represents  
lost jobs at food services and drinking establishments. Noteworthy levels of job losses were also  
Budget Footnotes  
P a g e | 35  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
recorded in the industries of health care and social assistance (-61,000),21 professional and  
business services (-52,000), and retail trade (-46,000). Note that employment data are derived  
th  
from a survey of employers regarding the pay period that includes the 12 of the month, thus  
the data are not reflective of how the labor market has evolved since.22  
The nations seasonally adjusted unemployment rate increased by 0.9 percentage point,  
to 4.4%, and the estimated number of unemployed persons rose to 7.1 million in March.  
Unemployment rates increased for all major demographic groups. The number of persons  
reporting losing their job due to a temporary layoff more than doubled in March, while the  
number of permanent job losses also increased. The countrys labor force participation rate23  
decreased by 0.7 percentage point, to 62.7%. Chart 6 shows the national payroll employment  
level, and Chart 7 shows the national unemployment rate.  
Economic activity in the manufacturing sector contracted in March, according to the  
manufacturing PMI. More purchasing managers reported declines in both new orders and  
production than noted increases. The manufacturing employment index was also down during  
the month. While some surveyed firms reported a significant uptick in orders due to COVID-19,  
other purchasing managers noted obstructions along their companys supply chain due to the  
virus. Deliveries slowed, attributed by ISM to supply problems resulting from COVID-19.  
Aggregate economic activity in the nonmanufacturing sector increased in March, as indicated by  
the NMI, however, slower deliveries that ISM viewed as mainly due to virus-related supply  
problems account for the increase in the index. Among nonmanufacturing industries surveyed by  
the ISM, five reported growth in business activity in March: health care and social assistance,  
accommodation and food service, construction, public administration, and finance and  
insurance. Nine reported decreased business activity in March: arts, entertainment, and  
recreation; mining; educational services; retail trade; professional, scientific, and technical  
services; transportation and warehousing; wholesale trade; information; and other services.  
On March 3, the FOMC held an unscheduled meeting ultimately leading to a reduction in  
the federal funds rate by 0.5 percentage point. The unscheduled monetary policy decision,  
according to a press release, was due to evolving risks to economic activity posed by COVID-19.  
On March 15, the FOMC voted to reduce the federal funds rate by a further  
1
.0 percentage point and took other measures to support credit flows. In a press release, the  
committee noted that the COVID-19 outbreak would dampen near-term economic activity,  
leading to risks to the outlook for the economy. The FOMC has since taken additional measures  
to support credit availability to households and businesses. Currently, the federal funds rate, the  
interest rate charged for private banks to borrow reserves on overnight deposit, is between  
0
% and 0.25%.  
21 Most losses in the health care and social assistance industry were in outpatient care facilities  
such as dentists (-17,000) and physician offices (-12,000). Employment losses were also recorded in child  
daycare services (-19,000).  
22 BLS indicates that slightly more than 40% of surveyed employers have biweekly pay periods,  
about one-third pay weekly, 20% semimonthly, and a small number monthly.  
23 Measured as the number of employed persons plus unemployed persons, divided by the adult  
civilian noninstitutionalized population.  
Budget Footnotes  
P a g e | 36  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
The industrial production index, a national measure of output, was up 0.6% in February,  
with increases in utilities and manufacturing activity offsetting a decline in mining. Overall  
industrial activity in February 2020 was at the same level as in February 2019, though still below  
the all-time peak in December 2018. Production increased year over year at companies in the  
automotive (+3.9%) and home electronics (+3.2%) industries, while production of companies in  
business equipment segments decreased (-3.7%) during the same time period.  
Nationally, real GDP grew 2.3% in 2019, compared with 2.9% growth in 2018, according  
to data released by the BEA. The price index for final sales to domestic purchasers, a measure of  
inflation based on the prices paid by consumers, businesses, and governments in the U.S.,  
increased 1.5% in 2019. During 2019, final sales to domestic purchasers rose 2.3% while goods  
and services exports were little changed.  
Chart 6: U.S. and Ohio Nonfarm Payroll Employment  
(
in millions)  
1
1
1
1
1
1
53.7  
48.4  
43.1  
37.8  
32.5  
27.2  
5.8  
5.6  
5.4  
5.2  
5.0  
4.8  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
U.S. Employment Ohio Employment (right scale)  
Chart 7: U.S. and Ohio Unemployment Rates  
% of Labor Force  
1
1
1
2.0%  
1.0%  
0.0%  
9
8
7
6
5
4
3
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
United States  
Ohio  
Budget Footnotes  
P a g e | 37  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
The Ohio Economy  
According to the most recent state employment data, nonfarm payroll employment in  
Ohio increased by approximately 7,800 in February, following payroll employment growth of  
4
,900 in January. Year over year, employment in the education and health services industry  
increased by around 10,900; employment in the leisure and hospitality industry increased by  
,300. Between February 2019 and February 2020, payroll employment decreased in the  
7
following industries: manufacturing, financial services, professional and business services,  
government, and mining and logging.24  
In February, the states unemployment rate was a seasonally adjusted 4.1%; the  
seasonally adjusted unemployment rate remained at this level from September 2019 through  
February 2020. As noted above, data on unemployment claims imply that the unemployment  
rate will rise sharply in March, similar to the national rate, and again in April. The seasonally  
adjusted number of unemployed persons in Ohio in February is estimated to be around 240,800.  
Approximately 5,829,000 persons are estimated to have participated in the labor market (been  
employed or actively sought work) during the month. Chart 6 shows Ohio employment and  
Chart 7 shows the statewide unemployment rate. Note that available employment and  
unemployment data for Ohio shown in the charts lag national data by one month.  
