A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2021  
Issue: October 2020  
Highlights  
Ross Miller, Chief Economist  
September GRF tax revenue was $8.7 million (0.5%) higher than the estimate  
published by the Office of Budget and Management (OBM) in September 2020. Tax  
revenue ended the first quarter of FY 2021 $262.4 million above estimate. Only two  
tax sources were below their estimates by more than $5 million: the commercial  
activity tax (CAT) and the kilowatt-hour tax, by $23.5 million and $7.4 million,  
respectively. Federal grants received during the quarter were $122.2 million below  
estimate, but that was primarily due to Medicaid spending being below estimate by  
$
116.0 million.  
Ohios nonfarm payroll employment grew by 45,500 in August, but was still  
48,700 below August 2019. Nearly one-third (31.8%) of the job losses over the last  
4
year were in the leisure and hospitality sector. Ohios unemployment rate ticked  
down to 8.9% in August, from 9.0% the prior month. The national unemployment  
rate was 8.4% in August.  
Through September 2020, GRF sources totaled $10.45 billion:  
Revenue from the sales and use tax was $183.9 million above estimate;  
Personal income tax (PIT) receipts were $84.2 million above estimate.  
Through September 2020, GRF uses totaled $10.69 billion:  
Program expenditures were $316.3 million below estimate;  
Expenditures from all program categories were below estimates.  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 13),  
the National Economy (p. 27), and the Ohio Economy (p. 30).  
Also Issue Updates on:  
BroadbandOhio Connectivity Grants (p. 19)  
Defense Manufacturing Grant (p. 20)  
State Opioid Response Grant (p. 21)  
Medicaid Telehealth Access (p. 21)  
Motor Fuel Tax Revenue Increases (p. 22)  
State Debt Refinancing (p. 23)  
Anti-Heroin Task Force Program Grants (p. 25)  
2
1st Century Community Learning Center Grants (p. 25)  
National Guard Operation Steady Resolve (p. 26)  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of September 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on October 1, 2020)  
State Sources  
Actual  
Estimate*  
Variance Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$148,303  
$738,370  
$886,673  
$133,600  
$752,100  
$885,700  
$14,703  
-$13,730  
$973  
11.0%  
-1.8%  
0.1%  
Personal Income  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
$887,978  
$15,553  
$89,911  
$30,797  
$6,808  
$0  
$900,100  
$7,100  
$73,800  
$31,600  
$6,800  
$0  
-$12,122  
$8,453 119.1%  
$16,111  
-$803  
$8  
$0  
-$2,367 -59.2%  
-$44 -44.4%  
-1.3%  
21.8%  
-2.5%  
0.1%  
---  
-$6,367  
$56  
-$4,000  
$100  
Natural Gas Consumption  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Business and Property  
Estate  
$121  
$0  
$121  
-$997 -21.7%  
$312 7.1%  
-$1,022 -53.8%  
---  
$3,603  
$4,712  
$878  
$91  
$0  
$4,600  
$4,400  
$1,900  
$0  
$0  
$0  
$91  
$0  
---  
---  
$11  
$11  
---  
Total Tax Revenue  
$1,920,824 $1,912,100  
$8,724  
0.5%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$0  
$5,099  
$689  
$0  
$2,184  
$65,800  
$0  
---  
$2,915 133.5%  
-$65,111 -99.0%  
-$62,196 -91.5%  
Total Nontax Revenue  
$5,788  
$67,984  
Transfers In  
$0  
$0  
$0  
-$53,471  
-$96,880  
---  
-2.7%  
-8.9%  
-4.9%  
Total State Sources  
Federal Grants  
$1,926,613 $1,980,084  
$989,526 $1,086,406  
Total GRF Sources  
$2,916,139 $3,066,490 -$150,351  
*Estimates of the Office of Budget and Management as of September 2020.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 2  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2021 as of September 30, 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on October 1, 2020)  
State Sources  
Tax Revenue  
Auto Sales  
Actual  
Estimate*  
Variance Percent FY 2020**  
$77,423 18.9% $418,613  
Percent  
16.4%  
$487,223  
$409,800  
Nonauto Sales and Use  
$2,490,157 $2,383,700 $106,457  
4.5% $2,325,404  
7.1%  
Total Sales and Use  
$2,977,380 $2,793,500 $183,880  
6.6% $2,744,017  
8.5%  
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  
$2,905,817 $2,821,600  
$84,217  
-$23,501  
$23,493  
-$7,420  
3.0% $2,282,127  
27.3%  
-13.0%  
9.3%  
-8.6%  
-23.2%  
$347,599  
$195,993  
$82,180  
$6,845  
$824  
$371,100  
$172,500  
$89,600  
$8,400  
$0  
-6.3%  
13.6%  
-8.3%  
$399,431  
$179,389  
$89,913  
$8,919  
-$1,555 -18.5%  
$824  
$3,123  
-$460  
-$2,509 -15.5%  
$1,146  
$1,838  
-$1,022 -53.8%  
$271  
$15  
---  
44.0%  
-1.4%  
$1 164666.6%  
-$9,506  
-$3,977  
$31,340  
$13,691  
$15,546  
$14,738  
$878  
-$7,100  
$31,800  
$16,200  
$14,400  
$12,900  
$1,900  
$0  
58.2%  
-2.3%  
7.2%  
24.5%  
11.2%  
-51.1%  
1131.1%  
---  
-69.8%  
14.3%  
$32,092  
$12,770  
$12,484  
$13,249  
$1,796  
-$26  
8.0%  
14.2%  
$271  
---  
---  
---  
$15  
$0  
$0  
$38  
$11  
$0  
$11  
Total Tax Revenue  
$6,589,152 $6,326,800 $262,352  
4.1% $5,766,691  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$1  
$11,496  
$81,221  
$92,718  
$0  
$7,601  
$72,097  
$1  
$3,895  
$9,124  
$13,020  
---  
51.2%  
12.7%  
16.3%  
$119  
$8,605  
$69,611  
-99.3%  
33.6%  
16.7%  
18.4%  
Total Nontax Revenue  
$79,697  
$78,335  
Transfers In  
$79,832  
$77,932  
$1,900  
2.4%  
$75,480  
5.8%  
14.2%  
39.6%  
22.0%  
Total State Sources  
Federal Grants  
$6,761,702 $6,484,429 $277,273  
$3,687,287 $3,809,476 -$122,189  
$10,448,989 $10,293,905 $155,084  
4.3% $5,920,507  
-3.2% $2,640,938  
1.5% $8,561,445  
Total GRF SOURCES  
*
*
Estimates of the Office of Budget and Management as of September 2020.  
*Cumulative totals through the same month in FY 2020.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 3  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean J. Botomogno, Principal Economist  
Overview  
FY 2021 GRF sources through September of $10.45 billion were $155.1 million (1.5%)  
above the estimate released by OBM in September 2020. GRF sources consist of state-source  
receipts, which include tax revenue, nontax revenue, and transfers in, and federal grants.2  
Federal grants were the only GRF category posting a year-to-date (YTD) negative variance with a  
shortfall of $122.2 million (3.2%). This shortfall was more than offset by positive variances of  
$
262.4 million (4.1%) for GRF tax sources, $13.0 million (16.3%) for nontax revenue, and  
$
and for FY 2021 through September, respectively.  
1.9 million (2.4%) for transfers in. Tables 1 and 2 show GRF sources for the month of September  
Through the end of September, three of the four largest tax sources had solid  
performances. The sales and use tax and the PIT were $183.9 million and $84.2 million above  
their respective estimates; a strong positive variance of $23.5 million for the cigarette tax  
canceled out a deficit of the same amount for the CAT (which was due to reduced economic  
3
activity tied to COVID-19-related measures in the prior quarter). Total revenues for the  
remaining GRF tax sources were $5.7 million below the combined estimate. The financial  
institutions tax (FIT), the liquor gallonage tax, and the alcoholic beverage tax were above their  
respective YTD revenue targets by $3.1 million, $1.8 million, and $1.1 million. However, those  
positive variances were offset by negative variances of $7.4 million for the kilowatt-hour tax,  
$
2.5 million for the natural gas consumption tax, and $1.6 million for the foreign  
insurance tax.  
For the month of September, GRF sources totaled $2.92 billion, an amount $150.4 million  
(4.9%) below projection, due to a shortfall of $96.9 million (8.9%) for federal grants and a  
timing-related negative variance of $62.2 million (91.5%) for nontax revenue. The monthly  
negative variance for nontax revenue reflects a payment made by JobsOhio in August that had  
4
been expected in September. GRF taxes were $8.7 million (0.5%) above estimate, and no  
transfers in occurred or were anticipated during the month. Regarding tax sources, the cigarette  
tax, the CAT, and the sales tax were above anticipated revenue by $16.1 million, $8.5 million, and  
$
1.0 million, respectively. Those positive variances were partially offset by negative variances of  
1 This report compares actual monthly and year-to-date 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.  
3
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. Those measures reduced taxable gross receipts in the spring quarter, which was  
the basis for the tax paid by quarterly CAT taxpayers in August 2020.  
