A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2020  
Issue: June 2020  
Highlights  
Ross Miller, Chief Economist  
May GRF tax revenue was $271 million (13.0%) below the estimate published by  
the Office of Budget and Management (OBM) in August 2019. The negative variance  
for the sales and use tax was $167 million, for the personal income tax (PIT) $91 million,  
and for the commercial activity tax (CAT) $11 million. For the year to date (YTD)  
through May GRF tax revenue was $1.05 billion below estimate. On the spending side,  
May Medicaid expenditures were $266 million above estimate. The states fiscal  
situation remains negative due to the COVID-19 pandemic and responses to it.  
Ohios unemployment rate jumped to 16.8% in April, and unemployment in the  
Cleveland and Toledo metro areas jumped to over 20%. By comparison, the national  
unemployment rate was 14.7% in April. In response, the Ohio Department of Job  
and Family Services (ODJFS) has distributed over $3.5 billion in unemployment  
compensation to Ohio workers during the 11 weeks prior to June 4.  
Through May 2020, GRF sources totaled $29.99 billion:  
Revenue from the sales and use tax was $326.6 million below estimate;  
PIT receipts were $767.0 million below estimate.  
Through May 2020, GRF uses totaled $31.92 billion:  
Program expenditures were $109.3 million below estimate;  
Expenditures for Medicaid were $382.4 million above estimate;  
Expenditures on all other program categories except Other Education were  
below estimates, with the largest negative variances being for Primary and  
Secondary Education ($196.2 million), Higher Education ($75.4 million), and  
Health and Human Services ($71.8 million).  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 12),  
the National Economy (p. 29), and the Ohio Economy (p. 31).  
Also Issue Updates on:  
CARES Funding for Small Business Assistance Programs (p. 21)  
Mainstream Voucher Program Funding (p. 21)  
Cybersecurity Grants for Boards of Elections (p. 22)  
Medicaid COVID-19 Waiver Approved (p. 22)  
Statewide Longitudinal Data Systems Grant (p. 23)  
Public School Enrollment (p. 24)  
Postsecondary Degree or Certificate Attainment (p. 25)  
2
Lake Erie Protection and Restoration Plan (p. 28)  
019 Capital Crimes Report (p. 27)  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of May 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on June 2, 2020)  
State Sources  
Actual  
Estimate*  
Variance Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$101,367  
$681,162  
$782,529  
$135,200  
$814,600 -$133,438 -16.4%  
$949,800 -$167,271 -17.6%  
-$33,833 -25.0%  
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  
Business and Property  
Estate  
$513,736  
$332,411  
$65,312  
$23,253  
-$23,324  
$18,952  
$34,225  
$37,221  
$27,151  
$3,123  
$4,455  
$0  
$605,100  
$343,500  
$68,700  
$21,000  
-$25,000  
$20,200  
$27,700  
$37,300  
$33,600  
$4,300  
$4,000  
$0  
-$91,364 -15.1%  
-$11,089  
-$3,388  
$2,253  
$1,676  
-$1,248  
$6,525  
-$79  
-3.2%  
-4.9%  
10.7%  
6.7%  
-6.2%  
23.6%  
-0.2%  
-$6,449 -19.2%  
-$1,177 -27.4%  
$455  
$0  
11.4%  
---  
-$139  
$10  
$0  
$0  
$0  
$0  
-$139  
$10  
$0  
---  
---  
---  
Total Tax Revenue  
$1,818,916 $2,090,200 -$271,284 -13.0%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$0  
$2,599  
$537  
$0  
$370  
$1,362  
$0  
$2,229 602.3%  
-$826 -60.6%  
---  
Total Nontax Revenue  
$3,136  
$1,733  
$1,404  
81.0%  
Transfers In  
Total State Sources  
Federal Grants  
$0  
$0  
$0  
---  
$1,822,052 $2,091,933 -$269,880 -12.9%  
$947,692  
$729,774 $217,918  
29.9%  
-1.8%  
Total GRF Sources  
$2,769,744 $2,821,706  
-$51,962  
*Estimates of the Office of Budget and Management as of August 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 2  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2020 as of May 31, 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on June 2, 2020)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance  
Percent FY 2019**  
Percent  
$1,326,996  
$8,372,326  
$9,699,323 $10,025,900  
$1,406,400  
$8,619,500  
-$79,404  
-$247,174  
-$326,577  
-5.6%  
-2.9%  
-3.3%  
$1,383,911  
$8,277,799  
$9,661,710  
-4.1%  
1.1%  
0.4%  
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  
Business and Property  
Estate  
$7,142,874  
$1,653,145  
$766,355  
$312,400  
$313,093  
$20,638  
$187,496  
$138,176  
$59,735  
$47,187  
$48,391  
$6,614  
$7,909,900  
$1,632,900  
$748,600  
$313,400  
$306,300  
$21,200  
$165,100  
$137,600  
$77,900  
$50,700  
$46,100  
$7,700  
-$767,026  
$20,245  
$17,755  
-$1,000  
$6,793  
-$562  
$22,396  
$576  
-$18,165 -23.3%  
-$3,513  
$2,291  
-$1,086 -14.1%  
-$449  
$10  
$68  
-9.7%  
1.2%  
2.4%  
-0.3%  
2.2%  
-2.7%  
13.6%  
0.4%  
$8,076,015  
$1,610,943  
$780,996  
$323,733  
$304,195  
$15,278  
$178,870  
$138,231  
$75,902  
$50,989  
$45,773  
$8,400  
$1,574 -128.5%  
-11.6%  
2.6%  
-1.9%  
-3.5%  
2.9%  
35.1%  
4.8%  
0.0%  
-21.3%  
-7.5%  
5.7%  
-6.9%  
5.0%  
-21.3%  
-$449  
$10  
$68  
$20,395,055 $21,443,300 -$1,048,245  
$0  
$0  
$0  
---  
---  
---  
$0  
$117  
---  
-42.0%  
-4.1%  
Total Tax Revenue  
-4.9% $21,272,724  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$111,446  
$66,099  
$103,645  
$82,500  
$57,624  
$87,398  
$227,522  
$28,946  
$8,475  
$16,248  
35.1%  
14.7%  
18.6%  
23.6%  
$82,665  
$63,582  
$84,737  
$230,983  
34.8%  
4.0%  
22.3%  
Total Nontax Revenue  
$281,190  
$53,668  
21.7%  
Transfers In  
$77,045  
$68,570  
$8,476  
-$986,101  
$299,792  
-$686,309  
12.4%  
$85,737  
-10.1%  
-3.9%  
3.4%  
Total State Sources  
Federal Grants  
$20,753,290 $21,739,391  
$9,239,545 $8,939,753  
$29,992,835 $30,679,144  
-4.5% $21,589,444  
3.4% $8,932,238  
-2.2% $30,521,683  
Total GRF SOURCES  
-1.7%  
*
*
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 | 3  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean J. Botomogno, Principal Economist  
Overview  
The negative impact of the COVID-19 pandemic on tax revenues continued in May 2020.  
GRF tax sources for the month fell $271.3 million (13.0%) below the projection published by OBM  
in August 2019. This performance was an improvement from the $866.5 million shortfall for tax  
sources recorded the previous month. Partially offsetting the negative variance of GRF tax  
2
sources, federal grants were $217.9 million (29.9%) above estimate in May, and nontax revenue  
was $1.4 million (81.0%) above estimate; no transfers into the GRF were expected or made  
during the month. Overall, the monthly negative variance for GRF sources totaled $52.0 million  
(1.8%), well below the deficit of $867.5 million recorded in April. GRF sources consist of both  
federal grants and state-source receipts, such as tax revenue, nontax revenue, and transfers in.  
Tables 1 and 2 show GRF sources for the month of May and for FY 2020 through May,  
respectively.  
In May 2020, revenue from the two largest tax sources, the sales and use tax and the PIT,  
were $167.3 million (17.6%) and $91.4 million (15.1%) below their respective estimates. The next  
two largest tax sources, the CAT and the cigarette and other tobacco products tax, also posted  
negative variances of $11.1 million (3.2%) and $3.4 million (4.9%), respectively. On the other  
hand, the financial institutions tax (FIT) and the kilowatt-hour tax recorded positive variances of  
$
6.5 million (23.6%) and $2.3 million (10.7%), respectively.  
The most recent monthly shortfall increased the YTD negative variance of GRF sources to  
686.3 million (2.2%), up from $634.3 million at the end of April. YTD tax sources were  
1.05 billion (4.9%) short of anticipated revenue. That negative variance was partially offset by  
$
$
positive variances of $299.8 million (3.4%) for federal grants, $53.7 million (23.6%) for nontax  
revenues, and $8.5 million (12.4%) for transfers in.  
