A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2020  
Issue: May 2020  
Highlights  
Ross Miller, Chief Economist  
April GRF income tax revenue amounted to just under half of the estimate  
published by the Office of Budget and Management (OBM) in August 2019,  
primarily due to a delay in the tax filing deadline until July 15, but also to an  
unprecedentedly large volume of layoffs resulting from the COVID-19 situation.  
April sales and use tax revenue amounted to 76.0% of estimate. GRF tax revenues  
as a whole were $867 million below estimate in April. For the year to date (YTD),  
GRF tax revenues at the end of April were $777 million (4.0%) below estimate.  
The national unemployment rate rose from 4.4% in March to 14.7% in April. A  
comparable jump in Ohios unemployment rate from the March level of 5.5% is  
likely, due to recent layoffs.  
Through April 2020, GRF sources totaled $27.22 billion:  
Revenue from the sales and use tax was $159.3 million below estimate;  
Personal income tax (PIT) receipts were $675.7 million below estimate.  
Through April 2020, GRF uses totaled $28.97 billion:  
GRF program expenditures were $336.0 million (1.2%) below estimate;  
GRF expenditures for Medicaid were above estimate by $116.4 million, and  
expenditures for Other Education were $2.6 million above estimate;  
Expenditures in all other program categories were below estimate, led by  
Health and Human Services ($117.0 million), Property Tax Reimbursements  
($100.5 million), and Primary and Secondary Education ($100.4 million).  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
In this issue...  
More details on GRF Revenues (p. 3), Expenditures (p. 12),  
the National Economy (p. 30), and the Ohio Economy (p. 32).  
Also Issue Updates on:  
CARES Act Funding for Transit Systems (p. 21)  
Department of Health Federal Fund Increases (p. 22)  
COVID-19 Pandemic Food Assistance (p. 22)  
Medicaid Eligibility and Federal Supplemental Unemployment (p. 23)  
COVID-19 Pandemic Emergency Housing Assistance (p. 24)  
CARES Act Funding for K-12 Schools (p. 25)  
CARES Act Higher Education Funding (p. 26)  
Arts Council Early Partial Payments (p. 27)  
Arts Council Individual Excellence Awards (p. 27)  
Regional Workforce Training Grants (p. 28)  
Economic Development Compliance Report (p. 29)  
Budget Footnotes  
P a g e | 2  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of April 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on May 1, 2020)  
State Sources  
Actual  
Estimate*  
Variance  
Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$67,421  
$680,476  
$747,897  
$157,900  
$826,700 -$146,224  
$984,600 -$236,703  
-$90,479  
-57.3%  
-17.7%  
-24.0%  
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  
$622,255 $1,258,000 -$635,745  
-50.5%  
-11.1%  
20.5%  
0.5%  
$62,315  
$83,955  
$30,947  
$487  
$70,100  
$69,700  
$30,800  
$300  
-$7,785  
$14,255  
$147  
$187  
62.2%  
$0  
$800  
-$800 -100.0%  
$25,173  
$107  
$3,523  
$4,477  
$4,886  
$0  
$25,800  
$300  
$4,300  
$3,600  
$4,300  
$0  
-$627  
-$193  
-$777  
$877  
$586  
$0  
-2.4%  
-64.2%  
-18.1%  
24.4%  
13.6%  
---  
$55  
$0  
$55  
---  
---  
$21  
$0  
$21  
Total Tax Revenue  
$1,586,097 $2,452,600 -$866,503  
-35.3%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$34,444  
$12,357  
$11,656  
$58,457  
$27,500  
$10,080  
$14,120  
$51,701  
$6,944  
$2,277  
-$2,464  
$6,756  
25.2%  
22.6%  
-17.5%  
13.1%  
Total Nontax Revenue  
Transfers In  
Total State Sources  
Federal Grants  
$614  
$0  
$614  
---  
-34.3%  
-1.2%  
$1,645,168 $2,504,301 -$859,133  
$677,386 $685,777 -$8,391  
Total GRF Sources  
$2,322,554 $3,190,078 -$867,524  
-27.2%  
*Estimates of the Office of Budget and Management as of August 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 3  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2020 as of April 30, 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on May 1, 2020)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance Percent FY 2019**  
Percent  
$1,225,629  
$7,691,165  
$8,916,794  
$1,271,200  
$7,804,900 -$113,735  
$9,076,100 -$159,306  
-$45,571  
-3.6%  
-1.5%  
-1.8%  
$1,238,103  
$7,479,114  
$8,717,217  
-1.0%  
2.8%  
2.3%  
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  
$6,629,138  
$1,320,734  
$701,042  
$289,147  
$336,417  
$1,685  
$153,270  
$100,955  
$32,584  
$44,064  
$43,936  
$6,614  
$7,304,800 -$675,662  
-9.2%  
2.4%  
3.1%  
-1.1%  
1.5%  
68.5%  
11.6%  
0.7%  
$7,402,156  
$1,271,335  
$699,771  
$305,211  
$327,738  
$330  
$148,390  
$104,428  
$44,472  
$44,162  
$41,810  
$8,400  
-10.4%  
3.9%  
0.2%  
-5.3%  
2.6%  
411.0%  
3.3%  
-3.3%  
-26.7%  
-0.2%  
5.1%  
$1,289,400  
$679,900  
$292,400  
$331,300  
$1,000  
$31,334  
$21,142  
-$3,253  
$5,117  
$685  
$137,400  
$100,300  
$44,300  
$46,400  
$42,100  
$7,700  
$15,870  
$655  
-$11,716 -26.4%  
-$2,336  
$1,836  
-$1,086 -14.1%  
-5.0%  
4.4%  
-21.3%  
-$310  
$68  
$0  
$0  
-$310  
$68  
---  
---  
$1,551 -120.0%  
$73  
-6.9%  
Total Tax Revenue  
$18,576,139 $19,353,100 -$776,961  
-4.0% $19,117,044  
-2.8%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$111,446  
$63,499  
$103,109  
$278,054  
$82,500  
$57,254  
$86,035  
$225,789  
$28,946  
$6,245  
$17,073  
$52,265  
35.1%  
10.9%  
19.8%  
23.1%  
$82,619  
$63,186  
$83,487  
$229,291  
34.9%  
0.5%  
23.5%  
21.3%  
Total Nontax Revenue  
Transfers In  
$77,045  
$68,570  
$8,476  
12.4%  
$84,588  
-8.9%  
-2.6%  
3.7%  
Total State Sources  
Federal Grants  
$18,931,238 $19,647,459 -$716,221  
$8,291,853 $8,209,979 $81,874  
$27,223,091 $27,857,438 -$634,347  
-3.6% $19,430,923  
1.0% $7,993,772  
-2.3% $27,424,696  
Total GRF SOURCES  
-0.7%  
*
*
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  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean J. Botomogno, Principal Economist  
Overview  
April 2020 GRF tax sources fell $866.5 million (35.3%) below the projection published by  
the OBM in August 2019, and this negative variance generated a corresponding shortfall of  
$
receipts, such as tax revenue, nontax revenue, and transfers in. This large GRF revenue shortfall  
was expected in light of the societal changes made in response to the COVID-19 pandemic and  
the delay to various tax payments authorized by H.B. 197 of the 133 General Assembly.  
867.5 million (27.2%) for GRF sources. GRF sources consist of both federal grants and state-source  
2
rd  
Due to a delay in the income tax filing deadline and an unprecedentedly large volume of  
layoffs resulting from the COVID-19 situation, April revenue from the two largest tax sources, the  
PIT and the sales and use tax, dropped $635.7 million (50.5%) and $236.7 million (24.0%) relative  
to their respective estimates. The PIT negative variance was driven primarily by a $697.8 million  
shortfall in payments accompanying the filing of annual returns. Since tax liabilities to be  
reported in those returns reflect economic activity in 2019, predating the emergence of  
COVID-19, most of the $697.8 million will be received in the state treasury in coming months,  
though much of it will likely arrive following the end of FY 2020. The next largest tax source, the  
commercial activity tax (CAT), had a smaller negative variance of $7.8 million (11.1%). The  
cigarette and other tobacco products tax posted a timing-related positive variance of  
$
variances. For the month, federal grants were short of estimates by $8.4 million (1.2%), but  
nontax revenue experienced a positive variance of $6.8 million (13.1%). Transfers in of  
14.3 million (20.5%). The remaining tax sources had relatively small positive or negative  
$
for the month of April and for FY 2020 through April, respectively.  
0.6 million were made when none were expected in April. Tables 1 and 2 show GRF sources  
The April underperformance reversed a GRF sources positive cumulative variance of  
$
233.2 million through three quarters in FY 2020, and for the YTD through April, the negative  
variance stood at $634.3 million (2.3%). YTD tax sources at the end of April were $777.0 million  
4.0%) short of anticipated revenue. However, the other GRF categories remained above their  
YTD estimates as follows: federal grants ($81.9 million, 1.0%), nontax revenue ($52.3 million,  
(
2
3.1%), and transfers in ($8.5 million, 12.4%).  
1 This report compares actual monthly and 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
To slow the COVID-19 pandemic, the Governor issued an emergency declaration on  
March 9, 2020, and various public health orders followed, including a stay-at-home requirement. In  
response to enactment of H.B. 197, the Tax Commissioner authorized an extension of the deadline to  
file state income taxes until July 15, matching the extended deadline for federal returns. 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 | 5  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
The PIT and the sales and use tax contributed the bulk of the YTD shortfall for tax sources  
with negative variances of $675.7 million and $159.3 million, respectively. In addition, the natural  
gas consumption tax, the kilowatt-hour tax, the alcoholic beverage tax, and the petroleum activity  
tax were short of their respective estimates by $11.7 million, $3.3 million, $2.3 million, and  
$
for the CAT, $21.1 million for the cigarette tax, $15.9 million for the financial institution tax (FIT),  
1.1 million. Those negative variances were partially offset by positive variances of $31.3 million  
$5.1 million for the foreign insurance tax, and $1.8 million for the liquor gallonage tax.  