4 In August 2020, nontax revenue was above estimate by $65.5 million due to the early payment.  
Budget Footnotes  
P a g e | 4  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
$
12.1 million for the PIT, $2.4 million for the FIT, and $1.0 million each for the alcoholic beverage  
tax and the petroleum activity tax. Chart 1, below, shows cumulative YTD variances of GRF  
sources in the first three months of FY 2021.  
Chart 1: Cumulative Variances of GRF Sources in FY 2021  
(
Variances from Estimates, $ in millions)  
$
$
$
$
$
$
350  
300  
250  
200  
150  
100  
$
50  
$0  
-
$50  
-
-
$100  
$150  
Jul-20  
Federal Grants  
Aug-20  
Sep-20  
Tax Revenue  
Total GRF Sources  
Compared to first-quarter GRF sources in FY 2020, YTD GRF sources rose $1.89 billion  
5
(
(
(
22.0%), due to large increases in federal grants ($1.05 billion, 39.6%) and tax sources  
$822.5 million, 14.3%). Nontax revenue and transfers in also rose, respectively, by $14.4 million  
18.4%) and $4.4 million (5.8%). The increase in GRF tax sources was led by an increase of  
$
623.7 million in PIT revenue and $233.4 million for the sales and use tax. The increase in PIT  
revenue was primarily due to a delay in the tax filing deadline from April until July, as explained  
in more detail in the PIT section below, while sales tax revenue has been supported by federal  
income support programs, as explained further in the section on that tax. Also, revenue from the  
cigarette tax, the FIT, the alcoholic beverage tax, and the liquor gallonage tax increased by  
$
noticeable revenue declines were experienced by the CAT ($51.8 million), the kilowatt-hour  
excise tax ($7.7 million), and the foreign insurance tax ($2.1 million).  
16.6 million, $5.5 million, $3.1 million, and $1.5 million, respectively. On the other hand,  
Sales and Use Tax  
Through September, revenue from the sales and use tax totaled $2.98 billion. This  
amount was $183.9 million (6.6%) above OBM projections, with $145.8 million of the overage  
coming in July. YTD GRF revenue was also $233.4 million (8.5%) above FY 2020 receipts. In the  
latest month, the performance of the tax weakened but was still positive. September GRF sales  
5 This growth 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. The increased federal reimbursement accounted for $275.6 million of the  
$
1.05 billion growth in federal grants, according to the Ohio Administrative Knowledge System (OAKS).  
Budget Footnotes  
P a g e | 5  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
tax revenue of $886.7 million was slightly above target. The auto sales and use tax had another  
strong monthly positive variance, which came in $1.0 million larger than the revenue shortfall  
from the nonauto sales and use tax, resulting in a positive variance of 0.1% for the combined  
total sales and use tax. As mentioned in the previous edition of Budget Footnotes, a decrease in  
employee compensation during 2020s second quarter was more than offset by the increase in  
unemployment compensation payments and other personal transfer receipts.6 Though  
nationwide hiring slowed in September, employment for persons earnings above $60,000 a year  
appears to be returning close to the prepandemic levels, while the bulk of job losses are  
concentrated in households earning less than that amount. Since the April trough, inflation-  
adjusted consumer spending had steadily increased, and recent data suggest it recovered to  
about 95% of prepandemic levels.  
For analysis and forecasting, revenue from the sales and use tax is separated into two  
parts: auto and nonauto. Auto sales and use tax collections generally arise from the sale of motor  
vehicles, but auto taxes arising from leases are paid at the lease signing and are mostly recorded  
under the nonauto tax instead of the auto tax.  
Nonauto Sales and Use Tax  
YTD FY 2021 GRF nonauto sales and use tax receipts totaled $2.49 billion, an amount  
106.5 million (4.5%) above estimate and $164.8 million (7.1%) above revenue in the first quarter  
$
of FY 2020. The performance of the nonauto sales and use tax receipts so far has been  
remarkable. The income support from the federal fiscal response to the pandemic essentially  
eliminated the economic downdraft of the COVID-19 pandemic in July and August. However, the  
impact of the federal income and employment support programs is waning, and this affected  
September revenue. Nonauto sales and use tax revenue of $738.4 million was below estimate by  
$
13.7 million (1.8%) and $9.4 million (1.3%) above revenue in September 2019. Generally, a large  
part of a months nonauto sales and use tax revenue is from tax collection or tax remittance on  
taxable sales in the previous month. The future performance of this tax source is likely to be  
dependent on continued improvement in the Ohio labor market, any additional federal personal  
transfer payments, and potential new restrictions if COVID-19 infections rise.  
Chart 2 provides year-over-year growth in nonauto sales and use tax collections since  
January 2020 and shows the rebound in nonauto sales and use tax revenue in recent months.  
6 To address the economic fallout from COVID-19, the U.S. Congress passed the CARES Act at the  
end of March 2020. The Act 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. In the months following passage of the CARES Act, other federal support  
programs have been enacted or modified.  
Budget Footnotes  
P a g e | 6  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 2: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
1
0.0%  
5
0
.0%  
.0%  
-
5.0%  
-
-
10.0%  
15.0%  
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20  
Jul-20  
Aug-20 Sep-20  
Auto Sales and Use Tax  
Through September, FY 2021 auto sales and use tax receipts of $487.2 million were  
77.4 million (18.9%) above estimate and $68.6 million (16.4%) above revenue in the  
$
corresponding period in FY 2020. In September, auto sales and use tax revenue was  
148.3 million, $14.7 million (11.0%) above estimate and $20.2 million (15.8%) above such  
$
receipts in September 2019. Growth of more than 15% from the prior year in the absence of any  
significant tax policy change is unusual. Auto sales tax revenue in July and September exceeded  
that threshold and was also good in August (growth of 7.6%). Chart 3 shows year-over-year  
growth in auto sales and use tax collections, the pandemic-related revenue declines earlier in the  
calendar year from both low demand and low supply of vehicles, and the subsequent rebound in  
the most recent months.  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
3
2
1
0.0%  
0.0%  
0.0%  
0
.0%  
-
-
-
-
10.0%  
20.0%  
30.0%  
40.0%  
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20  
Jul-20  
Aug-20 Sep-20  
Budget Footnotes  
P a g e | 7  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Cheap credit and high demand for SUVs and pickup trucks drove the faster than expected  
bounce back of the auto industry from lows in the spring quarter. In addition to the federal fiscal  
income support and improvement in labor markets, the pandemic may have led persons avoiding  
public transportation (either for work or leisure) to purchase motor vehicles. The increase in the  
Ohio auto tax base in FY 2021 relative to the corresponding period in FY 2020 was due to a 14.2%  
7
increase in the number of motor vehicles titled, according to data provided by the Ohio Bureau  
of Motor Vehicles (BMV) shown below. Unit purchases of both new and used vehicles increased;  
the taxable base for both new and used vehicles also rose.  
Spending  
$ in millions)  
YTD FY 2021  
Titles  
115,248  
Average Price  
(
New vehicles  
Used vehicles  
$4,190  
$36,361  
$9,539  
541,332  
$5,163  
Total  
656,580  
$9,354  
$14,247  
Growth from FY 2020  
New vehicles  
Used vehicles  
8.1%  
$394.9  
$697.8  
2.1%  
0.0%  
15.6%  
Total  
14.2%  
$1,092.7  
-0.8%  
BMV data show that unit sales of new passenger vehicles decreased 3.1% but their  
average price rose 5.6%; unit sales of new trucks rose 10.9% and their average price increased  
3
passenger vehicles grew 10.7%, though the average price fell 1.4%, and unit sales of used trucks  
jumped 18.0% and prices rose 0.8%.  
.2%. Demand for previously owned vehicles was high during the quarter: unit sales of used  
Personal Income Tax  
YTD FY 2021 GRF receipts from the PIT of $2.91 billion were $84.2 million (3.0%) above  
estimate and $623.7 million (27.3%) above such revenue in the first quarter of FY 2020. This large  
year-over-year growth is directly attributable to the delay of income tax filings from April to July  
2
020. Among measures designed to combat the impact of the COVID-19 pandemic, H.B. 197 of  
rd  
the 133 General Assembly authorized the Tax Commissioner to delay various state tax  
payments, which he did, to match the extended deadline for federal income tax returns. Thus, in  
July 2020, payments associated with annual returns of $501.9 million were $492.5 million above  
8
such payments in July 2019; PIT GRF revenue for the month was $550.1 million (87.3%) above  
receipts in July 2019.  
7 Titled motor vehicles include passenger vehicles, trucks, motorcycles, and other motor vehicles.  
8 In April 2020, this component was $697.8 million below anticipated revenue.  
Budget Footnotes  
P a g e | 8  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
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,  
9
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. The income tax filing delay introduced some  
volatility in the monthly trends of most PIT components. However, this volatility for payments  
with annual returns and for refunds is expected to decrease in the coming months as taxpayers  
continue to file tax year 2019 tax returns.  
September PIT revenue to the GRF of $888.0 million was $12.1 million (1.3%) below  
anticipated revenue. Gross collections were $13.9 million (1.4%) above target. Though  
employer withholding was $4.0 million below projection, the remaining components had  
positive variances: $8.6 million for quarterly estimated payments, $4.1 million for payments  
associated with annual returns, $3.9 million for trust payments, and $1.2 million for  
miscellaneous payments. Refunds were $23.1 million above estimates, more than offsetting  
the positive variance for gross collections. In addition, LGF distributions were $2.9 million  
higher than their expected level.  