As expected, the PIT and the sales and use tax contributed the bulk of the YTD shortfall  
3
for tax sources with negative variances of $767.0 million and $326.6 million, respectively. In  
addition, the natural gas consumption tax, the alcoholic beverage tax, the petroleum activity tax,  
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 Federal grants are typically federal reimbursements for Medicaid and other human services  
programs. Through May, spending on Medicaid and human services programs exceeded estimates by  
$
310.6 million.  
3
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 and  
some business closures. 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. Through June 1, the number of individual income tax returns filed dropped about 14%  
relative to the corresponding period in FY 2019, with most of that decline occurring in April when tax  
returns are normally due.  
Budget Footnotes  
P a g e | 4  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
and the kilowatt-hour tax were short of their respective revenue targets by $18.2 million,  
$
positive variances of $20.2 million for the CAT, $17.8 million for the cigarette tax, $22.4 million  
3.5 million, $1.1 million, and $1.0 million. Those negative variances were partially offset by  
for the FIT, $6.8 million for the foreign insurance tax, and $2.3 million for the liquor gallonage  
tax.  
Chart 1, below, shows cumulative YTD variances of GRF sources each month through  
May 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  
$1,200  
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20  
Federal Grants Tax Revenue Total GRF Sources  
Compared to GRF sources in FY 2019 through May, GRF sources decreased $528.8 million  
1.7%), due to declines of $877.7 million (4.1%) for tax sources and $8.7 million (10.1%) for  
transfers in. Those decreases were partially offset by increases of $307.3 million (3.4%) and  
50.2 million (21.7%), respectively, for federal grants and nontax revenue. The PIT experienced the  
(
$
largest reduction in tax revenue ($933.1 million) due to a tax payment delay and to two reductions  
made to withholding tax rates in the last 17 months, but also layoffs and employee furloughs. (The  
section below analyzing the PIT provides additional details on the rate cuts.) Revenue from the  
cigarette and other tobacco products tax decreased $14.6 million, which is a normal long trend;  
revenue from the natural gas consumption tax and the kilowatt-hour tax declined $16.2 million and  
$
their levels of FY 2019 by $37.6 million and $42.2 million, respectively. Other taxes with significant  
increases included the insurance taxes ($14.3 million combined) and the FIT ($8.6 million).  
11.3 million, respectively. However, revenue from the sales and use tax and the CAT were above  
Sales and Use Tax  
Home confinement and closures of nonessential businesses in April and May 2020  
constrained taxable spending, and sales and use tax receipts decreased dramatically. After this  
GRF source fell 24.0% below estimate in April, May sales tax revenue totaling $782.5 million was  
1
estimates by a combined $404.0 million. Both the nonauto and the auto portions of the tax had  
large negative variances in May. Monthly sales tax receipts were also $162.0 million (17.1%)  
7.6% below anticipated revenue; for the two-month period, sales tax revenues were short of  
Budget Footnotes  
P a g e | 5  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
below receipts in May 2019. This underperformance doubled the YTD negative variance for the  
tax source to $326.6 million (3.3%), up from $159.3 million through the previous ten months.  
However, total sales and use tax revenue totaling $9.70 billion for FY 2020 through May  
remained above revenue in the corresponding period last year by $37.6 million (0.4%), though  
receipts from the auto sales tax portion have fallen $56.9 million below such collections through  
May 2019.  
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  
GRF receipts from the nonauto sales and use tax in May were $681.2 million. This amount  
was $133.4 million (16.4%) below estimate and $117.5 million (14.7%) below revenue in May  
2
up from a cumulative negative variance of $113.7 million through April. YTD GRF receipts were  
019. For the YTD, total receipts of $8.37 billion were $247.2 million (2.9%) below projections,  
$
94.5 million (1.1%) above revenue in the corresponding period in FY 2019.  
In the last two months, consumers have received income support from federal stimulus  
checks, additional unemployment compensation from the federal Coronavirus Aid, Relief, and  
Economic Security (CARES) Act, and a number of businesses have kept some employees on  
4
payroll after receiving loans from the federal payroll protection program. That income has  
helped sales tax revenue. However, the timing of full resumption ofnormal economic activity  
is still uncertain and the nonauto sales and use tax revenue will be weak for a while longer due  
5
to lost jobs and reduced spending. Chart 2 shows year-over-year growth in nonauto sales and  
use tax collections in FY 2020 and reflects the toll of the pandemic on nonauto sales tax revenue  
in recent months.  
4 To address the economic fallout from COVID-19, the U.S. Congress passed the CARES Act at the  
end of March 2020. The new law included cash payments of up to $1,200 (plus $500 for each child age 16  
or under) for each qualifying adult, an additional $600 per week on top of any state-provided  
unemployment benefits through July 31, 13 weeks of unemployment benefits above that of each states  
unemployment program, and unemployment benefits for self-employed and “gig” workers. The payroll  
protection program is a loan program intended to subsidize payroll costs for eight weeks after those loans,  
some of which are forgivable, are made.  
5 The personal saving rate (measured as the ratio of savings to disposable personal income)  
jumped from 8.2% in February 2020 to 33.0% in April 2020, an indication that consumers have turned  
somewhat cautious.  
Budget Footnotes  
P a g e | 6  
June 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
6
4
2
0
.0%  
.0%  
.0%  
.0%  
.0%  
-
-
-
-
2.0%  
4.0%  
6.0%  
8.0%  
-
-
10.0%  
12.0%  
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20  
Auto Sales and Use Tax  
Monthly auto sales and use taxes of $101.4 million were $33.8 million (25.0%) below  
estimate and $44.4 million (30.5%) below revenue in May 2019. This performance was an  
improvement relative to that of April when this tax was 57.3% below estimate. YTD GRF revenue  
from this source totaling $1.33 billion was $79.4 million (5.6%) below estimate and $56.9 million  
(
4.1%) below receipts through May in FY 2019. In the first ten months of FY 2020, the cumulative  
negative variance had been $45.6 million. Chart 3 shows year-over-year growth in auto sales and  
use tax collections and the pandemic-related revenue declines from both low demand and low  
supply of vehicles. Auto manufacturers have resumed production, auto dealerships have  
reopened, and sales also have somewhat rebounded. Nationwide sales suggest that a market  
bottom was reached in April.  
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%  
30.0%  
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20  
Budget Footnotes  
P a g e | 7  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Nationwide, unit sales of light vehicles (autos and light trucks) increased to 12.1 million  
units (on an annualized seasonally adjusted basis) in the month of May, up from 9.0 million units  
in April. However, the recent monthly tally represents a year-over-year sales decrease of 30.1%  
when compared to sales in May 2019. Sales increased across all categories and this appears to  
mark the start of the long road back to the 17 million annualized units experienced over the past  
five years. Following the financial crisis of 2008 and 2009, new vehicle sales did not reach  
prerecession levels for a full five years. However, most forecasters believe the recovery of new  
vehicle sales will not take as long this time around, under the assumption that there are no other  
waves of virus outbreak that disrupt business and keep consumers locked down in their homes.  
Even without another outbreak, the industry will face significant headwinds over the next year:  
consumers are concerned about both the pandemic and near-term job uncertainty, and this is  
likely to keep some buyers away from showrooms.  
Personal Income Tax  
Both the economic downdraft and the extension of the deadline to file state income  
taxes negatively affected the PIT in the last two months. May PIT revenue to the GRF of  
$
were $635.7 million (50.5%) below OBMs August estimate. So, in the current fiscal quarter, the  
513.7 million was $91.4 million (15.1%) below projections. In April, GRF receipts from the PIT  
combined negative variance for the PIT totaled $727.1 million. PIT revenue to the GRF is  
comprised of gross collections, minus refunds and distributions to the Local Government Fund  
6
(
LGF). Gross collections consist of employer withholdings, quarterly estimated payments, trust  
payments, payments associated with annual returns, and other miscellaneous payments. The  
performance of the tax is typically driven by employer withholdings, which is the largest  
component of gross collections (about 81.0% of gross collections in FY 2019). Larger or smaller  
than expected refunds (which decrease gross collections) could also greatly affect the monthly  
performance of the tax.  
Gross collections for the month were $119.0 million (15.3%) below target, with all  
components below their respective estimates. Employer withholding had the largest revenue  
shortfall with a negative variance of $103.8 million. Payments due with annual returns came in  
at $6.3 million below estimate; miscellaneous payments and trust payments had negative  
variances of $4.4 million and $4.1 million, respectively. On the other hand, refunds and LGF  
distributions were $11.2 million (8.6%) and $16.5 million (36.8%) below their anticipated levels.  
Thus, PIT revenue to the GRF for the month totaled $91.4 million less than estimate.  