Chart 1, below, shows cumulative YTD variances of GRF sources each month through  
April 2020.  
Chart 1: Cumulative Variances of GRF Sources in FY 2020  
(Variances from Estimates, $ in millions)  
$
$
$
600  
400  
200  
$0  
-
-
-
-
$200  
$400  
$600  
$800  
-
$1,000  
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20  
Federal Grants Tax Revenue Total GRF Sources  
To address the economic fallout from COVID-19, the U.S. Congress passed the  
Coronavirus Aid, Relief, and Economic Security (CARES) Act. The new law includes cash payments  
of up to $1,200 (plus $500 for each child age 16 or under) for each qualifying adult, an additional  
$
of unemployment benefits above that of each states unemployment program, and  
unemployment benefits for self-employed and gig workers. Also, a federal Payroll Protection  
600 per week on top of any state-provided unemployment benefits through July 31, 13 weeks  
3
Program was created with the intention of funding businesses reeling from the pandemic.  
The federal stimulus package will reduce tax revenue losses for the remainder of FY 2020,  
and probably into FY 2021. However, the tax payment delay will continue to curtail GRF revenue  
from the PIT in May and June 2020; though various business sectors previously shuttered are  
reopening, the uptick in economic activity may be halting and slow. If so, revenue results running  
below expectations from the sales and use tax and from the CAT would also continue in the next  
few months.  
3 The Payroll Protection Program is a federal loan program intended to subsidize payroll costs for  
eight weeks after low-interest loans, some of which would be forgivable, are made.  
Budget Footnotes  
P a g e | 6  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Compared to GRF sources in FY 2019 through April, GRF sources decreased $201.6 million  
(0.7%), due to declines of $540.9 million (2.8%) for tax revenue and $7.5 million (8.9%) for  
transfers in. Those decreases were partially offset by increases of $298.1 million (3.7%) and  
48.8 million (21.3%), respectively, for federal grants and nontax revenue. The PIT experienced  
$
the largest reduction in tax revenue ($773.0 million) due to two reductions made to withholding  
tax rates in the last 16 months and the tax payment delay. (The section below analyzing the PIT  
provides additional details on the rate cuts.) Combined revenue from the utility-related taxes  
(kilowatt-hour tax, public utility tax, and natural gas consumption tax) fell $31.4 million due to  
lower energy prices this year. However, revenue from the sales and use tax and the CAT were  
above their levels of FY 2019 by $199.6 million and $49.4 million, respectively. Other taxes with  
noticeable increases included the foreign insurance tax ($8.7 million), the FIT ($4.9 million), the  
liquor gallonage tax ($2.1 million), and the cigarette and other tobacco products tax ($1.3 million).  
Sales and Use Tax  
Ohio citizenshome confinement and closures of nonessential businesses strongly  
constrained taxable spending in March and April 2020, and sales and use tax receipts decreased  
dramatically. After this GRF source fell 8.3% below estimate in March, April sales and use taxes  
totaling $747.9 million were 24.0% below anticipated revenue as the economic damage of the  
pandemic came into focus. Both the nonauto and the auto portions of the tax had large negative  
variances. Monthly receipts were also $190.2 million (20.3%) below receipts in April 2019. This  
underperformance gave rise to a YTD negative variance of $159.3 million (1.8%) for the tax  
source. In the first three quarters of the fiscal year, the cumulative positive variance had been  
$
remained above YTD FY 2019 receipts by 2.3%.  
77.4 million. However, sales and use tax revenue totaling $8.92 billion for FY 2020 through April  
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.  
Nonauto Sales and Use Tax  
April GRF receipts from the nonauto sales and use tax were $680.5 million. This amount  
was $146.2 million (17.7%) below estimate and $98.3 million (12.6%) below revenue in April  
2
019. In March, the tax was $66.6 million below anticipated revenue. Thus, for the two-month  
period, the nonauto sales and use tax was $212.8 million (14.0%) below the combined estimate.  
For the YTD, total receipts of $7.69 billion were $113.7 million (1.5%) below projections, down  
from a cumulative positive variance of $32.5 million through March. YTD GRF receipts were  
$
212.1 million (2.8%) above revenue in the corresponding period in FY 2019. Chart 2 shows  
year-over-year growth in nonauto sales and use tax collections in FY 2020 and reflects the  
dramatic revenue decline in the latest month. Though the stay-at-home requirement is being  
progressively lifted and nonessential business closures have started to ease, the resumption of  
normaleconomic activity is likely to be slow. Consequently, the year-over-year decline in  
nonauto sales and use tax revenue is expected to continue for a while longer, thoughstimulus”  
checks and unemployment compensation income will provide some support during this time  
when many consumers are adjusting their spending in response to lost jobs and reduced wages.  
Budget Footnotes  
P a g e | 7  
May 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)  
8.0%  
6.0%  
4.0%  
2.0%  
0.0%  
-
-
2.0%  
4.0%  
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20  
Auto Sales and Use Tax  
Monthly auto sales and use taxes of $67.4 million were $90.5 million (57.3%) below  
estimate and $92.0 million (57.7%) below revenue in April 2019. YTD GRF revenue from this  
source totaling $1.23 billion was $45.6 million (3.6%) below estimate and $12.5 million (1.0%)  
below 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 had been  
positive through March 2020. Then, in April, demand declined abruptly and the closures or sharp  
reduction in business activity at auto manufacturers and dealerships reduced the supply of  
vehicles, and vehicle sales and tax revenue suffered greatly.  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
1
1
5.0%  
0.0%  
5
0
.0%  
.0%  
-
5.0%  
-
-
-
-
10.0%  
15.0%  
20.0%  
25.0%  
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20  
Budget Footnotes  
P a g e | 8  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Nationwide, annualized seasonally adjusted units were about 9 million units in April, a  
decrease of approximately 46.0% when compared to unit sales in the same month in 2019. Sales  
dropped across all categories. Unit sales of light trucks and SUVs decreased nearly 42.0% year over  
year, while auto sales were down about 57.0%. Financial press reports suggest April new vehicle  
sales may have marked a bottom of the market, and this month begins the road back to higher  
sales. Still, the expected increase in vehicle sales may not bring unit sales back up to previous sales  
trends anytime soon. Most forecasting firms suggest vehicle unit sales is likely to remain below  
4
1
6 million seasonally adjusted annualized units until 2021 due to the significant headwinds the  
industry will face over the next year: consumers are concerned about both the pandemic and then  
near-term job uncertainty, and this is likely to keep some buyers away from showrooms.  
Personal Income Tax  
Ohio taxpayers took advantage of the extension of the deadline to file state income taxes  
5
mentioned earlier and PIT revenue to the GRF cratered. April PIT revenue to the GRF was  
$
gross collections, minus refunds and distributions to the Local Government Fund (LGF). Gross  
collections consist of employer withholdings, quarterly estimated payments, trust payments,  
635.7 million (50.5%) below OBMs August estimate. PIT revenue to the GRF is comprised of  
6
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 81.0% of gross collections in FY 2019). Larger or smaller than expected refunds  
could also greatly affect the monthly performance of the tax.  
April gross collections and refunds were below their respective estimates by sizable  
amounts. Gross collections were $888.4 million (49.2%) below target, with big deficits for nearly  
all the components. Payments due with annual returns came in sharply below projections and  
posted a negative variance of $697.8 million (84.9%) for the month. The first quarterly estimated  
payments, also typically due April 15, fell $80.9 million (65.3%) relative to expectations.  
Additionally, employer withholding and trust payments were short of projections by  
$
$
84.6 million (10.3%) and $25.8 million (79.4%). Refunds and LGF distributions were  
248.3 million (47.8%) and $4.3 million (15.0%) below estimate, respectively.  
Through April, YTD GRF receipts from the PIT were $6.63 billion, an amount $675.7 million  
(
9.2%) below projections. This YTD negative variance was an increase from a cumulative shortfall  
of $39.9 million through March 2020. Yearly GRF revenue was also $773.0 million (10.4%) below  
revenue in the first ten months of FY 2019. In addition to the impact of delayed income tax filings,  
two reductions in withholding rates also decreased FY 2020 revenue relative to FY 2019.  
Year-over-year growth in withholding receipts during the first half of FY 2020 was limited by a  
3
withholding receipts in 2020 was limited due to a 4.0% reduction in withholding rates effective  
.3% reduction in withholding rates implemented in January 2019. Year-over-year growth in  
4 Unit sales were about 17 million in calendar year (CY) 2019.  
5 Through April, the number of individual income tax returns filed dropped about 16.0% relative  
to the corresponding period in FY 2019, with most of that decline occurring in the month of April.  
6 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 January of the  
following year. Most estimated payments are made by high-income taxpayers.  
Budget Footnotes  
P a g e | 9  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
January 2020 and through April. 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.  
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 $824.4 million below  
projections, largely due a negative variance of $711.2 million for payments due with annual returns.  
Employer withholding, quarterly estimated payments, and trust payments also fell by $27.2 million,  
$66.5 million, and $20.3 million, respectively, though miscellaneous payments posted a positive  
variance of $0.9 million. Refunds were $149.5 million below estimate, but LGF distributions were  
above anticipated revenue by $0.8 million, thus resulting in a YTD PIT shortfall of $675.7 million.  
