A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2020  
Issue: July 2020  
Highlights  
Ross Miller, Chief Economist  
June GRF tax revenue was $50 million below the estimate published by the  
Office of Budget and Management (OBM) in August 2019, with the shortfall under  
the income tax amounting to $78 million. In contrast, sales and use tax revenue was  
just $1 million below estimate, due to a very strong month for revenue from sales  
of automobiles. The recovery in sales tax revenue was remarkably quick; revenue  
from the tax was $237 million and $167 million below estimate in April and May,  
respectively.  
GRF tax revenue was above estimate for FY 2020 through March, when  
responses to the COVID-19 pandemic began taking their toll. For all of FY 2020, GRF  
tax revenue was $1.10 billion below estimate due primarily to the income tax  
(
$845 million below estimate) and the sales and use tax ($328 million below).  
Looking forward, one bright spot is that a significant portion of the income tax  
shortfall should show up in July; the tax filing deadline extension to July 15 due to  
COVID-19 means that some income tax revenue originally expected in FY 2020 was  
delayed to FY 2021.  
On the spending side of the ledger, GRF program expenditures for FY 2020 were  
$865 million below estimate. This was largely due to $775 million in expenditure  
reductions ordered by the governor in response to the COVID-19 pandemic. The  
budget for the year was balanced by these spending reductions, a $613 million  
positive variance for federal grants (largely due to a temporary increase in the  
federal matching rate for Medicaid) and a carryover GRF balance from the end of  
FY 2019; the Budget Stabilization Fund (BSF) was not used.  
Simplified GRF Cash Statement, as of June 30, 2020  
($ in millions)  
Beginning Cash Balance  
$1,538.0  
$33,505.7  
$33,773.5  
$1,270.2  
$412.2  
Plus Actual Revenues, Transfers In, and Receivables  
Less Actual Expenditures and Transfers Out  
Ending Cash Balance  
Year-end Encumbrances  
Final FY 2020 Payroll  
$73.1  
Unobligated Ending Cash Balance  
Budget Stabilization Fund Balance  
Combined GRF and BSF Unobligated Ending Balance  
$784.8  
$2,691.6  
$3,476.4  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
Ohios May unemployment rate dropped to 13.7%, from 17.6% the prior month. The  
national unemployment rate was 13.3% in May and dropped to 11.1% in June. Ohios  
unemployment rate has been tracking the national rate, though somewhat higher, implying a  
likely comparable drop in the Ohio unemployment rate in June.  
Through June 2020, GRF sources totaled $33.51 billion:  
Revenue from the sales and use tax was $328.0 million below estimate;  
Personal income tax (PIT) receipts were $845.1 million below estimate.  
Through June 2020, GRF uses totaled $33.77 billion:  
Program expenditures were $865.1 million below estimate;  
Expenditures for the Primary and Secondary Education program were $340.6 million  
below estimate;  
Expenditures were more than $100 million below estimate for the Higher Education  
(
Protection ($107.2 million) program categories;  
$118.7 million), Health and Human Services ($109.4 million), and Justice and Public  
GRF spending for Medicaid was below estimate by $49.1 million.  
In this issue...  
More details on GRF Revenues (p. 3), Expenditures (p. 18),  
the National Economy (p. 38), and the Ohio Economy (p. 41).  
Also Issue Updates on:  
Summary of FY 2020 Expenditures (p. 29)  
Federal Funds for Lab Testing and Epidemiologic Support (p. 30)  
CARES Funding for Elections (p. 31)  
CARES Funding for Department of Aging (p. 31)  
Coronavirus Emergency Supplemental Funding Program (p. 32)  
CARES Funding for County and Independent Fairs (p. 33)  
Rural Industrial Park Loan Program (p. 34)  
Increases in Federal Appropriations for K-12 Education (p. 34)  
Attorney General GRF Budget Reductions (p. 36)  
State Unemployment Compensation Fund (p. 36)  
Next Issue: September 2020  
Have a great summer!  
Budget Footnotes  
P a g e | 2  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of June 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on July 1, 2020)  
State Sources  
Actual  
Estimate*  
Variance Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$175,741  
$810,721  
$986,461  
$141,600  
$846,300  
$987,900  
$34,141  
-$35,579  
-$1,439  
24.1%  
-4.2%  
-0.1%  
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  
$738,463  
$18,535  
$146,662  
$19,395  
-$8,021  
$282,401  
$27,407  
$2,858  
$0  
$6,455  
$4,996  
$2,124  
$14  
$816,500  
$5,600  
$143,100  
$21,300  
-$14,300  
$280,000  
$24,600  
$2,400  
$0  
$5,300  
$3,900  
$2,300  
$0  
-$78,037  
$12,935 231.0%  
-9.6%  
$3,562  
-$1,905  
$6,279  
$2,401  
$2,807  
$458  
2.5%  
-8.9%  
43.9%  
0.9%  
11.4%  
19.1%  
---  
21.8%  
28.1%  
-7.7%  
---  
$0  
$1,155  
$1,096  
-$176  
$14  
$389  
$2  
$389  
$2  
$0  
$0  
---  
---  
Total Tax Revenue  
$2,228,141 $2,278,600  
-$50,459  
-2.2%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$20,203  
$556  
$17,471  
$38,230  
$27,500  
$702  
$3,478  
$31,680  
-$7,297 -26.5%  
-$146 -20.8%  
$13,993 402.3%  
Total Nontax Revenue  
$6,550  
20.7%  
Transfers In  
Total State Sources  
Federal Grants  
$3,975  
$146,475 -$142,500 -97.3%  
$2,270,346 $2,456,755 -$186,409  
$1,242,500 $929,190 $313,310  
-7.6%  
33.7%  
3.7%  
Total GRF Sources  
$3,512,846 $3,385,946 $126,900  
*Estimates of the Office of Budget and Management as of August 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 3  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2020 as of June 30, 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on July 1, 2020)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance  
Percent FY 2019**  
Percent  
$1,502,737  
$9,183,047  
$10,685,784 $11,013,800  
$1,548,000  
$9,465,800  
-$45,263  
-$282,753  
-$328,016  
-2.9%  
-3.0%  
$1,501,684  
$9,071,740  
0.1%  
1.2%  
1.1%  
-3.0% $10,573,424  
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  
$7,881,337  
$1,671,680  
$913,017  
$331,795  
$305,073  
$303,038  
$214,903  
$141,034  
$59,735  
$53,642  
$53,386  
$8,737  
$8,726,400  
$1,638,500  
$891,700  
$334,700  
$292,000  
$301,200  
$189,700  
$140,000  
$77,900  
$56,000  
$50,000  
$10,000  
$0  
-$845,063  
$33,180  
$21,317  
-$2,905  
$13,073  
$1,838  
$25,203  
$1,034  
-$18,165 -23.3%  
-$2,358  
$3,386  
-$1,263 -12.6%  
-$435  
$399  
$71  
-9.7%  
2.0%  
2.4%  
-0.9%  
4.5%  
0.6%  
13.3%  
0.7%  
$8,910,214  
$1,629,544  
$918,179  
$343,635  
$296,342  
$276,048  
$202,443  
$143,161  
$75,902  
$56,250  
$50,342  
$11,608  
$2,074 -121.0%  
-11.5%  
2.6%  
-0.6%  
-3.4%  
2.9%  
9.8%  
6.2%  
-1.5%  
-21.3%  
-4.6%  
6.0%  
-4.2%  
6.8%  
-24.7%  
-$435  
$399  
$71  
$22,623,196 $23,721,900 -$1,098,704  
---  
---  
---  
$0  
$0  
$309  
$154  
28.9%  
-54.2%  
-3.7%  
Total Tax Revenue  
-4.6% $23,489,630  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$131,649  
$66,655  
$121,117  
$319,420  
$110,000  
$58,326  
$90,876  
$259,202  
$21,649  
$8,329  
$30,241  
$60,218  
19.7%  
14.3%  
33.3%  
23.2%  
$114,807  
$64,414  
$87,156  
$266,378  
14.7%  
3.5%  
39.0%  
19.9%  
Total Nontax Revenue  
Transfers In  
$81,020  
$215,044  
-$134,024 -62.3%  
$247,888  
-67.3%  
-4.1%  
7.4%  
Total State Sources  
Federal Grants  
$23,023,636 $24,196,146 -$1,172,511  
-4.8% $24,003,895  
6.2% $9,763,899  
-1.6% $33,767,794  
$10,482,045  
$9,868,943  
$613,102  
-$559,409  
Total GRF SOURCES  
$33,505,681 $34,065,090  
-0.8%  
*
*
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  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean J. Botomogno, Principal Economist  
Overview  
On June 30, 2020, Ohio closed the books of a difficult fiscal quarter and year as the impact  
of the COVID-19 pandemic brought down GRF tax revenue. For FY 2020 as a whole, GRF sources  
of $33.51 billion were $559.4 million (1.6%) below OBM estimates of August 2019. GRF sources  
consist of state-source receipts, which include tax revenue, nontax revenue, and transfers in, and  
federal grants.  
For the fiscal year through June, GRF tax sources totaled $22.62 billion. This amount was  
1.10 billion (4.6%) below projections, due to negative variances of $845.1 million (9.7%) for the  
$
PIT and $328.0 million (3.0%) for the sales and use tax. In addition, transfers in were  
$
134.0 million (62.3%) short of estimates. On the other hand, an outsized positive variance of  
2
$613.1 million (6.2%) for federal grants and a surplus of $60.2 million (23.2%) for nontax  
revenue partially offset the negative variances of the other GRF source categories. Tables 1 and  
2
show GRF sources for the month of June and for FY 2020 through June, respectively.  
As noted in previous issues of Budget Footnotes, to slow the pandemic outbreak, 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. Among measures  
designed to help consumers and businesses weather the impact of the COVID-19 pandemic,  
rd  
H.B. 197 of the 133 General Assembly authorized the Tax Commissioner to delay various state  
tax payments during the period of the Governors emergency declaration. In response to  
enactment of the bill, the Tax Commissioner authorized an extension of the deadline to file state  
income taxes until July 15, matching the extended deadline for federal income tax returns. Both  
reduced economic activity and the tax payment delay curtailed GRF revenue from the PIT in the  
final months of FY 2020; reduced economic activity also reduced sales and use tax receipts and  
revenue from the commercial activity tax (CAT) during those months. As a whole, in the April to  
June period, GRF tax revenues fell $1.19 billion (17.4%) below the estimates, though through the  
first nine months of FY 2020, they were $89.5 million (0.5%) above estimates.  
The PIT and the sales and use tax were responsible for the YTD shortfall for tax sources,  
as the remaining tax sources posted a combined positive variance of $74.4 million for the year.  
In addition to the PIT and the sales tax, the natural gas consumption tax, the kilowatt-hour tax,  
the alcoholic beverage tax, and the petroleum activity tax, were short of their respective revenue  
targets by $18.2 million, $2.9 million, $2.4 million, and $1.3 million. The negative variances were  
1 This report compares actual monthly and year-to-date (YTD) GRF revenue sources to OBMs  
estimates. If actual receipts were higher than estimate, that GRF source is deemed to have a positive  
variance. Alternatively, a GRF source is deemed to have a negative variance if actual receipts were lower  
than estimate.  
2 Federal grants are typically federal reimbursements for Medicaid and other human services  
programs. This overage is primarily due to a COVID-19-related temporary increase in the share of federal  
reimbursements for Medicaid. The increase was authorized by the federal Coronavirus Aid, Relief, and  
Economic Security (CARES) Act.  
Budget Footnotes  
P a g e | 5  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
partially offset by positive variances of $33.2 million for the CAT, $21.3 million for the cigarette  
tax, $25.2 million for the financial institutions tax (FIT), $14.9 million for the insurance taxes, and  
$3.4 million for the liquor gallonage tax.  
The performance of GRF tax revenue in June 2020, $50.5 million (2.2%) below anticipated  
revenues, was a substantial improvement compared to results in April and May when this GRF  
category experienced shortfalls of 35.3% and 13.0%, respectively. Transfers in was the other  
category with a negative variance in June, and this revenue stream was $142.5 million (97.3%)  
3
short of projections because an expected transfer of excess CAT revenue was not made.  
However, these negative variances were offset by a positive variance of $313.3 million (33.7%)  
for federal grants (thus contributing more than half of the full-year surplus for this GRF category)  
and an overage of $6.6 million (20.7%) for nontax revenue. Overall, the monthly positive variance  
for GRF sources totaled $126.9 million (3.7%).  
In June 2020, revenue from the two largest tax sources, the PIT and the sales and use tax,  
were $78.0 million and $1.4 million below their respective estimates. On the other hand, the next  
two largest tax sources, the CAT and the cigarette and other tobacco products tax, posted  
positive variances of $12.9 million and $3.6 million, respectively. The kilowatt-hour tax recorded  
a shortfall of $1.9 million in June, but most of the remaining tax sources in June came in ahead  
of their estimates, including positive variances of $6.3 million for the foreign insurance tax,  
$
alcoholic beverage tax and the liquor gallonage tax. Chart 1, below, shows cumulative YTD  
variances of GRF sources each month through June 2020.  