Through May, YTD GRF receipts from the PIT were $7.14 billion, an amount $767.0 million  
(9.7%) below projections. This YTD negative variance was an increase from a cumulative shortfall  
of $675.7 million through April 2020. Yearly GRF revenue was also $933.1 million (11.6%) below  
revenue through May in FY 2019. In addition to the economic effects of the pandemic and  
delayed income tax filings authorized by H.B. 197, two reductions in withholding rates 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 3.3% reduction in withholding rates implemented in January  
2
019. Year-over-year growth in withholding receipts in calendar year (CY) 2020 was limited due  
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 | 8  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
to a 4.0% reduction in withholding rates effective January 2020 and through May. The more  
recent reduction was due to a 4.0% reduction in income tax rates for nonbusiness income  
enacted by H.B. 166 (the budget act for the biennium). 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 $943.4 million below  
projections, largely due to a negative variance of $717.6 million for payments due with annual  
returns. Employer withholding, quarterly estimated payments, and trust payments also fell by  
$
131.0 million, $66.9 million, and $24.4 million below their respective estimates. Reducing the  
negative variance of gross collections, refunds were $160.7 million below estimate and LGF  
distributions were below expectation by $15.7 million, thus resulting in a lower YTD PIT shortfall  
in GRF revenue of $767.0 million.  
Compared to gross collections in FY 2019 through May, payments due with annual returns  
and employer withholding were reduced by $760.4 million and $90.4 million, respectively. In  
addition, quarterly estimated payments and payments with trust returns were below last years  
payments by $44.3 million and $36.3 million. Overall, YTD gross collections through May were  
$
933.2 million below YTD collections in FY 2019. LGF distributions were $5.4 million above those  
in the corresponding period in FY 2019, but YTD refunds were, by a comparable amount, 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.  
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  
-$131.0  
-$66.9  
-$24.4  
-$717.6  
-$3.5  
-1.5%  
-$90.4  
-1.1%  
Quarterly Estimated Payments  
Trust Payments  
-9.4%  
-33.8%  
-66.7%  
-4.2%  
-9.0%  
-7.5%  
-4.1%  
-9.7%  
-$44.3  
-$36.3  
-$760.4  
-$1.7  
-6.4%  
-43.1%  
-68.0%  
-2.0%  
-8.9%  
-0.3%  
1.5%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
-$943.4  
-$160.7  
-$15.7  
-$767.0  
-$933.2  
-$5.4  
Less Refunds  
Less LGF Distribution  
GRF PIT Revenue  
$5.4  
-$933.1  
-11.6%  
Budget Footnotes  
P a g e | 9  
June 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 fallen about 4.6%, on average, in the last  
three months.  
Chart 4: Monthly Witholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
1
0.0%  
8.0%  
6.0%  
4.0%  
2.0%  
0.0%  
-
-
-
-
2.0%  
4.0%  
6.0%  
8.0%  
-
10.0%  
Actual  
Adjusted  
Commercial Activity Tax  
The last FY 2020 CAT payment from quarterly taxpayers (based on taxable receipts for the  
January to March quarter) due on May 11 provided $332.4 million. This amount was $11.1 million  
(
3.2%) below estimate, and $7.2 million (2.1%) below GRF CAT revenue in May 2019. Though the  
CAT experienced a deficit in May, the first full impact of the economic downdraft from the  
COVID-19 pandemic will be felt with the next payment by quarterly taxpayers in August 2020.  
That payment will be based on taxable gross receipts from April to June 2020.  
The monthly CAT performance reduced the YTD positive variance of this tax source to  
20.2 million (1.2%), down from $31.3 million through April 2020. With one month left in FY 2020,  
$
the CAT is likely to finish the year in positive territory (June estimated receipts are $5.6 million).  
YTD revenue from the CAT to the GRF totaling $1.65 billion was $42.2 million (2.6%) above  
revenue through May in FY 2019. The increase in GRF revenue in FY 2020 has been driven  
throughout the fiscal year, in part, by a decline in tax credits and refunds claimed against the CAT.7  
Compared to FY 2019, gross collections were higher by about 1.2%, but refunds and credits were  
1
7.2% below their levels through May in FY 2019, resulting in a higher growth rate for the GRF.  
7 A number of Ohios business tax credits can be claimed against more than one type of tax, but  
many are claimed against the CAT, which is imposed on the privilege of doing business in Ohio.  
Budget Footnotes  
P a g e | 10  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Under continuing law, CAT receipts are deposited into the GRF (85.0%), the School District  
Tangible Property Tax Replacement Fund (Fund 7047, 13.0%), and the Local Government  
Tangible Property Tax Replacement Fund (Fund 7081, 2.0%). The distributions to Fund 7047 and  
Fund 7081 are used to make reimbursement payments to school districts and other local taxing  
units, respectively, for the phase out of property taxes on general business tangible personal  
property. Any receipts in excess of amounts needed for such payments are transferred back to  
the GRF. On the other hand, if CAT revenue is insufficient for the required payments, the GRF  
would subsidize the local funds.  
Budget Footnotes  
P a g e | 11  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of May 2020  
($ in thousands)  
(Actual based on OAKS reports run June 8, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent  
Primary and Secondary Education  
Higher Education  
$487,400  
$161,032  
$5,192  
$583,180  
$206,291  
$5,199  
-$95,780 -16.4%  
-$45,258 -21.9%  
Other Education  
-$7  
-0.1%  
Total Education  
$653,624  
$794,669 -$141,045 -17.7%  
Medicaid  
$1,437,081 $1,171,100  
$117,218 $72,044  
$1,554,298 $1,243,144  
$265,980  
$45,174  
22.7%  
62.7%  
25.0%  
Health and Human Services  
Total Health and Human Services  
$311,155  
Justice and Public Protection  
General Government  
$220,698  
$38,822  
$220,903  
$50,203  
-$206  
-0.1%  
-$11,381 -22.7%  
Total Government Operations  
$259,520  
$271,107  
-$11,587  
-4.3%  
Property Tax Reimbursements  
Debt Service  
$466,429  
$17,933  
$398,306  
$17,935  
$68,123  
-$2  
17.1%  
0.0%  
Total Other Expenditures  
$484,362  
$416,241  
$68,121  
16.4%  
Total Program Expenditures  
Transfers Out  
$2,951,804 $2,725,161  
$0 $0  
$2,951,804 $2,725,161  
$226,643  
$0  
8.3%  
---  
Total GRF Uses  
$226,643  
8.3%  
*September 2019 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 12  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2020 as of May 31, 2020  
($ in thousands)  
(Actual based on OAKS reports run June 8, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2019** Percent  
Primary and Secondary Education  
Higher Education  
$7,455,195 $7,651,360 -$196,165  
-2.6%  
-3.4%  
3.3%  
$7,517,902  
$2,112,422  
$67,290  
-0.8%  
1.2%  
$2,138,510 $2,213,914  
$79,938 $77,353  
-$75,404  
$2,585  
Other Education  
18.8%  
-0.2%  
Total Education  
$9,673,643 $9,942,627 -$268,984  
-2.7% $9,697,614  
Medicaid  
$14,428,663 $14,046,254 $382,409  
2.7% $13,846,168  
4.2%  
7.0%  
4.4%  
Health and Human Services  
$1,301,901 $1,373,681  
-$71,780  
-5.2%  
$1,216,884  
Total Health and Human Services  
$15,730,564 $15,419,935 $310,629  
2.0% $15,063,053  
Justice and Public Protection  
General Government  
$2,273,209 $2,317,568  
$424,782 $488,848  
$2,697,991 $2,806,416 -$108,425  
-$44,359  
-1.9%  
$2,061,574  
$366,337  
10.3%  
16.0%  
11.1%  
-$64,066 -13.1%  
Total Government Operations  
-3.9% $2,427,911  
Property Tax Reimbursements  
Debt Service  
$1,774,351 $1,806,732  
$1,375,978 $1,386,164  
$3,150,329 $3,192,896  
-$32,381  
-$10,186  
-$42,567  
-1.8%  
-0.7%  
$1,750,625  
$1,369,314  
1.4%  
0.5%  
1.0%  
Total Other Expenditures  
-1.3% $3,119,940  
Total Program Expenditures  
Transfers Out  
$31,252,526 $31,361,873 -$109,347  
$668,161 $669,975 -$1,814  
$31,920,686 $32,031,848 -$111,162  
-0.3% $30,308,518  
3.1%  
-0.3%  
$764,217 -12.6%  
2.7%  
Total GRF Uses  
-0.3% $31,072,735  
*
*
September 2019 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on June 5, 2020)  
Month of May 2020  
Estimate* Variance Percent  
Year to Date through May 2020  
Department  
Medicaid  
GRF  
Actual  
Actual  
Estimate*  
Variance Percent  
$1,368,774 $1,102,779  
$265,995  
24.1% $13,692,282 $13,314,247 $378,035  
2.8%  
-5.5%  