For FY 2021, revenues from each component of the PIT relative to estimates and revenue  
received in FY 2020 are detailed in the table below. FY 2021 gross collections were $51.2 million  
above projections. Quarterly estimated payments and trust payments were above their  
respective projections by $52.7 million and $13.9 million. Those positive variances were partially  
offset by shortfalls of $9.4 million for payments due with annual returns, $3.1 million for  
miscellaneous payments, and $2.9 million for employer withholding. Refunds were $47.4 million  
below estimate, but LGF distributions were above expectation by $14.4 million, thus resulting in  
a YTD positive variance of $84.2 million for the GRF.  
Compared to the corresponding period last year, first-quarter gross collections grew  
809.8 million, driven by an increase of $595.2 million from payments due with annual returns.  
$
In addition, quarterly estimated payments, trust payments, and employer withholding increased  
by $144.2 million, $45.4 million, and $28.2 million, respectively. However, miscellaneous  
payments were $3.2 million lower than in FY 2020. Year-over-year growth in withholding receipts  
in calendar year (CY) 2020 is limited because of a 4.0% reduction in withholding rates effective  
January 2020 due to H.B. 166s reduction of income tax rates for nonbusiness income. FY 2021  
refunds and LGF distributions were higher than those in FY 2020 by $169.3 million and  
$
to YTD receipts in FY 2020.  
16.9 million, respectively. Therefore, growth in PIT GRF revenue totaled $623.7 million relative  
9 Quarterly estimated payments are made by taxpayers who expect to be underwithheld by more  
than $500. Payments are due in April, June, and September of an individuals tax year and January of the  
following year. Most estimated payments are made by high-income taxpayers.  
Budget Footnotes  
P a g e | 9  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
FY 2021 PIT Revenue Variance and Annual Change by Component  
YTD Variance from Estimate  
Changes from FY 2020  
Category  
Amount  
$ in millions)  
Percent  
(%)  
Amount  
($ in millions)  
Percent  
(%)  
(
Withholding  
-$2.9  
$52.7  
$13.9  
-$9.4  
-0.1%  
$28.2  
$144.2  
$45.4  
1.3%  
Quarterly Estimated Payments  
Trust Payments  
15.4%  
30.7%  
-1.4%  
-17.3%  
1.5%  
57.5%  
327.9%  
1154.8%  
-17.4%  
31.7%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$595.2  
-$3.2  
-$3.1  
$51.2  
-$47.4  
$14.4  
$84.2  
$809.8  
$169.3  
$16.9  
Less Refunds  
-12.4%  
13.4%  
3.0%  
101.3%  
16.0%  
Less LGF Distribution  
GRF PIT Revenue  
$623.7  
27.3%  
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 2021 and estimated withholding receipts adjusted for the decrease in  
the withholding tax rate. Payrolls are estimated to have increased about 5.5%, on average, in the  
first quarter of FY 2021, after their low point in the spring quarter.  
Chart 4: Monthly Witholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
8
6
4
2
0
.0%  
.0%  
.0%  
.0%  
.0%  
-
-
-
-
2.0%  
4.0%  
6.0%  
8.0%  
-
-
10.0%  
12.0%  
Jan-20  
Feb-20 Mar-20 Apr-20 May-20 Jun-20  
Jul-20  
Aug-20 Sep-20  
Actual  
Adjusted  
Budget Footnotes  
P a g e | 10  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Commercial Activity Tax  
September receipts to the GRF from the CAT were $15.6 million, an amount $8.5 million  
119.1%) above estimate, bringing the YTD negative variance for this tax source to $23.5 million  
6.3%), down from $32.0 million in the first two months. For the quarter, GRF receipts from CAT  
(
(
taxpayers were $347.6 million, $51.8 million (13.0%) below revenue in FY 2020 through  
September. The first payment from quarterly CAT taxpayers in August, based on taxable gross  
receipts from April to June 2020, was short of estimate by $30.4 million (9.9%). September is not  
a big month for the CAT, but the monthly revenue partially reduced a good portion of the August  
deficit. First-quarter gross collections totaled $505.8 million, a decrease of $51.0 million (10.1%),  
relative to gross collections in FY 2020 through September. Refunds and credits were  
$
credited to the Revenue Enhancement Fund (Fund 2280) was $3.3 million. (Moneys in the fund  
help defray Ohio Department of Taxation costs of administering the CAT and other taxes.)  
32.6 million, an increase of $10.5 million (32.1%) above those items in FY 2020. Revenue  
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%). First-quarter distributions were  
$
53.2 million and $8.2 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.  
Cigarette and Other Tobacco Products Tax  
YTD through September, FY 2021 revenue from the cigarette and other tobacco products  
OTP) tax totaling $196.0 million was above estimate by $23.5 million (13.6%). This total included  
(
$
of September, receipts from this tax source of $89.9 million were $16.1 million (21.8%) above  
estimate and $9.9 million (12.4%) above revenue in September 2019.  
169.7 million from the sale of cigarettes and $26.3 million from the sale of OTP. For the month  
FY 2021 first-quarter receipts grew $16.6 million (9.3%) relative to revenues in the first  
quarter of FY 2020. Receipts from cigarette sales and OTP sales increased by $11.0 million (6.9%)  
and $5.6 million (27.3%), respectively. The increase in OTP revenue is due, in part, to additional  
revenue from the vapor tax. H.B. 166 levied a tax of 10¢ per milliliter (or gram) of vapor product  
(
depending on the form of the product) which is defined as any liquid solution or other substance  
that contains nicotine and is depleted as it is used in an electronic smoking product. Of total  
receipts in FY 2020 of $82.4 million from the sale of OTP, the new tax on vapor products  
contributed $3.6 million, according to the Ohio Department of Taxation.  
On a yearly basis, revenue from the cigarette tax usually trends downward, generally at a  
slow pace. However, that historical trend has been suspended in the last six months. Through  
March in FY 2020, receipts from the sales of cigarette stamps were 2.2% below such revenue in  
the first nine months of FY 2019. In the April to June 2020 quarter, those receipts were flat  
compared to receipts in the same quarter in FY 2019, and FY 2021 first-quarter receipts from the  
cigarette base were unusually strong. Revenue increased by $1.6 million in July, $1.0 million in  
August, and $8.3 million in September 2020, relative to the corresponding months in FY 2020.  
The COVID-19 pandemic may have modified recent purchasing patterns and behavior: smokers  
are spending less on travel and entertainment during the pandemic and thus have more  
Budget Footnotes  
P a g e | 11  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
disposable income for cigarettes. Fewer social interactions and more time at home allow for  
more tobacco use occasions. Also, some smokers may also have switched back to traditional  
cigarettes due to recent federal restrictions on e-cigarette flavors.  
The OTP tax is an ad valorem tax, generally 17% of the wholesale price paid by wholesalers  
for the product; thus, revenue from that portion of the tax base (about 9% of the total tax base)  
grows with OTP price increases.  