In Ohio, real GDP grew by 1.7% in 2019, compared with growth of 1.9% in the previous  
nd  
year. According to the BEA, Ohio ranked 32 among all states in GDP growth rate in 2019,  
2
5
although fastest in the Great Lakes region. Per-capita GDP in Ohio was around $59,800 in 2019,  
compared with $65,300 nationally.  
According to the BEA, the personal income (PI) of Ohioans increased by 3.7% in 2019, when  
2
6
the PI of Ohio residents totaled approximately $590.8 billion. Net earnings, the component of PI  
including wages and salaries, supplemental benefits, and proprietors income less social insurance  
taxes, increased by 3.4% in Ohio in 2019, second fastest among states in the Great Lakes region.  
There were 8,624 existing home sales registered in Ohio in February 2020, 8.8% more  
than in February 2019, according to the Ohio Association of Realtors. The average sale price of  
existing homes sold during the month was 8.0% higher than the average sale price a year prior.  
Economic Forecast Update  
The table below compares the outlook for the economy, as predicted in forecasts from  
IHS Markit released in March of this year and in May 2019. The March national forecast in the  
table, released on March 20, is an update issued in response to rapidly changing events, and  
served as the basis for the Ohio forecast shown below. The May 2019 predictions, as well as other  
variables, were inputs to forecasts by LBO economists of GRF revenues, for use by the conference  
committee in deliberations on H.B. 166, the main operating budget act of the current General  
Assembly.  
24 The government category includes federal, state, and local government employers.  
25 The Great Lakes region includes Ohio, Indiana, Michigan, Illinois, and Wisconsin.  
26 PI is the income received by all persons in an economy. It includes wages and salaries, employee  
benefits, proprietorsincome, rental income, income from the ownership of financial assets, and transfers  
from government or businesses less social insurance taxes. PI does not include capital gains or losses.  
Budget Footnotes  
P a g e | 38  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
The economic outlook has darkened rapidly with the exponential spread of the COVID-19  
pandemic. IHS Markits baseline forecast now shows nationwide real GDP falling in the second  
calendar quarter of this year at a 12.6% annual rate and falling also in the first and third calendar  
quarters of this year before beginning to recover in the fourth quarter. The predicted drop in the  
second calendar quarter, if realized, would be the sharpest decline in BEAs quarterly records that  
start in 1947. On an annual average basis, real GDP fell more than this only in 1932, in BEA annual  
records that start in 1929. Economic forecasts are highly uncertain at this time since we do not  
know the future trajectory of COVID-19 infections or the rate at which shuttered firms and persons  
sheltering in place in their homes will be able to resume more usual prepandemic activities.  
Figures shown in the table below are percent changes from the average of the four  
quarters in state FY 2019 to that for FY 2020 and from FY 2020 to FY 2021, except that  
unemployment rates are averages for the four quarters of the fiscal year indicated.  
On a fiscal year basis, overall growth of U.S. real GDP was revised downward by  
.5 percentage points for FY 2020 and 2.3 percentage points for FY 2021. Downward revisions  
1
for Ohio real GDP were 1.7 percentage points and 2.6 percentage points, respectively, for those  
years. Wage and salary income was also revised sharply lower for both the nation and the state.  
Inflation gyrates wildly, despite the apparent stability shown by the fiscal year averages, as  
consumer energy prices plummet in the current quarter then rebound. The unemployment rate  
soars to nearly 9% for the nation, and nearly 10% for Ohio, by this calendar years fourth quarter  
before beginning to decline in 2021.  
Revisions to IHS Markit Economic Forecast for FY 2020 and FY 2021  
Forecast for FY 2020 as of Forecast for FY 2021 as of  
Variable Name (National)  
U.S. real GDP growth  
May 2019 March 2020 May 2019 March 2020  
2.3%  
4.6%  
4.3%  
2.5%  
1.4%  
3.5%  
0.8%  
2.5%  
3.1%  
1.4%  
0.4%  
4.5%  
2.0%  
4.7%  
5.0%  
2.0%  
0.9%  
3.5%  
-0.3%  
-1.4%  
0.5%  
1.4%  
-4.1%  
7.9%  
U.S. wage and salary growth  
U.S. PI growth  
U.S. consumer price index inflation  
U.S. nonfarm employment growth  
U.S. unemployment rate  
Forecast for FY 2020 as of Forecast for FY 2021 as of  
May 2019 March 2020 May 2019 March 2020  
Variable Name (Ohio)  
Ohio real GDP growth  
1.7%  
4.0%  
4.1%  
0.9%  
4.1%  
0.0%  
1.7%  
2.7%  
-0.9%  
5.2%  
1.1%  
3.7%  
4.2%  
0.2%  
4.1%  
-1.5%  
-2.2%  
-0.1%  
-5.1%  
8.8%  
Ohio wage and salary growth  
Ohio PI growth  
Ohio nonfarm employment growth  
Ohio unemployment rate  
Budget Footnotes  
P a g e | 39  
April 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 8 below shows the March 2020 quarterly forecast for Ohio real GDP associated with  
the fiscal year changes in the table. Quarter-to-quarter changes are shown in the chart at annual  
rates for FY 2019, FY 2020, and FY 2021. IHS Markit expects Ohio real GDP to plummet in the  
current quarter at a 15.2% annual rate and to fall again in the first quarter of FY 2021 at a 2.7%  
annual rate, before beginning to recover in the rest of the fiscal year. Ohio real GDP does not  
recover to its prerecession level until FY 2022.  
Chart 8: Ohio Real GDP  
8
4
0
.0%  
.0%  
.0%  
-
-
4.0%  
8.0%  
-
-
12.0%  
16.0%  
FY 2019  
FY 2020  
FY 2021  
Budget Footnotes  
P a g e | 40  
April 2020