-0.6%  
Non-GRF  
$660,022 $1,037,950 -$377,929 -36.4% $8,972,092 $9,491,554 -$519,462  
$2,028,796 $2,140,729 -$111,933 -5.2% $22,664,374 $22,805,801 -$141,426  
All Funds  
Developmental Disabilities  
GRF  
$60,546  
161,753  
222,299  
$58,018  
$190,864  
$248,882  
$2,528  
4.4%  
$636,583  
$633,011  
$2,293,031  
$2,926,042  
$3,572  
-$68,410  
-$64,838  
0.6%  
-3.0%  
-2.2%  
$
-$29,111 -15.3% $2,224,620  
-$26,583 -10.7% $2,861,204  
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$6,781  
$19,166  
25,947  
$9,253  
$22,560  
$31,812  
-$2,472 -26.7%  
-$3,394 -15.0%  
-$5,866 -18.4%  
$90,165  
$174,965  
$265,130  
$88,990  
$178,280  
$267,270  
$1,175  
-$3,315  
-$2,140  
1.3%  
-1.9%  
-0.8%  
Non-GRF  
$
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$980  
$1,051  
$4,267  
$5,318  
-$71  
-6.8%  
$9,632  
$38,477  
$48,109  
$10,006  
$41,096  
$51,102  
-$374  
-$2,619  
-$2,993  
-3.7%  
-6.4%  
-5.9%  
Non-GRF  
$1,829  
-$2,438 -57.1%  
-$2,509 -47.2%  
$
2,809  
All Funds  
All Departments:  
GRF  
$1,437,081 $1,171,100  
$842,769 $1,255,641 -$412,872 -32.9% $11,410,154 $12,003,960 -$593,806  
2,279,850 $2,426,741 -$146,891 -6.1% $25,838,817 $26,050,215 -$211,398  
$265,980  
22.7% $14,428,663 $14,046,254 $382,409  
2.7%  
-4.9%  
-0.8%  
Non-GRF  
All Funds  
$
*September 2019 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 14  
June 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 June 5, 2020)  
Month of May 2020  
Estimate* Variance  
Year to Date through May 2020  
Actual Estimate* Variance Percent  
Payment Category  
Actual  
Percent  
Managed Care  
CFC†  
$1,532,279 $1,627,518  
-$95,239  
$50,799  
$99,548  
-5.9% $16,449,796 $16,356,243  
$93,553  
$152,249  
$295,301  
0.6%  
2.7%  
$597,788  
$515,914  
$130,621  
$82,478  
$205,479  
$0  
$546,988  
$416,366  
9.3% $5,846,662  
23.9% $4,544,422  
-51.6% $2,555,274  
$5,694,413  
$4,249,121  
Group VIII  
ABD†  
6.9%  
$269,931 -$139,310  
$2,763,373 -$208,099  
-7.5%  
-0.7%  
-2.6%  
ABD Kids  
My Care  
P4P†  
$85,299  
$232,969  
$75,966  
-$2,821  
-3.3%  
-11.8% $2,417,623  
$206,121  
$879,694  
$885,702  
$2,483,185  
$280,448  
-$6,008  
-$27,490  
-$65,563  
-$75,966 -100.0%  
-$74,327 -26.5%  
Fee-For-Service  
ODM Services  
DDD Services  
$558,577  
$341,866  
$216,710  
$0  
$589,890  
$356,685  
$233,204  
$0  
-$31,313  
-$14,819  
-$16,494  
$0  
-5.3% $7,477,566 $7,632,751 -$155,185  
-2.0%  
-2.2%  
-2.0%  
-1.5%  
-0.6%  
-4.2% $3,900,453  
-7.1% $2,773,628  
$3,989,482  
$2,829,170  
$669,444  
$144,655  
-$89,028  
-$55,543  
-$9,747  
-$867  
Hospital - HCAP†  
Hospital - Other  
---  
---  
$659,697  
$143,788  
$0  
$0  
$0  
Premium Assistance  
Medicare Buy-In  
Medicare Part D  
$100,530  
$58,742  
$41,789  
$100,752  
$57,926  
$42,826  
-$222  
$816  
-0.2% $1,036,640 $1,059,995  
-$23,355  
-$10,769  
-$12,587  
-2.2%  
-1.8%  
-2.8%  
1.4%  
$601,502  
$435,138  
$612,270  
$447,725  
-$1,038  
-2.4%  
Administration  
Total  
$88,463  
$108,581  
-$20,118  
-18.5%  
$874,815 $1,001,226 -$126,410 -12.6%  
$2,279,850 $2,426,741 -$146,891  
-6.1% $25,838,817 $26,050,215 -$211,398 -0.8%  
*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  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
EMexlanpey Cearnter,dDiriecttorures8  
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 were discussed in last months  
Budget Footnotes. Although some of these reductions began to be implemented in May, GRF  
uses in May were $226.6 million (8.3%) above estimate. This positive variance reduced the  
negative YTD variance to $111.2 million (0.3%) at the end of May. The total for YTD uses at the  
end of May was $31.92 billion, consisting of $31.25 billion in program expenditures and  
$
the preceding Table 4. The preceding Table 3 shows GRF uses compared to estimates for the  
month of May.  
668.2 million in transfers out. YTD variances in GRF uses compared to estimates are shown in  
Medicaids GRF expenditures were above estimate by $266.0 million for the month of  
May, increasing Medicaids YTD positive GRF variance to $382.4 million (2.7%) at the end of May.  
The section below gives more details about Medicaid GRF and non-GRF variances.  
Property Tax Reimbursements and Health and Human Services also had positive monthly  
variances in May of $68.1 million and $45.2 million, respectively. These positive variances,  
however, only partially offset the negative YTD variances in these categories at the end of April.  
The two categories had negative YTD variances of $32.4 million (1.8%) and $71.8 million (5.2%),  
respectively, at the end of May.  
Primary and Secondary Education had the largest negative monthly and YTD variances at  
$
95.8 million and $196.2 million (2.6%), respectively. The second largest negative monthly and  
YTD variances were in Higher Education at $45.3 million and $75.4 million (3.4%), respectively.  
Finally, the third largest negative monthly variance was in General Government at $11.4 million,  
increasing this categorys negative YTD variance to $64.1 million (13.1%).  
These variances are discussed below.  
Medicaid  
GRF Medicaid expenditures were above their monthly estimate in May by $266.0 million  
(
22.7%), which increased the YTD variance in GRF Medicaid expenditures to $382.4 million (2.7%)  
above estimate. Non-GRF Medicaid expenditures were below their monthly estimate, by  
412.9 million (32.9%), and remained below their YTD estimate by $593.8 million (4.9%).  
$
Including both the GRF and non-GRF, all funds Medicaid expenditures were $146.9 million (6.1%)  
below estimate in May, and $211.4 million (0.8%) below their YTD estimate at the end of May.  
The impact of the COVID-19 pandemic began to show in March and Aprils Medicaid caseloads,  
8 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  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
and the impacts continue to show in Mays report. Medicaid experienced a total enrollment  
increase of nearly 20,000 in March. In April, this trend continued, with a total caseload increase  
of more than 75,000 cases. Mays figures show a continuation of this trend, with a caseload  
increase of more than 67,000 cases. These May caseload figures were above the budget estimate  
by 4.8% (135,678 cases). March, April, and Mays caseload increases reversed the trend of the  
initial eight months of the fiscal year, which had all seen caseloads below budget estimate. For  
YTD average caseloads, total Medicaid enrollment is now above estimate, by 0.2% (6,560 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 an all funds negative variance in  
May of $111.9 million (5.2%), which kept YTD expenditures below estimate, with a $141.4 million  
(
YTD negative variance, which was $29.5 million (0.1%) below estimate at the end of April.  
0.6%) negative variance. Mays below estimate expenditures increased the magnitude of the  
ODODD had an all funds negative variance ($26.6 million) in May which increased the  
magnitude of ODODDs negative YTD variance from $38.3 million (1.4%) at the end of April to  
$
Health, Aging, Mental Health and Addiction Services, State Board of Pharmacy, and Education –  
64.8 million (2.2%) at the end of May. The other six sisteragencies Job and Family Services,  
account for the remaining 1.0% of the total Medicaid budget. Unlike ODM and ODODD, the six  
sisteragencies incur only administrative spending. ODJFS had a $5.9 million (18.4%) negative  
variance in May, which brought its YTD variance below estimate, with a $2.1 million (0.8%)  
negative variance. 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 $93.6 million (0.6%). Fee-For-Service (FFS,  
$
155.2 million, 2.0%) had the largest overall negative variance, followed by Administration  
($126.4 million, 12.6%), and Premium Assistance ($23.4 million, 2.2%).  
The YTD negative variance in Premium Assistance is driven partly by lower than expected  
retroactive enrollment in Medicare Part D, a trend which ODM confirms has persisted for most  
of FY 2020. Part D expenditures have included lower than projected premiums as well,  
throughout most of FY 2020. The month of April experienced Medicare Buy-In expenditures 4.5%  
(
which caused the Medicare Buy-In to be below projection. In May, expenditures stabilized, and  
were 1.4% ($820,000) above estimate, bringing the YTD negative variance for Medicare Buy-In to  
$2.6 million) below estimate, due to a March accounting issue, and subsequent April adjustment  
1
.8% ($10.8 million) under budget.  