Budget Footnotes  
P a g e | 12  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of September 2020  
($ in thousands)  
(Actual based on OAKS reports run October 6, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent  
Primary and Secondary Education  
Higher Education  
$669,146  
$196,351  
$7,956  
$750,194  
$194,400  
$9,481  
-$81,048 -10.8%  
$1,951  
-$1,526 -16.1%  
-$80,622 -8.5%  
1.0%  
Other Education  
Total Education  
$873,453  
$954,075  
Medicaid  
$1,303,977 $1,488,036 -$184,059 -12.4%  
$98,373 $97,838 $536 0.5%  
$1,402,351 $1,585,874 -$183,523 -11.6%  
Health and Human Services  
Total Health and Human Services  
Justice and Public Protection  
General Government  
$189,201  
$27,793  
$196,030  
$43,227  
-$6,829 -3.5%  
-$15,434 -35.7%  
Total Government Operations  
$216,994  
$239,257  
-$22,263  
-9.3%  
Property Tax Reimbursements  
Debt Service  
$358,510  
$237,970  
$596,480  
$300,767  
$240,038  
$540,805  
$57,743  
-$2,068  
$55,675  
19.2%  
-0.9%  
10.3%  
Total Other Expenditures  
Total Program Expenditures  
Transfers Out  
$3,089,278 $3,320,011 -$230,733  
$670 $0 $670  
$3,089,948 $3,320,011 -$230,063  
-6.9%  
---  
Total GRF Uses  
-6.9%  
*September 2020 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2021 as of September 30, 2020  
($ in thousands)  
(Actual based on OAKS reports run October 6, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2020** Percent  
Primary and Secondary Education  
Higher Education  
$2,395,750 $2,470,100  
-$74,350  
-$6,382  
-$162  
-3.0% $2,176,112  
10.1%  
4.5%  
$566,239  
$25,379  
$572,620  
$25,541  
-1.1%  
-0.6%  
$541,734  
Other Education  
$31,651 -19.8%  
Total Education  
$2,987,367 $3,068,261  
-$80,894  
-2.6% $2,749,497  
8.7%  
Medicaid  
$5,265,222 $5,381,234 -$116,012  
$329,919 $350,051 -$20,132  
$5,595,142 $5,731,285 -$136,144  
-2.2% $4,158,325  
26.6%  
10.8%  
25.6%  
Health and Human Services  
Total Health and Human Services  
-5.8% $297,636  
-2.4% $4,455,961  
Justice and Public Protection  
General Government  
$682,021  
$102,633  
$784,653  
$711,151  
$123,210  
$834,361  
-$29,130  
-4.1%  
$630,320  
$111,008  
$741,328  
8.2%  
-7.5%  
5.8%  
-$20,578 -16.7%  
Total Government Operations  
-$49,708  
-6.0%  
Property Tax Reimbursements  
Debt Service  
$498,980  
$411,621  
$910,601  
$546,433  
$413,690  
$960,123  
-$47,453  
-$2,068  
-8.7%  
-0.5%  
$601,005 -17.0%  
$761,147 -45.9%  
Total Other Expenditures  
-$49,521  
-5.2% $1,362,152 -33.1%  
-3.0% $9,308,938 10.4%  
-5.8% $656,601 -37.3%  
-3.1% $9,965,540 7.3%  
Total Program Expenditures  
Transfers Out  
$10,277,763 $10,594,030 -$316,267  
$411,398 $436,900 -$25,502  
$10,689,161 $11,030,930 -$341,769  
Total GRF Uses  
*
*
September 2020 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2020.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 14  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on October 8, 2020)  
Month of September 2020  
Actual Estimate* Variance Percent  
Year to Date through September 2020  
Actual Estimate* Variance Percent  
Department  
Medicaid  
GRF  
$1,251,435 $1,433,518 -$182,083 -12.7% $5,093,640 $5,203,502 -$109,861  
$908,369 $837,520 $70,849 8.5% $2,115,151 $2,160,690 -$45,538  
2,159,804 $2,271,039 -$111,235 -4.9% $7,208,792 $7,364,192 -$155,400  
-2.1%  
-2.1%  
-2.1%  
Non-GRF  
$
All Funds  
Developmental Disabilities  
GRF  
$43,798  
264,268  
308,066  
$43,139  
$189,818  
$232,957  
$659  
$74,450  
$75,110  
1.5%  
39.2%  
32.2%  
$146,767  
$710,477  
$857,244  
$146,817  
$629,052  
$775,870  
-$51  
$81,425  
$81,374  
0.0%  
12.9%  
10.5%  
$
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$7,924  
$13,946  
21,870  
$10,392  
$15,256  
$25,648  
-$2,468 -23.7%  
-$1,310 -8.6%  
-$3,778 -14.7%  
$21,974  
$40,003  
$61,977  
$27,739  
$46,826  
$74,565  
-$5,765 -20.8%  
-$6,823 -14.6%  
-$12,588 -16.9%  
Non-GRF  
$
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$820  
$987  
$2,460  
$3,447  
-$167 -16.9%  
-$1,133 -46.0%  
-$1,300 -37.7%  
$2,842  
$9,039  
$3,176  
$10,668  
$13,844  
-$334 -10.5%  
-$1,629 -15.3%  
-$1,964 -14.2%  
Non-GRF  
$1,328  
$
2,147  
$11,880  
All Funds  
All Departments:  
GRF  
$1,303,977 $1,488,036 -$184,059 -12.4% $5,265,222 $5,381,234 -$116,012  
-2.2%  
1.0%  
Non-GRF  
All Funds  
$1,187,911 $1,045,054  
2,491,888 $2,533,090  
$142,856  
-$41,202  
13.7% $2,874,670 $2,847,236  
-1.6% $8,139,893 $8,228,471  
$27,434  
-$88,578  
$
-1.1%  
*September 2020 estimates from the Office of Budget and Management and Department of Medicaid  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 15  
October 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 October 8, 2020)  
Month of September 2020  
Year to Date through September 2020  
Actual Estimate* Variance Percent  
Payment Category  
Managed Care  
Actual  
Estimate* Variance Percent  
$1,662,764 $1,732,814 -$70,050  
-4.0% $5,158,380 $5,220,652 -$62,271  
-1.2%  
-2.3%  
-0.2%  
-0.6%  
-0.8%  
-1.2%  
0.0%  
CFC†  
$602,334  
$501,134  
$251,567  
$80,532  
$237,099  
-$9,903  
$606,123  
-$3,789  
-0.6% $1,830,152 $1,873,690 -$43,538  
Group VIII  
ABD†  
$542,089 -$40,955  
-7.6% $1,527,436 $1,530,746  
-$3,310  
-$4,773  
-$1,984  
-$8,633  
-$34  
$256,333  
$82,537  
$245,732  
$0  
-$4,766  
-$2,004  
-$8,633  
-$9,903  
-1.9%  
-2.4%  
-3.5%  
---  
$756,230  
$242,336  
$721,760  
$80,466  
$761,002  
$244,320  
$730,393  
$80,500  
ABD Kids  
My Care  
P4P†  
Fee-For-Service  
ODM Services  
DDD Services  
$667,521  
$320,316  
$304,060  
$43,146  
$619,791 $47,730  
$346,583 -$26,267  
$227,993 $76,067  
7.7% $2,523,234 $2,507,396 $15,838  
-7.6% $1,066,296 $1,111,778 -$45,482  
0.6%  
-4.1%  
11.1%  
-3.4%  
33.4%  
$834,278  
$622,660  
$751,151 $83,127  
$644,466 -$21,807  
Hospital - HCAP&Other†  
$45,215  
-$2,070 -4.6%  
Premium Assistance  
Medicare Buy-In  
Medicare Part D  
$94,601  
$59,825  
$34,776  
$94,003  
$58,990  
$35,013  
$598  
$835  
0.6%  
1.4%  
$249,263  
$179,367  
$69,896  
$246,194  
$175,828  
$70,366  
$3,069  
$3,539  
-$470  
1.2%  
2.0%  
-$237  
-0.7%  
-0.7%  
Administration  
Total  
$67,002  
$86,483 -$19,481 -22.5%  
$209,016  
$254,229 -$45,213 -17.8%  
$2,491,888 $2,533,090 -$41,202  
-1.6% $8,139,893 $8,228,471 -$88,578 -1.1%  
*September 2020 estimates from the Office of Budget and Management and Department of Medicaid  
P4P - Pay For Performance  
CFC - Covered Families and Children; ABD - Aged, Blind, and Disabled; HCAP - Hospital Care Assurance Program;  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 16  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
EMexlanpey Cearnter,dDiriecttorures10  
Ivy Chen, Principal Economist  
Overview  
FY 2021 GRF program expenditures totaled $10.28 billion at the end of September. These  
expenditures were $316.3 million (3.0%) below the estimate released by OBM in early September  
020. The program category with the largest negative variance was Medicaid, which had a  
negative YTD GRF variance of $116.0 million (2.2%) as a result of a negative variance of  
184.1 million (12.4%) in September more than offsetting a positive variance of $68.0 million in  
August. Primary and Secondary Education had the second largest negative YTD variance at  
74.4 million (3.0%), which, like Medicaid, was caused by a negative September variance  
$81.0 million, 10.8%) more than offsetting a positive August variance ($6.7 million, 0.7%).  
2
$
$
(
Property Tax Reimbursements had the third largest negative YTD variance at $47.5 million (8.7%),  
despite a positive September variance of $57.7 million (19.2%). All other program categories also  
had negative YTD variances at the end of September. YTD variances are shown in the preceding  
Table 4, while Table 3 shows September variances.  
In addition to program expenditures, total uses include transfers out. Transfers out  
totaled $411.4 million YTD and had a negative YTD variance of $25.5 million (5.8%) at the end of  
September. Combining program expenditures and transfers out, total GRF uses for FY 2021 were  
$
The rest of this section discusses both GRF and non-GRF variances in Medicaid and the GRF  
variances in Primary and Secondary Education and Property Tax Reimbursements.  
10.69 billion at the end of September. These uses were $341.8 million (3.1%) below estimate.  
Medicaid  
GRF Medicaid expenditures were below their monthly estimate in September by  
$
184.1 million (12.4%) and below their YTD estimate by $116.0 million (2.2%) at the end of  
September. Non-GRF Medicaid expenditures were above their monthly estimate, by  
142.9 million (13.7%), which brought the YTD expenditures to $27.4 million (1.0%) above  
estimate. Including both the GRF and non-GRF, all funds Medicaid expenditures were  
41.2 million (1.6%) below estimate in September and $88.6 million (1.1%) below their YTD  
$
$
estimate at the end of September.  
The impact of the COVID-19 pandemic began to show in March's Medicaid caseloads, and  
the impacts have continued to show through monthly caseload increases since March. From  
March through September of 2020, caseloads have increased by 39,400 cases per month, on  
average. According to the Ohio Department of Medicaid (ODM), nearly all of the caseload  
variance 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  
10 This report compares actual monthly and YTD expenditures from the GRF to OBMs estimates.  
If a program categorys actual expenditures were higher than estimate, that program category is deemed  
to have a positive variance. The program category is deemed to have a negative variance when its actual  
expenditures were lower than estimate.  