Compared to gross collections in FY 2019 through April, payments due with annual  
returns this year were reduced by $750.9 million. In addition, quarterly estimated payments and  
trust payments decreased $43.5 million and $29.6 million, respectively. On the other hand,  
employer withholding and miscellaneous payments were, respectively, $65.0 million and  
$
2.5 million higher than in FY 2019 through April. Overall, YTD gross collections through April  
were $756.5 million below YTD collections in FY 2019. LGF distributions were $19.2 million above  
those in the corresponding period in FY 2019, but YTD refunds were $2.8 million below FY 2019  
refunds. 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  
7
the corresponding period in FY 2019, YTD FY 2020 employer withholding receipts grew 0.8%,  
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  
-$27.2  
-$66.5  
-$20.3  
-$711.2  
$0.9  
-0.3%  
$65.0  
-$43.5  
-$29.6  
-$750.9  
$2.5  
0.8%  
Quarterly Estimated Payments  
Trust Payments  
-9.5%  
-31.5%  
-68.5%  
1.2%  
-6.4%  
-40.2%  
-69.7%  
3.4%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
-$824.4  
-$149.5  
$0.8  
-8.5%  
-$756.5  
-$2.8  
-7.9%  
Less Refunds  
-7.4%  
-0.1%  
Less LGF Distribution  
GRF PIT Revenue  
0.2%  
$19.2  
5.9%  
-$675.7  
-9.2%  
-$773.0  
-10.4%  
7 Withholding receipts consist of monthly employer withholding (about 99.0% of the total) and  
annual employer withholding.  
Budget Footnotes  
P a g e | 10  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
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 2.5%, on average, in the last three months.  
Chart 4: Monthly Witholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
1
0.0%  
8
6
4
2
0
.0%  
.0%  
.0%  
.0%  
.0%  
-
-
2.0%  
4.0%  
Actual  
Adjusted  
Commercial Activity Tax  
April CAT GRF receipts of $62.3 million were $7.8 million (11.1%) below estimate, and  
8.8 million (12.3%) below April 2019 revenue. The monthly underage decreased the CATs YTD  
$
positive variance to $31.3 million (2.4%), down from $39.1 million at the end of March 2020.  
FY 2020 GRF receipts totaled $1.32 billion, an amount $49.4 million (3.9%) above revenue  
through April in FY 2019. The increase in GRF revenue in FY 2020 has been driven throughout the  
8
fiscal year, in part, by a decline in tax credits and refunds claimed against the CAT. Through April,  
FY 2020 gross collections (i.e., all funds revenue) grew only 2.5% while refunds and credits fell  
1
4.2%, resulting in a higher growth rate for the GRF. Though the tax is above target YTD relative  
to estimate through April, CAT returns for quarterly calendar taxpayers due May 10 will reflect  
the early negative economic impact of the COVID-19 pandemic. Those receipts are based on  
companiestaxable receipts for the January to March quarter.  
Under continuing law, CAT receipts are deposited into the GRF (85.0%), the School District  
Tangible Property Tax Replacement Fund (Fund 7047, 13.0%), and the Local Government  
Tangible Property Tax Replacement Fund (Fund 7081, 2.0%). The distributions are used to make  
reimbursement payments to school districts and other local taxing units, respectively, for the  
phase out of property taxes on general business tangible personal property. Any receipts in  
excess of amounts needed for such payments are transferred back to the GRF. On the other hand,  
if CAT revenue is insufficient for the required payments, the GRF would subsidize the local funds.  
8 A number of Ohios business tax credits can be claimed against more than one type of tax, but  
many are claimed against the CAT, which is imposed on the privilege of doing business in Ohio.  
Budget Footnotes  
P a g e | 11  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of April 2020  
($ in thousands)  
(Actual based on OAKS reports run May 1, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent  
Primary and Secondary Education  
Higher Education  
$576,621  
$234,190  
$3,505  
$636,732  
$191,903  
$3,986  
-$60,111  
$42,287  
-9.4%  
22.0%  
Other Education  
-$481 -12.1%  
Total Education  
$814,316  
$832,621  
-$18,305  
-2.2%  
Medicaid  
$997,998 $1,018,410  
$78,129 $152,659  
$1,076,126 $1,171,069  
-$20,413  
-2.0%  
Health and Human Services  
Total Health and Human Services  
-$74,530 -48.8%  
-$94,943  
-8.1%  
Justice and Public Protection  
General Government  
$209,772  
$52,693  
$230,065  
$46,503  
-$20,293  
$6,189  
-8.8%  
13.3%  
-5.1%  
Total Government Operations  
$262,464  
$276,568  
-$14,104  
Property Tax Reimbursements  
Debt Service  
$304,570  
$96,242  
$310,403  
$98,535  
-$5,833  
-$2,294  
-$8,126  
-1.9%  
-2.3%  
-2.0%  
Total Other Expenditures  
$400,812  
$408,938  
Total Program Expenditures  
Transfers Out  
$2,553,719 $2,689,197 -$135,478  
$41 $0 $41  
$2,553,761 $2,689,197 -$135,437  
-5.0%  
---  
Total GRF Uses  
-5.0%  
*September 2019 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 12  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2020 as of April 30, 2020  
($ in thousands)  
(Actual based on OAKS reports run May 1, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2019** Percent  
Primary and Secondary Education  
Higher Education  
$6,967,795 $7,068,180 -$100,386  
-1.4%  
-1.5%  
3.6%  
$6,951,472  
$1,914,180  
$64,343  
0.2%  
3.3%  
$1,977,477 $2,007,623  
$74,746 $72,154  
-$30,146  
$2,592  
Other Education  
16.2%  
1.0%  
Total Education  
$9,020,018 $9,147,957 -$127,939  
-1.4% $8,929,995  
Medicaid  
$12,991,582 $12,875,154 $116,428  
$1,184,683 $1,301,637 -$116,954  
0.9% $12,363,054  
5.1%  
3.3%  
4.9%  
Health and Human Services  
-9.0%  
$1,147,197  
Total Health and Human Services  
$14,176,266 $14,176,791  
-$526  
0.0% $13,510,251  
Justice and Public Protection  
General Government  
$2,052,511 $2,096,664  
-$44,153  
-2.1%  
$1,911,571  
$340,053  
7.4%  
13.5%  
8.3%  
$385,960  
$438,644  
-$52,685 -12.0%  
Total Government Operations  
$2,438,471 $2,535,309  
-$96,838  
-3.8% $2,251,624  
Property Tax Reimbursements  
Debt Service  
$1,307,922 $1,408,426 -$100,504  
$1,358,044 $1,368,228 -$10,184  
-7.1%  
-0.7%  
$1,446,709  
$1,349,087  
-9.6%  
0.7%  
Total Other Expenditures  
$2,665,966 $2,776,654 -$110,688  
-4.0% $2,795,796  
-4.6%  
Total Program Expenditures  
Transfers Out  
$28,300,721 $28,636,712 -$335,991  
-1.2% $27,487,666  
3.0%  
$668,161  
$669,975  
-$1,814  
-0.3%  
$759,217 -12.0%  
2.6%  
Total GRF Uses  
$28,968,882 $29,306,687 -$337,805  
-1.2% $28,246,883  
*
*
September 2019 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on May 1, 2020)  
Month of April 2020  
Year to Date through April 2020  
Actual Estimate* Variance Percent  
Department  
Medicaid  
GRF  
Actual  
Estimate* Variance Percent  
$933,223  
$953,580 -$20,358  
-2.1% $12,323,508 $12,211,468 $112,040  
-0.2% $8,312,070 $8,453,603 -$141,533  
0.9%  
-1.7%  
-0.1%  
Non-GRF  
$1,112,369 $1,114,100  
-$1,730  
$
2,045,592 $2,067,680 -$22,088  
-1.1% $20,635,579 $20,665,072  
-$29,493  
All Funds  
Developmental Disabilities  
GRF  
$57,840  
165,788  
223,629  
$57,616  
$224  
0.4% $576,037 $574,994  
$1,043  
-$39,299  
-$38,255  
0.2%  
-1.9%  
-1.4%  
$
$179,027 -$13,239  
$236,644 -$13,015  
-7.4% $2,062,868 $2,102,166  
-5.5% $2,638,905 $2,677,160  
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$6,213  
$6,340  
$17,098  
$23,438  
-$128  
-2.0%  
$83,385  
$155,799  
$239,184  
$79,738  
$155,720  
$235,458  
$3,647  
$79  
4.6%  
0.1%  
1.6%  
Non-GRF  
$12,788  
$19,000  
-$4,310 -25.2%  
-$4,438 -18.9%  
All Funds  
$3,726  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$722  
$873  
$4,395  
$5,268  
-$151 -17.3%  
$8,652  
$36,648  
$45,300  
$8,955  
$36,829  
$45,784  
-$302  
-$182  
-$484  
-3.4%  
-0.5%  
-1.1%  
Non-GRF  
$4,458  
$64  
1.4%  
$
5,180  
-$88  
-1.7%  
All Funds  
All Departments:  
GRF  
$997,998 $1,018,410 -$20,413  
$1,295,404 $1,314,620 -$19,216  
2,293,402 $2,333,030 -$39,628  
-2.0% $12,991,582 $12,875,154 $116,428  
-1.5% $10,567,385 $10,748,319 -$180,935  
0.9%  
-1.7%  
-0.3%  
Non-GRF  
All Funds  
$
-1.7% $23,558,967 $23,623,473  
-$64,507  
*September 2019 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 14  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on May 1, 2020)  
Month of April 2020  
Year to Date through April 2020  
Actual Estimate* Variance Percent  
Payment Category  
Actual  
Estimate* Variance Percent  
Managed Care  
CFC†  
$1,538,404 $1,548,883 -$10,479  
-0.7% $14,917,517 $14,728,725  
$188,792  
$101,449  
$195,753  
-$68,789  
-$3,187  
1.3%  
2.0%  
5.1%  
-2.8%  
-0.4%  
-1.7%  
0.8%  
$559,198  
$452,247  
$250,860  
$81,514  
$194,585  
$0  
$546,763 $12,435  
$415,458 $36,789  
$269,364 -$18,504  
2.3% $5,248,874  
8.9% $4,028,508  
-6.9% $2,424,653  
$5,147,425  
$3,832,756  
$2,493,442  
$800,403  
Group VIII  
ABD†  
ABD Kids  
My Care  
P4P†  
$85,240 $797,216  
$232,058 -$37,473 -16.1% $2,212,144  
$0 $0 --- $206,121  
-$3,726  
-4.4%  
$2,250,216  
$204,482  
-$38,073  
$1,639  
Fee-For-Service  
ODM Services  
DDD Services  
$575,882  
$365,439  
$210,369  
$0  
$607,108 -$31,226  
$375,652 -$10,213  
$231,456 -$21,087  
-5.1% $6,918,989 $7,042,861 -$123,873  
-1.8%  
-2.0%  
-1.5%  
-1.5%  
-0.6%  
-2.7% $3,558,587  
-9.1% $2,556,917  
$3,632,796  
$2,595,966  
$669,444  
$144,655  
-$74,210  
-$39,049  
-$9,747  
-$867  
Hospital - HCAP†  
Hospital - Other  
$0  
$0  
$0  
---  
---  
$659,697  
$143,788  
$74  
$74  
Premium Assistance  
$95,607  
$99,999  
-$4,392  
-4.4%  
$936,110  
$959,243  
-$23,134  
-2.4%  
Medicare Buy-In  
$54,869  
$57,483  
-$2,613  
-4.5%  
$542,760  
$554,345  
-$11,585  
-2.1%  
Medicare Part D  
$40,738  
$42,517  
-$1,779  
-4.2%  
$393,350  
$404,899  
-$11,549  
-2.9%  
Administration  
Total  
$83,510  
$77,040  
$6,469  
8.4%  
$786,352  
$892,644 -$106,292 -11.9%  
$2,293,402 $2,333,030 -$39,628  
-1.7% $23,558,967 $23,623,473 -$64,507 -0.3%  
*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 | 15  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
EMexlanpey Cearnter,dDiriecttorures9  
Ivy Chen, Principal Economist  
Overview  
On May 7, the Governor signed an executive order requiring GRF expenditure reductions  
of $775.0 million for FY 2020 as part of an effort to balance the budget in the wake of decreased  
revenues as a result of the COVID-19 pandemic. These reductions are discussed briefly below.  