2.8 million for the FIT, $2.4 million for the domestic insurance tax, and $1.1 million each for the  
Chart 1: Cumulative Variances of GRF Sources in FY 2020  
(
Variances from Estimates, $ in millions)  
$800  
$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 Jun-20  
Federal Grants Tax Revenue Total GRF Sources  
3 Excess CAT receipts to be transferred to the GRF in June was estimated at $141.5 million. The  
section below analyzing the CAT provides additional details on distributions and transfers from this tax.  
Budget Footnotes  
P a g e | 6  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Compared to GRF sources in FY 2019 through June, GRF sources decreased $262.1 million  
(0.8%), due to declines of $866.4 million (3.7%) for tax sources and $166.9 million (67.3%) for  
transfers in. Those decreases were partially offset by increases of $718.1 million (7.4%) and  
53.0 million (19.9%), respectively, for federal grants and nontax revenue. Revenue from the PIT  
$
dropped $1.03 billion due to a tax payment delay and to two reductions made to withholding tax  
rates, one in 2019 and another in 2020, but also layoffs and employee furloughs more recently.  
(
the cigarette and other tobacco products tax decreased $5.2 million, which is a normal long  
trend; revenue from the natural gas consumption tax, the kilowatt-hour tax, the petroleum  
The section below analyzing the PIT provides additional details on the rate cuts.) Revenue from  
4
activity tax, the alcoholic beverage tax, the corporate franchise tax, and the public utility tax  
declined $16.2 million, $11.8 million, $2.9 million, $2.6 million, $2.5 million, and $2.1 million,  
respectively. On the other hand, revenue from the sales and use tax and the CAT were above  
their levels of FY 2019 by $112.4 million and $42.1 million, respectively. Other taxes with  
significant increases included the domestic insurance tax ($27.0 million), the FIT ($12.5 million),  
the foreign insurance tax ($8.7 million), and the liquor gallonage tax ($3.0 million).  
The COVID-19 pandemic will have carryover effects on revenues at the beginning of  
FY 2021. Though the income tax filing delay reduced FY 2020 PIT revenue by hundreds of millions  
of dollars, those amounts are likely to be recovered in the early months of FY 2021. On the other  
hand, the first full negative impact of the COVID-19 pandemic on CAT revenue will be felt with  
the next payment by quarterly taxpayers due in August 2020. That payment will be based on  
taxable gross receipts from April to June 2020, and is likely to be substantially below the last  
quarterly payment of $332.4 million received in May 2020 (for taxable gross receipts during the  
January to March quarter, which were generally affected by the pandemic in the last two weeks  
of the period).  
Sales and Use Tax  
Over the first three quarters of FY 2020, the sales and use tax was $77.4 million above  
projections. Then, home confinement and closures of nonessential businesses significantly  
constrained taxable spending in April and May, and sales and use tax receipts fell $405.4 million  
(
totaling $10.69 billion was $328.0 million (3.0%) below estimate, but those receipts were above  
FY 2019 receipts by $112.4 million (1.1%). For the month of June, GRF sales tax revenue of  
13.9%) below estimate in the last quarter of FY 2020. For the fiscal year as a whole, GRF revenue  
$986.5 million was just $1.4 million (0.1%) below estimate, due to a strong positive variance from  
the auto sales tax portion of the tax. June 2020 sales tax revenue was also $74.7 million (8.2%)  
above June 2019 receipts. Thus, it appears the recovery in sales tax receipts has begun.  
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.  
4 H.B. 510 of the 129th General Assembly eliminated this tax at the end of 2013 and replaced it  
with the FIT. Adjustments to tax filings in previous years continue to affect this tax source.  
Budget Footnotes  
P a g e | 7  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Nonauto Sales and Use Tax  
FY 2020 GRF nonauto sales and use tax receipts totaled $9.18 billion, an amount  
$282.8 million (3.0%) below estimate but $111.3 million (1.2%) above revenue in FY 2019.  
Nonauto sales and use tax revenue of $810.7 million in June was below estimate by  
5
$
$
35.6 million (4.2%). In April and May, this tax source fell $146.2 million (17.7%) and  
133.4 million (16.4%), respectively, relative to the corresponding estimates. Thus, for the fourth  
fiscal quarter, the negative variance for nonauto tax totaled $315.2 million (12.7%).  
In recent months, consumers have received income support from federal stimulus checks,  
additional unemployment compensation from the federal CARES Act, and a number of businesses  
have kept some employees on payroll after receiving loans from the federal payroll protection  
6
program. That income support from the federal fiscal response to the pandemic has helped  
mitigate the economic downdraft of the COVID-19 pandemic on the sales tax. 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.  
Chart 2: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-monthMoving Average)  
8.0%  
6.0%  
4.0%  
2.0%  
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 Jun-20  
5 Though most businesses are now reopened, a big part of June sales tax revenue is from collection  
or remittance from taxable sales in May.  
6 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.  
Budget Footnotes  
P a g e | 8  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
A recent change to state sales tax law also helped nonauto sales tax revenue in FY 2020.  
7
H.B. 166 (the main operating budget act for the biennium) substantially modified Ohios nexus  
assumptions, and this change was expected to increase nonauto sales tax revenue by $121 million  
(
actual receipts from marketplace facilitators are not yet available). As a consequence of the  
pandemic, consumption patterns were significantly altered due to store closures and online  
purchases sharply rose. Thus,the nexus changes in the budget act probably helped reduce the yearly  
revenue shortfall by increasing collections on sales that may previously have escaped the sales tax.  
Auto Sales and Use Tax  
The auto sales and use tax strongly rebounded in June 2020 from bad performances in  
the prior two months. June auto sales and use tax receipts of $175.7 million were $34.1 million  
(
24.1%) above estimate and $58.0 million (49.2%) above revenue in June 2019. This most recent  
monthly performance, which likely results from delayed purchases that could not be made in the  
previous two months, offsets the underage of $33.8 million realized in May; with June receipts,  
the combined negative variance for the April to June quarter totaled $90.2 million, almost  
equaling the shortfall of $90.5 million recorded in April.  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-monthMoving Average)  
1
5.0%  
0.0%  
1
5
.0%  
.0%  
0
-
5.0%  
-
-
-
-
-
-
10.0%  
15.0%  
20.0%  
25.0%  
30.0%  
35.0%  
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20  
For the fiscal year through June, GRF revenue from this source totaling $1.50 billion came  
in $45.3 million (2.9%) below estimate but $1.1 million (0.1%) above receipts through June in  
FY 2019. Chart 3 shows year-over-year growth in auto sales and use tax collections, the  
pandemic-related revenue declines in the later part of the fiscal year from both low demand and  
low supply of vehicles and the apparent rebound in June.  
7 Effective August 1, 2019, Ohio enacted substantial nexus statutes when a seller has at least  
200 transactions or $100,000 or more in gross sales into Ohio. With this change, a seller making sales into  
Ohio may have a requirement to collect Ohio (sellers) use tax without a physical presence in this state.  
Also, companies that own, operate, or control electronic market places (marketplace facilitators) were  
required to register and collect sales and use taxes for sales made by anyone on their platform.  
Budget Footnotes  
P a g e | 9  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
The small increase in the Ohio auto tax base relative to FY 2019 was due to higher vehicle  
prices paid by consumers (as consumer tastes and preferences have shifted away from cars toward  
trucks, sport utility vehicles, and crossovers), according to data provided by the Ohio Bureau of  
Motor Vehicles, shown below. Through June 2020, the number of motor vehicles titled fell 4.5%  
from the corresponding period in FY 2019; unit purchases of both new and used vehicles fell. The  
taxable base for new vehicles decreased, but spending on used vehicles increased, despite the drop  
in unit sales, due to the rise of the average price of used vehicles.  
Spending  
$ in millions)  
FY 2020  
Titles  
370,290  
Average Price  
$36,137  
(
New vehicles  
Used vehicles  
$13,381  
1,667,654  
$16,267  
$9,755  
Total  
2,037,944  
$29,648  
$14,548  
Growth from FY 2019  
New vehicles  
Used vehicles  
-2.8%  
-4.8%  
-4.5%  
-0.1%  
0.9%  
0.5%  
2.8%  
6.0%  
5.2%  
Total  
Personal Income Tax  
FY 2020 GRF receipts from the PIT of $7.88 billion were $845.1 million (9.7%) below  
estimate. The large majority of the negative variance, $805.1 million, occurred in the last three  
months of the fiscal year as the economy was reeling from the economic downdraft from  
COVID-19. More importantly, the delay of income tax filings authorized by H.B. 197 likely reduced  
FY 2020 PIT revenue by over half a billion dollars, which will be recovered in FY 2021. Through  
June 30, 2020, approximately 582,000 (10.5%) fewer tax returns were filed for tax year (TY) 2019,  
relative to the number of tax returns filed in the corresponding period for TY 2018. June PIT  
revenue to the GRF of $738.5 million was $78.0 million (9.6%) below projections. In April and  
May, GRF receipts from the PIT were short of OBMs August estimates by $635.7 million and  
$91.4 million, respectively.  
PIT revenue to the GRF is comprised of gross collections, minus refunds and distributions  
to the Local Government Fund (LGF). Gross collections consist of employer withholdings,  
8
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 87% of gross collections  
in FY 2020). Larger or smaller than expected refunds (which decrease gross collections) could also  
greatly affect the monthly performance of the tax.  
8 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 | 10  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Gross collections for June were $50.6 million (5.6%) below target, with most components  
below their respective estimates. The tax filing delay substantially reduced receipts from the  
second quarterly PIT estimated payment, and this component was $106.9 million (55.5%) below  
anticipated revenue. Trust payments, employer withholding, and miscellaneous payments also  
had negative variances of $5.2 million, $2.3 million, and $1.6 million, respectively. The negative  
variances were partially offset by a positive variance of $65.5 million (655.1%) from payments  
due with annual returns. This component was also strongly affected by the filing delay as fewer  
tax returns are normally filed in the month of June. Adding to the negative variance of gross  
collections, refunds were higher than estimated by $33.2 million (67.6%), but LGF distributions  
were $5.8 million (15.1%) below their anticipated level. Thus, PIT revenue to the GRF for the  
month totaled $78.0 million less than estimate.  
For FY 2020, revenues from each component of the PIT relative to estimates and revenue  
received in FY 2019 are detailed in the table below. FY 2020 gross collections were $994.0 million  
below projections, largely due to a negative variance of $652.1 million for payments due with  
annual returns. Employer withholding, quarterly estimated payments, and trust payments also  
amounted to $133.3 million, $173.8 million, and $29.6 million less than their respective  
estimates. Reducing the negative variance of gross collections, refunds were $127.5 million  
below estimate and LGF distributions were below expectation by $21.5 million, thus resulting in  
a lower YTD PIT shortfall in GRF revenue of $845.1 million.  
Through June, YTD GRF receipts from the PIT were $1.03 billion below revenue through  
June 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 2019.  
Year-over-year growth in withholding receipts in calendar year (CY) 2020 was limited due to a  
4
.0% reduction in withholding rates effective January 2020 and through June. The more recent  
reduction was due to a 4.0% reduction in income tax rates for nonbusiness income enacted by  
H.B. 166. OBM revenue estimates for FY 2020 incorporated the fiscal impact of this rate reduction  
for the January to June period.  
Compared to gross collections in FY 2019, payments due with annual returns and  
employer withholding were reduced by $696.0 million and $103.3 million, respectively. In  
addition, quarterly estimated payments and payments with trust returns were below last years  
payments by $151.3 million and $43.7 million, respectively. Overall, FY 2020 gross collections  
were $997.4 million below such collections in FY 2019. FY 2020 refunds were $31.0 million higher  
than those in FY 2019, while LGF distributions were $0.5 million above those in the previous year.  
Budget Footnotes  
P a g e | 11  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
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  
-$133.3  
-$173.8  
-$29.6  
-1.5%  
-$103.3  
-$151.3  
-$43.7  
-1.1%  
Quarterly Estimated Payments  
Trust Payments  
-19.2%  
-36.7%  
-60.1%  
-5.6%  
-8.8%  
-5.8%  
-5.0%  
-9.7%  
-17.1%  
-46.1%  
-61.6%  
-3.4%  
-8.8%  
1.5%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
-$652.1  
-$5.2  
-$696.0  
-$3.1  
-$994.0  
-$127.5  
-$21.5  
-$997.4  
$31.0  
Less Refunds  
Less LGF Distribution  
GRF PIT Revenue  
$0.5  
0.1%  
-$845.1  
-$1,028.9  
-11.5%  
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 6.9%, on average, in the last three months.  