The negative variance in FFS in May might be driven by delays in nonessential care, which  
was postponed or canceled due to ongoing effects of the COVID-19 pandemic. While total  
Managed Care expenditures for May were below estimate by $95.2 million (5.9%), Managed Care  
expenditures for the Covered Families and Children (CFC) and Group VIII populations were above  
their monthly estimates, by $50.8 million (9.3%) and $99.5 million (23.9%), respectively. These  
variances added to positive YTD variances of $152.2 million (2.7%) for CFC and $295.3 million  
(
6.9%) for Group VIII. These two figures create the YTD positive variance in total Managed Care  
expenditures. Higher expenditures in May for the CFC and Group VIII populations 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  
Budget Footnotes  
P a g e | 17  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
variances in the CFC and Group VIII categories. All other Managed Care payment categories were  
below estimate both for the month of May and for their YTD totals.  
The positive variances for Group VIII expenditures have been influenced by higher than  
expected caseloads. For the first nine months of FY 2020, monthly Managed Care caseloads for  
Group VIII were above estimate, but by less than 1.7% on average. In April, increased caseloads  
caused by the COVID-19 economic decline caused Managed Care caseloads for Group VIII to  
increase to 10.2% (56,482 cases) above estimate, and in May, caseloads were 13.3% (73,984 cases)  
above estimate, which brought the average monthly caseloads to 3.5% (19,520 cases) above  
estimate for the first 11 months of FY 2020.  
According to May 11, 2020, information from OBM, ODM is expected to reduce its  
FY 2020 GRF budget by nearly $212 million, with a $200 million cut to item 651525,  
Medicaid/Health Care Services, and a cut of just under $12 million to item 651425, Medicaid  
Program Support State. OBM has also confirmed in a May 6, 2020, press release that ODM will  
make a cut of $9.1 million to their FY 2020 non-GRF budget.  
Property Tax Reimbursements  
In May, the negative YTD variance in Property Tax Reimbursements was reduced from  
100.5 million (7.1%) at the end of April to $32.4 million (1.8%) at the end of May. Property tax  
$
reimbursement funds are disbursed upon the request of county auditors. The timing of these  
requests typically varies from that assumed in the OBM estimate. The narrowing of the negative  
YTD variance in this category was expected.  
Health and Human Services  
After a large negative variance in April ($74.5 million), the Health and Human Services  
category had a positive variance in May of $45.2 million, bringing its negative YTD variance to  
$
71.8 million (5.2%).  
The Ohio Department of Mental Health and Addiction Services (ODMHAS) had a positive  
variance of $27.6 million for the month of May, decreasing its negative YTD variance to  
10.4 million. Over half of the monthly and YTD variances were due to item 336421, Continuum  
of Care Services, which had a positive variance of $14.1 million in May and a negative variance of  
7.6 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. ODMHAS also  
had a positive May variance of $9.7 million in item 336412, Hospital Services, which increased  
this items positive YTD variance to $14.3 million. This item is used to fund the operations of  
ODMHASs six state hospitals.  
ODJFS had a positive variance of $19.9 million in May that reduced this agencys negative  
YTD variance at the end of May to $40.4 million. Item 600413, Child Care State/Maintenance of  
Effort, had the largest positive variance in May of $15.2 million followed by item 600523, Family  
and Children Services, with a positive variance in May of $10.7 million. Item 600413s positive  
May variance pushed its YTD variance into positive territory ($9.2 million), but item 600523  
maintained a negative YTD variance ($12.3 million).  
Budget Footnotes  
P a g e | 18  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Primary and Secondary Education  
The Primary and Secondary Education category had a negative variance for the month of  
May of $95.8 million, which increased this categorys negative YTD variance to $196.2 million  
(
2.6%). This category only includes the Ohio Department of Education (ODE). The negative variance  
in May was mainly due to a negative variance in item 200550, Foundation Funding, of  
108.3 million, which brought this items YTD negative variance to $144.5 million. Item 200550  
$
provides the main funding for the states foundation aid to public schools. As reported in the prior  
issue of Budget Footnotes, the executive reduced FY 2020 expenditures for this item by  
9
$
300.5 million. This reduction was reflected in the second of the two payments made in May and  
will continue to be reflected in the last two payments of the fiscal year in June.  
Item 200478, Industry-Recognized Credentials High School Students, also had a negative  
variance in May ($4.5 million). OBMs estimates for this item consist of only this one $4.5 million  
payment in May. This funding is to provide start-up funds to public schools to establish  
credentialing programs for the new Innovative Workforce Incentive Program. This funding has  
been delayed.  
Offsetting these negative May variances, item 200532, Nonpublic Administrative Cost  
Reimbursement, had a positive variance for the month of $16.0 million, partially offsetting the  
negative variance in this item of $23.3 million in April and resulting in a negative YTD variance of  
$
7.8 million. Item 200532 is used to reimburse nonpublic schools chartered by the state for  
certain administrative activities required to maintain their charter.  
Higher Education  
The Higher Education category increased its negative YTD variance in May by  
$
45.3 million, resulting in a negative YTD variance of $75.4 million (3.4%). The largest monthly  
and YTD variances were in item 235501, State Share of Instruction, with a variance for both the  
month and YTD of $38.4 million. This item is used to distribute the states main contribution to  
its public higher education institutions. Generally, there are not variances in this item, since the  
appropriation is paid out consistently over the fiscal year. However, the executive budget  
1
0
reductions for FY 2020 include a reduction of $76.7 million for this item. The other half of this  
reduction will be reflected in June.  
Most other line items in this category were also under estimate for the YTD. These items  
include 235438, Choose Ohio First Scholarship ($13.2 million), 235563, Ohio College Opportunity  
Grant ($12.4 million), and 235599, National Guard Scholarship ($6.5 million).  
General Government  
The General Government category had a negative YTD variance of $64.1 million (13.1%)  
at the end of May, and a negative variance of $11.4 million for the month of May. The May  
9 Note that the federal CARES Act provides $440.3 million in additional funding to be distributed  
to Ohio’s public schools through September 30, 2022. More information about this funding can be found  
on page 25 of the May issue of Budget Footnotes.  
10 Note that the federal CARES Act provides $269.1 million in funding for Ohio’s public institutions  
of higher education. More information about this funding can be found on page 26 of the May issue of  
Budget Footnotes.  
Budget Footnotes  
P a g e | 19  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
variance was largely the result of a negative monthly variance of $5.4 million in item 775470,  
Public Transportation State, in the Ohio Department of Transportation (ODOT) budget. This  
negative variance increased this items negative YTD variance to $19.0 million. 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 third  
highest negative YTD variance in this category is $4.8 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.  
Budget Footnotes  
P a g e | 20  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
Development Services Agency Receives $10.6 million in CARES  
Act Funding for Small Business Assistance Programs  
Tom Middleton, Senior Budget Analyst  
On May 11, 2020, the Controlling Board approved a request by DSA to use approximately  
10.6 million in increased federal funding received under the CARES Act for FY 2020. These  
$
moneys will supplement three existing DSA programs: the Small Business Development Center  
(
Technical Assistance Center (PTAC) Program. These programs are funded primarily from federal  
sources that aim to assist small businesses and entrepreneurship.  
SBDC) Program, the Ohio Manufacturing Extension Partnership (MEP), and the Procurement  
Of the $10.6 million, $6.7 million will support the SBDC Program which offers  
management counseling, training, and technical assistance to small businesses and  
entrepreneurs at 28 SBDCs located around the state. The additional funds are to be distributed  
by formula proportional to the current grant funds received by each SBDC. The CARES Act funding  
brings total funding for the SBDC Program to just under $12.0 million for FY 2020. Federal funding  
comes primarily from the U.S. Small Business Administration.  
MEP will receive $3.8 million of the CARES Act allocation to DSA. This program is primarily  
funded through the U.S. Department of Commerce, offering technical assistance and services to  
improve the competitiveness of small- and medium-sized manufacturing firms to accelerate new  
manufacturing technology and work processes. DSA distributes Ohios MEP funding to six  
regional partners across the state: (1) CIFT (Northwest), (2) Columbus State Community College  
(
(
Central), (3) FASTLANE (West), (4) MAGNET (Northeast), (5) OSU-South Centers (Southeast), and  
6) TechSolve (Southwest). The supplementary funding provided under the CARES Act brings the  
total appropriated for MEP to approximately $10.3 million in FY 2020.  
Finally, DSA will use $116,277 of CARES Act funding to provide additional help to small  
businesses competing for federal, state, and local contracts under the PTAC Program. There are  
eight PTACs in Ohio. With the additional CARES Act funding, a total of just over $866,000 in  
FY 2020 will be available for small businesses participating in the PTAC Program.  