GRF uses in April were $135.4 million (5.0%) below estimate. FY 2020 GRF uses for the YTD have  
been under estimate all throughout the year. The negative variance at the end of March was  
$
202.4 million; this variance increased to $337.8 million (1.2%) at the end of April. The total for  
YTD uses at the end of April was $28.97 billion, consisting of $28.30 billion in program  
expenditures and $668.2 million in transfers out. 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 April.  
Medicaids GRF expenditures were below estimate by $20.4 million for the month of  
April, decreasing Medicaids YTD positive GRF variance to $116.4 million (0.9%) at the end of  
April. The section below gives more details about Medicaid GRF and non-GRF variances.  
Health and Human Services had the largest negative YTD and monthly variances at  
$
117.0 million (9.0%) and $74.5 million, respectively. The second largest negative YTD variance  
was in Property Tax Reimbursements at $100.5 million (7.1%), this negative variance grew by  
5.8 million in April. Primary and Secondary Education had the third largest negative YTD  
variance and the second largest negative monthly variance at $100.4 million (1.4%) and  
60.1 million, respectively. Three other program categories had negative YTD variances that were  
$
$
more than $30.0 million. Two of these had positive variances in April that reduced their negative  
YTD variances and one had a negative variance in April that increased its YTD variance. These  
categories are: General Government ($52.7 million (12.0%), decreasing by $6.2 million in April),  
Justice and Public Protection ($44.2 million (2.1%), increasing by $20.3 million), and Higher  
Education ($30.1 million (1.5%), decreasing by $42.3 million). These variances are discussed  
below.  
Executive Order Reductions  
The governor signed an executive order on May 7 requiring $775.0 million in GRF budget  
reductions for FY 2020. OBM released a table showing a total of $776.3 million in reductions  
detailed by agency, which is available at obm.ohio.gov. The following table shows the reductions  
by program category.  
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 | 16  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Executive Order Budget Reductions by Program Category  
Category  
Primary and Secondary Education  
Higher Education  
FY 2020 Budget Reduction  
$354,590,000  
$109,088,900  
$2,130,100  
Other Education  
Medicaid  
$211,973,500  
$54,342,600  
$16,586,300  
$27,552,800  
$776,264,200  
Health and Human Services  
Justice and Public Protection  
General Government  
TOTAL  
Medicaid  
GRF Medicaid expenditures were below their monthly estimate in April by $20.4 million  
(2.0%), which decreased the YTD variance in Medicaid expenditures to $116.4 million (0.9%) above  
estimate. Non-GRF Medicaid expenditures were also below their monthly estimate, by  
19.2 million (1.5%), and remained below their YTD estimate by $180.9 million (1.7%). Including  
$
both the GRF and non-GRF, all funds Medicaid expenditures were $39.6 million (1.7%) below  
estimate in April and $64.5 million (0.3%) below their YTD estimate at the end of April. The initial  
impact of the COVID-19 pandemic has shown in Medicaid caseloads. Medicaid experienced a total  
enrollment increase of more than 24,000 in March, which represented Ohio Medicaids largest  
one-month caseload increase in more than three years. In April, this trend continued, with a total  
caseload increase of more than 93,000 cases. For the month of April, caseloads were above the  
budget estimate by 3.57% (100,656 cases). March and Aprils caseload increases reversed the trend  
of the previous eight months of the fiscal year, which had all seen caseloads below estimate. For  
YTD average caseloads, total Medicaid enrollment remains below estimate, by 0.03% (715 cases).  
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 99.0% of the total Medicaid budget. Therefore, they generally also account for the  
majority of the variances in Medicaid expenditures. ODM had a negative variance in April of  
$
22.1 million (1.1%), which maintained YTD expenditures below estimate, with a $29.5 million  
(0.1%) negative variance. Aprils negative monthly variance increased the magnitude of the YTD  
negative variance, which was $7.4 million at the end of March.  
ODODD had a negative variance ($13.0 million) in April which increased the magnitude of  
ODODDs negative YTD variance from $25.2 million (1.0%) at the end of March to $38.3 million (1.4%)  
at the end of April. The other sixsisteragencies Job and Family Services, Health, Aging, Mental  
Health and Addiction Services, State Board of Pharmacy, and Education account for the remaining  
Budget Footnotes  
P a g e | 17  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
1.0% of the total Medicaid budget. Unlike ODM and ODODD, the six sisteragencies incur only  
administrative spending. The Ohio Department of Job and Family Services (ODJFS) had a $4.4 million  
(18.9%) negative variance in April, which decreased its YTD positive variance to $3.7 million (1.6%).  
Table 6 shows all funds Medicaid expenditures by payment category. Expenditures were  
below their YTD estimates for three of the four payment categories. Managed Care expenditures  
were above their YTD estimate by $188.8 million (1.3%). Fee-For-Service (FFS, $123.9 million,  
1
1
.8%) had the largest overall negative variance, followed by Administration ($106.3 million,  
1.9%), and Premium Assistance ($23.1 million, 2.4%).  
The negative variance in FFS in April might be driven by delays in non-essential care, which  
was postponed or canceled throughout the month of April. While total Managed Care expenditures  
for April were below estimate by $10.5 million (0.7%), Managed Care expenditures for the Covered  
Families and Children (CFC) and Group VIII populations were above their monthly estimates, by  
$
12.4 million (2.3%) and $36.8 million (8.9%), respectively. These variances added to positive YTD  
variances of $101.4 million (2.0%) for CFC and $195.8 million (5.1%) for Group VIII. These two figures  
represent the majority of the YTD positive variance in total Managed Care expenditures, and their  
higher expenditures in April may be driven by the caseload increases in these populations. Through  
FY 2020, the largest factors which have contributed to the positive YTD variance in total Managed  
Care have been positive monthly variances in the 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 3.0% 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. In April, increased caseloads caused by the COVID-19 economic  
decline caused Managed Care caseloads for Group VIII to increase to 10.4% (57,871 cases) above  
estimate, which brought the average monthly caseloads to 2.6% (14,278 cases) above estimate  
for the first ten months of FY 2020.  
ODM is expected to reduce its FY 2020 GRF budget by $212.0 million and its non-GRF  
budget by $9.1 million.  
Health and Human Services  
The negative YTD variance in the Health and Human Services category increased by  
74.5 million in April, from $42.4 million (3.7%) to $117.0 million (9.0%).  
$
ODJFS is largely responsible for the negative April variance in this category. ODJFS had a  
negative variance of $56.8 million in April that brought this agencys negative YTD variance at the  
end of April to $60.3 million. Item 600523, Family and Children Services, had the largest negative  
variance in April of $33.3 million, changing its YTD variance from a positive $10.4 million at the end  
of March to a negative $23.0 million at the end of April. In addition, item 600535, Early Care and  
Education, had a negative monthly variance in April of $17.2 million, partially offsetting positive  
variances from earlier months and resulting in a positive YTD variance for this item of $3.7 million.  
Item 600450, Program Operations, continued its trend of negative monthly variances with a  
negative variance of $1.8 million in April, bringing its negative YTD variance to $21.0 million at the  
end of April. ODJFS is expected to reduce its FY 2020 budget by $36.2 million, 66.6% of the total  
budget reductions for this program category.  
Budget Footnotes  
P a g e | 18  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
The Ohio Department of Mental Health and Addiction Services (OMHAS) had a negative  
variance of $17.9 million for the month of April, increasing its negative YTD variance to  
$
38.0 million. Over half of the monthly and YTD variances were due to item 336421, Continuum  
of Care Services, which had a negative variance of $10.5 million in April and $21.7 million YTD.  
Item 336421 is used to distribute funds to local boards of mental health and alcohol, drug, and  
gambling addiction services to meet locally determined needs. OMHAS is expected to reduce its  
FY 2020 budget by $8.3 million, 15.3% of the total budget reductions for this program category.  