Budget Footnotes  
P a g e | 17  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
pandemic. Based on FY 2021 ODM estimates, September's caseload of 3.1 million enrollees is  
approximately 80,700 cases (2.6%) below estimate.  
Table 5 shows GRF and non-GRF Medicaid expenditures for ODM, the Ohio Department  
of Developmental Disabilities (ODODD), and six other “sister” 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 negative variance in September of $111.2 million (4.9%) and  
YTD expenditures were also below estimate, with a negative variance of $155.4 million (2.1%).  
ODODD had an all funds positive variance of $75.1 million (32.2%) in September and ended  
September with a YTD positive variance of $81.4 million (10.5%). The other six “sister” agencies  
Pharmacy, and Education account for the remaining 1.0% of the total Medicaid budget. Unlike  
Job and Family Services, Health, Aging, Mental Health and Addiction Services, State Board of  
ODM and ODODD, the six “sister” agencies incur only administrative spending.  
Table 6 shows all funds Medicaid expenditures by payment category. Expenditures were  
below their YTD estimates for Managed Care and Administration by $62.3 million (1.2%) and  
$
45.2 million (17.8%), respectively. Fee-For-Service (FFS) YTD expenditures were above estimate  
by $15.8 million (0.6%), and Premium Assistance YTD expenditures were above estimate by  
3.1 million (1.2%).  
$
Primary and Secondary Education  
The Primary and Secondary Education program category includes all GRF expenditures by  
the Ohio Department of Education (ODE), except for Medicaid and Property Tax Reimbursement  
expenditures. This category's negative September variance of $81.0 million (10.8%) more than  
offset its positive August variance of $6.7 million (0.7%), resulting in a negative YTD variance of  
$
74.4 million (3.0%). The category's negative September variance was caused mainly by variances  
of $48.2 million in appropriation item 200550, Foundation Funding, and $30.7 million in  
appropriation item 200573, EdChoice Expansion. The variances in both of these items were  
caused by a timing issue related to scholarship payments and should be reversed in future  
months.  
Property Tax Reimbursements  
This category of GRF expenditures reimburses school districts and other local  
governments for their property tax losses due to property tax rollbacks and the homestead  
exemption. Reimbursements are made twice a year. The current payment is based on a property  
tax settlement conducted in August. Reimbursements will be made as counties request them  
through December. Since payments are made at the request of the counties, this category often  
has variances at the beginning of a cycle that are offset as the cycle draws to a close. At the end  
of August, this category was under estimate by $105.2 million (42.8%). A positive variance of  
$
variance of $47.5 million (8.7%) at the end of September, which should decrease even more by  
the end of the calendar year.  
57.7 million (19.2%) in September partially offset August's variance, resulting in a negative YTD  
Budget Footnotes  
P a g e | 18  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
ODE Awards $50 Million in BroadbandOhio Connectivity Grants  
Jason Glover, Budget Analyst  
On September 2, 2020, ODE released the list of awardees for the $50.0 million  
BroadbandOhio Connectivity Grant Program. Nearly 950 schools were awarded funds ranging  
from $500 to just over $150,000. The table below shows the total award amounts by school type.  
As the table shows, 470 traditional school districts received approximately $30.1 million (60.1%).  
Next, 266 community and STEM schools received $12.5 million (25.0%), followed by 151  
chartered nonpublic schools at $4.8 million (9.6%), 35 joint vocational school districts (JVSDs) at  
$
1.8 million (3.6%), and 27 education service centers (ESCs) and county developmental  
disabilities (DD) boards at $870,000 (1.7%). Schools were required to apply to ODE to receive the  
funds. Eligible grant requests of less than $20,000 were approved for the full amount. However,  
due to high demand, eligible requests over $20,000 were prorated at 60% of the difference  
between $20,000 and the requested amount.  
The BroadbandOhio Connectivity Grant Program uses $50 million of Ohios CARES Act  
Coronavirus Relief Fund (Fund 5CV1) resources, approved by the Controlling Board in late July,  
to help schools with the costs of remote learning. The program focuses on the following eligible  
student groups: economically disadvantaged students, students defined by ODE asvulnerable”  
youth, those with chronic conditions, and students who do not have other access to the internet.  
More specifically, grant funds may be used for home internet, hotspot/MiFi with a service plan,  
mobile hotspots (including on buses), public Wi-Fi infrastructure, and other technology that  
provides a connection for the student.  
BroadbandOhio Connectivity Grant Funding by School Type  
School Type  
Traditional School Districts  
Community and STEM Schools  
Chartered Nonpublic Schools  
Joint Vocational School Districts  
ESCs and County DD Boards  
Total  
Number of Awardees Total Allocations  
470  
266  
151  
35  
$30,052,586  
$12,495,134  
$4,790,869  
$1,777,149  
$866,861  
27  
949  
$49,982,599  
Budget Footnotes  
P a g e | 19  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
U.S. Department of Defense Awards the State $5.0 Million for  
Defense Manufacturing  
Shannon Pleiman, Senior Budget Analyst  
On September 17, 2020, the U.S. Department of Defense (DoD) awarded a $5.0 million  
grant to the Development Services Agency (DSA) to improve defense manufacturing processes in  
the state. The grant will be administered under DSAs existing Ohio Manufacturing Extension  
Partnership (MEP) Program and will be awarded to ten MEP partners as shown in the table below.  
The first seven recipients listed in the table will use the grant funding to engineer and  
implement Industry 4.0and advanced manufacturing technology at small- to medium-sized  
defense manufacturers. Industry 4.0 refers to the use of interconnected digital technologies in  
the manufacturing process, or theinternet of things.The remaining three recipients will use  
the award money to develop workforce credentials and training for Industry 4.0 equipment and  
production process needs. Altogether, these organizations will use this funding over the next  
three years to (1) undertake at least 26 advanced manufacturing projects, (2) credential at least  
4
manufacturers in the defense supply chain.  
00 new workers in advanced manufacturing, and (3) create at least 50 new products and 20 new  
Defense Manufacturing Grant by MEP Program (Total: $5,000,000)  
Total Grant  
Amount  
Total Grant  
Amount  
MEP Partner  
MEP Partner  
FASTLANE  
$600,000 Ohio Aerospace Institute  
$300,000  
$300,000  
Manufacturing Advocacy and  
Growth Network  
$600,000 Ohio State University Center  
for Design and Manufacturing  
Excellence  
TechSolve  
$600,000 Ohio Manufacturing Association  
$300,000 America Makes  
$1,400,000  
$300,000  
Center for Innovative Food  
Technology  
Columbus State Community  
College  
$300,000 Lorain County Community  
College and Automation and  
Robotics Manufacturing Institute  
$300,000  
The federal grant is in response to the state being designated by DoD as a Defense  
Manufacturing Community on August 16, 2020. The purpose of the designation is to support  
long-term community investments that strengthen national security innovation and expand the  
capabilities of defense manufacturing. In order for the state to receive the grant, a 25% match  
was required (approximately $1.3 million) which brings the total funding for the initiative to  
$
6.3 million. The matching funds are supported by $650,000 in state funds and $600,000 in  
program income and partner contributions. The $650,000 in state funds will be paid from GRF  
line item 195499, BSD Federal Programs Match, which provides state matching funds for federal  
programs, including the MEP Program.  
Budget Footnotes  
P a g e | 20  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Ohio Receives $96.2 Million State Opioid Response Grant  
Ryan Sherrock, Economist  
On August 21, 2020, the Ohio Department of Mental Health and Addiction Services  
(OhioMHAS) announced that it received a $96.2 million federal State Opioid Response (SOR)  
grant. SOR grant funds are used by states to combat the ongoing opioid epidemic. Specifically,  
these funds will be used to increase access to medication-assisted treatment, reduce unmet  
treatment need, and reduce overdose deaths through the provision of prevention, treatment,  
and recovery supports for opioid use disorder. In addition, funds will be used to support  
evidence-based prevention, treatment, and recovery support services for stimulant drugs,  
including cocaine and methamphetamine, to address a rise in their usage. OhioMHAS estimates  
that 20,000 Ohioans will receive services through these grant funds. In addition, OhioMHAS will  
build and engage local and regional community partnerships to scale-up local supports necessary  
for recovery.  
These grant funds were awarded by the U.S. Substance Abuse and Mental Health Services  
st  
Administration as part of the 21 Century CARES Act. The total amount of funding available was  
$
1.42 billion. States and territories received an award based on a formula that considered (1) the  
proportion of state residents who meet criteria for dependence or abuse of heroin or pain  
relievers, but have not received any treatment and (2) the proportion of drug poisoning deaths  
in the state. Additionally, 15% of the funds were set-aside for the ten states with the highest  
mortality rates related to drug poisoning deaths. These states include Ohio, as well as Delaware,  
Kentucky, Maryland, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Washington  
D.C., and West Virginia.  
This was the third round of SOR funding awarded. In total, Ohio has received  
235.1 million since the programs inception in 2018. Past and current Ohio SOR efforts include  
$
expanding prevention efforts related to naloxone distribution, increasing access to medication-  
assisted treatment and recovery housing, and developing employment opportunities for persons  
in recovery from opioid addiction.  