Mainstream Voucher Program Receives $1.85 million in  
Additional Funds  
Nelson V. Lindgren, Economist  
In early May 2020, the U.S. Department of Housing and Urban Development (HUD)  
awarded 24 Ohio cities a total of $1.85 million in increased funding for the Mainstream Voucher  
Program. These funds will be granted to public housing authorities in these cities and used to  
provide housing assistance to non-elderly individuals with disabilities. The programs focus is on  
individuals who are at-risk of institutionalization or are transitioning out of institutional settings,  
as well as individuals who are, or are at-risk of, experiencing homelessness. The program aims to  
further the goals of the Americans with Disabilities Act (ADA) by helping persons with disabilities  
live in integrated settings. It also encourages partnerships with health and human service  
Budget Footnotes  
P a g e | 21  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
agencies to coordinate services and supports to enable individuals to live independently in the  
community. The funding amounts range from $15,131 to $256,324. The list of award amounts  
for each housing authority can be accessed on ODODD’s web site: dodd.ohio.gov.  
Ohio housing authorities originally received $3.9 million for the Mainstream Voucher  
Program in November 2019. The increased funding referenced above was authorized by the  
CARES Act, which was signed into law on March 27, 2020. The funds are intended to help  
ameliorate increased demand for public housing programs created by the COVID-19 pandemics  
economic fallout.  
Secretary of State to Award $13.7 million in Cybersecurity Grants  
to County Boards of Elections  
Terry Steele, Senior Budget Analyst  
On April 27, 2020, the Controlling Board approved a request by the Secretary of State  
(SOS) to spend the additional $13.7 million in federal funding awarded to Ohio in January by the  
Elections Assistance Commission (EAC) under the Help America Vote Act (HAVA). These grants  
are required to be used to improve the administration of elections for federal office, primarily  
through enhancing election technology and making security improvements to the systems,  
equipment, and processes used in federal elections. The SOS intends to use this funding to issue  
grants to county boards of elections for cybersecurity, physical security, and ADA compliance  
upgrades. More specifically, these grants will continue existing cybersecurity monitoring and  
alerting programs in cooperation with county boards of elections, provide additional IT support  
to county boards of elections that do not have dedicated IT staff, and further enhance the SOSs  
ongoing cybersecurity program.  
The election security grant requires a 20% state match, or slightly more than $2.7 million.  
This match comes from a combination of state funding provided from the Absent Voters Ballot  
Application Mailing Fund (Fund 5RG0) to conduct the April 2020 primary election under H.B. 197,  
as well as Business Services Fund (Fund 5990) money appropriated to the SOS for elections  
administration under H.B. 166.  
CMS Approves Ohios Medicaid Waivers Related to COVID-19  
Nelson V. Lindgren, Economist  
On April 22, 2020, the U.S. Centers for Medicare and Medicaid Services (CMS) approved  
Ohios Section 1135 Medicaid Waiver request, which was submitted by the Ohio Department of  
Medicaid on April 15. ODM and other state Medicaid agencies sought these waivers to improve  
access to care and ease administrative requirements related to the COVID-19 pandemic. Ohios  
waiver request seeks flexibility to do the following: (1) increase the use of telehealth and other  
technology, (2) waive signature requirements for many providers to encourage safe distancing,  
(
3) ease obstacles to access nursing home care, (4) allow services to be provided at alternative  
locations, and (5) remove staffing-level requirements for providers. The waiver approval begins  
on the effective date of the declared emergency and will be retroactively effective as of  
March 1 2020. Approval ends on the termination of the emergency period or 60 days from the  
date the waiver is granted, unless extended by CMS.  
Budget Footnotes  
P a g e | 22  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Section 1135 waivers allow CMS to waive various requirements to increase access to  
medical services during a time of national emergency. There are two instances in which such a  
waiver may be approved: the president declares a disaster or emergency or the U.S. Health and  
Human Services Secretary declares a public health emergency. Approvals only apply to federal  
requirements not to state licensure or conditions of participation. Waivers ensure that providers  
can receive reimbursements for services rendered even if they are unable to comply with  
requirements that would normally prohibit Medicaid payments.  
ODE Receives $3.25 million Federal Grant to Expand Educational  
Data Systems  
Nick Ciolli, Budget Analyst  
In March 2020, ODE announced that it was awarded a five-year, $3.25 million grant from  
the U.S. Department of Education under the Statewide Longitudinal Data Systems (SLDS) Grant  
Program. The grant will support expansion of the states educational data system through a  
project called Using Data for Equity: Empowering Educators with Information, Tools and Training  
to Support Each Child in Achieving their Goals.The project has four core goals:  
1
. Create a system to link preK-12 and workforce data to improve the states understanding  
of postsecondary outcomes.  
2
. Enhance the states Equitable Access Analysis Tool to improve school district and schools’  
access to information about educator equity gaps. The enhancements include additional  
data and increased functionality and usability through a web-based, interactive platform,  
the goal of which is to increase student access to high-quality educators.  
3
4
. Create reports to identify students at risk of not graduating. New Early Warning System  
and Progress Toward Graduation reports will be accessible to districts and schools to  
improve the information educators have available to them in providing at-risk students  
with additional support.  
. Train educators on how to use the data resources available to them to improve education  
outcomes.  
The grant, which will run through February of FY 2024, will be spent out of Fund 3HF0  
appropriation line item 200649, Federal Education Grants. Roughly $800,000 of the grant will be  
available to spend each fiscal year. This is the fourth SLDS grant that ODE has received since 2006  
and the first new award since 2010. The most recent SLDS grant ran through FY 2015.  
Budget Footnotes  
P a g e | 23  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Data Released Comparing Ohios Public School Enrollment  
Growth Rate with the Nations  
Alexander Moon, Economist  
The National Center for Education Statistics (NCES) published the most recent edition of  
1
1
The Condition of Education in May. This report includes data that show that the rate of decline  
in Ohio public school enrollment has eased slightly in recent years while the national rate of  
growth continues to slow. As shown in the chart below, Ohio public school enrollment fell by  
0
.3% in FY 2018 (the most recent year for which federal data were available), slightly smaller than  
the 0.4% and 0.5% declines in FY 2016 and FY 2017, respectively, following a very small positive  
rate of growth in FY 2015. In contrast, public school enrollment growth nationally has been  
positive but generally trending downward, slowing to 0.1% in FY 2018, after 0.4% and 0.2%  
increases the prior two years. Over the past five years, public school enrollment has grown by an  
average of 0.4% nationally.  
Chart 5: Public School Enrollment Growth Rates, Ohio vs. United States,  
FY 2014-FY 2018  
1.0%  
0.5%  
0.0%  
0
.5%  
0.5%  
0
.4%  
0
.2%  
0
.1%  
0
.0%  
-0.3%  
-0.3%  
-0.4%  
-0.5%  
-
-
0.5%  
1.0%  
FY 2014  
FY 2015  
FY 2016  
FY 2017  
FY 2018  
Ohio  
United States  
Ohios average annual growth rate over the past five years was -0.3%, ranking 41st in the  
nation (see table below). This rate is on par with the average for Ohios surrounding states and  
somewhat lower than the Midwest region as a whole (-0.1%). Compared to surrounding states,  
Ohios public school enrollment growth rate was lower than Indiana (the only neighbor with a  
positive average growth rate) and Kentucky but higher than Pennsylvania, Michigan, and West  
Virginia.  
11 The full NCES report, which summarizes actual enrollment between FY 2001 and FY 2018 and  
projections through FY 2030 along with a host of other education-related data, is available online at:  
https://nces.ed.gov/pubs2020/2020144.pdf. The NCES is the primary federal entity for collecting,  
analyzing, and reporting data related to education in the U.S. and other nations.  
Budget Footnotes  
P a g e | 24  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Average Annual Public School Enrollment Growth Rates, FY 2014FY 2018  
State  
Average Growth Rate  
National Rank  
Indiana  
Kentucky  
Ohio  
0.2%  
-0.1%  
-0.3%  
-0.4%  
-0.5%  
28  
38  
41  
43  
45  
50  
Pennsylvania  
Michigan  
West Virginia  
-0.8%  
-0.3%  
-0.1%  
Surrounding States Average  
Midwest Region Average  
Postsecondary Degree or Certificate Attainment Increased to  
5.5% in Ohio in 2018  
4
Jason Glover, Budget Analyst  
Ohios overall rate of college degree or certificate attainment increased by nearly one  
percentage point, from 44.6% in 2017 to 45.5% in 2018, according to the latest figures compiled  
by the Lumina Foundation. The chart below plots Ohios progress toward achieving its goal of  
6
value in the marketplace by 2025. While Ohios attainment rate has steadily increased since  
2008, the 45.5% attainment rate in 2018 was still nearly three percentage points below the  
5% of Ohioans ages 25 to 64 having a degree, certificate, or other postsecondary credential of  
12  
national average of 48.4%. The large percentage point increases in both Ohios and the U.S.s  
average attainment rates between 2013 and 2014 are due to the inclusion of workforce-relevant  
certificates in the total of postsecondary credentials beginning in 2014.  