Also contributing to the negative YTD variance in this category was the Department of  
Health (DOH), which had a negative YTD variance of $8.3 million at the end of April. This YTD  
variance was a result of an accumulation of negative monthly variances for most months of the  
fiscal year, although DOH had a positive variance of $1.3 million for the month of April. DOHs  
variances are spread out over most of its line items. DOH is expected to reduce its FY 2020 budget  
by $5.3 million, 9.7% of the total budget reductions for this program category.  
The agency in this category with the fourth highest negative YTD variance is the  
Department of Veterans Services, which had a negative YTD variance of $6.9 million at the end  
of April. This variance is primarily from item 900321, VeteransHomes, which pays the operating  
costs of the states two veteranshomes.  
Property Tax Reimbursements  
The negative YTD variance in Property Tax Reimbursements of $100.5 million (7.1%) was  
due primarily to this categorys expenditures being $74.0 million below estimate in March,  
although this category also had a negative variance of $5.8 million in April. 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. This category is  
exempt from budget reductions.  
Primary and Secondary Education  
The Primary and Secondary Education category had a negative variance for the month of  
April of $60.1 million, which increased this categorys negative YTD variance to $100.4 million  
(
1.4%). This category only includes the Ohio Department of Education (ODE). The negative  
variance in April was mainly due to negative variances in items 200550, Foundation Funding, and  
00532, Nonpublic Administrative Cost Reimbursement, of $28.2 million and $23.3 million,  
2
respectively. Item 200550 provides the main funding for the states foundation aid to public  
schools. The executive budget reductions include a $300.0 million reduction to this program.  
Reductions by school district are available at obm.ohio.gov. The reductions were distributed  
across school districts based on each districts number of students and capacity to raise local  
revenue. Item 200532 is used to reimburse nonpublic schools chartered by the state for certain  
administrative activities required to maintain their charter. The variance in this item is due to  
timing. Item 200437, Student Assessment, also has a significant negative YTD variance at the end  
of April of $15.7 million, despite a positive variance of $1.6 million for the month. In addition to  
the $300.0 million reduction from the foundation program, ODE is expected to reduce its FY 2020  
budget by $54.6 million for a total of $354.6 million.  
Budget Footnotes  
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May 2020  
Legislative Budget Office of the Legislative Service Commission  
General Government  
The General Government category had a negative YTD variance of $52.7 million (12.0%)  
at the end of April, but a positive variance of $6.2 million for the month of April. The April variance  
was largely the result of a positive monthly variance of $11.3 million in item 775470, Public  
Transportation State, in the Ohio Department of Transportation (ODOT) budget. This positive  
variance decreased this items negative YTD variance to $13.6 million. ODOT is expected to  
reduce its FY 2020 budget by $6.7 million, 24.2% of the total budget reductions for this program  
category. Item 700417, Soil and Water Phosphorus Program, in the Department of Agriculture  
budget, continued to have a negative YTD variance of $15.0 million due to the delay of the start  
of this program. The Department of Agriculture is expected to reduce its FY 2020 budget by  
$
4.8 million, 17.3% of the total budget reductions for this program category. The third highest  
negative YTD variance in this category is $3.8 million in item 195556, TechCred Program, in the  
Development Services Agency (DSA) budget. The TechCred Program is a new workforce  
development program that receives funding from the Ohio Incumbent Workforce Training Fund  
(Fund 5HR0) as well as the GRF. DSA is expected to reduce its FY 2020 budget by $7.4 million,  
2
6.8% of the total budget reductions for this program category  
Justice and Public Protection  
The Justice and Public Protection category had a negative variance for the month of April  
of $20.3 million, which increased this categorys negative YTD variance to $44.2 million (2.1%).  
The negative variance in April was due to a negative variance of $17.4 million in the Department  
of Rehabilitation and Correction (DRC), which decreased DRCs positive YTD variance to  
$
7.2 million. Most other agencies in this category had negative YTD variances including the  
Department of Public Safety (DPS, $16.9 million), the Attorney General ($11.1 million), the Public  
Defender ($9.3 million), the Department of Youth Services (DYS, $8.5 million), and the  
Judiciary/Supreme Court ($4.7 million). Most FY 2020 budget reductions in this category are  
expected for DYS ($6.2 million, 37.4% of the category total), the Public Defender ($6.1 million,  
3
6.8%), and DPS ($3.0 million, 18.1%).  
Higher Education  
The Higher Education category reversed much of the negative YTD variance it has had  
since December with a positive variance in April of $42.3 million. This categorys YTD variance  
was a negative $30.1 million (1.5%) at the end of April. As reported in the last issue of Budget  
Footnotes, expenditures from two line items had been delayed since December. These  
expenditures were made in April. The two items are listed below with their positive April  
variances indicated in parentheses:  
235535, Ohio Agricultural Research and Development Center ($28.0 million);  
235511, Cooperative Extension Service ($18.8 million).  
Most other line items in this category were under estimate for the YTD. These items  
include 235438, Choose Ohio First Scholarship, ($10.8 million); 235563, Ohio College Opportunity  
Grant, ($9.6 million); and 235599, National Guard Scholarship, ($4.0 million). The Department of  
Higher Education (DHE) is expected to reduce its FY 2020 budget by $109.1 million. This includes  
$
to public colleges and universities. Reductions by institution are available at obm.ohio.gov.  
76.7 million in item 235501, State Share of Instruction, which provides the states main support  
Budget Footnotes  
P a g e | 20  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
CARES Act Allocates $478 million to Support Ohio Transits  
Tom Middleton, Senior Budget Analyst  
On April 2, 2020, the Federal Transit Administration (FTA) announced that Ohio will  
receive approximately $478.1 million from a total of $25 billion authorized nationwide under the  
federal CARES Act to assist transit systems across the nation in response to COVID-19. The money  
will be distributed under two FTA programs: the Urban Transit Program (UTP), assisting transits  
in cities with a population of 50,000 or more, and the Rural Transit Program (RTP), for transits in  
less populated areas. As the table below shows, $396.1 million (82.8%) of the funding designated  
for Ohio is distributed by formula under the UTP. This money goes directly to transit systems  
serving designated metropolitan areas according to factors such as ridership, service miles, fare  
revenue, cost per hour, passengers per mile, and others. For example, in the Columbus area, the  
Central Ohio Transit Authority (COTA) provides most transit service and receives the lions share  
of FTA funding for the area, but Delaware County Transit also receives a small portion of the  
areas allocation.  
In contrast to UTP funding, the federal grant funding under the RTP is administered by  
the state through ODOT. On April 20, 2020, the Controlling Board approved $81.9 million in  
additional RTP funding in FY 2020 to rural transit systems under the CARES Act. According to  
ODOT, the majority of this additional funding will be allocated to transit agencies in proportion  
to previously awarded FY 2020 allocations. Most of the remaining RTP funding will go toward  
(
1) capital projects that did not yet receive funding in FY 2020 and (2) rural intercity bus  
programs. The FTA funding is spent through Highway Operating Fund (Fund 7002) line item  
75452, Public Transportation Federal.  
7
Funding for Ohio Transit Agencies Under the CARES Act, by Metropolitan Area  
Metropolitan  
CARES Act  
Allocation  
Metropolitan  
Area  
CARES Act  
Allocation  
Metropolitan  
Area  
CARES Act  
Allocation  
Area  
Cleveland  
Dayton  
$123,467,325 Canton  
$11,428,977 Mansfield  
$3,050,997  
$2,877,930  
$1,577,933  
$1,290,256  
$1,082,965  
$314,948  
$81,351,601 Youngstown*  
$53,174,170 Lorain-Elyria  
$45,389,982 Middletown  
$23,034,772 Springfield  
$17,820,132 Newark  
$11,106,926 Lima  
Columbus  
Cincinnati*  
Akron  
$7,895,873 Steubenville-Weirton  
$4,183,573 Wheeling, WV*  
$3,700,111 Huntington, WV*  
$3,319,130 Parkersburg, WV*  
Toledo*  
TOTAL UTP allocations (federal direct awards)  
TOTAL RTP allocations (awarded through ODOT)  
TOTAL All CARES Act funding to Ohio transits  
$396,067,601  
$81,932,267  
$477,999,868  
*Amount in this metropolitan area (which crosses into other states) represents the amount received by Ohio transits.  
Budget Footnotes  
P a g e | 21  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Typically, funding allocations under these two FTA programs can be used to cover up to  
0% of capital costs and 50% of operating costs, with the state or local entities covering the  
8
remaining matching costs. Under the CARES Act, funding can cover 100% of eligible costs related  
to the COVID-19 pandemic beginning January 20, 2020, including (1) reimbursement of operating  
costs to maintain service, (2) purchase of personal protective equipment, and (3) payment of  
administrative leave for operations personnel due to reductions in service.  
DOH Receives Federal Funding of $94.4 million to Address  
COVID-19  
Jacquelyn Schroeder, Senior Budget Analyst  
Between March 25 and May 11, the Controlling Board approved six requests to increase  
appropriations for DOH by a total of $94.4 million in FY 2020 to address the COVID-19 pandemic.  
The increases affect three DOH funds the Public Health Emergency Preparedness Fund  
(
Fund 3GN0), the newly created Coronavirus Relief Fund (Fund 5CV1), and the Federal Public  
Health Programs Fund (Fund 3920). The increase of $24.2 million in Fund 3GN0 will be used for  
a variety of activities including: supporting local health department efforts to monitor,  
investigate, and contain the virus; developing public education and awareness campaigns;  
distributing specimen collection kits and conducting testing; making medication available to  
providers; supporting DOHs COVID-19 call center; and purchasing personal protective  
equipment and public health laboratory supplies. Fund 5CV1, which received an appropriation of  
$
63.4 million, will be used for the same purposes as Fund 3GN0, as well as a few others. These  
other purposes include contracting for data analysis to help determine when mitigation efforts  
can be lifted, public antibody testing, ventilator inventory system and maintenance, external  
laboratory testing, developing technology for notification of localized outbreaks, and increasing  
the number of epidemiological investigators at local health departments. Lastly, the increase of  
approximately $6.8 million in Fund 3920 will be used to provide funding to rural hospitals to help  
combat COVID-19, increase epidemiology and laboratory capacity, and to prevent and minimize  
the impact of COVID-19 on individuals with HIV or AIDS.  