Chart 4: Monthly Witholding Receipts Trend  
Actual vs. Prior Year  
(Three-monthMoving Average)  
10.0%  
5
.0%  
.0%  
0
-
5.0%  
-
-
10.0%  
15.0%  
Actual  
Adjusted  
Budget Footnotes  
P a g e | 12  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Commercial Activity Tax and Petroleum Activity Tax  
June receipts to the GRF from the CAT were $18.5 million, an amount $12.9 million  
(231.0%) above estimate, but $0.1 million (0.4%) below June 2019 revenue. For the fiscal quarter,  
however, GRF revenue from this source was $5.9 million (1.4%) below estimate due to negative  
variances in April and May. Though the CAT experienced a shortfall in the April to June quarter,  
FY 2020 GRF CAT revenue of $1.67 billion was above projections by $33.2 million (2.0%) and  
$
42.1 million (2.6%) above such receipts in FY 2019. 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 and is likely to be substantially below the last quarterly payment of $332.4 million  
received in May 2020 (for taxable gross receipts during the January to March quarter, which were  
generally affected by the pandemic in the last two weeks of the period). The August payment will  
be based on taxable gross receipts from April to June 2020.  
As shown in the chart below, the increase in GRF revenue in FY 2020 has been driven, in  
9
part, by a decline in tax credits and refunds claimed against the CAT. Compared to FY 2019,  
FY 2020 gross collections were higher by about 1.6%, but FY 2020 refunds and credits were 10.6%  
below those items in FY 2019, resulting in a higher growth rate for the GRF.  
Under continuing law, CAT receipts are deposited into the GRF (85.0%), the School District  
Tangible Property Tax Replacement Fund (Fund 7047, 13.0%), and the Local Government  
Tangible Property Tax Replacement Fund (Fund 7081, 2.0%). Through June, Fund 7047 and  
Fund 7081 received $255.7 million and $39.3 million, respectively.10 Disbursements from the  
funds to school districts and other local governments were $132.3 million and $12.0 million,  
respectively. 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 generally transferred back to the GRF. Distributions of CAT  
revenue to the two local funds largely exceeded the payment requirements in FY 2020. However,  
balances in Fund 7047 and Fund 7081 were not used to make the estimated transfer of  
$
budget situation next year because CAT revenue is expected to decline in FY 2021.  
141.5 million to the GRF in June. Those balances are likely to be needed for shoring up the  
9 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.  
10 In FY 2019, Fund 7047 and Fund 7081 received $249.2 million and $38.3 million, respectively.  
Budget Footnotes  
P a g e | 13  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 5: Cumulative Growth in Collections and Refunds in FY 2020  
(
Relative to FY 2019, $ in millions)  
$70.0  
$60.0  
$50.0  
$40.0  
$30.0  
$20.0  
$10.0  
$0.0  
-
-
-
$10.0  
$20.0  
$30.0  
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20  
Gross Collections Refunds  
The petroleum activity tax (PAT) is applied to receipts from the sale or exchange of motor  
fuel at a rate of 0.65% on a motor fuel suppliers adjusted gross receipts, with revenue from the  
tax shared between the GRF and the Petroleum Activity Tax Public Highway Fund (Fund 5NZ0).  
PAT GRF revenue was $8.7 million in FY 2020, an amount $1.3 million (12.6%) below estimate  
and $2.9 million (24.7%) below FY 2019 GRF receipts. All funds revenue (net of refunds) from the  
PAT was $82.5 million in FY 2020, with $73.8 million of that total deposited in the highway fund.  
FY 2020 PAT receipts were affected by the decline in motor fuel sales related to COVID-19 home  
confinement. In FY 2019, all funds PAT receipts were $95.5 million, and $83.9 million was  
deposited in Fund 5NZ0.  
Cigarette and Other Tobacco Products Tax  
FY 2020 revenue from the cigarette and other tobacco products (OTP) tax totaling  
$913.0 million was above estimate by $21.3 million (2.4%). This total included $830.6 million  
from the sale of cigarettes and $82.4 million from the sale of OTP. For the month of June, receipts  
from this source of $146.7 million were $3.6 million (2.5%) above estimate and $9.5 million  
(6.9%) above revenue in June 2019 (in part due to added revenue from the new tax on vapor  
products).  
FY 2020 receipts from this tax source fell $5.2 million (0.6%) relative to revenues in  
FY 2019. Receipts from cigarette sales fell $11.4 million (1.4%) while those from the sale of OTP  
increased $6.3 million (8.2%). On a yearly basis, revenue from the cigarette and OTP tax usually  
trends downward, generally at a slow pace; this is due to a decline of cigarette revenue, while  
receipts from the tax on OTP generally increase. The OTP tax is an ad valorem tax, generally 17%  
of the wholesale price paid by wholesalers for the product; thus, revenue from that portion of  
the tax base (about 9% of the total tax base) grows with OTP price increases, and in FY 2020,  
added receipts from the tax on vapor products.  
Budget Footnotes  
P a g e | 14  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
H.B. 166 levied a tax of 10¢ per milliliter (or gram) of vapor product (depending on the form  
of the product). A vapor product is defined as any liquid solution or other substance that contains  
nicotine and is depleted as it is used in an electronic smoking product. The taxation of vapor  
products was expected to boost OTP and GRF revenue by $3.2 million in FY 2020. However, at the  
time of publication, actual revenue from this source is not yet available from the Tax Department.  
Utility-Related Taxes  
Utility-related taxes include the public utility tax, the natural gas distribution or MCF tax,  
and the kilowatt-hour tax. Receipts from these taxes are credited to the GRF. However, half the  
share of GRF total tax revenue transferred to the Public Library Fund (PLF) is debited against the  
kilowatt-hour tax for accounting purposes (the other half is debited against the nonauto sales  
and use tax). Changes in consumption and prices are generally the main determinants of revenue  
from utility-related taxes.  
The public utility excise tax is imposed on the gross intrastate receipts of some utilities.11  
Companies subject to the tax pay 4.75% of gross receipts, except for pipeline companies which  
pay 6.75%. Revenues from this tax totaled $141.0 million in FY 2020, $1.0 million (0.7%) more  
than estimated but $2.1 million (1.5%) below FY 2019 revenue. Taxes paid by natural gas  
companies account for most tax receipts from the public utility tax. Other classes of utilities that  
pay this tax include pipelines, waterworks, water transportation, and heating. Taxes due from  
pipeline companies in recent years are well above amounts owed prior to the surge in oil and gas  
exploration in eastern Ohio.  
The MCF tax is levied based on the quantity of natural gas distributed to end users in  
Ohio.12 The tax is charged at rates ranging from 2¢ to 15.93¢ per Mcf (thousand cubic feet),  
depending on the amount distributed to each end user. Receipts from this tax were $59.7 million  
in FY 2020, $18.2 million (23.3%) below anticipated revenue and $16.2 million (21.3%) below  
receipts the previous year. Lower tax receipts reflect relatively mild winter temperatures in  
January and March that reduced heating demand for natural gas and also refunds during the year  
that were expected by the Department of Taxation to be nonrecurring in nature.  
The kilowatt-hour tax is levied on electric distribution companies with end users in Ohio.  
The tax rate depends on the volume of electricity used by the customer. In FY 2020, GRF receipts  
from the kilowatt-hour tax were $331.8 million, $2.9 million (0.9%) below estimate and  
$11.8 million (3.4%) lower than FY 2019 GRF receipts. Net revenue in FY 2020 reflects higher tax  
refunds this year and decreased electricity consumption due to thestay-at-home order and  
business closures related to the COVID-19 pandemic. As noted earlier, half the share of GRF total  
tax revenue transferred to the PLF is debited against the kilowatt-hour tax. FY 2020 total  
kilowatt-hour tax receipts (all funds receipts) were $531.4 million, which was $16.4 million (3.0%)  
lower than FY 2019 total receipts.  
11 Exemptions include receipts from sales to the federal government or to other public utilities for  
resale and receipts billed on behalf of other entities by natural gas companies. Companies that pay the  
public utility tax do not pay the CAT.  
12 Exemptions include natural gas distributed to the federal government and natural gas both  
produced and consumed by an end user that does not flow through a natural gas companys pipelines.  
Budget Footnotes  
P a g e | 15  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Foreign and Domestic Insurance Taxes  
Insurance taxes are levied on premiums collected by insurance companies and are  
deposited in the GRF. The domestic insurance tax is paid by insurance companies whose  
headquarters are in Ohio while the foreign insurance tax is paid by insurance companies whose  
headquarters are located outside of the state. The large majority of the revenue is deposited in  
the GRF, while a small portion is dedicated to the state Fire Marshal Fund (Fund 5460). Combined  
revenue from the insurance taxes was $640.9 million in FY 2020, of which $608.1 million was  
deposited in the GRF.  
The GRF received $303.0 million from the domestic insurance tax in FY 2020, an amount  
$
1.8 million (0.6%) above estimate and $27.0 million (9.8%) more than receipts in FY 2019. The  
increase in receipts from the domestic tax was largely due to an increase in taxes paid by  
Medicaid managed care organizations and property and casualty insurers. Net revenue from this  
tax was also heavily influenced by reduced tax credits this fiscal year.  
Foreign insurance tax receipts totaled $305.1 million. That amount was $13.1 million  
(4.5%) above estimate and $8.7 million (2.9%) more than FY 2019 revenue. Unlike Medicaid  
managed care organizations that are all domestic insurers, the performance of the foreign  
insurance tax is directly related to increased premiums received by property and casualty, life  
and health, and other insurers.  
Financial Institutions Tax  
The FIT is levied on the total Ohio equity capitalof financial institutions, which includes  
a firms common stock, perpetual preferred stock, surplus, retained earnings, treasury stock, and  
unearned employee stock ownership plan shares. Annual FIT tax returns are due in October, but  
estimated payments are made in January, March, and May. The reconciliation between  
estimated payments and final tax liability generally results in net refunds between July and  
December.  
In FY 2020, GRF receipts from the FIT of $214.9 million were $25.2 million (13.3%) above  
estimate and $12.5 million (6.2%) above receipts in FY 2019. Both gross collections and refunds  
and credits increased compared to FY 2019, by $15.0 million and $3.5 million, respectively.  
Alcoholic Beverage and Liquor Gallonage Taxes  
The alcoholic beverage tax applies to sales of beer, malt beverages, wine, and mixed  
alcoholic beverages. All beverages brewed or fermented from malt products and containing at  
least 0.5% alcohol by volume are included in the tax base. The tax is levied on a per-container  
rate depending on the type of beverage sold and tax rates vary greatly. Revenue is deposited in  
the GRF.  
FY 2020 GRF revenue from the alcoholic beverage tax was $53.6 million, an amount  
$
below that of the prior year. The bases for the alcoholic beverage tax are split into beer/malt  
beverages and wine/mixed beverages. In FY 2020, revenue from the malt beverages category was  
2.4 million (4.2%) below OBMs August 2019 estimate. FY 2020 revenue was $2.6 million (4.6%)  
$
and mixed beverages category was $13.6 million, a decrease of $0.8 million (5.6%) from FY 2019.  
40.0 million, a decrease of $1.8 million (4.5%) from FY 2019 collections; revenue from the wine  
Budget Footnotes  
P a g e | 16  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
The liquor gallonage tax is levied at the rate of $3.38 per gallon of spirituous liquor. This  
is the equivalent of $0.67 per standard 750 milliliter bottle. Revenue is deposited in the GRF.  
Revenue from the liquor gallonage tax was $53.4 million during FY 2020, $3.4 million (6.8%)  
above estimated revenue for this tax. FY 2020 revenue was $3.0 million (6.0%) above receipts in  
FY 2019, continuing the upsurge in consumption of liquor yet again this year.  
Despite the temporary closure of restaurants and bars, combined revenue for the two  
taxes came in above estimate for the fiscal year and above FY 2019 combined revenue. Alcoholic  
beverage sales continue to shift from beer, wine, and mixed beverages and towards spirituous  
liquor, largely a result of changes in consumer preferences. Over the last ten years, the share of  
combined revenue for all alcoholic beverages coming from the liquor tax rose from roughly 40%  
to 50% in FY 2020. That increase has come primarily at the expense of tax revenue from the sales  
of beer and malt beverages.  
Earnings on Investments  
GRF revenue from investment earnings was $131.6 million during FY 2020, an amount  
$21.6 million (19.7%) above estimated revenue from this source. GRF investment revenue during  
FY 2020 was $16.8 million greater than in FY 2019, representing a 14.7% increase over the  
previous year. Revenue increased mainly because a larger pool of funds to invest was available,  
though yields in most months in FY 2020 were slightly lower than in FY 2019.  