Ohio Department of Medicaid Files Rules to Make Expanded  
Access to Telehealth Permanent  
Nelson V. Lindgren, Economist  
On August 31, 2020, ODM filed a rule with the Joint Committee on Agency Rule Review  
JCARR) to expand access to telehealth. This rule would make permanent the emergency rules  
11  
(
regarding telehealth, which were issued in March in response to the COVID-19 pandemic. The  
rule expands the type of providers eligible to render telehealth services to include supervised  
practitioners (e.g., trainees and aides), Medicaid School Program providers, audiologists, speech-  
language pathologists, occupational therapists, physical therapists, home health and private duty  
nurses in home health or hospice settings, dentists, dietitians, behavioral health practitioners,  
and optometrists. The rule also provides fewer restrictions on patient and provider site locations.  
11 Executive Order 2020-05D specified that these rules would become effective immediately,  
March 19, 2020. The order was to expire 120 days from the effective date of the emergency rules or upon  
the adoption of the rules through the normal JCARR process, whichever is sooner.  
Budget Footnotes  
P a g e | 21  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
In addition, the rule requires providers who utilize telehealth to include a modifier that reflects  
the physical location of the patient and a place of service code that reflects the physical location  
of the treating provider. ODM states that this is being done, in part, to improve access to care.  
Between March 19 and September 1, 2020, more than 625,000 Medicaid members have used  
telehealth services. Only 5,000 telehealth claims were submitted prior to the COVID-19  
pandemic.  
This rule is scheduled for a hearing before JCARR on October 1, 2020, and according to  
ODM, is on track to become effective as the current emergency rules expire. Thus, if approved,  
expanded telehealth access will be continued throughout the remainder of the COVID-19  
pandemic and beyond, assuming continued federal flexibility.  
Motor Fuel Tax Revenue Increased by $650 Million (33.6%) in  
FY 2020, Although Consumption Decreased Due to COVID-19  
Tom Middleton, Senior Budget Analyst  
Eric Makela, Economist  
Motor fuel tax (MFT) revenue increased $650 million (33.6%) in FY 2020, although  
consumption decreased, as indicated in the table below. This increase was due to MFT rate  
rd  
increases enacted in H.B. 62 of the 133 General Assembly, the transportation budget bill for the  
FY 2020-FY 2021 biennium. H.B. 62 increased the MFT rate by 10.5 cents per gallon for gasoline  
and by 19 cents per gallon for other fuels, including diesel.12 The increases became effective on  
July 1, 2019, the start of FY 2020.  
Motor Fuel Purchases and MFT Paid  
Taxable Fuel Purchases (millions of gallons)  
Motor Fuel Taxes Paid ($ in millions)  
Fiscal  
Quarter  
% Change from  
% Change from  
FY 2020  
FY 2019  
FY 2020  
FY 2019  
Q1  
1,780.3  
1,705.3  
1,559.3  
1,377.1  
6,422.0  
-1.1%  
-3.3%  
-4.1%  
-23.0%  
-8.0%  
$714.9  
$684.5  
43.0%  
40.0%  
40.0%  
12.1%  
33.6%  
Q2  
Q3  
$631.8  
Q4  
$556.8  
Total  
$2,588.0  
Source: Ohio Department of Taxation MVR Reports  
12 Taxable fuel includes gasoline, kerosene, diesel, compressed natural gas, and any other liquid  
that can be used to fuel combustion engines. Year to year, about 75% of MFT revenue is derived from the  
purchase of gasoline, about 25% is from diesel, and around 0.1% is from other fuels.  
Budget Footnotes  
P a g e | 22  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Fuel consumption declined slightly through the first three quarters of FY 2020, compared  
to FY 2019, but dropped precipitously (-23%) in the last quarter of FY 2020 largely due to the  
COVID-19 pandemic reducing travel demands. Nationally during this quarter, inflation-adjusted  
consumer spending on motor vehicle fuels, lubricants, and fluids reached its lowest quarterly  
1
3
record since 1986.  
Of all MFT revenue, about 60% is used by the Ohio Department of Transportation for state  
road projects and to pay off highway bond debt, about 35% is allocated to political subdivisions  
by formula for local road and bridge projects, and about 5% is distributed to other state agencies  
for transportation-related purposes.  
State Debt Refinancing Frees $363.6 Million in FY 2021 Budget  
Eric Makela, Economist  
During the month of June 2020, OBM announced the issuance of $780 million of general  
obligation (GO) bonds. The Series 2020A and Series 2020B bonds, issued by the Ohio Public  
Facilities Commission (OPFC), refinanced previously issued bonds at lower interest rates; the  
move freed an additional $363.6 million in cash flow during FY 2021.14  
As shown in the table below, the OPFC bonded debt service due for all programs in  
FY 2021 was $1.14 billion prior to the June sale and $775.7 million after the bonds were  
1
5
refinanced. The table displays estimated debt service from OPFC bonded debt from FY 2021 to  
FY 2039 before and after OPFCs debt restructuring in June, as well as the estimated effects on  
GRF debt service expenditures during this period. Scheduled debt service payments for several  
years between FY 2022 and FY 2039 increase due to the refinancing, but by less than the FY 2021  
savings, resulting in a reduction in debt service paid during fiscal years 2021 through 2039 of  
$
111.2 million.  
The refunding bonds covered three different categories of debt usage: higher education,  
common schools, and infrastructure improvement. A total of $292.5 million of bonds were issued  
to refund previous debt issued for higher education facilities; approximately $271.8 million of  
bonds were issued to refund debt incurred for common school capital investment; approximately  
$
facilities capital projects. The refunded, or retired, debt was issued between 2009 and 2018.  
215.8 million of bonds were issued to refund debt previously taken on to fund general public  
16  
13 Based on consumer expenditure data from the Bureau of Economic Analysis and compiled by  
IHS Markit.  
14 https://obm.ohio.gov/wps/portal/gov/obm/home/news-and-events/news-release-2020-06-29.  
15 Source: Ohio Office of Budget and Management.  
16 Subtotals may not add to total due to rounding.  
Budget Footnotes  
P a g e | 23  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
GRF Debt Service for OPFC Bonded Debt ($ in millions)*  
Change in GRF Debt  
Service Expenditure  
Fiscal Year  
Prior to Refunding Bonds  
After Refunding Bonds  
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
021  
022  
023  
024  
025  
026  
027  
028  
029  
030  
031  
032  
033  
034  
035  
036  
037  
038  
039  
$1,139.4  
$1,072.9  
$984.7  
$847.2  
$746.0  
$655.9  
$567.1  
$543.6  
$519.1  
$493.5  
$489.1  
$431.4  
$345.6  
$307.7  
$255.9  
$228.7  
$194.2  
$134.0  
$73.1  
$775.7  
$1,074.1  
$985.8  
$912.1  
$847.1  
$702.6  
$599.0  
$538.7  
$512.4  
$494.2  
$492.4  
$434.7  
$347.4  
$309.5  
$257.7  
$230.6  
$195.6  
$134.9  
$73.5  
-$363.6  
$1.1  
$1.1  
$65.0  
$101.0  
$46.7  
$31.9  
-$4.9  
-$6.7  
$0.7  
$3.3  
$3.3  
$1.8  
$1.8  
$1.8  
$1.8  
$1.3  
$0.9  
$0.4  
Total  
$10,029.1  
$9,917.9  
-$111.2  
*Sums and differences may not total due to rounding.  
Budget Footnotes  
P a g e | 24  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Controlling Board Approves Attorney General Appropriation  
Increase for Federal Anti-Heroin Task Force Program Grants  
Jessica Murphy, Budget Analyst  
On September 14, 2020, the Controlling Board approved a request from the Ohio  
Attorney General to appropriate an additional $2.5 million in FY 2021 to use two federal  
Community Oriented Policing Services (COPS) Anti-Heroin Task Force (AHTF) Program grants  
awarded subsequent to the enactment of the FY 2020-FY 2021 biennial budget.  
The Attorney Generals Organized Crime Investigations Commission is using the grants for  
investigative purposes to locate or investigate illicit activities, including activities related to the  
distribution of heroin, fentanyl, carfentanil, or other opioids, the unlawful distribution of  
prescription opioids, or unlawful diversion and distribution of prescription opioids. The  
Commission authorizes task forces to investigate organized criminal activity that crosses city,  
township, and county borders and to provide related technical, administrative, and prosecutorial  
support.  
The two COPS AHTF Program grants received by the Commission total $5.2 million:  
1.5 million awarded in 2019 and $3.7 million awarded in 2020. The awards are for 24 months  
$
and 36 months in duration, respectively. There is no required state match. The funding is not  
intended for treatment programs or prosecution of heroin and other opioid-related activities.  
The competition for the grants was limited to state law enforcement agencies with high rates of  
primary treatment admissions for heroin, fentanyl, carfentanil, or other opioids.  