Funds received in Fund 3GN0 were provided by the federal Coronavirus Preparedness and  
Response Supplemental Appropriations Act, which was signed into law on March 6, 2020. Funds  
received in Fund 3920 and Fund 5CV1 were provided by the CARES Act. The CARES Act allows  
states to use funding from the Coronavirus Relief Fund for expenditures made in response to the  
COVID-19 pandemic from March 1, 2020, through December 30, 2020.  
Ohio Provides Expanded Access to Food Assistance Programs  
Nicholas J. Blaine, Budget Analyst  
In response to the COVID-19 pandemic, the state and federal government have  
implemented numerous policy changes to alleviate food insecurity among low-income  
households. Some of these changes were authorized by the federal Families First Coronavirus  
Response (FFCR) Act. The act allowed the U.S. Department of Agriculture (USDA) to grant state  
requests for flexibility in administering food assistance programs. One approved request allows  
Ohio to provide the maximum benefit to households enrolled in the Supplemental Nutrition  
Budget Footnotes  
P a g e | 22  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Assistance Program (SNAP) for up to two months.10 This means a household with three  
individuals will receive the maximum amount of $509 regardless of income. SNAP benefit  
amounts vary depending on a households income and size. If a household already receives the  
maximum amount, it will not receive additional benefits. The act also temporarily suspended  
SNAPs three-month limit on benefits for unemployed adults under age 50 without children and  
eased administrative requirements to help states deal with increased applications during a time  
of office closures. Examples of eased administrative requirements include waiving in-person and  
telephone interviews for initial applications and recertifications, extending quality control  
deadlines, and adjusting reporting requirements.  
Additionally, the USDA approved Ohios request to operate the Disaster Household  
1
1
Distribution Program (DHDP). DHDP provides prepackaged boxes of food for families through  
the states network of 13 food banks and over 2,800 distribution sites. The food inventories used  
for distribution come from the Emergency Food Assistance Program (TEFAP), which is  
administered by ODJFS. While TEFAP also provides emergency food assistance, there are  
program differences. For example, TEFAP has income eligibility requirements and DHDP does not.  
Not having to verify income allows social distancing to be maintained while providing food quickly  
and efficiently. In addition, TEFAP is an ongoing program, while DHDP is a temporary program  
that operates only for approved time periods. In Ohios case, DHDP operated between  
April 7, 2020, and April 30, 2020. To support ongoing emergency efforts, the FFCR Act provided  
additional funds to TEFAP. In response to this, the Controlling Board approved an ODJFS request  
to increase appropriations for the program by $4.0 million in FY 2020 and $5.5 million in FY 2021.  
TEFAP dollars provided to the states are used for both state and food site administrative costs  
associated with dispensing USDA purchased food items.  
Lastly, Executive Order 2020-13D, signed on April 10, 2020, directs the Governors Office  
of Faith Based and Community Initiatives to use a portion of their operational funds to reduce  
1
2
food insecurity. The Office is directed to provide up to $5.0 million in each fiscal year to the  
Ohio Association of Foodbanks to provide supplies to ensure safety, food, and personal hygiene  
necessities during the COVID-19 pandemic. Of this amount, $1.0 million must support the  
Agricultural Clearance Program, which provides surplus agricultural products to food banks.  
CARES Act Modifies Medicaid Income Eligibility Rules  
Nelson V. Lindgren, Economist  
The CARES Act requires federal supplemental unemployment benefits to be disregarded  
when determining eligibility for Medicaid and Childrens Health Insurance Program (CHIP)  
coverage. The CARES Act provides supplemental benefits of $600 per week to unemployed  
individuals through July 31, 2020. These supplemental benefits are in addition to any state  
10 SNAP households are eligible for assistance with incomes up to 130% of the federal poverty  
level (FPL) (about $28,200 per year for a family of three in 2020).  
11 The USDA can approve a states request to operate such a program if the President declares a  
national emergency.  
12 H.B. 166 of the 133rd General Assembly earmarked $13.3 million in each fiscal year from federal  
Fund 3V60 appropriation item 600689, TANF Block Grant, to support the Offices efforts.  
Budget Footnotes  
P a g e | 23  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
unemployment benefits an individual would qualify for under Ohio law. Unemployment benefits  
are typically considered taxable income and are used to determine financial eligibility for both  
1
3
Medicaid and CHIP. However, the CARES Act specifically states that these amounts be  
disregarded when determining eligibility.  
Medicaid is a joint state-federal program that together with CHIP provides health care to  
about 2.8 million Ohioans. To be eligible for both programs, an individual must meet financial  
and nonfinancial requirements. Nonfinancial requirements include being a U.S. citizen and a  
resident of the state in which the individual is to receive benefits. Financial eligibility standards  
differ for various populations but must meet federally specified minimums or maximums. In Ohio,  
adults under age 65 eligible under the Group VIII Medicaid expansion must have an income 138%  
of the FPL or less (about $30,000 for a family of three) to be eligible. Children under age 19 eligible  
under the covered families and children population must have an income of 206% FPL or less  
(about $44,750 for a family of three).  
OHFA Awards $5.0 million Under Emergency Housing Assistance  
Grant Program  
Shannon Pleiman, Senior Budget Analyst  
On March 18, 2020, the Ohio Housing Finance Agency (OHFA) approved the use of  
5.0 million from its general reserve funds to create the Emergency Housing Assistance Grant  
$
Program in response to the COVID-19 pandemic. The grant funds will be used for homelessness  
prevention, rapid rehousing, and emergency rental assistance. The purpose of the grant is to  
(
nonpayment of rent related to a decline in income, wage reduction, job loss, health challenges,  
or other circumstances caused by COVID-19.  
1) help slow the transmission of COVID-19 and (2) prevent evictions and housing loss due to  
By mid-April, OHFA had distributed this funding to Ohios eight urban federally designated  
entitlement counties, referred to as Continuums of Care (CoC) and the Balance of State CoC  
(
representing the other 80 counties and overseen by DSA) which coordinate housing and other  
services for homeless families and individuals in the state. CoCs will determine how much funding  
is available for homelessness prevention, rapid rehousing, and emergency rental assistance and  
the length of the assistance based on the needs of the communities they serve. Eligible uses of  
the funds include making rental assistance payments (including arrears), paying for security  
deposits, and covering moving costs. The table below displays funding distributed to each CoC.  
The amounts awarded were based on the number of extremely low-income and very low-income  
residents in each service area.  
13 For more information about the types of income included in a taxpayers modified adjusted  
gross income (MAGI) and income eligibility for Medicaid, see www.healthcare.gov/income-and-  
household-information/income/.  
Budget Footnotes  
P a g e | 24  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Funding Awarded Under OHFAs Emergency Housing Assistance Grant Program  
Entitlement Community (CoC)  
Balance of State  
Total Funding  
$2,006,273  
Cuyahoga  
Franklin  
Hamilton  
Montgomery  
Lucas  
$785,654  
$651,962  
$534,622  
$277,191  
$251,013  
$249,202  
$139,141  
$104,943  
$5,000,001  
Summit  
Stark  
Mahoning  
TOTAL  
CARES Act Provides $489.2 million in Emergency Relief Formula  
Funds for K-12 Schools  
Alexander Moon, Economist  
The CARES Act will provide an estimated $489.2 million in emergency relief formula  
funding for Ohios public elementary and secondary schools according to projections published  
by Federal Funds Information for States. State allocations are based on their relative share of  
funding in the most recent fiscal year under Title I, Part A of the federal Elementary and  
Secondary Education Act (ESEA), which provides funds to school districts and community schools  
(
local education agencies (LEAs)) for educational services to disadvantaged students. ODE must  
distribute at least 90% of the states allocation to LEAs in proportion to each LEAs share of Title I,  
Part A funds in the most recent fiscal year. LEAs may use the funds for a wide variety of activities.  
Among others, emergency relief formula funding may be used to:  
Maintain continuity of services and continue employment of existing LEA staff;  
Purchase educational technology to aid in educational interactions between students and  
teachers;  
Plan and coordinate for issues related to long-term school closure;  
Coordinate and improve COVID-19 preparedness and response efforts;  
Train LEA staff on sanitation and purchase supplies to sanitize school facilities;  
Provide mental health services and supports;  
Budget Footnotes  
P a g e | 25  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Address the needs of individual schools and the unique needs of low-income children,  
students with disabilities, and other vulnerable populations; and  
Plan and implement summer learning and supplemental afterschool programs.  
Up to 10% of the states allocation may be used for state-level activities. Of that, 0.5%  
may be used for administration and the remainder may be used to respond to emergency needs  
related to COVID-19, as determined by ODE. The CARES Act includes a maintenance of effort  
provision meant to prevent the federal funds from supplanting state spending, but the  
requirement may be waived by the U.S. Department of Education (USDOE) for states that  
experience a precipitous decline in financial resources.  
In addition to the formula funds, the CARES Act provides Ohio with $104.9 million under  
the Governors Emergency Education Relief Fund. Ohios allocation is based on its relative  
population between the ages of five and 24 (60%) and its relative count of students eligible for  
federal Title I services, mainly children ages five to 17 living in poverty (40%). The Governor must  
apply to receive these funds, which may be distributed at the Governors discretion to provide  
emergency support through grants to LEAs or institutions of higher education that are  
determined to be the most significantly affected by COVID-19. Funding may also be used to  
provide support to other educational institutions deemedessential by the Governor for  
emergency educational services, the provision of childcare or early childhood education, social  
and emotional support, and the protection of education-related jobs.  