Budget Footnotes  
P a g e | 17  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of June 2020  
($ in thousands)  
(Actual based on OAKS reports run July 1, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent  
Primary and Secondary Education  
Higher Education  
$391,678  
$143,760  
$2,153  
$536,114 -$144,436 -26.9%  
$187,057  
$3,709  
-$43,297 -23.1%  
-$1,556 -42.0%  
Other Education  
Total Education  
$537,591  
$726,880 -$189,289 -26.0%  
Medicaid  
$1,043,185 $1,474,642 -$431,457 -29.3%  
$42,143 $79,717 -$37,574 -47.1%  
$1,085,328 $1,554,359 -$469,031 -30.2%  
Health and Human Services  
Total Health and Human Services  
Justice and Public Protection  
General Government  
$112,742  
$15,655  
$175,595  
$40,502  
-$62,852 -35.8%  
-$24,846 -61.3%  
-$87,698 -40.6%  
Total Government Operations  
$128,398  
$216,096  
Property Tax Reimbursements  
Debt Service  
$26,254  
$73,955  
$35,868  
$74,012  
-$9,614 -26.8%  
-$57  
-0.1%  
Total Other Expenditures  
$100,209  
$109,880  
-$9,671  
-8.8%  
Total Program Expenditures  
Transfers Out  
$1,851,525 $2,607,214 -$755,690 -29.0%  
$1,337 $13,700 -$12,363 -90.2%  
$1,852,862 $2,620,914 -$768,053 -29.3%  
Total GRF Uses  
*September 2019 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 18  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2020 as of June 30, 2020  
($ in thousands)  
(Actual based on OAKS reports run July 1, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2019** Percent  
Primary and Secondary Education  
Higher Education  
$7,846,873 $8,187,474 -$340,601  
$2,282,270 $2,400,971 -$118,701  
-4.2%  
-4.9%  
1.3%  
$8,143,715  
$2,292,590  
$70,726  
-3.6%  
-0.5%  
16.1%  
-2.8%  
Other Education  
$82,091  
$81,061  
$1,029  
Total Education  
$10,211,233 $10,669,506 -$458,273  
-4.3% $10,507,031  
Medicaid  
$15,471,844 $15,520,897  
-$49,053  
-0.3% $15,052,848  
2.8%  
5.7%  
3.0%  
Health and Human Services  
$1,343,999 $1,453,397 -$109,399  
-7.5%  
$1,272,017  
Total Health and Human Services  
$16,815,843 $16,974,294 -$158,452  
-0.9% $16,324,866  
Justice and Public Protection  
General Government  
$2,385,951 $2,493,163 -$107,212  
-4.3%  
$2,222,454  
$391,270  
7.4%  
12.6%  
8.1%  
$440,437 $529,349 -$88,912 -16.8%  
Total Government Operations  
$2,826,388 $3,022,512 -$196,124  
-6.5%  
$2,613,724  
Property Tax Reimbursements  
Debt Service  
$1,800,605 $1,842,600  
$1,449,932 $1,460,175  
$3,250,537 $3,302,775  
-$41,995  
-$10,243  
-$52,238  
-2.3%  
-0.7%  
-1.6%  
$1,801,184  
$1,430,790  
$3,231,974  
0.0%  
1.3%  
0.6%  
Total Other Expenditures  
Total Program Expenditures  
Transfers Out  
$33,104,001 $33,969,088 -$865,086  
$669,498 $683,675 -$14,178  
$33,773,499 $34,652,763 -$879,264  
-2.5% $32,677,595  
-2.1%  
-2.5% $33,450,601  
1.3%  
$773,006 -13.4%  
Total GRF Uses  
1.0%  
*
*
September 2019 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 19  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on July 7, 2020)  
Month of June 2020  
Estimate* Variance  
Fiscal Year 2020  
Estimate* Variance Percent  
Department  
Medicaid  
GRF  
Actual  
Percent  
Actual  
$1,049,139 $1,417,775 -$368,636  
-26.0% $14,741,416 $14,732,022  
60.5% $10,094,704 $10,190,838  
2.6% $24,836,120 $24,922,859  
$9,395  
-$96,134  
-$86,739  
0.1%  
-0.9%  
-0.3%  
Non-GRF  
$1,122,612  
$699,284  
$423,328  
$54,692  
All Funds  
$2,171,750 $2,117,058  
Developmental Disabilities  
GRF  
-$11,952  
$49,953  
$228,072  
$278,024  
-$61,904 -123.9%  
$624,632  
$2,437,330  
$3,061,961  
$682,964  
-$58,332  
-$83,773  
-8.5%  
-3.3%  
-4.4%  
$212,709  
-$15,363  
-$77,267  
-6.7%  
$2,521,102  
Non-GRF  
All Funds  
$200,758  
-27.8%  
$3,204,066 -$142,105  
Job and Family Services  
GRF  
$5,527  
$5,928  
$15,921  
$21,849  
-$401  
-$2,332  
-$2,733  
-6.8%  
-14.6%  
-12.5%  
$95,693  
$188,554  
$284,247  
$94,918  
$194,201  
$289,120  
$774  
-$5,647  
-$4,873  
0.8%  
-2.9%  
-1.7%  
Non-GRF  
$13,589  
$19,116  
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$471  
$1,462  
$1,932  
$987  
$4,724  
$5,711  
-$517  
-$3,262  
-$3,779  
-52.3%  
-69.1%  
-66.2%  
$10,103  
$39,938  
$50,041  
$10,993  
$45,820  
$56,813  
-$890  
-8.1%  
Non-GRF  
-$5,881 -12.8%  
-$6,772 -11.9%  
All Funds  
All Departments:  
GRF  
$1,043,185 $1,474,642 -$431,457  
-29.3% $15,471,844 $15,520,897  
-$49,053  
-0.3%  
-1.5%  
-0.8%  
Non-GRF  
$1,350,372  
$948,001  
$402,371  
-$29,086  
42.4% $12,760,526 $12,951,961 -$191,435  
-1.2% $28,232,369 $28,472,857 -$240,488  
$2,393,557 $2,422,643  
All Funds  
*September 2019 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 20  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on July 7, 2020)  
Month of June 2020  
Fiscal Year 2020  
Estimate* Variance Percent  
Payment Category  
Actual  
Estimate* Variance Percent  
Actual  
Managed Care  
CFC†  
$1,694,689 $1,553,958 $140,731  
9.1% $18,144,485 $17,910,201  
$234,284  
$212,067  
$393,383  
1.3%  
3.4%  
$606,525  
$515,399  
$256,878  
$81,296  
$234,592  
$0  
$546,707  
$417,316  
$270,623  
$85,324  
$233,989  
$0  
$59,819  
$98,082  
-$13,745  
-$4,028  
$603  
10.9%  
23.5%  
-5.1%  
-4.7%  
0.3%  
---  
$6,453,187 $6,241,120  
$5,059,821 $4,666,438  
Group VIII  
ABD†  
8.4%  
$2,812,151 $3,033,996 -$221,844  
-7.3%  
-1.0%  
-2.4%  
ABD Kids  
My Care  
P4P†  
$960,990  
$2,652,214 $2,717,174  
$206,121 $280,448  
$971,026  
-$10,036  
-$64,960  
$0  
-$74,327 -26.5%  
Fee-For-Service  
ODM Services  
DDD Services  
$529,055  
$288,730  
$198,432  
$0  
$675,471 -$146,415 -21.7%  
$402,759 -$114,030 -28.3%  
$8,006,621 $8,308,222 -$301,601  
$4,189,183 $4,392,241 -$203,058  
$2,972,059 $3,101,882 -$129,823  
-3.6%  
-4.6%  
-4.2%  
-1.5%  
28.4%  
$272,712  
-$74,280 -27.2%  
Hospital - HCAP†  
Hospital - Other  
$0  
$0  
$0  
---  
---  
$659,697  
$185,682  
$669,444  
$144,655  
-$9,747  
$41,027  
$41,894  
$41,894  
Premium Assistance  
$105,929  
$101,012  
$4,917  
4.9%  
$1,142,569 $1,161,007  
-$18,438  
-1.6%  
Medicare Buy-In  
$64,390  
$58,334  
$6,055  
10.4%  
$665,892  
$670,605  
-$4,713  
-0.7%  
Medicare Part D  
$41,539  
$42,677  
-$1,139  
-2.7%  
$476,677  
$490,402  
-$13,725  
-2.8%  
Administration  
Total  
$63,884  
$92,203  
-$28,318 -30.7%  
$938,694 $1,093,428 -$154,734 -14.2%  
-0.8%  
$2,393,557 $2,422,643  
-$29,086 -1.2% $28,232,369 $28,472,857 -$240,488  
*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 | 21  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
EMexlanpey Cearnter,dDiriecttorures13  
Ivy Chen, Principal Economist  
Overview  
GRF program expenditures totaled $33.10 billion in FY 2020, $865.1 million (2.5%) under  
the estimate released by OBM at the beginning of the fiscal year. This negative variance was  
primarily due to the Governors executive order, signed on May 7, 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. Most of the negative variance was  
from June, the last month of the fiscal year. GRF program expenditures totaled $1.85 billion for  
the month of June and were $755.7 million (29.0%) under estimate. The Governors ordered  
budget reductions were discussed in Mays Budget Footnotes.  
Program expenditures constitute the majority of GRF uses, but GRF uses also include  
transfers out. FY 2020 transfers out were $669.5 million, including $312.4 million in transfers  
from the FY 2019 GRF ending balance that were required by H.B. 166. Transfers out were  
$
$
14.2 million (2.1%) under estimate for the fiscal year mainly due to a negative variance of  
12.4 million for the month of June.  
Medicaids GRF expenditures were below estimate by $431.5 million for the month of  
June, changing Medicaids yearly variance from a positive $382.4 million (2.7%) at the end of  
May, to a negative $49.1 million (0.3%) for the complete fiscal year. The section below gives more  
details about Medicaid GRF and non-GRF variances.  
All other categories also had negative variances in June and all but Other Education ended  
the year below estimate. Primary and Secondary Education had the largest negative FY 2020  
variance at $340.6 million (4.2%). Three other program categories had negative variances for the  
year that were greater than $100 million: Higher Education with a negative variance of  
$
118.7 million (4.9%), Health and Human Services with a negative variance of $109.4 million  
(7.5%), and Justice and Public Protection with a negative variance of $107.2 million (4.3%). These  
variances are discussed below.  
State agencies encumbered $412.2 million in GRF appropriations for expenditure in  
FY 2021, $55.1 million higher than the estimated year-end encumbrances of $357.1 million made  
by OBM at the beginning of the fiscal year. The Encumbrancessection of this report  
provides additional information on FY 2020 actual year-end encumbrances. In addition to these  
encumbrances, $73.1 million for the last payroll of FY 2020 was disbursed in FY 2021.  
Medicaid  
GRF Medicaid expenditures were below their monthly estimate in June by $431.5 million  
29.3%), which balanced out Mays YTD positive variance in GRF expenditures and brought the  
(
13 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 | 22  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
yearly variance to $49.1 million (0.3%) below estimate at the end of the fiscal year. Non-GRF  
Medicaid expenditures were above their monthly estimate, by $402.4 million (42.4%). This  
positive variance was offset by Mays $412.9 million (32.9%) negative variance, and yearly  
non-GRF Medicaid expenditures remained below estimate, by $191.4 million (1.5%). Including  
both the GRF and non-GRF, all funds Medicaid expenditures were $29.1 million (1.2%) below  
estimate in June and $240.5 million (0.8%) below their yearly estimate at the end of the fiscal  
year.  
The impact of the COVID-19 pandemic began to show in Marchs Medicaid caseloads, and  
the impacts have continued to show through Junes report. Medicaid experienced a total  
enrollment increase of nearly 20,000 in March. In April and May, this trend continued, with  
caseload increases of more than 70,000 and 45,000 cases, respectively. June saw a caseload  
increase of more than 60,000, and Junes figure was above the budget estimate by almost  
1
65,000 cases (5.8%). Caseload increases have reversed the trend of the initial nine months of  
the fiscal year, which had all seen caseloads below the budget estimate. For FY 2020, average  
caseloads are now above estimate, by 0.6% (15,440 cases). According to the Ohio Department of  
Medicaid (ODM), nearly all of the caseload variance over the previous three months has been  
due to the suspension of routine redeterminations of eligibility and an increase in the number of  
new applications and approvals, due to the economic impacts of the COVID-19 pandemic.  
Table 5 shows GRF and non-GRF Medicaid expenditures for ODM, the Ohio Department  
of Developmental Disabilities (ODODD), and six othersister agencies 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 positive variance in June of $54.7 million (2.6%), but yearly  
expenditures remained below estimate, with an $86.7 million (0.3%) negative variance. Junes  
above estimate monthly expenditures decreased the magnitude of the yearly negative variance,  
which was $141.4 million (0.6%) below estimate at the end of May.  
