A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2021  
Issue: March 2021  
Highlights  
Ross Miller, Chief Economist  
February GRF tax revenue exceeded the estimate published by the Office of  
Budget and Management (OBM) in September 2020 by $183 million. The three biggest  
tax sources were each well above estimate: the sales and use tax by $48 million, the  
personal income tax (PIT) by $90 million, and the commercial activity tax (CAT) by  
$
25 million. Though tax revenue has exceeded estimate each month this fiscal year,  
February was the first month since July during which the positive variance exceeded  
100 million. For FY 2021 through February, GRF tax revenue was $722 million above  
$
estimate. On the spending side of the budget, February GRF expenditures were well  
below estimate, due to a $537 million negative variance for Medicaid expenditures.  
The U.S. Bureau of Labor Statistics reported an increase in nationwide  
nonfarm payroll employment of 379,000 in February, but the unemployment rate  
remained 6.2%.  
Through February 2021, GRF sources totaled $25.21 billion:  
Revenue from the sales and use tax was $446.4 million above estimate;  
PIT receipts were $237.2 million above estimate.  
Through February 2021, GRF uses totaled $23.75 billion:  
Program expenditures were $1.57 billion below estimate, due almost  
entirely to Medicaid, for which spending was $1.54 billion below estimate;  
Expenditures under two program categories were significantly above  
estimate, due in part to timing, including Primary and Secondary Education  
(by $114.0 million) and Debt Service ($81.3 million).  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 13),  
the National Economy (p. 30), and the Ohio Economy (p. 33).  
Also Issue Updates on:  
FY 2021 School Foundation Funding (p. 21)  
Federal Emergency Relief Funds for Schools (p. 22)  
Federal Relief Funding for Higher Education Institutions (p. 23)  
ODE Literacy Data (p. 24)  
2
021 Federal Poverty Guidelines (p. 26)  
Alzheimers Disease and Related Dementias Task Force (p. 27)  
Ohio EPA H2Ohio Projects (p. 27)  
Agriculture H2Ohio Incentive Payments (p. 29)  
Justice Assistance Grants (p. 29)  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of February 2021  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on March 1, 2021)  
State Sources  
Actual  
Estimate*  
Variance  
Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$121,078  
$686,701  
$807,778  
$98,200  
$661,500  
$759,700  
$22,878  
$25,201  
$48,078  
23.3%  
3.8%  
6.3%  
Personal Income  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Business and Property  
Estate  
$382,487  
$376,861  
$61,461  
$28,076  
$116,876  
$0  
$76,290  
$28,111  
$16,411  
$5,659  
$4,205  
$0  
$292,100  
$351,900  
$62,100  
$31,300  
$119,700  
$0  
$51,300  
$30,000  
$15,100  
$4,400  
$3,700  
$0  
$90,387  
$24,961  
-$639  
-$3,224  
-$2,824  
$0  
$24,990  
-$1,889  
$1,311  
$1,259  
$505  
30.9%  
7.1%  
-1.0%  
-10.3%  
-2.4%  
---  
48.7%  
-6.3%  
8.7%  
28.6%  
13.6%  
---  
$0  
$16  
$0  
$0  
$16  
$0  
$0  
$0  
$0  
$0  
---  
---  
---  
Total Tax Revenue  
$1,904,231 $1,721,300 $182,931  
10.6%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$0  
$6,408  
$435  
$0  
$7,102  
$496  
$0  
-$693  
-$61  
---  
-9.8%  
-12.2%  
Total Nontax Revenue  
$6,844  
$7,597  
-$754  
-9.9%  
Transfers In  
$0  
$0  
$0  
---  
10.5%  
-44.8%  
-5.3%  
Total State Sources  
Federal Grants  
$1,911,074 $1,728,897 $182,177  
$381,563 $691,055 -$309,492  
$2,292,638 $2,419,952 -$127,315  
Total GRF Sources  
*
estimate, adjusted for the shift of income tax filings from April (FY 2020) to July (FY 2021)).  
Detail may not sum to total due to rounding.  