Ohio Higher Education Institutions to Receive $396 million in  
Direct Formula Funding from CARES Act  
Edward Millane, Senior Budget Analyst  
The CARES Act will provide 220 Ohio higher education institutions with approximately  
396 million in financial relief to address the impacts of COVID-19. In general, each institutions  
$
allocation is determined by a formula that takes into account its relative share of federal Pell  
Grant recipients (75%) and its relative share of other students (25%). Eligible higher education  
institutions will receive their allocations directly from USDOE.  
An institution may use its allocation to cover any costs associated withsignificant  
changes to the delivery of instruction due to the coronavirus,but is explicitly prohibited from  
using the funds to support endowments, recruitment activities, and capital projects for facilities  
related to athletics, sectarian instruction, or religious worship. In addition, an institution must  
use at least 50% of its allocation to provide emergency financial aid grants to students for any  
expenses they incurred as a direct result of the disruption of campus operations related to  
COVID-19. Examples of eligible expenses under the act include housing, course materials, meal  
plans, technology, and other items that otherwise are included in the students total cost of  
attendance. The table below shows both the direct allocation and the minimum allocation for  
emergency financial aid grants to students by sector type of the states higher education  
institutions. As the table indicates, public universities receive roughly 50% of the state total.  
Private, nonprofit institutions receive the next highest share (21%) followed by community  
colleges (18%), private, for-profit institutions (9%), and Ohio technical centers (2%).  
Budget Footnotes  
P a g e | 26  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
CARES Act Formula Aid Allocations for Ohio Higher Education Institutions by Sector Type*  
Number of  
Institutions  
Minimum Allocation for  
Emergency Financial Aid  
Institution Sector Type  
Allocation  
$199,282,449  
Public universities  
Private, nonprofits  
Community colleges  
Private, for-profits  
Ohio technical centers  
TOTAL  
14  
$99,641,220  
$42,292,663  
$34,926,812  
$16,974,681  
$3,972,591  
70  
22  
$84,585,361  
$69,853,633  
$33,949,393  
$7,945,204  
67  
47  
220  
$395,616,040  
$197,807,967  
*Allocations are based on information reported as of April 24, 2020.  
Additional CARES Act funding specifically supports awards for minority-serving  
institutions (MSIs), including Central State University and Wilberforce University (Ohios  
historically black colleges and universities), based on their relative shares of certain existing  
federal appropriations. The CARES Act also allocates funding for discretionary grants to  
institutions that have the greatest unmet needs related to COVID-19, prioritizing such institutions  
whose formula and MSI CARES Act funding is less than $500,000. In addition to the funds directly  
received from USDOE, Ohio higher education institutions may receive a portion of the  
$
104.9 million the state is allocated from the CARES Act through the Governors Education  
Emergency Relief Fund, at the Governors discretion (see separate article discussing emergency  
relief formula funds for K-12 schools for additional details on this fund).  
Arts Council Issues Early Partial Organizational Grant Payments  
Shaina Morris, Budget Analyst  
In March of this year, as a means of providing some economic relief from the COVID-19  
pandemic, the Ohio Arts Council (OAC) began issuing early partial payments to nearly all  
organizations awarded FY 2020 operating or project support grants that had not already  
requested and received such payments. The partial payments represent 50% of the total grant.  
Under current practice, grantees are paid entirely in arrears but are permitted to request early  
partial payments equal to one-half of their awards.  
Arts Council Approves Individual Excellence Awards  
Shaina Morris, Budget Analyst  
On January 29, 2020, the OAC Board approved Individual Excellence Awards of $5,000  
each to be awarded to 75 artists in 19 Ohio counties. These competitive awards, totaling  
375,000 and backed by the GRF, recognize an Ohio artists body of work in a variety of  
disciplines. The number of Individual Excellence Awards for each discipline eligible for funding  
$
Budget Footnotes  
P a g e | 27  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
during the FY 2020 application cycle was as follows: poetry (20), fiction (19), nonfiction (12),  
music composition (8), playwriting/screenplays (8), choreography (5), and criticism (3).  
Award recipients may use the money for a variety of expenses related to growth and  
development but may not use it for enrolling in or continuing a degree-granting program. The  
recipients must remain in the state during the grant year.  
The annual fall application process is only open to residents of Ohio who are at least  
8 years of age and are not students attending high school or students pursuing undergraduate  
1
or graduate degrees at the time of application. A panel of nationally recognized artists and arts  
professionals meet to evaluate and score applications in each discipline. After reviewing all of the  
work, panelists make funding recommendations. The OAC Board makes all final funding  
decisions.  
DHE Announces Recipients of $8 million in Regional Workforce  
Training Grants  
Jason Glover, Budget Analyst  
In late February 2020, DHE awarded $8 million in capital funds to 36 institutions under  
the Regionally Aligned Priorities in Delivering Skills (RAPIDS) Program. RAPIDS grants provide  
funding for capital equipment and facilities used to train students and current workers for the  
specific workforce requirements of varying regions throughout the state. In this round of grants,  
DHE awarded $975,000 across each of six JobsOhio regions and another $2.1 million among  
institutions in the Northeast region. Most of the projects address advanced manufacturing while  
others focus on or also involve the healthcare, robotics, cybersecurity, information technology,  
automotive, construction, or logistics fields. Each regions grant recipients and award amounts  
are provided below.  
Northeast region. Youngstown State University ($716,666), Cuyahoga Community  
College ($264,857), Lorain County Community College ($237,921), Cleveland State University  
(
Community College ($143,333), Northeast Ohio Medical University ($143,333), and Stark State  
$213,888), University of Akron ($143,334), Kent State University ($143,333), Lakeland  
College ($143,333).  
Central region. Columbus State Community College ($331,672), Ohio State University  
($199,974), Central Ohio Technical College ($161,266), Marion Technical College ($142,011), and  
North Central State College ($140,077).  
East region. Washington State Community College ($361,851), Belmont College  
$250,000), Zane State College ($238,650), and Eastern Gateway Community College ($124,500).  
(
Northwest region. University of Toledo ($474,287), Bowling Green State University  
$147,345), Terra State Community College ($128,400), Northwest State Community College  
$121,724), and Rhodes State College ($103,244).  
(
(
Southeast region. Southern State Community College ($529,662), Hocking College  
$121,278), Rio Grande Community College ($118,508), Ohio University ($108,553), and Shawnee  
(
State University ($97,000).  
Budget Footnotes  
P a g e | 28  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Southwest region. University of Cincinnati ($325,054), Miami University ($325,000), and  
Cincinnati State Technical and Community College ($324,946).  
West region. Wright State University ($511,437), Sinclair Community College ($161,000),  
Clark State Community College ($132,233), Central State University ($107,270), and Edison  
Community College ($63,060).  
Attorney General Issues 2019 Economic Development Compliance  
Report  
Jessica Murphy, Budget Analyst  
On February 24, 2020, the Ohio Attorney Generals Office released its 2019 Economic  
Development Compliance Report, a required annual review of recipient compliance with the  
terms and conditions, including any performance metrics, of state awards for economic  
1
4
development adminstered by DSA. This monitoring compliance duty was first enacted by  
th  
15  
H.B. 420 of the 127 General Assembly and became effective December 30, 2008.  
The economic development awards issued by DSA fall into four main categories:  
workforce training grants, project grants, tax credits, and project loans. The latest report  
examined 149 awards with a performance period ending in CY 2018. Of those, 109 recipients, or  
7
9
compliance included the commitments for training workers, job creation, job retention,  
minimum hourly wage, capital investment, or other commitments, as set forth in an award  
agreement.  
3.2%, were determined to be either compliant or substantially compliant having met at least  
0% of the performance metrics set forth in the agreement. The metrics used to determine  
Forty (26.8%) of the award recipients were determined to be noncompliant. The primary  
reason for noncompliance was the failure to create jobs, and, in the case of tax credits, an  
additional reason was the failure to generate sufficient new payroll. Remedial actions against  
noncompliant recipients mostly involved a reduced term or rate of a tax credit award or an  
increased effective interest rate for a project loan. Overall, remedial action was taken against  
2
7 of those found to be noncompliant, with the remaining 13 not subjected to any such action  
largely because of a subseqent determination that they were substantially compliant by having  
attained 90% or greater of their job creation commitment.  
14 https://www.ohioattorneygeneral.gov/Files/Reports/Economic-Development-Accountability-  
Report/2019-Economic-Development-Accountability-Report.  
15 R.C. 125.112.  
Budget Footnotes  
P a g e | 29  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
Phillip A. Cummins, Senior Economist  
Overview  
The national economy continues to face challenges associated with the COVID-19  
pandemic and efforts to mitigate the spread of the virus. The national unemployment rate leaped  
to 14.7% in April, as 20,500,000 nonfarm payroll jobs were lost nationally. Inflation-adjusted  
gross domestic product (real GDP) decreased at a seasonally adjusted 4.8% annual rate in the  
first quarter of 2020, according to initial estimates by the Bureau of Economic Analysis (BEA). The  
Institute for Supply Management (ISM’s) manufacturing production index recorded its lowest  
reading in the indexs history starting in 1948. The Federal Reserve Open Market Committee  
(
rate at 0% to 0.25%.  
FOMC), in a meeting on April 28-29, decided to maintain the target range for the federal funds  
Ohios unemployment rate jumped to 5.5% in March and the state lost a seasonally  
adjusted 39,700 nonfarm payroll jobs during the month. Over 90% of Ohios job losses measured  
in the March survey were in the service sector. In addition, around 97,000 residents exited the  
labor market during March. LBO economists anticipate Ohios labor market to follow the negative  
trend nationally when the April data are released.  