ODE Awards $46 Million in 21st Century Community Learning  
Center Grants  
Alexander Moon, Economist  
In August 2020, ODE awarded $46.3 million in new and continuing grants for FY 2021 to  
60 schools and community-based organizations under the 21 Century Community Learning  
st  
2
Centers (21CCLC) Grant Program. This federally funded program awards grants to support  
community learning centers that provide academic enrichment services during nonschool hours  
or extended learning time as part of the school day, particularly for students in low-performing,  
high-poverty schools. In this latest round of funding, ODE awarded grants for 42 new programs  
and 218 continuing programs, totaling $8.4 million and $37.9 million, respectively.  
ODE distributes 21CCLC grant funds to recipients for a five-year period with a maximum  
of $200,000 per year for the first three years of the program and gradually reduced maximum  
amounts for the last two years as recipients must transition to other resources to sustain the  
program after the 21CCLC grant expires. Also, to continue receiving a grant, recipients must  
annually submit program data to ODE and undergo periodic evaluations of the programs  
effectiveness. Nearly all of the 42 new grantees received the maximum $200,000 in funding for  
this year. Cuyahoga County is home to the largest number of new recipients, with seven, followed  
by Hamilton (4), Stark (3), and Montgomery (3) counties. To see the full list of grant recipients,  
st  
visit education.ohio.gov and search for21 Century Community Learning Centers.”  
Budget Footnotes  
P a g e | 25  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Ohio National Guard Extends Operation Steady Resolve into  
December 2020  
Shaina Morris, Budget Analyst  
On September 17, 2020, the Ohio National Guard announced the continuation of  
Operation Steady Resolve, the name given its COVID-19 related missions, through December  
020. From the time that the Governor activated the Ohio National Guard under U.S. Code  
2
Title 32 in March until August 31, 2020, Ohio was authorized to be reimbursed by the federal  
government at 100% of its mission costs to respond to COVID-19 and to facilitate economic  
1
7
recovery.In August, a presidential order continued funding, but at a cost share of 75% and for  
costs associated with . . . emergency assistance activities associated with preventing,  
mitigating, and responding to the threat to public health and safety posed by the virus . . . ”  
undertaken by the National Guard. These funds are provided by the Federal Emergency  
Management Agency (FEMA) of the U.S. Department of Homeland Security and authorized  
through December 31, 2020. The Ohio National Guards COVID-19 response has also received  
CARES Act funding to support payroll and other expenses.  
More than 400 Guard and State Defense Force members were initially activated in March  
to assist with the rising demand for food bank services resulting from the COVID-19 pandemic  
and increased unemployment. Operation Steady Resolve will continue into December with about  
3
50 Guard members assisting 14 food bank locations and warehouses across the state. This  
mission serves all 88 counties. Since activation, the Ohio National Guard has packed more than  
3 million pounds of food and distributed more than 50 million pounds of food, as well as assisted  
4
in providing more than 700,000 meals to citizens in need throughout the state.  
In addition to the food bank mission, the Ohio National Guard is assisting community  
pop-up COVID-19 testing centers, transporting sample collections to laboratories, providing  
personal protective equipment warehousing and logistics, and providing quick response medical  
teams for temporary assistance at nursing home facilities. Previous missions related to the  
pandemic have included collaborating with regional partners to identify and develop alternate  
care sites to expand medical capacity and to provide medical and operational support at state  
and federal prisons.  
17 Activation under U.S. Code Title 32 means that the states Governor has been authorized or  
directed by the President to mobilize or activate the National Guard. The National Guard personnel are  
on active duty under state control, but with pay and benefits provided by the federal government.  
Budget Footnotes  
P a g e | 26  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
Phil Cummins, Senior Economist  
Overview  
The national economy continued to show signs of improving health in September. The  
pace of recovery has slowed. Nonfarm payroll employment increased by 661,000 in September.  
American employers have 22.7% of employed persons working remotely. Industrial production,  
as measured by the Federal Reserve Boards (FRBs) industrial production index (IPI), was up 0.4%  
in August, the fourth consecutive month of expansion. Gross domestic product adjusted for  
inflation (real GDP) decreased at a 31.4% annual rate in the second quarter of 2020, according to  
the Bureau of Economic Analysis (BEA).  
Ohio employers added 45,500 nonfarm payroll workers in August, and the states  
unemployment rate edged down to 8.9%; employment totals generally rose across industries.  
The states real GDP fell at an annualized rate of 33.0% in the second quarter of 2020 in response  
to COVID-19 and its fallout, leading to a sharp drop in wage income and proprietors income  
during the quarter. The market for existing housing remains heated, as demand for homes  
remains high despite challenges posed by the pandemic, and as of August 2020 the YTD dollar  
volume of existing home sales in Ohio was 4.9% greater than in 2019.  
The National Economy  
Nonfarm payroll employment increased by 661,000 in September, and the national  
unemployment rate declined by 0.5 percentage point, to a seasonally adjusted 7.9%. In April, at  
the height of the national pandemic response, the unemployment rate stood at 14.7%. Rates of  
unemployment decreased among all age and racial groups during September. The seasonally  
1
8
adjusted number of persons in the civilian labor force decreased by 695,000 during the month.  
The labor force participation rate declined for both men and women in September.19 The trend  
in the national unemployment rate can be seen in Chart 6.  
The increase in nonfarm payroll employment in September followed substantially larger  
increases in May through August. Nevertheless, the recovery in employment in the latest five  
months totaled only about half of the jobs lost in March and April. Among industries, seasonally  
adjusted employment growth in September in leisure and hospitality (+318,000) and retail trade  
(
(
(
September, seasonally adjusted, mostly the result of fewer than usual employees returning to  
work with both local and state government education employers. Compared to September 2019,  
seasonally adjusted employment has decreased in the significant majority of industries. Some  
+142,000) was sizable, while employment increased in health care and social assistance  
+108,000), professional and business services (+89,000), transportation and warehousing  
+74,000), and manufacturing (+66,000). Government employment decreased by 216,000 in  
18 The civilian labor force equals employed persons plus unemployed persons who have searched  
for work during the previous four weeks.  
19 The labor force participation rate equals the civilian labor force divided by the civilian,  
noninstitutionalized adult population.  
Budget Footnotes  
P a g e | 27  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
exceptions are general merchandise stores (+212,000), couriers and messengers (+111,300), and  
warehousing and storage (+60,600). The trend in national employment can be seen in Chart 5.  
A new segment of the U.S. Census Bureaus household survey attempts to document  
pandemic-specific changes to work practices. In September, around 19.4 million persons  
reported either not working or working fewer hours because their employer lost business due to  
the pandemic. In addition, 22.7% of employed persons worked remotely during the month, down  
from 24.3% in August.  
Nationally, initial and ongoing claims for unemployment insurance (UI) remain elevated  
but have declined significantly since the early onset of the pandemic. For the week ending  
October 3, a seasonally adjusted 840,000 initial unemployment claims were filed, down 9,000  
from the previous week and well above the average of about 213,000 weekly claims filed from  
the last full week in December 2019 through March 7, 2020. Insured unemployment, a measure  
of the number of continued UI claims, was 11.0 million during the week ended September 26,  
down from a high of 24.9 million the week of May 9, and the lowest number of continued claims  
since March.  
Real GDP decreased at an annual rate of 31.4% nationally during the second quarter of  
2
020, according to the third estimate released by the BEA. During the second quarter, personal  
consumption expenditures (PCE) on goods decreased at a seasonally adjusted annual rate of  
0.8%; the most notable decreases in this spending category were in clothing and gasoline and  
1
energy goods. PCE on services decreased at a rate of 41.8% during the quarter, led by a drop in  
spending on health care as consumers delayed elective procedures and hospitals focused on  
pandemic readiness. After-tax corporate profits during the second quarter of 2020 were 18.8%  
lower than during the same quarter a year prior.  
The FRBs Open Market Committee (FOMC) decided to keep the federal funds interest rate  
steady at a range between 0% and 0.25% during their most recent meeting from September 15-16.  
In a press release, the FOMC anticipated the committee would keep interest rates at this level until  
the labor market approached maximum employment and inflation had trended above 2% for a  
period of time. FRB members projected a drop in real GDP of between 3% and 4% in the four  
quarters ending in the current quarter, followed by growth between 3.6% and 4.7% in the four  
quarters of CY 2021, above the economys longer-run growth trend.20  
National industrial production, as measured by the FRB’s IPI, rose by a seasonally adjusted  
.4% in August, following postcontraction growth of 1.0% in May, 6.1% in June, and 3.5% in July.  
0
In August, the total IPI was 7.7% below its level a year prior. Among major industry groups,  
manufacturing production increased by 1.0% in August; mining (-2.5%) and utilities (-0.4%)  
contracted during the month.  
The manufacturing purchasing managers index, derived from a survey of manufacturers  
by the Institute for Supply Management, measured growth in September for the fourth  
consecutive month, though employment decreased at more firms than it increased. Input prices  
increased for the fourth straight month, and firms reported shortages of intermediate inputs  
such as aluminum, capacitors, and lumber.  
20 Projections derived from Table 1 of the Federal Reserve Board’s “Projection Materials”:  
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20200916.pdf.  
Budget Footnotes  
P a g e | 28  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
The rise in prices for goods and services continued in August, as the consumer price index  
(CPI) for all items increased by 0.4% during the month. During August, the price of food increased  
by 0.1% while the price of energy increased by 0.9%. Prices of commodities, less food and energy  
commodities, increased by 1.0%, the largest monthly increase of the year. Compared with a year  
earlier, prices for all items were 1.3% higher in August, while prices for all items less food and  
energy were up 1.7% year over year.  