ODODD had an all funds negative variance of $77.3 million (27.8%) in June which increased  
the magnitude of ODODDs negative yearly variance from $64.8 million (2.2%) at the end of May  
to $142.1 million (4.4%) at the end of the fiscal year. The other sixsisteragencies Job and  
Family Services (ODJFS), Health, Aging, Mental Health and Addiction Services, State Board of  
Pharmacy, and Educationaccount for the remaining 1.0% of the total Medicaid budget. Unlike  
ODM and ODODD, the six sisteragencies incur only administrative spending. ODJFS had a  
$
variance, which was $4.9 million (1.7%) below estimate at the end of the fiscal year.  
2.7 million negative variance in June, which increased the magnitude of ODJFSs yearly negative  
Table 6 shows all funds Medicaid expenditures by payment category. Expenditures were  
below their yearly estimates for three of the four payment categories. Managed Care  
expenditures were above their yearly estimate by $234.3 million (1.3%). Fee-For-Service (FFS,  
$
301.6 million, 3.6%) had the largest overall negative variance, followed by Administration  
($154.7 million, 14.2%), and Premium Assistance ($18.4 million, 1.6%).  
The yearly negative variance in Premium Assistance is driven partly by lower than  
expected retroactive enrollment in Medicare Part D, a trend which has persisted for most of  
FY 2020. Part D expenditures have included lower than projected premiums as well, throughout  
Budget Footnotes  
P a g e | 23  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
most of FY 2020. Junes expenditures for Medicare Buy-In were 10.4% ($6.1 million) above  
estimate, which brought the yearly variance to 0.7% ($4.7 million) below estimate.  
Total FFS expenditures were $146.4 million (21.7%) below estimate for the month of June.  
The negative variance in FFS for the past four months, including June, is partially driven by  
decreased expenditures in the Ohio Medicaid Schools Program (MSP). Due to the closure of  
schools throughout the state on March 16, 2020, expenditures for MSP have been reduced, as  
many programs have not been operating without students in attendance at schools. The negative  
variance in FFS may further be influenced by delays in nonessential care, which was postponed  
or canceled due to the ongoing effects of the COVID-19 pandemic.  
Managed Care expenditures for June were above estimate by $140.7 million (9.1%).  
Managed Care expenditures for the Covered Families and Children (CFC) and Group VIII  
populations were the drivers of these above estimate expenditures, with June expenditures  
above monthly estimates, by $59.8 million (10.9%) and $98.1 million (23.5%), respectively. These  
variances brought these categoriespositive yearly variances to $212.1 million (3.4%) for CFC and  
$393.4 million (8.4%) for Group VIII. These two figures are partially offset by negative yearly  
variances in the other four Managed Care Categories, leading to a yearly positive variance in  
Managed Care expenditures of $234.3 million (1.3%).  
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 10.1% (55,954 cases) above estimate; in May, caseloads were 13.2% (73,321 cases)  
above estimate; and in June, caseloads were 15.6% (86,683 cases) above estimate, which brought  
the average monthly caseloads for FY 2020 to 4.5% (24,978 cases) above estimate.  
According to May 11, 2020, information from OBM, ODM was 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 also confirmed in a May 6, 2020, press release that ODM would  
make a cut of $9.1 million to their FY 2020 non-GRF budget.  
Primary and Secondary Education  
The Primary and Secondary Education category had a negative variance for the month of  
June of $144.4 million, which increased this categorys negative yearly variance to $340.6 million  
(
4.2%). This category only includes the Ohio Department of Education (ODE). The negative  
variance in June was mainly due to a negative variance in item 200550, Foundation Funding, of  
125.0 million, which brought this items yearly negative variance to $269.5 million. Item 200550  
$
provides the main funding for the states foundation aid to public schools. As reported in the May  
issue of Budget Footnotes, the executive reduced FY 2020 expenditures for this item by  
14  
$300.5 million. Item 200502, Pupil Transportation, is used to fund the transportation portion of  
foundation aid as well as other transportation services funded outside of the main formula. This  
14 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.  
Budget Footnotes  
P a g e | 24  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
item had a negative variance of $23.0 million in June, which resulted in it ending the year with a  
negative variance of $22.9 million.  
Higher Education  
The Higher Education category ended the fiscal year with a negative yearly variance of  
$
118.7 million (4.9%). The largest variance was in item 235501, State Share of Instruction, with a  
negative variance of $76.7 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  
reductions for FY 2020 included a reduction of $76.7 million for this item.15  
Most other line items in this category were also under estimate for the fiscal year. The  
largest of these variances were for items 235438, Choose Ohio First Scholarship, ($16.6 million)  
and 235563, Ohio College Opportunity Grant, ($13.6 million).  
Health and Human Services  
The Health and Human Services category had negative variances of $37.6 million for the  
month of June and $109.4 million (7.5%) for the complete fiscal year. These variances were  
mainly due to negative variances for ODJFS and the Ohio Department of Mental Health and  
Addiction Services (ODMHAS).  
ODJFS had a negative variance of $23.2 million in June and ended the fiscal year with a  
negative yearly variance for FY 2020 of $63.7 million. Item 600450, Program Operations, had the  
largest negative yearly variance of $22.6 million. Some of this variance may be a timing issue as  
this item also had encumbrances totaling $25.2 million at the end of the fiscal year. This item is  
used for the administrative and operating expenses of various departments within the agency.  
The next most significant FY 2020 variances were in items 600523, Family and Children Services,  
with a negative yearly variance of $12.9 million and 600410, TANF State Maintenance of Effort,  
with a negative yearly variance of $10.0 million. All other items in the ODJFS budget also had  
negative yearly variances for FY 2020.  
ODMHAS had a negative variance of $11.1 million for the month of June, increasing its  
negative yearly variance to $21.5 million. The largest negative yearly variance was $7.2 million in  
item 336421, Continuum of Care Services. 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 had negative yearly variances in all other items except for 336412, Hospital  
Services, which had a positive yearly variance of $2.3 million in spite of a negative variance for  
the month of June of $12.1 million. This item is used to fund the operations of ODMHASs six  
state hospitals.  
Justice and Public Protection  
The Justice and Public Protection category had a negative variance for the month of June  
of $62.9 million, which increased this categorys negative yearly variance to $107.2 million  
(4.3%). The negative variance in June was largely due to a negative variance of $56.8 million in  
15 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 | 25  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
the Department of Rehabilitation and Correction (DRC), which caused DRC to end the fiscal year  
with a negative yearly variance of $49.5 million. The second largest negative yearly variance in  
this category was $23.4 million for the Department of Public Safety (DPS).  
All of the items in DRCs budget had negative variances for both the month of June and  
the fiscal year. The variances were dominated by DRCs main operating item, 501321,  
Institutional Operations, with variances of $42.0 million for June and $36.4 million for the fiscal  
year. All the items in DPS’s budget also had negative yearly variances, including $9.7 million for  
item 763511, Local Disaster Assistance, and $5.7 million for item 761403, Recovery Ohio Law  
Enforcement.  
Encumbrances  
As of June 30, 2020, state agencies encumbered a total of $412.2 million in GRF  
appropriations for expenditure in FY 2021. An agency generally has five months to spend  
prior-year encumbrances for operating expenses, after which time they lapse. An agency may  
encumber appropriations for purposes other than operating expenses beyond the five-month  
period if approval is obtained from the Director of Budget and Management. Encumbrances for  
some grant and aid payments are encumbered for several months or sometimes years.  
The table below summarizes the encumbrances by the fiscal year of the original  
appropriation. As seen from the table, the majority of the encumbrances were originally  
appropriated in FY 2020. However, small encumbrances remain from as early as FY 2011.  
FY 2020 Year-End Encumbrances by Fiscal Year for Which Appropriations Were Originally Made  
Fiscal Year  
Amount ($ in thousands)  
$748  
Percentage of Total  
0.2%  
2
2
2
2
2
011-2016  
017  
$1,813  
$13,429  
$38,982  
$357,266  
$412,238  
0.4%  
3.3%  
018  
019  
9.5%  
020  
86.7%  
100.0%  
Total  
The encumbrance amounts vary greatly from agency to agency. As shown in the following  
table, ODJFS has by far the largest encumbrance amount at $100.8 million, 24.5% of the total.  
ODE is second with an encumbrance of $68.3 million (16.6%). The next five agencies with the  
largest encumbrances are the Department of Higher Education (DHE) at $39.2 million (9.5%), the  
Ohio Department of Transportation (ODOT) at $33.6 million (8.2%), ODM at $32.6 million (7.9%),  
the Development Services Agency (DSA) at $26.5 million (6.4%), and DRC at $23.8 million (5.8%).  
Thirty-nine other agencies encumbered the remaining $87.2 million (21.2%).  
Budget Footnotes  
P a g e | 26  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
FY 2020 Year-End Encumbrances by Agency  
Agency  
Job and Family Services  
Education  
Amount ($ in thousands)  
$100,825  
Percentage of Total  
24.5%  
16.6%  
9.5%  
$68,323  
$39,185  
$33,635  
$32,637  
$26,549  
$23,837  
$87,247  
$412,238  
Higher Education  
Transportation  
Medicaid  
8.2%  
7.9%  
Development  
6.4%  
Rehabilitation and Correction  
Other  
5.8%  
21.2%  
100.0%  
Total  
Ohio Department of Job and Family Services  
ODJFS encumbered $100.8 million for expenditure in FY 2021. Encumbrances in six  
appropriation items account for $96.8 million (96.0%) of the total. These six items are: (1) item  
600523, Children and Families Subsidy, at $36.5 million, (2) item 600450, Program Operations, at  
$25.2 million, (3) item 655523, Medicaid Program Support Local Transportation, at  
$15.2 million, (4) item 655522, Medicaid Program Support Local, at $7.1 million, (5) item  
600533, Child, Family, and Community Protective Services, at $6.8 million, and (6) item 600521,  
Family Assistance Local, at $6.0 million.  
Funds encumbered in item 600523 will be used mainly for assistance to county public  
children services agencies, including assistance with children who require services from multiple  
systems. Funds encumbered in item 600450 will be used mainly for administration of the federal  
SNAP program in Ohio. Funds encumbered in items 655523 and 655522 will mainly be used for  
the remaining state share of Medicaid subsidies to county departments of job and family services.  
Item 655523 pays the states share of Medicaid costs for local transportation services, and item  
6
55522 pays the states share of Medicaid costs for local administrative services. Funds  
encumbered in item 600533 will be used primarily to provide funding to county agencies for  
community protective services. Finally, encumbrances in item 600521 will be used to provide the  
states share of county administration costs for public assistance programs.  
Ohio Department of Education  
ODE encumbered $68.3 million for expenditure in FY 2021. Three appropriation items  
with significant encumbrances are: (1) item 200550, Foundation Funding, at $29.6 million,  
(
Assessment, at $9.4 million. These three items account for $49.6 million (72.5%) of ODEs total  
2) item 200408, Early Childhood Education, at $10.5 million, and (3) item 200437, Student  
encumbrances. The remaining $18.8 million was encumbered in various other items.  
Budget Footnotes  
P a g e | 27  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Funds encumbered in item 200550 will be used mainly to meet year-end school  
foundation payment adjustments. Foundation payments are allocated to districts based on a  
variety of data. Some of these data are not finalized until the following fiscal year. Funds are  
generally encumbered each year in order to make adjusted payments based on these updated  
data. Funds encumbered in item 200408 will be used to pay providers for early childhood  
education services to children from lower income families. Funds encumbered in item 200437  
will be used to pay contractors for costs related to the states standardized tests.  
Department of Higher Education  
DHE encumbered $39.2 million for expenditure in FY 2021. The majority of the total  
(
obligations to scholarship recipients. Another $3.5 million was encumbered in item 235563, Ohio  
$31.3 million) was encumbered in item 235438, Choose Ohio First Scholarship, to pay the states  
College Opportunity Grant; these funds will be used for needbased financial aid.  
Ohio Department of Transportation  
ODOT encumbered $33.6 million for expenditure in FY 2021. Most of this encumbrance  
(
$26.4 million) was in item 775470, Public Transportation State, which is used primarily for  
competitive grants for public transit systems across the state. An additional $5.1 million was  
encumbered in item 777471, Airport Improvements State, to provide grants to public airports  
in Ohio for pavement maintenance and obstruction removal.  
Ohio Department of Medicaid  
ODM encumbered a total of $32.6 million for expenditure in FY 2021, including  
16.3 million in item 651425, Medicaid Program SupportState, and $16.3 million in item  
$
6
51525, Medicaid/Health Care Services. Funds encumbered in item 651425 will be used to pay  
ODMs outstanding personal services and contract expenses for administering the Medicaid  
program in Ohio. Item 651525 is the primary funding source for Ohio Medicaid. Funds  
encumbered in this item will be used for subsidy payments to Medicaid providers.  