Estimates of the Office of Budget and Management as of September 2020 (H.B. 166  
Budget Footnotes  
P a g e | 2  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2021 as of February 28, 2021  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on March 1, 2021)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance Percent FY 2020**  
Percent  
$1,138,075  
$6,704,789 $6,397,000  
$7,842,864 $7,396,500  
$999,500  
$138,575  
$307,789  
$446,364  
13.9%  
4.8%  
6.0%  
$1,029,245  
$6,388,173  
$7,417,418  
10.6%  
5.0%  
5.7%  
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  
$6,512,218 $6,275,000  
$1,212,282 $1,215,600  
$237,218  
-$3,318  
$39,647  
-$18,487  
$16,051  
-$1,260 -60.0%  
$17,237 21.8%  
-$19,270 -19.6%  
-$4,602 -11.4%  
$4,385  
$4,507  
-$2,338 -53.1%  
$5,817  
$59  
$12  
3.8%  
-0.3%  
7.6%  
-8.2%  
5.8%  
$5,590,361  
$1,246,186  
$543,536  
$228,384  
$316,474  
$3,971  
$86,364  
$95,904  
$29,061  
$35,406  
$35,143  
$4,041  
16.5%  
-2.7%  
3.7%  
$563,647  
$207,213  
$293,651  
$840  
$96,437  
$79,130  
$35,798  
$41,385  
$38,607  
$2,062  
$5,817  
$59  
$524,000  
$225,700  
$277,600  
$2,100  
$79,200  
$98,400  
$40,400  
$37,000  
$34,100  
$4,400  
$0  
-9.3%  
-7.2%  
-78.8%  
11.7%  
-17.5%  
23.2%  
16.9%  
9.9%  
11.9%  
13.2%  
-49.0%  
---  
---  
---  
$92 6214.6%  
$0  
$38  
$0  
---  
-67.1%  
8.3%  
$12  
$0  
Total Tax Revenue  
$16,932,022 $16,210,000  
$722,022  
4.5% $15,632,380  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$32,562  
$24,408  
$94,481  
$151,450  
$18,750  
$20,325  
$82,244  
$121,319  
$13,812  
$4,083  
$12,237  
73.7%  
20.1%  
14.9%  
24.8%  
$76,978  
$20,809  
$80,349  
$178,136  
-57.7%  
17.3%  
17.6%  
-15.0%  
Total Nontax Revenue  
$30,132  
Transfers In  
$85,026  
$77,932  
$7,094  
9.1%  
$76,431  
11.2%  
8.1%  
Total State Sources  
Federal Grants  
$17,168,499 $16,409,251  
$759,248  
4.6% $15,886,947  
$8,039,906 $9,006,755 -$966,849 -10.7% $7,004,470  
$25,208,404 $25,416,005 -$207,601 -0.8% $22,891,417  
14.8%  
10.1%  
Total GRF SOURCES  
*
Estimates of the Office of Budget and Management as of September 2020 (H.B. 166 estimate, adjusted for the  
shift of income tax filings from April (FY 2020) to July (FY 2021)).  
*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  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean J. Botomogno, Principal Economist  
Overview  
FY 2021 GRF sources through February of $25.21 billion were $207.6 million (0.8%) short  
of the estimate released by OBM in September 2020, due to a large negative variance of  
$
include tax revenue, nontax revenue, and transfers in, and federal grants. Partially offsetting  
the negative variance for federal grants, year-to-date (YTD) state-source receipts were  
966.8 million (10.7%) for federal grants. GRF sources consist of state-source receipts, which  
$
$
$
759.2 million (4.6%) above estimate. This overage was due to positive variances of  
722.0 million (4.5%) for GRF tax sources, $30.1 million (24.8%) for nontax revenue, and  
7.1 million (9.1%) for transfers in. GRF revenue from federal grants is related to spending for  
Medicaid and other human services programs, and YTD GRF Medicaid expenditures posted a  
2
substantial negative variance totaling $1.54 billion (11.8%) through February. Thus, despite the  
YTD shortfall of GRF sources, the budget situation remains sound. Tables 1 and 2 show GRF  
sources for the month of February and for FY 2021 through February, respectively.  
OBM released updated FY 2021 GRF estimates in February with the introduction of the  
executive budget (Blue Book). OBM now anticipates GRF revenue of $36.21 billion for the full  
fiscal year, down from its September estimate of $38.42 billion, with most of the variance in  
federal grants. The reduction in estimated GRF tax revenues was $634.5 million. Because LBO  
has not received updated monthly estimates for the remainder of this fiscal year, this  
publication will continue to compare actual GRF sources to the estimates released in  
September 2020.  