Chart 5: U.S. and Ohio Nonfarm Payroll Employment  
(
in millions)  
1
1
1
1
1
1
53.9  
48.5  
43.1  
37.7  
32.3  
26.9  
5.7  
5.5  
5.3  
5.1  
4.9  
4.7  
2
016  
2017  
2018  
2019  
2020  
U.S. Employment  
Ohio Employment (right scale)  
Chart 6: U.S. and Ohio Unemployment Rates  
% of Labor Force  
1
1
1
8.0%  
5.0%  
2.0%  
9.0%  
6.0%  
3.0%  
2
016  
2017  
2018  
2019  
Ohio  
2020  
United States  
Budget Footnotes  
P a g e | 29  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
The Ohio Economy  
Ohios economy added a seasonally adjusted 45,500 nonfarm payroll jobs in August, and  
the state unemployment rate decreased by 0.1 percentage point, to 8.9%. States with the highest  
unemployment rates during the month were Nevada (13.2%) and Rhode Island (12.8%). The  
states with the lowest unemployment rates during the month were Nebraska (4.0%) and Utah  
(
the decrease occurred in the months immediately following the initial rollback of COVID-19  
4.1%). Ohios unemployment rate has declined from a high of 17.6% in April, though much of  
lockdown orders. Chart 6 displays Ohios unemployment rate.  
Nonfarm payroll employment in Ohio increased across a range of industries in August.  
Among private sector industries, the most job gains were measured in educational and health  
services (+12,300), professional and business services (+7,500), and trade, transportation, and  
utilities (+6,800). The seasonally adjusted number of manufacturing jobs increased by 4,500, with  
gains almost evenly split between durable goods (+2,300) and nondurable goods (+2,200)  
segments. Total job gains in the private sector in August were 37,700. Payroll employment by the  
federal government in Ohio increased by 8,200 in August, likely due to a rise in the number of  
temporary Census workers. Chart 5 shows Ohio nonfarm payroll employment.21  
Ohios real GDP fell at a seasonally adjusted, annualized rate of 33.0% during the second  
quarter of 2020, according to new data released by the BEA; the rate of contraction among all  
2
2
states in the Great Lakes region was 32.8%. Among industries, reductions in activity in durable  
goods manufacturing and in health care and social assistance had the greatest impact on the  
measured decrease in Ohios GDP. Shutdowns in response to the health crisis brought about  
economic strain across the nation, as real GDP contracted at more than a 21% rate in each state.23  
The personal income (PI) of Ohioans increased at a seasonally adjusted annual rate of  
th  
3
7.8% during the second quarter of 2020, an increase in total personal income that ranked 20  
2
4
among states. During the first quarter of this year, PI grew at a rate of 3.6%. During the second  
quarter, net earnings, equal to worker compensation plus proprietorsincome minus  
government social insurance taxes, plummeted at a 28.3% rate, while income from dividends,  
interest earnings from financial holdings, and rent payments decreased at an 8.5% rate.  
Unemployment compensation and other transfer payments soared, accounting for the overall  
increase in PI.  
Earlier this year, Opportunity Insights, a consortium of businesses, nonprofits, and  
academic institutions, began collaborating to publish select indicators of economic recovery from  
2
5
the recent economic contraction. In the week ending September 25, the number of job postings  
21 During the COVID-19 pandemic, the Ohio Department of Job and Family Services produced a  
county-level count of job-posting trends by occupation and employer. The County Job Trends Report is  
available on the Department’s website at: ohiolmi.com/Home/COVID-19.  
22 States in the Great Lakes region are Illinois, Indiana, Michigan, Ohio, and Wisconsin.  
23 The annual rate of GDP change was 20.4% in the District of Columbia.  
24 Personal income is direct income from wages and salaries, rental income, business income,  
income received from ownership of financial assets, and government transfers.  
25 https://tracktherecovery.org/.  
Budget Footnotes  
P a g e | 30  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
was down 31.2% compared to January 4-31.26 Opportunity Insightsmeasures of consumer  
spending suggest that, as of September 20, Ohioans weekly spending on restaurants and hotels  
was down 20.5% compared to January, while spending on transportation was down 48.6%.  
Spending on general merchandise and groceries were up 15.4% and 20.8%, respectively, during  
2
7
the same time frame.  
According to the Ohio Association of Realtors, both the dollar value and number of  
transactions for existing homes were greater in August 2020 than in August 2019. The total  
number of existing home sales during the month was 4.2% above that a year prior, while the  
average sale price was 12.3% greater. Despite some logistical challenges caused by the current  
health crisis, the YTD dollar volume of existing home sales reached $21.2 billion in August, a 4.9%  
increase over 2019.  
Economic Forecast Update  
The table below updates the economic forecast published in this space in July. Economic  
weakness in this years first half was severe, but less so than it appeared to be three months ago.  
Real GDP nationwide plunged at about a 31% annual rate in the April-June quarter, the sharpest  
fall on record but short of the 42% rate of decline anticipated at that time. Other measures of  
the economy in the nation and Ohio generally show similar patterns, as COVID-19-related  
economic shutdowns depressed activity.  
The table compares the current outlook for the economy with the outlook last year, as  
predicted in forecasts from IHS Markit released in September of this year and in May 2019. The  
May 2019 predictions as well as other variables were inputs to forecasts by LBO economists of  
GRF revenues, for use by the legislature in enacting H.B. 166, the current bienniums main  
operating budget act.  
As noted here three months ago, economic forecasts are inherently uncertain. This is so  
even in the best of times. Current uncertainty is exacerbated by the COVID-19 pandemic. Efforts  
to tamp down flare-ups of infections as they occur, and the extent of success in researching  
effective treatments and vaccines, will substantially influence the future course of sales,  
production, and employment  
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.  
On a fiscal year basis, comparing the May 2019 forecast with the September 2020  
forecast, overall growth of U.S. real GDP was lower by 3.4 percentage points for FY 2020 and by  
2
.1 percentage points for FY 2021. Downward revisions for Ohio real GDP were 3.8 percentage  
points and 1.4 percentage points, respectively, for those years. Wage and salary income was also  
revised sharply lower for both the nation and the state, but total PI growth is estimated to have  
been stronger in FY 2020 than anticipated in May 2019 because of federal fiscal support through  
26 All dates in this paragraph are in reference to the year 2020.  
27 Consumer spending data for the Opportunity Insights project is based on purchase data from  
consumer credit and debit card purchases. As compared to data published by the BEA, the sample is  
smaller and is based on the state where the cardholder lives, rather than where the transaction occurs.  
Budget Footnotes  
P a g e | 31  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
expanded unemployment compensation and other transfer programs. Inflation, on average, is  
generally below rates expected in May 2019.  
Revisions to IHS Markit Economic Forecast for FY 2020 and FY 2021  
Forecast for FY 2020 as of Forecast for FY 2021 as of  
May  
019  
September  
2020  
May  
2019  
September  
2020  
Variable Name (National)  
U.S. real GDP growth  
2
2.3%  
-1.1%  
1.7%  
5.1%  
1.6%  
-1.9%  
6.0%  
2.0%  
-0.1%  
2.8%  
1.8%  
1.7%  
-1.9%  
7.5%  
U.S. wage & salary growth  
U.S. PI growth  
4.6%  
4.3%  
2.5%  
1.4%  
3.5%  
4.7%  
5.0%  
2.0%  
0.9%  
3.5%  
U.S. CPI inflation  
U.S. nonfarm employment growth  
U.S. unemployment rate  
Forecast for FY 2020 as of Forecast for FY 2021 as of  
May  
2019  
September  
2020  
May  
2019  
September  
2020  
Variable Name (Ohio)  
Ohio real GDP growth  
1.7%  
-2.1%  
0.2%  
5.4%  
-3.2%  
6.8%  
1.1%  
-0.3%  
2.1%  
2.0%  
-2.1%  
8.1%  
Ohio wage & salary growth  
Ohio PI growth  
4.0%  
4.1%  
0.9%  
4.1%  
3.7%  
4.2%  
0.2%  
4.1%  
Ohio nonfarm employment growth  
Ohio unemployment rate  
Chart 7 below shows the September 2020 quarterly forecast for Ohio real GDP.  
Quarter-to-quarter changes are shown in the chart at annual rates, for FY 2019, FY 2020, and  
FY 2021. BEAs initial estimate, published subsequent to the forecast shown in the chart, is that  
Ohio real GDP fell in the second quarter at a 33% annual rate, a smaller decline than anticipated  
in IHS Markits forecast. Ohio real GDP is expected to begin recovering in FY 2021, but not to rise  
above its prerecession peak until the last quarter of FY 2022.  
Budget Footnotes  
P a g e | 32  
October 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 7: Ohio Real GDP  
40%  
30%  
20%  
10%  
0%  
-
-
-
-
10%  
20%  
30%  
40%  
FY 2019  
FY 2020  
FY 2021  
Budget Footnotes  
P a g e | 33  
October 2020