Development Services Agency  
DSA encumbered $26.5 million for expenditure in FY 2021. The two items with the largest  
encumbrances were items 195455, Appalachia Assistance, with an encumbrance of $8.7 million,  
and 195556, TechCred Program, with an encumbrance of $7.2 million. Item 195455 is used to  
provide economic and community development assistance to the 32 counties in Ohios  
Appalachian region. Item 195556 provides the GRF funding for the TechCred Program, a new  
workforce development program that also receives funding from the Ohio Incumbent Workforce  
Training Fund (Fund 5HR0).  
Department of Rehabilitation and Correction  
DRC encumbered $23.8 million for expenditure in FY 2021, of which $16.8 million  
occurred in item 501321, Institutional Operations, and another $5.6 million in item 505321,  
Institution Medical Services. Funds were encumbered in item 501321 for a mix of purchased  
personal services, supplies, maintenance, repairs, equipment, materials, and other expenditures  
at DRC and institutions. Funds encumbered in item 505321 will be used to pay various  
outstanding bills for providing medical services to inmates.  
Budget Footnotes  
P a g e | 28  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
FY 2020 Operating and Capital Expenditures Total $75 billion  
Melaney Carter, Director  
In FY 2020, the state of Ohio incurred a total of $74.56 billion in operating and capital  
expenditures. As seen from Table A, $68.77 billion (92.2%) of the total expenditures were  
authorized in the main operating budget. The transportation and capital budgets accounted for  
$4.12 billion (5.5%) and $1.32 billion (1.8%), respectively. The remaining $344.3 million (0.5%)  
was authorized in the Bureau of WorkersCompensation and Industrial Commission budgets.  
Table A. FY 2020 Operating and Capital Expenditures by Budget  
Budget  
Main Operating  
Amount  
$68,767,890,171  
% of Total  
92.2%  
5.5%  
Transportation  
Capital  
$4,120,793,857  
$1,322,323,264  
$344,253,558  
1.8%  
WorkersCompensation  
0.5%  
Total  
$74,555,260,850  
100.0%  
Table B shows FY 2020 expenditures by the account category used in the states  
accounting system. As seen from Table B, Subsidies and Shared Revenue is the largest spending  
area. In FY 2020, 85.8% ($28.39 billion) of total GRF expenditures were distributed as subsidies  
to Medicaid service providers, schools, colleges and universities, local governments, and various  
other entities. Across all funds, this categorys expenditures totaled $50.03 billion (67.1%).  
The vast majority of the expenditures incurred under the Capital Item category –  
$3.80 billion (5.1%) across all funds supported the construction and maintenance of roads and  
bridges in the state as well as the construction and renovation of public K-12 schools and colleges  
and universities. Capital Item expenditures are mainly funded by bond proceeds. FY 2020 debt  
service payments totaled $314.3 million (0.9%) for the GRF and $1.80 billion (2.4%) across all funds.  
For FY 2020, state payroll costs (including both salaries and fringe benefits) amounted to  
$5.08 billion (6.8%) across all funds, of which $2.27 billion was supported by the GRF. In addition  
to Payroll, spending that is commonly referred to as the state governments operating expenses  
also include expenditures incurred under the Purchased Personal Services, Supplies and  
Maintenance, and Equipment categories. For FY 2020, the state governments operating  
expenses totaled $8.77 billion across all funds, of which $3.20 billion came from the GRF. In  
percentage terms, these amounts represent 11.8% and 9.7% of the respective totals.  
Budget Footnotes  
P a g e | 29  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Table B. FY 2020 Operating and Capital Expenditures by Account Category  
%
Total  
of  
% of  
Total  
Account Category  
00 - Payroll  
GRF Only  
All Funds  
5
5
5
5
5
5
5
5
5
5
$2,268,019,036  
$397,360,561  
$514,996,995  
$19,876,908  
$28,392,448,840  
$0  
6.9%  
$5,084,173,330  
$1,655,084,753  
$1,855,222,340  
$177,696,912  
6.8%  
10 - Purchased Personal Services  
20 - Supplies and Maintenance  
30 - Equipment  
1.2%  
1.6%  
0.1%  
2.2%  
2.5%  
0.2%  
67.1%  
0.1%  
5.1%  
0.0%  
2.4%  
13.4%  
50 - Subsidies Shared Revenue  
60 - Goods and Services for Resale  
70 - Capital Items  
85.8% $50,032,914,379  
0.0%  
0.1%  
0.0%  
0.9%  
$105,184,151  
$3,797,351,987  
$20,014,788  
$34,528,961  
$3,462,527  
90 - Judgments, Settlements and Bonds  
91 - Debt Service  
$314,302,671  
$1,159,004,883  
$1,801,640,160  
95 - Transfers and Non-Expense  
3.5% $10,025,978,049  
Total $33,104,001,382 100.0% $74,555,260,850 100.0%  
Ohio Department of Health Receives $238.4 million for COVID-19  
Lab Testing  
Jacquelyn Schroeder, Senior Budget Analyst  
On June 1, 2020, the Controlling Board approved a request from the Ohio Department of  
1
6
Health (ODH) to create a new fund and establish appropriations in the amount of $60.0 million  
in FY 2020 and $178.4 million in FY 2021 to be used to combat COVID-19. Funds are provided  
through the existing Epidemiology and Laboratory Capacity (ELC) Enhancing Detection Grant and  
will be used to expand COVID-19 lab testing and to provide epidemiologic support for local health  
departments. This includes increasing the volume of diagnostic testing as well as antibody testing  
to determine community spread. The ELC Grant is intended to ensure sufficient testing capacity  
in the event of future case surges. Funds are also required to be used to modernize public health  
surveillance in order to accelerate efforts in identifying new cases of COVID-19, connecting  
individuals who may have been exposed to testing, and limiting the spread of the disease.  
These funds were authorized under the Paycheck Protection Program and Health Care  
Enhancement Act, which was signed into law on April 24, 2020. In total, the U.S. Centers for  
Disease Control and Prevention (CDC) provided $10.25 billion to states, territories, and local  
16 New Federal Fund 3HP0 line item 440673, COVID-19 Lab Testing and Epidemiology Support.  
Budget Footnotes  
P a g e | 30  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
jurisdictions in additional ELC Grant funds. The CDC requires the funds to supplement, rather  
than duplicate or supplant, existing funding. In addition, each state, territory, or tribal  
organization receiving funds must submit its plan for COVID-19 testing, including goals for the  
remainder of CY 2020, to include: the number of tests needed month by month, to include  
diagnostic, serological, and other tests, as appropriate; month-by-month estimates of laboratory  
and testing capacity, including those related to workforce, equipment and supplies, and available  
tests; and a description of how the resources will be used for testing, including easing any COVID-  
1
determine progress made toward completion of grant activities.  
9 community mitigation policies. Federal monitoring of performance measures will be used to  
Secretary of State Will Use $12.9 million in CARES Act Funding  
to Cover Costs of the 2020 Election Cycle  
Terry Steele, Senior Budget Analyst  
On June 15, 2020, the Controlling Board approved a request by the Secretary of State to  
use $12.9 million in federal CARES Act funding for eligible costs related to completing the 2020  
election cycle. The funding the state received came through Elections Assistance and was  
deposited into the Help America Vote Act (HAVA) Fund (Fund 3AS0). The money will be used to  
reimburse county boards of elections for equipment, personnel, or supplies the boards  
determine necessary to carry out the general election. This includes providing personal  
protective equipment (PPE), cleaning supplies, and sanitizing equipment at all polling locations.  
In addition to these expenses, the Secretary of State will use a portion of the CARES Act  
funding to pay for mailing of unsolicited absent voter ballot applications. In the past, these  
mailings were paid through a Controlling Board transfer of cash from the Emergency  
Purposes/Contingencies Fund (Fund 5KM0) to the Absent Voters Mailing Fund (Fund 5RG0). The  
cost of these mailings depends on the number of registered voters in Ohio. For the 2016 and  
2018 general elections, this cost ranged from nearly $1.3 million to almost $1.4 million,  
respectively.  
To use this federal grant funding, the Secretary of State is required to provide a 20% state  
match, or approximately $2.6 million. The Secretary of State has met this matching requirement  
rd  
through appropriations contained in H.B. 197 of the 133 General Assembly, which transferred  
$
7.0 million in cash from Fund 5KM0 to Fund 5RG0 to pay all the expenses associated with the  
completion of the March 17, 2020, primary election. As of this writing, slightly more than  
4.0 million has been spent for these purposes.  
$
Ohio Department of Aging Receives $31.0 million in Federal  
CARES Funds  
Ryan Sherrock, Economist  
On June 1, 2020, the Controlling Board approved a request from the Ohio Department of  
Aging to increase appropriations by approximately $4.9 million in FY 2020 and $26.1 million in  
FY 2021 to account for additional federal funds received under the CARES Act. This funding will be  
Budget Footnotes  
P a g e | 31  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
awarded to Ohios 12 regional area agencies on aging (AAA)17 who will in turn distribute funds to  
organizations within their local aging networks. Funds will be used to support an increase in  
demand for Older American Act (OAA) services resulting from the COVID-19 pandemic. Specifically,  
funds will be used to provide the following: nutrition services to reduce hunger and food insecurity  
among older individuals; supportive services, including transportation, information and assistance,  
outreach, case management, homemaker or chore services, and legal services; caregiver support;  
and ombudsman services to protect and advocate for Ohioans residing in long-term care settings.  
Funds may also be used to assist Ohioans in accessing services within the aging network.  
OAA services are available to individuals aged 60 and older, but are targeted for those  
with the greatest economic or social needs, particularly low-income and minority individuals, and  
those residing in rural areas. While means testing is prohibited, participants can make voluntary  
contributions for services received. In addition, states are allowed to implement cost-sharing in  
the form of a sliding-scale fee for certain services. However, individuals cannot be denied services  
due to failure to make cost-sharing payments. OAA services require a state match; thus, a state  
match amount of approximately $476,500 will be provided from existing GRF appropriations.  
Controlling Board Appropriates $16 million Federal Coronavirus  
Justice Assistance Grant  
Maggie West, Senior Budget Analyst  
On May 11, 2020, the Controlling Board approved a request by DPS to create the  
Coronavirus Emergency Supplemental Funding Fund with an appropriation of $16.0 million for  
FY 2020. This action will permit the Departments Office of Criminal Justice Services to administer  
a federal grant made available by the U.S. Department of Justice under the Coronavirus  
Emergency Supplemental Funding (CESF) Program, the purpose of which is to assist agencies in  
1
8
preventing, preparing for, and responding to COVID-19. There is no match requirement under  
the CESF Program.  
Eligible applicants for Ohios CESF Program include units of local government, state  
agencies, state-supported universities, statewide and local nonprofit or faith-based associations,  
1
9
and law enforcement agencies. Projects may apply for six or 12 months of funding, which may  
be backdated to March 1, 2020. The funding is in the form of a reimbursement grant that requires  
a recipient to submit quarterly reports through an online grants management system to request  
reimbursement for grant expenses. Allowable projects and purchases include overtime,  
17 Most aging programs in Ohio are administered at the local level by AAAs, which represent all  
88 counties. The AAAs distribute federal, state, and, in some cases, local funds and organize and  
coordinate community-based services for older adults.  
18 Under the CESF Program, the federal Bureau of Justice Assistance allocated nearly $850 million  
in federal fiscal year (FFY) 2020 to be awarded to eligible states, local units of government, and tribes. In  
general, CESF allocations to each state were calculated by proportionally increasing the allocations  
available under the FFY 2019 State and Local Edward Byrne Memorial Justice Assistance Grant (JAG)  
Program to align with the CESF appropriation amount.  
19 Law enforcement agencies are required to comply with crime statistics reporting, using either  
the Ohio Incident-Based Reporting System or the Uniform Crime Reporting Summary Reporting System.  
Budget Footnotes  
P a g e | 32  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
equipment (including law enforcement and medical PPE), hiring, supplies (such as gloves, masks,  
and sanitizer), training, travel expenses, and addressing the medical needs of inmates in prisons,  
jails, and detention centers.  
Since the Controlling Boards May approval, the states Office of Criminal Justice Services  
2
0
has awarded $2.1 million in CESF grants to 65 projects in 36 counties. The award amounts range  
from $849 (New Middletown Police Department) to $200,000 (Oriana House in Summit County).  
The Department of Public Safety plans to return to the Controlling Board for approval to  
reappropriate the unexpended, unencumbered portion of the federal award from FY 2020 for  
the same purpose in FY 2021.  
Controlling Board Approves $9.4 million for County and  
Independent Fairs  
Shannon Pleiman, Budget Analyst  
In June, the Controlling Board approved two Department of Agriculture requests to release  
9.4 million to support the 94 county and independent fairs in the state. Each approved request was  
$
for $4.7 million. The first request, approved on June 1, 2020, released capital funds for the  
Agricultural Society Facilities Grant Program in FY 2020. The second request, approved on  
June 15, 2020, established a new appropriation in FY 2021 for the Department to provide assistance  
to county and independent fairs for expenses that are necessary due to the COVID-19 public health  
emergency. This new appropriation is supported by federal funds under the CARES Act.  