GRF tax sources have been above estimate throughout FY 2021. The fiscal years overage  
has generally been due to favorable performances by three of the biggest taxes. Through  
February, the sales and use tax, the PIT, and the cigarette tax were $446.4 million, $237.2 million,  
and $39.6 million above their respective estimates. The CAT, another major tax source, had a YTD  
shortfall of $3.3 million, due to poor tax payments in the first fiscal quarter tied to  
3
COVID-19-related measures in the spring quarter. Excluding the largest tax sources above, the  
remaining taxes had a combined YTD positive variance of just $2.1 million. The foreign insurance  
tax, the liquor gallonage tax, and the alcoholic beverage tax were above their respective YTD  
1 This report compares actual monthly and YTD GRF revenue sources to OBMs estimates. If  
actual receipts were higher than estimate, that GRF source is deemed to have a positive variance.  
Alternatively, a GRF source is deemed to have a negative variance if actual receipts were lower than  
estimate.  
2 FY 2021 Medicaid variances are measured against estimates that are approximately $3 billion  
higher for all funds Medicaid expenditures than the estimates established when H.B. 166 was enacted.  
Thus, the negative variance for federal grants is likely to persist throughout the fiscal year.  
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 economic activity and taxable gross receipts in the spring quarter, which  
was the basis for the tax paid by quarterly CAT taxpayers in August 2020.  
Budget Footnotes  
P a g e | 4  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
revenue targets by $16.1 million, $4.5 million, and $4.4 million. The financial institutions tax (FIT)  
was $17.2 million above anticipated revenue, due to its February performance. Receipts of  
$
a YTD shortfall totaling $7.8 million at the end of January. In addition, the corporate franchise tax  
76.3 million during the month were $25.0 million above projected revenue, and this result erased  
4
(
CFT) had a YTD positive variance of $5.8 million, due to revenue from the conclusion of certain  
5
audits. The positive variances were partly offset by YTD deficits from the public utility tax (in part  
due to a one-time refund not anticipated), the kilowatt-hour tax, the natural gas consumption tax,  
the petroleum activity tax (PAT), and the domestic insurance tax. These taxes experienced  
negative variances of $19.3 million, $18.5 million, $4.6 million, $2.3 million, and $1.3 million,  
respectively. Utility-related taxes kilowatt-hour, public utility, and natural gas consumption –  
have generally been below their respective estimates throughout FY 2021, in part due to  
decreased energy consumption related to closures induced by the COVID-19 pandemic, milder  
weather, and lower than expected energy prices.  
February GRF sources were below expectations by $127.3 million (5.3%), brought down  
by another large negative variance for federal grants, in this case a shortfall of $309.5 million  
(
44.8%). That deficit was partially offset by a positive variance of $182.9 million (10.6%) for GRF  
taxes. Regarding the other revenue categories, nontax revenue was below expectation by  
0.8 million (9.9%). As in the previous five months, GRF revenue from transfers in was not  
$
anticipated in February 2021 and none was made. (OBM anticipates the next GRF transfers in to  
be made in June.)  
For the month, the PIT, the sales and use tax, and the CAT were above their anticipated  
revenue levels by $90.4 million, $48.1 million, and $25.0 million, respectively. In addition to the  
FITs monthly positive variance mentioned earlier, the natural gas consumption tax and the  
alcoholic beverage tax each surpassed their projections by $1.3 million. Most of the remaining  
tax sources experienced shortfalls, including the kilowatt-hour tax ($3.2 million), the foreign  
insurance tax ($2.8 million), and the public utility tax ($1.9 million). Chart 1, below, shows  
cumulative YTD variances of GRF sources through February in FY 2021.  
Growth of GRF sources relative to year-ago sources has followed the same patterns in  
the last few months, with large increases in federal grants and tax revenues. YTD GRF sources  
rose $2.32 billion (10.1%) compared to sources in the corresponding period in FY 2020. Tax  
sources and federal grants rose $1.30 billion (8.3%) and $1.04 billion (14.8%), respectively.  