12 Luminas full report for Ohio can be viewed online at: https://luminafoundation.org/stronger-  
nation/report/2020/#state/OH.  
Budget Footnotes  
P a g e | 25  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 6: Degree and Certificate Attainment Rates for Ohio and U.S.  
4
4
8.4%  
5.5%  
5
4
4
3
3
3
0.0%  
6.0%  
2.0%  
8.0%  
4.0%  
0.0%  
4
4
7.6%  
4.6%  
4
6.9%  
4
5.3%  
5.8%  
4
4
4.1%  
39.4% 40.0%  
8.7%  
43.6%  
3.2%  
4
3
8.3%  
3
8.1%  
3
3
3
7.9%  
4.9%  
3
6.5%  
7.5%  
3
5.5%  
3
3
5.8%  
3
4.7%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  
Ohio U.S.  
The pie chart below illustrates the education levels of Ohio residents between the ages  
of 25 and 64. Overall, the most common credential among those completing some form of  
postsecondary education is a bachelors degree (19.5%), followed by a graduate or professional  
degree (11.4%), associates degree (9.6%), and high-quality certificate (5.0%). The remaining  
5
However, 16.0% have some college experience.  
4.5% of the population between ages 25 and 64 have not completed a postsecondary credential.  
Chart 7: Ohio Education Levels, Residents Ages 25 to 64, 2018  
Graduate or professional  
degree, 11.4%  
Some college but  
no credential,  
Bachelor's  
degree, 19.5%  
1
6.0%  
High school  
graduate/GED,  
No College Attainment,  
54.5%  
3
0.5%  
Some high  
school but no  
diploma, 5.8%  
Associate degree, 9.6%  
Certificate, 5.0%  
Less than high  
school, 2.2%  
Budget Footnotes  
P a g e | 26  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Educational attainment rates for Ohioans ages 25 to 64 earning at least an associates  
degree vary widely by county (note that the Lumina Foundations data does not estimate the  
number of residents with postsecondary certificates at the county level). Fourteen (16%)  
counties were above the state rate, excluding certificates, of 40.5%. Delaware County had the  
highest rate, at 65.2%. Holmes County had the lowest rate, at 12.7%.  
Attorney General Issues 2019 Capital Crimes Report  
Jessica Murphy, Budget Analyst  
On April 1, 2020, the Office of the Ohio Attorney General issued its annual report on  
1
3
capital crimes for 2019. The report provides information on each aggravated murder case that  
resulted in a death sentence since 1981, the year that Ohio adopted its current death penalty  
statute replacing those ruled unconstitutional. Ohio has issued 340 death sentences in the  
3
2
8
8
8 years covered in the report, seven of which occurred in 2019. Of these 340 death sentences,  
1 were commuted, 56 executions were performed, 30 offenders died prior to execution,  
offenders were found ineligible for the death penalty due to intellectual disability, and  
1 sentences were removed based on judicial action. One case is pending resentencing.  
As of December 31, 2019, 143 offenders were on death row. Cuyahoga and Hamilton  
counties accounted for the largest number of inmates on death row (21), followed by Franklin  
13), Lucas (9), Trumbull (8), Butler and Summit (7), Montgomery and Stark (6), Mahoning (5),  
(
and Clark (4). Another 25 counties accounted for between one and three of the offenders on  
death row.  
Under current Ohio law, the death penalty applies to the offense of aggravated murder  
when the offender also is convicted of one or more specifications of an aggravating circumstance  
or for the offense of terrorism when the most serious offense comprising terrorism is aggravated  
murder. A defendant must have been at least 18 at the time the crime was committed to be  
sentenced to death.  
Lethal injection is the only method of execution used in Ohio. A single drug protocol  
requiring intravenous injection of a large dosage of sodium thiopental or pentobarbital was  
utilized from 2010 to 2013, at which point the manufacturers stopped selling those drugs to the  
state. The most recent execution, on July 18, 2018, utilized a three-drug protocol.14 The use of  
that three-drug protocol for future executions is subject to current and continuing litigation.  
13 https://www.ohioattorneygeneral.gov/2019CapitalCrimesReport.  
14  
Three-drug protocol: Midazolam (sedative), paralytic drugs (prevents involuntary  
movement), and potassium chloride (stops the heart).  
Budget Footnotes  
P a g e | 27  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
2020 Lake Erie Protection and Restoration Plan Released  
Jamie Doskocil, Fiscal Supervisor  
In April 2020, the Ohio Lake Erie Commission approved and released its 2020 Lake Erie  
1
5
Protection and Restoration Plan (LEPR). The LEPR reflects actions that the Commission and its  
member agencies will take over the next several years to protect, preserve, and restore Lake Erie  
1
6
and promote economic development for the region. The states actions complement federal  
and local partnersinitiatives in the Lake Erie basin and across the region.  
The Commission is required to publish a Lake Erie protection and restoration strategy that  
describes the goals of the Commission and prioritizes the uses of the Lake Erie protection fund  
and other funds. The plan was last published in 2016.  
The 2020 plan has nine priority areas: (1) nutrient pollution reduction, (2) habitat and  
species, (3) invasive species, (4) dredge material management and maritime infrastructure,  
(5) areas of concern, (6) toxic pollutants, (7) beach and recreational use, (8) tourism, jobs, and  
economy, and (9) water withdrawals. Four primary funding mechanisms will be utilized: H2Ohio  
for Lake Erie (a state initiative), the Great Lakes Restoration Initiative (a federal initiative),  
partnerships with local and regional investments, and other state funding.  
The report also noted the progress of work undertaken by member agencies and partners  
since the 2016 plan. The highlighted accomplishments include:  
Implementing the Sandusky Bay Initiative (initial project evaluation, design, and  
engineering for coastal restoration projects);  
$18 million to reduce, repair, and replace home sewage treatment systems in  
2
7 counties of the Lake Erie Basin;  
$1 million for the Dredge Material Management Program through the Healthy Lake Erie  
Fund with eight beneficial use projects identified for implementation;  
Implementing through soil and water conservation districts the Ohio Working Lands Hay  
Buffer and Small Grains programs, components of the Soil and Water Phosphorus  
nd  
Program established in S.B. 299 of the 132 General Assembly;  
Initiating projects to manage and prevent aquatic invasive species.  
15  
The final plan, as well as prior plans, can be located at: https://lakeerie.ohio.gov/  
LakeEriePlanning/LakeErieProtectionandRestorationStrategy.aspx.  
16 The Commission is comprised of the directors of six state agencies including the Ohio  
Environmental Protection Agency, and the departments of Natural Resources, Health, Agriculture,  
Transportation, and Development Services. There are five additional members appointed by the Governor  
and two board members of the Great Lakes Protection Fund who serve as ex-officio members.  
Budget Footnotes  
P a g e | 28  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
Phil Cummins, Senior Economist  
Overview  
The national economy appeared to begin its recovery during May, as a gradual easing of  
COVID-19 restrictions allowed some businesses to reopen. According to the Bureau of Labor  
Statistics (BLS), payroll employment increased by a seasonally adjusted 2.5 million in May after  
falling 20.7 million in April and 1.4 million in March. The national unemployment rate decreased  
to 13.3% from a peak of 14.7% in April. Economic activity contracted at an annualized rate of  
5
.0% during the first quarter of 2020, according to the most recent data released by the Bureau  
of Economic Analysis (BEA). The Federal Reserve Board (FRB) reported the largest ever  
month-over-month decline in national industrial production in April, estimating a seasonally  
adjusted decrease in total output of 11.2%. A business cycle peak occurred in February and a  
recession began then, the National Bureau of Economic Research (NBER) determined. The NBER  
is widely recognized as the authority on the timing of U.S. business cycles. The expansion lasted  
1
in the fourth quarter of 2019.  
28 months, longest in history. On a quarterly basis, the peak was determined to have occurred  
During April, Ohios total payroll employment decreased by a seasonally adjusted 14.9%,  
the largest monthly decline on record at the BLS. The number of unemployed Ohioans during  
April was estimated to be 957,400, larger than the March number by 622,900. However, initial  
unemployment claims during the week ended May 30 were about 34,600, significantly below the  
high of 274,300 during the last full week of March. In the last week of May, business activity  
continued to be hampered, with approximately 51% of Ohios small businesses reporting a  
decrease in operating revenue from the prior week, according to the Small Business Pulse Survey,  
a temporary survey being conducted by the Census Bureau.  
The National Economy  
Nonfarm payroll employment rose by a seasonally adjusted 2,509,000 in May, while the  
national unemployment rate decreased by 1.4 percentage points to 13.3%. The leisure and  
hospitality industry, buoyed by the lifting of COVID-19 restrictions in various states, added  
1
construction (+464,000), education and health services (+424,000), retail trade (+367,800), and  
,239,000 workers to their payrolls in May, seasonally adjusted. Payroll employment in  
manufacturing (+225,000) also increased markedly during the month. Government employment  
1
7
decreased by 585,000 nationwide.  