The Agricultural Society Facilities Grant Program was established in H.B. 166, the main  
operating budget act for the FY 2020-FY 2021 biennium. The program offers grants of up to  
$
50,000 to county and independent agricultural societies to support capital projects that  
enhance the use and enjoyment of agricultural society facilities. The grants are funded by an  
additional $4.7 million in capital appropriations under Fund 7026 capital line item C70022,  
Agricultural Society Facilities. Grants can be used to acquire, construct, reconstruct, expand,  
improve, plan, and equip buildings on fairgrounds. Although H.B. 166 required agricultural  
societies to provide matching grants from local governments or businesses toward qualifying  
capital projects, the Department of Agriculture waived this requirement on April 21, 2020, due  
to the ongoing COVID-19 public health emergency. According to the Department, all  
94 agricultural societies applied for the grant and will receive the $50,000.  
The new funding supported by the CARES Act under Fund 5CV1 appropriation item  
00672, Coronavirus Relief Local Fairs, will support expenses incurred by county and  
7
independent fairs to comply with health guidance and measures necessitated by the COVID-19  
public health emergency. In July, the Department will distribute $50,000 to each fair that  
conducts a junior fair and $15,000 to each fair that does not. County and independent fairs can  
use this funding for items necessary for sanitation, social distancing, PPE, and signage. Examples  
of these items include masks, gloves, disinfectant sprays and wipes, health and security staffing,  
professional sanitation staffing, and directional signage throughout the fairgrounds.  
20 A complete list of projects and awarded funding can be found at: https://www.ocjs.ohio.gov/  
links/CESF_Recommended_for_Funding-Round_One.pdf.  
Budget Footnotes  
P a g e | 33  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Controlling Board Approves $8.2 million for Rural Industrial Park  
Loans in FY 2021  
Tom Middleton, Senior Budget Analyst  
On June 15, 2020, the Controlling Board approved a request by the Development Services  
Agency (DSA) to transfer $8.2 million in appropriations from FY 2020 to FY 2021 for the Rural  
Industrial Park Loan Program. The transfer will allow DSA to award more loans under the program  
in FY 2021. H.B. 166 included appropriations of $25 million for the program in FY 2020 but none  
in FY 2021.  
The program allows eligible applicants to apply for loans and loan guarantees for the  
development and improvement of industrial parks in rural areas of Ohio. Loans are available for  
projects in the 35 counties that both (1) contain less than 125,000 in population and (2) qualify  
as a distressed county or a labor surplus county as defined under R.C. 122.19. Most of the  
counties are in southeast Ohio. The loans issued under the program can range from $500,000 to  
$2.5 million and may be used to finance up to 75% of allowable project costs.  
H.B. 166 transferred $25 million from the Facilities Establishment Fund (Fund 7037) to the  
Rural Industrial Park Loan Fund (Fund 4Z60) in FY 2020 to capitalize the program, which had  
previously been phased out at the end of FY 2011. The table below summarizes the four loans  
approved in FY 2020, totaling $6.8 million in awards.  
Rural Industrial Park Loan Awards, FY 2020  
Loan Recipient  
JBS Development, LLC  
Project Location  
Loan Amount  
$2,500,000  
Galion  
Crawford County)  
(
Meigs County Community Improvement  
Corporation  
Tuppers Plains  
(Meigs County)  
$1,463,021  
$1,844,000  
$952,560  
Lawrence County Economic Development  
Corporation  
South Point  
(Lawrence County)  
Lawrence County Economic Development  
Corporation  
Ironton  
(Lawrence County)  
Total  
$6,759,581  
Controlling Board Increases Appropriations for Federal K-12  
Education Programs  
Nick Ciolli, Budget Analyst  
On June 15, 2020, the Controlling Board approved appropriation increases totaling  
$30.5 million in FY 2020 and $26.0 million in FY 2021 for four Ohio Department of Education  
(
The appropriation increases do not represent new federal grant funding. Rather, ODE requested  
ODE) line items that disburse federal education funds to school districts and other public schools.  
Budget Footnotes  
P a g e | 34  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
them due to districts drawing down federal funds at a rate faster than anticipated under H.B. 166.  
ODE provides federal funding on a reimbursement basis as districts and schools submit claims for  
expenses incurred. The appropriation increases for each line item are listed in the table below.  
As the table shows, the largest increases ($26.0 million for each fiscal year) were approved for  
item 200680, Individuals with Disabilities Education Act, which supports special education and  
related services for students with disabilities. Appropriations for items 200661, Early Childhood  
Education, and 200669, Striving Readers, were each increased by $2.0 million for FY 2020. These  
items provide federal funding for special education and related services for preschool children  
with disabilities and support competitive grants to local education providers to advance literacy  
skills for children, respectively. An additional $500,000 in FY 2020 was approved for item 200622,  
Homeless Children Education, which provides competitive grants to school districts to help  
ensure access to a free and appropriate education for homeless children and youth.  
ODE Federal Fund Group Line Item Appropriation Increases Approved by  
Controlling Board on June 15, 2020 ($ in millions)  
Approved  
Increase  
FY 2020  
Approved  
Increase  
FY 2021  
Adjusted  
Appropriation Appropriation  
FY 2020 FY 2021  
Adjusted  
Fund  
ALI  
ALI Name  
3M20 200680  
Individuals with  
Disabilities  
$26.0  
$26.0  
$480.8  
$481.0  
Education Act  
3C50  
200661  
Early Childhood  
Education  
$2.0  
$0  
$14.6  
$12.6  
3
FE0  
EJ0  
200669  
200622  
Striving Readers  
$2.0  
$0.5  
$0  
$0  
$14.5  
$3.8  
$12.5  
$3.3  
3
Homeless Children  
Education  
Total  
$30.5  
$26.0  
$513.6  
$509.4  
Separately, the Controlling Board approved a request to appropriate $14.6 million for  
FY 2021 in new Fund 3HL0 line item 200678, Literacy Development, which will be used to spend  
the proceeds of a five-year, $42 million federal literacy grant ODE was awarded in October 2019.  
Ohios Comprehensive Literacy State Development Grant will primarily support the  
establishment of up to 64 model literacy sites through subgrants to selectedhigh-need”  
school- or early childhood program-based locations throughout the state as well as professional  
learning and coaching. ODE expects to award the grants by August 2020. See page 19 of the  
November 2019 Budget Footnotes for more details.  
Budget Footnotes  
P a g e | 35  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Attorney General Plans Voluntary Return of $4.6 million in  
FY 2020 GRF Appropriations  
Jessica Murphy, Budget Analyst  
On May 7, 2020, the Attorney General announced a plan to voluntarily reduce the Offices  
FY 2020 GRF budget by $4.6 million to help offset the states GRF tax receipt shortfall caused by  
the COVID-19 pandemic. The plan is comprised of allowing the unexpended, unencumbered  
portion of five GRF line items to lapse back into the GRFs available cash balance. The GRF  
reduction represents approximately 5.3% of the Attorney Generals total GRF FY 2020 budget of  
21  
$
87.2 million. According to the Attorney Generals Office, the reduction plan will not negatively  
affect its programs, services, or activities.  
The largest appropriation reduction, $4.5 million, or 98% of the total, is tied to GRF line  
item 055502, School Safety Training Grants. The line item is used by the Attorney General, in  
consultation with the Superintendent of Public Instruction and the Director of Mental Health and  
Addiction Services, to make grants for school safety and school climate programs and training to  
public and chartered nonpublic schools, local law enforcement agencies, and schools operated  
by county boards of developmental disabilities. The FY 2020-FY 2021 biennium budget provides  
an appropriation of $12 million in both FY 2020 and FY 2021 for this grant program. The FY 2021  
appropriation remains unchanged.  
The remainder of the FY 2020 GRF appropriation reduction, $100,284, or 2% of the total,  
is comprised of funding for drug abuse response team grants ($81,000), county prosecutor pay  
supplements ($8,788), county sheriff pay supplements ($8,684), and BCIRS22 lease rental  
payments ($1,812).  
State Requests $3.1 billion in Advances for its Depleted  
Unemployment Compensation Fund  
Nicholas J. Blaine, Budget Analyst  
On June 16, 2020, Governor DeWine announced the states Unemployment  
Compensation (UC) Fund (the fund) was depleted due to over one million individuals seeking  
2
3
benefits in response to the COVID-19 pandemic. In order to continue paying benefits, the state  
requested $3.1 billion in advances from the U.S. Department of Labor (USDOL), the federal  
agency responsible for overseeing state unemployment programs. These loans will have no  
impact on those applying for or receiving benefits and will be repaid through state and federal  
UC taxes paid by employers. USDOL will waive interest on the advances for the duration of 2020,  
but the state will be responsible for paying interest on borrowed amounts beginning in 2021 (the  
interest rate for 2020 is 2.4%, but the rate in subsequent years may vary). Current law requires  
the Ohio Department of Job and Family Services to levy a surcharge on employers that pay  
21 The Attorney General’s overall FY 2020 budget total is $392.2 million, of which the GRF portion  
represents 22%.  
22 BCIRS is the Bureau of Criminal Investigation Records System.  
23 Between March 21, 2020, and June 20, 2020, about 1.4 million initial claims were filed for  
UC benefits.  
Budget Footnotes  
P a g e | 36  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
UC taxes in order to cover the cost of interest. In addition to state interest payments, USDOL can  
also reduce the Federal Unemployment Tax Act (FUTA) credit. Currently, FUTA levies a tax of 6.0%  
on the first $7,000 of each employees taxable wage ($420 per employee). However, states with  
an unemployment program approved by USDOL receive a credit of 5.4 percentage points  
resulting in an effective tax rate of 0.6% ($42 per employee). If the state has an outstanding loan  
balance on January 1 for two consecutive years and the balance is still outstanding on  
November 10 of the second year, USDOL will annually reduce the credit by 0.3% ($21 per  
2
4
employee) until the advance is repaid. Additional credit reductions may also be applied. USDOL  
provides updates on statesoutstanding balances on their website: oui.doleta.gov.  
Unemployment insurance is a federal and state partnership for income maintenance  
during periods of involuntary unemployment that provides partial compensation for lost wages  
to eligible individuals. Ohio previously sought advances from USDOL in order to pay for  
UC benefits during the Great Recession. Beginning in January 2009, Ohio borrowed $3.39 billion  
after depleting the fund and repaid the loan in August 2016 (see Budget Footnotes from  
October 2016 for more information.  
24 If Ohio maintains a loan balance through January 1, 2022, it will need to repay the advances  
by November 10, 2022, or an additional 0.3% FUTA rate will be charged to employers beginning  
January 1, 2023.  
Budget Footnotes  
P a g e | 37  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
TRurhaaizacRikdzwiann, SegniortEchonoemistEconomy  
Philip A. Cummins, Senior Economist  
Overview  
Economic activity began to recover in May and June, after plunging in late March and in  
April. The pace of activity remains far short of prepandemic levels and may now be threatened  
by a resurgence of COVID-19 infections and renewed shutdowns to limit its spread. Total  
employment rose in the latest two months, partly reversing the decline in the previous two  
months. Unemployment fell but remains high. Industrial production rose in May and probably  
also in June based on reports from purchasing managers. Consumer prices fell in the latest three  
months through May, reflecting sharply lower energy prices. Petroleum and gasoline prices have  
since risen as economies around the world start to recover, boosting demand for fuel.  
Inflation-adjusted gross domestic product (real GDP) fell at a 5% annual rate in the January to  
March quarter and is predicted to have fallen far more steeply in the second quarter. Updated  
information on the economic outlook is shown at the end of this report. The Federal Reserve, the  
nations central bank, kept its short-term interest rate target near zero and continued to hold  
vast amounts of securities purchased in recent months to support financial markets and credit  
flows to businesses and households.  
Ohios economy is following that of the nation, with employment starting to recover in  
May and unemployment falling but remaining high. Growth of the states personal income  
slowed in this years first quarter to 1.8% at an annual rate. The states real GDP contracted 5.5%  
at a seasonally adjusted annual rate in the first quarter of 2020. Home sales in the state remained  
very soft through May.  
The National Economy  
Total nonfarm payroll employment nationwide rose by 4.8 million last month, and  
3.2 million fewer people were reported unemployed in June, reducing the countrys  
unemployment rate from 13.3% in May to 11.1% in June. Trends in U.S. employment and the  
unemployment rate are shown in Chart 7 and Chart 8.  