Growth for federal grants was due in part to a COVID-19-related temporary rise in the share of  
federal reimbursements for Medicaid. This increase, which was authorized by the Coronavirus  
Aid, Relief, and Economic Security (CARES) Act, accounted for $767.1 million of the $1.04 billion  
growth in federal grants. Transfers in also rose, by $8.6 million (11.2%), but nontax revenue fell  
by $26.7 million (15.0%) from lower earnings on investments in FY 2021.  
4 Annual FIT tax returns are due in October, but estimated payments are made at the end of  
January, March, and May. The reconciliation between estimated payments and final tax liability may  
result in net refunds between July and December. The January payment, including February receipts,  
was $6.7 million above the combined estimate for the two-month period.  
5 Though GRF receipts are no longer anticipated because H.B. 510 of the 129th General Assembly  
eliminated the CFT at the end of 2013, adjustments to tax filings in previous years continue to affect this  
tax source.  
Budget Footnotes  
P a g e | 5  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Chart 1: Cumulative Variances of GRF Sources in FY 2021  
(
Variances from Estimates, $ in millions)  
$
1,000  
$
$
$
$
800  
600  
400  
200  
$0  
-
$200  
$400  
$600  
$800  
-
-
-
-
-
$1,000  
$1,200  
Jul-20  
Aug-20  
Sep-20  
Oct-20  
Nov-20  
Dec-20  
Jan-21  
Feb-21  
Federal Grants  
Tax Revenue  
Total GRF Sources  
The growth in GRF tax sources was due to increases of $921.9 million in PIT revenue and  
425.4 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 and use tax revenue has been supported by federal income support  
programs since the spring of 2020. Combined receipts from the remaining taxes fell by  
$
47.6 million. Revenue from the cigarette tax, the FIT, the natural gas consumption tax, the  
alcoholic beverage tax, the CFT, and the liquor gallonage tax increased. On the other hand,  
revenue declined for the CAT, the public utility tax, the kilowatt-hour tax, the foreign insurance  
tax, the domestic insurance tax, and the PAT.  
Sales and Use Tax  
The sales and use tax continues to perform superbly. February GRF sales and use tax  
revenue of $807.8 million was $48.1 million (6.3%) above estimate, and both portions of the tax  
(
i.e., auto and nonauto) again beat their respective estimates in the latest month. Compared to  
receipts last year in the same month, revenue was higher by $24.0 million (3.1%). Through  
February, FY 2021 revenue totaled $7.84 billion. This amount was $446.4 million (6.0%) above  
OBM projections and 5.7% above receipts in the corresponding period in FY 2020.  
Sales tax revenue has been supported by increased consumer spending. Overall spending  
was estimated to have risen by 3.2%, compared to its level of January 2020. Ohio retail spending  
(
including online purchases, excluding groceries) was also estimated to have increased by 17.0%  
compared to its January 2020 level. Consumer spending on goods, which is mostly taxable under  
Ohio sales tax law, has been strong throughout FY 2021, though spending on services (a majority  
of which is untaxed) has substantially lagged. On the other hand, the labor market continues to  
be different for various categories of workers, with increased employment levels among  
high-wage earners, though employment rates among workers in the middle and bottom tiers of  
Budget Footnotes  
P a g e | 6  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
wage earners remain below prepandemic levels.6 The performance of this tax source in the  
fourth fiscal quarter is likely to be dependent on continued improvement in the Ohio economy  
7
and buoyed by the pending federal relief package. COVID-19 infections appear to be stabilizing  
and increased vaccinations might also provide another boost to the economy.  
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 GRF nonauto sales and use tax receipts totaled $6.70 billion, an amount  
307.8 million (4.8%) above estimate and $316.6 million (5.0%) above revenue in FY 2020  
$
through February. February receipts of $686.7 million were $25.2 million (3.8%) above  
estimate. Monthly receipts were also $5.8 million (0.9%) above revenue in February 2020.  
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. Chart 2, below, provides year-over-year  
growth in nonauto sales and use tax collections in 2020.  
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%  
6 For these purposes, high-wage earners are defined as those earning in excess of $60,000 per year.  
Low-wage earners are those earning below $27,000 per year. Employment rates as of December 12, 2020;  
spending data as of February 14, 2021. Data available at: https://tracktherecovery.org/.  