The National Economy  
Nonfarm payroll employment decreased by a seasonally adjusted 20,500,000 in April, the  
largest monthly decrease in the nations history. The industry with the largest decrease in  
employment during the month was leisure and hospitality, in which employment decreased by  
7
,653,000, or 47.0%. Employment decreased significantly in education and health services  
(-2,544,000), professional and business services (-2,128,000), and retail trade (-2,107,000).  
During the month, payroll employment also decreased by over 1 million workers in  
manufacturing and in other services. In April, employment decreased in nearly every industry;  
those which support pandemic-related work from home and sheltering in place, such as general  
merchandising stores other than department stores (+93,400), couriers (+1,800), and computer  
and peripheral equipment manufacturing (+800) were shielded the most from economic  
disruption.  
The nations unemployment rate increased to 14.7% in April 2020, up from the 4.4%  
recorded in the March household survey. The increase was the single largest monthly rise in the  
national unemployment rate since the inception of the current statistic in 1948. The nations  
labor force participation rate decreased by 2.5 percentage points; 60.2% of the adult resident  
noninstitutionalized population are now employed or actively seeking work, down from 62.8% a  
year prior and lowest since 1973. Insured unemployment, a measure of the number of persons  
currently drawing unemployment benefits, reached approximately 22 million in the week ended  
April 25. Chart 5 shows monthly employment totals both nationally and in Ohio; Chart 6 shows  
the monthly unemployment rates both nationally and in Ohio.  
Budget Footnotes  
P a g e | 30  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Nationally, personal income (PI)16 decreased by a seasonally adjusted 2.0% in  
March 2020. Income from compensation of employees decreased by 2.8%, while the value of  
business proprietorsincome decreased by 8.2% over the month. Transfer payments to persons  
increased 1.6%.  
Real GDP decreased at an annual rate of 4.8% in the first quarter of 2020, according to  
initial estimates. Government spending (+0.7%) and residential fixed investment (+21.0%)  
increased from the previous quarter; however, these increases were more than offset by declines  
in personal consumption expenditures (-7.6%), nonresidential fixed investment (-8.6%), and  
exports (-8.7%).  
Total industrial production in the U.S. declined a seasonally adjusted 5.4% in March,  
according to the Federal Reserve Board. Declines in production occurred in nearly all market  
groups and industries. Manufacturing production fell 6.3% in March, while declines in production  
were also recorded in mining (-2.0%) and utilities (-3.9%).  
According to the ISM, economic activity in the manufacturing sector contracted between  
March and April. During the month, factory new orders contracted significantly more quickly than  
in March. ISMs manufacturing production index registered the lowest figure since the indexs  
inception over 72 years ago. In April, ISMs employment index registered its largest  
month-over-month decrease since the beginning of the index. Two industries reported an  
expansion of production in April, (1) paper products and (2) food, beverage, and tobacco products.  
All other manufacturing industries surveyed reported declines in production during the month.  
ISMs nonmanufacturing survey measured a contraction of economic activity in the  
nonmanufacturing sector, the first drop since late 2009. Business activity, new orders, and  
employment among surveyed nonmanufacturing business all fell in aggregate during April. Prices  
paid by businesses for materials and services increased in the sector. Among the  
nonmanufacturing industries surveyed by ISM, only the finance and insurance industry reported  
an increase in business activity.  
The FOMC, in a meeting from April 28-29, decided to maintain the target range for the  
federal funds rate at 0% to 0.25%. In addition, the Federal Reserve and U.S. Department of the  
Treasury have begun multiple initiatives to ease access to funds for financial institutions and  
municipalities and to incentivize continued consumer spending amid rising uncertainty in the  
1
7
economy and labor markets. As a result of these initiatives, the amount of cash and easily  
convertible money available in the U.S. economy increased approximately 12.2% in the eight  
1
8
weeks ending April 27.  
16 PI is the income received by persons from all sources: from participation as workers in the labor  
market, from owning a business, from the ownership of financial assets, and from government in the form  
of transfers.  
17 https://www.federalreserve.gov/.  
18 As measured by the weekly average of the M2 monetary measure. M2 includes cash, funds in  
checking and savings accounts, time deposits of under $100,000, and balances in cashable financial  
instruments such as retail money market mutual funds.  
Budget Footnotes  
P a g e | 31  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 5: 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 6: U.S. and Ohio Unemployment Rates  
% of Labor Force  
1
1
5.0%  
2.0%  
9
6
3
.0%  
.0%  
.0%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
United States Ohio  
The Ohio Economy  
Nonfarm payroll employment in Ohio decreased by a seasonally adjusted 39,700 in  
March, according to the most recent state-level data from the Bureau of Labor Statistics (BLS).  
The majority of job losses, 36,300, occurred in the private service-providing sector, primarily in  
the leisure and hospitality industry. The number of persons employed in durable goods  
manufacturing decreased by 2,700, while the number of persons employed in nondurable goods  
manufacturing increased by 1,500. Employment levels decreased in construction (-1,500) and  
wholesale trade (-2,400). Note that employment data are derived from a survey of employers for  
th  
the pay period that includes the 12 of the month, thus the March data are reflective only of the  
initial response to the COVID-19 pandemic.  
Budget Footnotes  
P a g e | 32  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
In March, the unemployment rate increased to a seasonally adjusted 5.5%, from 4.1% the  
previous month, among the largest month-over-month increases in the nation. Between  
February and March, a seasonally adjusted 97,000 persons exited the labor market in Ohio,  
meaning they were no longer actively working or seeking work. Persons who are not in the labor  
market are not counted as unemployed by the BLS. Chart 5 shows employment levels both  
nationally and in Ohio; Chart 6 shows the unemployment rate both nationally and in Ohio.  
According to the Department of Labor, approximately 61,000 initial unemployment claims  
were processed in Ohio during the week ending May 2, 2020, down from more than 274,000 at  
the peak five weeks earlier. Insured unemployment decreased by 8.6% in the week ended  
April 25, from more than 777,000 the week before, by far the highest in the history of the series  
dating from 1987.  
The U.S. Census Bureau recently began publishing an experimental weekly data product,  
Business Formation Statistics. The data are based on Employer Identification Number  
applications to the IRS made in the United States. Data are filtered to eliminate those unlikely to  
be associated with business formation, such as applications for tax liens, estates, trusts, private  
households, or civic and social organizations. The latest survey indicates that 2,180 business  
applications were filed in Ohio during the week ended May 2. For the YTD, the number of  
applications was 4% lower than in the same period in 2019. The number of high propensity  
applications, those identified as having a high chance of turning into businesses supporting  
payroll, decreased by 6% YTD compared with a year earlier. Since mid-March, high propensity  
applications were 18% lower than a year earlier after being up slightly earlier in the year.1  
9
The number of existing home sales in March 2020 was 6.5% greater than during March  
2
than a year prior. In the first quarter of 2020, the total dollar value of existing home sales in Ohio  
was approximately $5.8 billion, compared with $4.9 billion during the first quarter of 2019.  
019. The average sale price of existing homes was $199,445 during the month, 10.5% higher  
The economy in the Cleveland Federal Reserve District contracted steeply in the latter  
half of March, the result of COVID-19 and mitigation efforts, according to the Beige Book.20 By  
the end of the survey period, most businesses reported cutting staff, hours, or both, often with  
furloughs in hopes of increasing staffing when activity improves. Over half of firms expected  
further near-term staffing cuts. Staffing was not cut in a few industries. Selling prices declined,  
while consumer spending fell sharply due to social distancing. Manufacturing contacts reported  
a decrease in demand and investment; the firms that noted an initial spike in demand due to the  
COVID-19 response expected demand to drop off. Construction, both residential and  
nonresidential, continues; however, demand is expected to weaken in the upcoming months.  
19 High propensity businesses include corporations, businesses which indicate on applications they  
intend to hire employees or have previously scheduled pay periods. Business applications in the following  
NAICS (North American Industry Classification System) industrial categories are also included in the  
definition of high propensity businesses: manufacturing (31-33), retail stores (44), health care (62),  
restaurants/food service (72).  
20 The Federal Reserve Bank of Clevelands district consists of all of Ohio, western Pennsylvania,  
eastern Kentucky, and the northern panhandle of West Virginia. Comments here are derived from the  
latest edition of the Beige Book, a Federal Reserve publication that summarizes reports from business and  
industry contacts outside of the Federal Reserve System collected on or before April 6, 2020.  
Budget Footnotes  
P a g e | 33  
May 2020  
Legislative Budget Office of the Legislative Service Commission  
Businesses rushed to secure loans and lines of credit. Banking firms worked to assist clients’  
increased demand for personal loans. Companies in the professional and business services  
industry expect weak economic conditions in the coming months. The freight industry observed  
a significant rise in shipments of consumer staples but weakness in other sectors.  
Economic Forecast Update  
The prediction for Ohios economy that appeared in this space last month was an early  
assessment by economic forecasting firm IHS Markit of the effects of COVID-19 on the state.  
Greater economic weakness is currently forecast than was predicted a month ago. Last months  
forecast of a 15.2% annual rate of decline in Ohio real GDP in the current quarter was revised to  
a 26.1% drop. The average statewide unemployment rate in FY 2021 was revised upward from  
8
.8% to 10.9%, with a peak near the end of this calendar year at 11.6%. Total nonfarm payroll  
employment is now expected to fall 7.6% in FY 2021, revised downward from a 5.1% decline  
predicted a month ago. Ohio wage and salary income is now predicted to drop 4.9% in FY 2021,  
compared with a 2.2% decline predicted last month.  
The outlook remains highly uncertain. In issuing its latest forecast, IHS Markit indicated  
an assumption for the national economy that the pandemic would peak in the current quarter,  
followed by easing of social distancing requirements early in the third quarter. In the firms  
modeling, the national economic outlook is the key driver of the outlook for the state. Because  
Ohio may be easing restrictions on activity here earlier than is assumed in IHS Markits latest  
forecast, the drop in state economic activity may be less severe than indicated above.  
Budget Footnotes  
P a g e | 34  
May 2020