Employment on nonfarm payrolls fell in March and April by a total of 22.2 million from an  
all-time peak in February of 152.5 million. In May and June, employment recovered by a total of  
7
February. The largest employment gains in May and June were in the leisure and hospitality sector,  
totaling 3.5 million, less than half the jobs lost in the previous two months. Retailers added  
.5 million. Nonfarm payroll employment in June remained 14.7 million lower than at the peak in  
1
.1 million workers in the latest two months, health care and social assistance added 0.8 million,  
construction added 0.6 million, and manufacturing also added 0.6 million mostly in durable goods.  
Employment in government fell 0.5 million, mainly with local governments, about equally divided  
between education and other units of local government. Federal government employment  
continues to include workers hired on a temporary basis to conduct the decennial census.  
These numbers represent net changes in employment, the difference between hires and  
total separations (departures from jobs due to dismissals, quits, and other reasons). Total  
monthly hiring and total separations are shown separately in Chart 6. These estimates are based  
on a sample of employers, lag the net figures reported in the previous paragraph by about a  
Budget Footnotes  
P a g e | 38  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
month, and are available through May. Separations in March and April totaled nearly 25 million,  
highest on records kept since 2000. In May, when states began easing restrictions on employers,  
separations fell to a low level, 4.1 million, while hires jumped to 6.5 million, highest on record.  
Chart 6: U.S. Employment: Hires and Separations  
16  
14  
12  
10  
8
6
4
2
0
2016  
2017  
2018  
Hires  
2019  
2020  
Total separations  
The number of people counted as unemployed in the U.S. rose from 5.8 million in  
2
5
February to 23.1 million in April, highest on records kept since 1948. Unemployment fell in May  
and June but, at 17.8 million, remained 12.0 million higher than in February. The nations  
unemployment rate soared to 14.7% in April from a 50-year low of 3.5% in February and in late  
2019. It declined in May and June but remains high.  
Real GDP fell in the January to March quarter at a 5.0% annual rate. The source agency  
for these estimates, the U.S. Bureau of Economic Analysis (BEA), attributes the decline to the  
response in March to the spreading COVID-19 pandemic. U.S. production fell as consumers in  
March, many beginning to shelter in place at home, some dealing with job and income losses, cut  
back sharply on their spending. In the first quarter, nonresidential fixed investments and exports  
also declined and inventories were reduced. Residential fixed investment rose in the first quarter,  
seasonally adjusted, as construction activity fell off less during the winter than anticipated in  
seasonal adjustment factors, likely because of a mild winter. Among industries, particularly large  
declines were reported for food services and drinking places, insurance carriers and related  
activities, and ambulatory health care services.  
In the second quarter, consumer spending fell precipitously in April before recovering  
partially in May as the economy began to reopen. In June, sales of cars and light trucks rose  
further. Both residential and nonresidential construction spending slid in April and May.  
2
5
Earlier annual data and estimates, though not fully comparable, indicate that  
U.S. unemployment in April was at an all-time high. The unemployment rate peaked in 1933 at an  
estimated 25% but the nation’s population and labor force were much smaller than currently.  
Budget Footnotes  
P a g e | 39  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Shipments of nondefense capital goods, an indicator of business spending on equipment,  
dropped sharply in April and remained lower in May. Purchasing managers surveyed by the  
Institute for Supply Management reported recovery in business activity and new orders in June,  
in manufacturing and in much of the rest of the economy. BEAs initial estimate of second quarter  
GDP is scheduled for release July 30.  
Industrial production rose 1.4% in May, after falling sharply in March and April, as factories  
began to reopen following shutdowns due to COVID-19. Total output remained well below earlier  
levels, 15.4% below the February level and 16.3% lower than the all-time peak in December 2018.  
Factory output rose 3.8% in May; gains were widespread among industries, with particularly large  
increases in motor vehicle and parts production, from extremely low levels in April. Production at  
both electric and natural gas utilities fell. Mining output declined for the fourth straight month, as  
oil and gas well drilling dropped to more than 63% lower than in May 2019.  
The consumer price index (CPI) fell 0.1% in May, after large declines in March (-0.4%) and  
April (-0.8%). The declines reflect sharply lower prices for fuel and smaller declines in prices for  
transportation services and apparel. Food prices rose, particularly food for at-home  
consumption. In May, the overall index was 0.1% higher than a year earlier. The index for all items  
except food and energy was 1.2% above its year-ago level, the smallest year-over-year rise since  
2011 when the economy was recovering from the 2007-2009 recession.  
Chart 7: U.S. and Ohio Nonfarm Payroll Employment  
(
in millions)  
153.9  
148.5  
143.1  
137.7  
132.3  
126.9  
5.7  
5.5  
5.3  
5.1  
4.9  
4.7  
2016  
2017  
2018  
2019  
2020  
U.S. Employment  
Ohio Employment (right scale)  
Budget Footnotes  
P a g e | 40  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 8: U.S. and Ohio Unemployment Rates  
%
of Labor Force  
18.0%  
15.0%  
12.0%  
9.0%  
6.0%  
3.0%  
2016  
2017  
2018  
2019  
Ohio  
2020  
United States  
The Ohio Economy  
Ohios unemployment rate declined to 13.7% in May 2020 from the revised rate of 17.6%  
in April, highest in records that start in 1976. Ohios unemployment rate was 4.1% in May 2019.  
Chart 8 shows Ohios unemployment rate. The states unemployment rate in May was higher  
than the U.S. unemployment rate, which was 13.3% in May, down from 14.7% in April. The  
number of persons classified as unemployed in the state was 788,000 in May, 211,000 fewer than  
in April, and 551,000 higher than in May of last year.  
In May, Ohios total nonfarm payroll employment increased by 127,100 or 2.7% from the  
revised number in April, following large decreases in April and March totaling nearly 900,000. The  
monthly job gain in May is the largest monthly increase in Ohios employment during the last three  
decades as published by the U.S. Bureau of Labor Statistics. In May, private service-providing  
sectors and goods-producing industries added 112,000 and 38,400 jobs, respectively. Job gains in  
private service-providing sectors were in leisure and hospitality (+36,600), trade, transportation,  
and utilities (+31,400), educational and health services (+17,000), other services (+13,900),  
professional and business services (+11,900), and financial activities (+2,000). Job gains in  
goods-producing industries were largely in construction and manufacturing. Government  
employment decreased by 23,300 jobs, mostly in local governments.  
Compared to May of last year, the states nonfarm payroll employment was 757,600, or  
1
leisure and hospitality. Chart 7 shows Ohio nonfarm payroll employment.  
3.6% lower. Job losses were essentially across the board with a remarkably large decline in  
During the week ended June 27, 35,206 initial unemployment claims were filed in Ohio, a  
0
.8% increase from the previous week, according to the Department of Labor. The highest  
number of initial claims filed in the state was 274,288 during the week ended March 28, 2020. A  
total of 426,542 people filed for unemployment insurance benefits in Ohio during the week  
ended June 20, 39,821 fewer than the previous week and 350,672 fewer than at the peak in April.  
Budget Footnotes  
P a g e | 41  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Ohios personal income grew 1.8% at an annual rate in the first quarter of 2020, a  
decrease from the 3.5% growth in the fourth quarter of 2019. Ohios growth in the first quarter  
was led by increases in transfer receipts26 and property income (dividends, interest, and rent).  
Nationwide, the average state personal income grew 2.3% in the first quarter of 2020, down from  
nd  
3
.6% in the fourth quarter of 2019. In the first quarter of 2020, Ohios growth ranked 42 in the  
nation (from highest growth to lowest).  
Ohios real GDP decreased 5.5% at a seasonally adjusted annual rate in the first quarter  
of 2020, a sharper decline than the 5.0% rate of contraction in real GDP for the 50 states. The  
decrease in Ohios GDP was led by the finance and insurance; accommodation and food services;  
healthcare and social assistance; durable goods manufacturing; arts, entertainment, and  
recreation; and retail trade sectors. GDP fell in all 50 states. In current dollars, without an  
adjustment for inflation, Ohios GDP dropped from $706.8 billion at an annual rate in the fourth  
quarter of 2019 to $699.1 billion at an annual rate in the first quarter of 2020. Ohios GDP in the  
latest quarter accounted for about 3.2% of U.S. GDP.  
Ohio housing sales continued to decline in May. The number of existing homes sold in Ohio  
decreased by 25.0% compared to May of last year, according to the Ohio Association of Realtors.  
From January through May of this year, existing home sales decreased by 7.2% compared to the  
corresponding months in 2019. The statewide sales price of homes sold in January through May  
of this year averaged $196,390, or 5.7% higher than in the same months of 2019.  
Economic Forecast Update  
The table below compares the current outlook for the economy with the outlook last year,  
as predicted in forecasts from IHS Markit released in June of this year and in May 2019. The May  
2
revenues, for use by the legislature in enacting H.B. 166.  
019 predictions as well as other variables were inputs to forecasts by LBO economists of GRF  
IHS Markits June baseline forecast shows nationwide real GDP falling in the quarter just  
ended at a 42% annual rate, after dropping in this years first quarter at a 5% rate, depressed by  
the COVID-19-related economic shutdown. The predicted second quarter plunge would be the  
sharpest drop on record. From the quarter just ended to the fourth quarter of FY 2021, real GDP  
rebounds by 11%. Even with this strong rebound, real GDP in all of FY 2021 is expected to be  
4% lower than in FY 2020, the second consecutive year of decline.  
Economic forecasts are inevitably uncertain. The uncertainty is heightened currently by  
the ongoing COVID-19 pandemic. Renewed lockdowns in response to upsurges in infections could  
slow the economy. Progress in research to find an effective vaccine or treatment could accelerate  
economic recovery.  
Figures shown in the table below are percent changes from the average of the four  
quarters in FY 2019 to that for FY 2020, and from FY 2020 to FY 2021, except that unemployment  
rates are averages for the four quarters of the fiscal year indicated.  
26 Transfer receipts are benefits that individuals receive from the government (federal, state, or  
local) or from businesses when the individual did not perform any (current) work in exchange for the  
benefits. Examples include unemployment insurance benefits, Social Security, and other retirement and  
disability benefits.  
Budget Footnotes  
P a g e | 42  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
On a fiscal year basis, comparing the May 2019 forecast with the June 2020 forecast,  
overall growth of U.S. real GDP was revised downward by 4.4 percentage points for FY 2020 and  
6
.0 percentage points for FY 2021. Downward revisions for Ohio real GDP were 5.0 percentage  
points and 6.5 percentage points, respectively, for those years. Wage and salary income was also  
revised sharply lower for both the nation and the state. Inflation gyrates wildly, as consumer  
energy prices plummet in this calendar years first half, then rebound. The unemployment rate  
soars above 13% for the nation and above 17% for Ohio during the quarter just ended before  
beginning to decline.  
Revisions to IHS Markit Economic Forecast for FY 2020 and FY 2021  
Forecast for FY 2020 as of  
Forecast for FY 2021 as of  
Variable Name (National)  
U.S. real GDP growth  
May 2019  
2.3%  
June 2020  
-2.1%  
0.9%  
May 2019  
2.0%  
June 2020  
-4.0%  
0.5%  
U.S. wage and salary growth  
U.S. personal income growth  
U.S. CPI inflation  
4.6%  
4.3%  
2.5%  
1.4%  
3.5%  
4.7%  
5.0%  
2.0%  
0.9%  
3.5%  
3.9%  
0.3%  
1.6%  
0.8%  
U.S. nonfarm employment growth  
U.S. unemployment rate  
-2.0%  
6.1%  
-3.0%  
9.0%  
Forecast for FY 2020 as of  
Forecast for FY 2021 as of  
Variable Name (Ohio)  
May 2019  
1.7%  
June 2020  
-3.3%  
-0.9%  
3.4%  
May 2019  
1.1%  
June 2020  
-5.4%  
Ohio real GDP growth  
Ohio wage and salary growth  
Ohio personal income growth  
Ohio nonfarm employment growth  
Ohio unemployment rate  
4.0%  
4.1%  
0.9%  
4.1%  
3.7%  
4.2%  
0.2%  
4.1%  
-1.5%  
-0.4%  
-3.5%  
7.6%  
-4.3%  
12.0%  
Chart 9 below shows the June 2020 quarterly forecast for Ohio real GDP associated with  
the fiscal year changes in the table. Quarter-to-quarter changes are shown in the chart at annual  
rates, for FY 2019, FY 2020, and FY 2021. IHS Markit expected Ohio real GDP to plummet in the  
quarter just ended at a 47% annual rate before beginning to recover in FY 2021. Ohio real GDP  
does not recover to its prerecession level until FY 2023.  
Budget Footnotes  
P a g e | 43  
July 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 9: Ohio real GDP  
2
0.0%  
0.0%  
1
0.0%  
-
-
-
-
-
10.0%  
20.0%  
30.0%  
40.0%  
50.0%  
FY 2019  
FY 2020  
FY 2021  
Budget Footnotes  
P a g e | 44  
July 2020