The number of unemployed persons decreased by over 2 million, and was estimated to be  
approximately 20,985,000 in May. Despite the improvement in May, the unemployment rate and  
number of unemployed persons are up by 9.8 percentage points and 15,198,000, respectively, since  
February. The cohort of persons unemployed between five and 14 weeks, reflective of the timing of  
17 Decreases in employment were at all levels of government: federal (-14,000), state (-84,000),  
and local (-487,000). Most of the state and local declines were in education.  
Budget Footnotes  
P a g e | 29  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
COVID-19 measures, accounts for about 70.8% of total unemployment. Chart 8 shows payroll  
employment in the U.S. and Ohio; Chart 9 shows the unemployment rate in the U.S. and Ohio.  
Nationally, real GDP decreased at an annualized rate of 5.0% in the first quarter of 2020.  
During the quarter, large drops in personal consumption expenditures (PCE), nonresidential fixed  
investment, and inventories were only partially offset by increases in residential fixed investment  
and government spending. PCE for goods was approximately equal to the previous quarter, as  
spending for durable goods fell sharply while outlays rose for nondurables, particularly food and  
beverages purchased for off-premises consumption. PCE for services decreased by around 2.5%  
from the last quarter of 2019, equivalent to a 9.7% annual rate of decline, with declines in health  
care, food services and accommodations, recreation services, and transportation. Exports and  
imports fell for both goods and services. The rate of nonresidential fixed investment decreased  
by a seasonally adjusted 2.0% (a 7.9% annual rate) during the quarter, the fourth consecutive  
quarter of decline. The rate of residential fixed investment increased by 4.3% (18.5% annual rate).  
According to the FRBs industrial production index (IPI), total industrial production  
decreased by a seasonally adjusted 11.2% in April, the largest national decline in its over  
1
00 years of history. The decrease was attributable to the slowing or suspension of production  
due to the COVID-19 pandemic, according to an FRB press release. All major market groups  
posted declines in April, recording production levels 13% to 26% below that of a year prior.18  
Among major industry groups, utility companies (-0.9%) were least changed month-over-month,  
as cold weather boosted demand for natural gas. Manufacturing firms (-13.7%) were most  
affected; shutdowns of most motor vehicle assembly plants and sharply lower parts production  
led to a particularly acute 71.7% decline in that segment.  
Manufacturing activity contracted in May at more firms nationally than it expanded,  
according to the Institute for Supply Managements (ISMs) purchasing managers index (PMI).  
Manufacturing new orders and production declined during the month, continuing a trend onset  
by the COVID-19 pandemic. ISMs prices index decreased in May, an indication of declining prices  
in the market for raw materials. A majority of respondents in most industries reported declines.  
Those in six industries reported growth: nonmetallic mineral products; furniture and related  
products; apparel, leather, and allied products; food, beverage, and tobacco products; paper  
products; and wood products.  
According to ISMs NMI, the institutes nonmanufacturing index, economic activity in the  
nonmanufacturing sector declined in May, after declining in April for the first time since 2009.  
Business activity/production and new orders both fell. A majority of survey participants in every  
nonmanufacturing industry surveyed reported a decrease in employment in April, and none  
reported increased employment in May.  
After decreasing 32% in March and 23% in April, the seasonally adjusted number of light  
vehicle sales nationally recovered 40% in May. Business accounts for about half of the car and  
light truck market.  
The seasonally adjusted number of private housing starts dropped in April, falling 30.2%  
from the number in March, after declining 18.6% in that month. The number of privately owned  
housing units started in April was 29.7% below that in April 2019.  
18 Major market groups include final products, nonindustrial supplies, and materials.  
Budget Footnotes  
P a g e | 30  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 8: U.S. and Ohio Nonfarm Payroll Employment  
(
in millions)  
1
1
1
1
1
1
53.9  
48.5  
43.1  
37.7  
32.3  
26.9  
5.7  
5.5  
5.3  
5.1  
4.9  
4.7  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
U.S. Employment Ohio Employment (right scale)  
Chart 9: U.S. and Ohio Unemployment Rates  
% of Labor Force  
1
1
1
8.0%  
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  
In April, a total of 823,700 nonfarm payroll jobs were cut in Ohio, a decrease of 14.9% in  
total nonfarm payroll employment from the previous month. The number of workers declined  
during the month in leisure and hospitality (-263,500), trade, transportation, and utilities  
(
(
-115,900), professional and business services (-101,000), education and health services  
-99,900), manufacturing (-96,300), and construction (-39,400). Payroll employment also  
decreased during April in local government (-36,400) and state government (-5,600).  
Budget Footnotes  
P a g e | 31  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
Ohios unemployment rate increased from 5.8% in March to 16.8% in April. The number  
of unemployed Ohioans grew by approximately 622,900 from March to April; around  
9
57,400 persons were estimated to be unemployed during the month. The number of labor  
market participants in Ohio decreased by 75,000 in April, indicating that most recently  
unemployed workers remained in the labor market. Chart 8 shows payroll employment in the  
U.S. and Ohio; Chart 9 shows the unemployment rate in the U.S. and Ohio.  
According to the Department of Labor, approximately 34,600 initial unemployment claims  
were filed by Ohioans during the week ended May 30, a decrease of 19% from the previous week.  
At the peak nine weeks earlier, 274,300 initial claims were filed. The number of persons receiving  
unemployment compensation during the week ended May 23 was approximately 548,400, down  
by 88,500 (-14%) from the week prior and down 29% from five weeks earlier.  
According to the most recently released BEA data, real GDP in Ohio was 1.7% greater in  
019 than in 2018. Real GDP growth in Ohio was highest among Great Lakes states (others are  
2
Illinois, Indiana, Michigan, and Wisconsin) but below the national rate of 2.3%. Real GDP in the  
state grew by 0.8%, 1.6%, and 1.9% in CYs 2016, 2017, and 2018, respectively. Among industry  
groups, management of companies and enterprises and mining, quarrying, and natural gas  
extraction contributed notably more to Ohios economic growth than in other states in the Great  
Lakes region.  
The number of existing home sales plummeted in April, as a decrease in demand during  
the month led to drops in both the number and total dollar value of transactions. YTD, however,  
the number of existing home units sold is just 0.3% below the 2019 rate. Through the first four  
months of 2020, the average sale price of existing structures and real estate was 7.3% greater  
than during the same months in 2019.  
The U.S. Census Bureau recently developed a weekly survey to measure changes in  
business conditions during the COVID-19 pandemic and economic downturn. The survey includes  
a random sample of small businesses in each state. During the final full week in May,  
approximately 51% of Ohio businesses reported decreases in operating revenue as compared  
with the previous week; 20% reported increases in operating revenue. During the week, 19% of  
surveyed businesses reported temporary closures, while 81% remained open. Approximately  
5
operations for at least one month, while 32% reported having less than one months cash  
available for operations.  
8% of Ohio businesses surveyed had enough cash on hand currently to sustain business  
1
9
Economic conditions in the Cleveland Federal Reserve District continued to deteriorate in  
the most recent sampling period, the result of COVID-19 and shifts in consumer demand.20  
Employment in the district declined broadly, with hiring limited to a few firms. Consumer  
spending remained significantly below prepandemic levels in most industries. Manufacturing  
orders slid, and a majority of manufacturing contacts indicated inefficiencies brought on by social  
19 The remaining 10% were unable to answer the question about cash on hand.  
20 The Federal Reserve Bank of Cleveland’s 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 businesses  
and industry contacts outside of the Federal Reserve System collected on or before May 18, 2020.  
Budget Footnotes  
P a g e | 32  
June 2020  
Legislative Budget Office of the Legislative Service Commission  
distancing. Construction activity declined for most firms in the industry. The noted slowdown in  
production industries resulted in weak cargo volumes among long-haul freight companies. Real  
estate agents indicated demand from first-time homebuyers was hampered due a weakened job  
market, though financial service providers noted increased refinancing activity. Demand for  
business loans remained robust, although down since March.  
Economic Forecast Update  
Ohios near-term economic outlook has become considerably darker in the past month.  
Economic forecasting firm IHS Markit, used by LBO in developing state revenue projections, now  
estimates that Ohio real GDP in the current quarter will fall 12%, equivalent to a 39% annual rate.  
The states economic recovery gets underway in the July-September quarter, in this forecast, but  
the rebound is much slower than the second-quarter plunge, and real GDP does not return to its  
prerecession level until the second half of CY 2022, at the start of FY 2023. The FY 2021 average  
statewide unemployment rate is projected to rise to 18.6%, with a peak during the year of more  
than 21%. In FY 2021, total nonfarm payroll employment is expected to fall 13.2% and Ohio wage  
and salary income is predicted to drop 7.1%.  
Budget Footnotes  
P a g e | 33  
June 2020