7 H.R. 1319, the American Rescue Plan Act of 2021, includes a recovery rebate of up to $1,400  
per person, depending on income level.  
Budget Footnotes  
P a g e | 7  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Auto Sales and Use Tax  
Through February, FY 2021 receipts totaled $1.14 billion, an amount $138.6 million  
(13.9%) above estimate and $108.8 million (10.6%) above revenue in the corresponding period  
last fiscal year. (Excluding an outsized first-quarter performance, the growth rate compared to  
last year for the succeeding five months of 6.6% has also been good.) February auto sales and  
use tax revenue was $121.1 million, $22.9 million (23.3%) above estimate and $18.2 million  
(17.7%) above such receipts in February 2020. Chart 3, below, shows year-over-year growth in  
auto sales and use tax collections, the pandemic-related revenue declines earlier in calendar  
year (CY) 2020 from both low demand and low supply of vehicles, and the subsequent rebound  
starting in late spring and continuing through the current fiscal year.  
New U.S. light vehicle (auto and light truck) sales came in below expectations in  
February. Sales of 15.7 million units (on a seasonally adjusted annual rate basis) were 6.6%  
below year-ago total unit sales. Both passenger cars and light trucks saw weaknesses. The  
pullback in U.S. sales was likely caused by the severe weather that struck Texas and other  
southeastern states during the month, thus the February weakness may be transient. As  
mentioned in previous editions of this publication, although a useful barometer of the direction  
of the industry, U.S. light vehicle monthly unit sales do not track closely with Ohios auto sales  
and use tax performance and have been, for several months, below auto sales and use tax  
growth.  
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%  
Personal Income Tax  
A positive revenue variance of $90.4 million (30.9%) in February pushed up the YTD  
variance of the PIT to $237.2 million (3.8%), up from $146.8 million through January. In  
January, GRF revenue from this tax source was also above estimate, by $71.5 million. Both  
performances were primarily due to lower than anticipated refunds resulting from a delayed  
Budget Footnotes  
P a g e | 8  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
start to the tax filing season.8 For the January to February period, refunds were about 38%  
below refunds during the corresponding period in 2020.  
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  
9
withholdings, quarterly estimated payments, trust payments, payments associated with annual  
returns, and other miscellaneous payments. The performance of the tax is typically driven by  
employer withholdings, which is the largest component of gross collections (about 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.  
YTD, FY 2021 GRF receipts from the PIT of $6.51 billion were $921.9 million (16.5%)  
above such revenue in FY 2020 through February. The large year-over-year PIT revenue growth  
(
which is expected to decrease over time) is directly attributable to the delay of income tax  
filings from April to July 2020. Excluding July receipts, combined PIT GRF revenue was  
371.8 million (7.5%) above receipts in the August to February period in FY 2020. Among  
$
measures designed to combat the impact of the COVID-19 pandemic, H.B. 197 of the  
rd  
1
33 General Assembly authorized the Tax Commissioner to delay various state tax payments,  
which he did for this tax, to match the extended deadline for federal income tax returns. About  
719.0 million in income tax annual returns and first-quarter estimated payments were  
$
postponed and realized in FY 2021, according to the Department of Taxation.  
February PIT revenue to the GRF was above anticipated revenue due to fewer than  
anticipated refunds. Refunds were $53.1 million (11.9%) below their projected level. Gross  
collections were $35.8 million (4.6%) above target, with mixed results for the various  
components. Collections were buoyed by positive variances of $25.1 million for quarterly  
estimated payments, $13.0 million for taxes due with annual returns, and $3.5 million for trust  
payments. Those positive variances were partially offset by shortfalls of $3.4 million for  
employer withholding and $2.4 million for miscellaneous payments.  
For FY 2021 through February, 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 $117.7 million above anticipated revenue. Quarterly estimated payments,  
trust payments, and payments due with annual returns were above their projections by  
$
115.6 million, $20.2 million, and $7.5 million, respectively. Those positive variances were  
partially offset by shortfalls of $17.5 million for employer withholding and $8.1 million for  
miscellaneous payments. Refunds were $132.8 million below estimate, but LGF distributions  
were above expectation by $13.3 million, thus resulting in the YTD positive variance of  
$
237.2 million for the GRF.  
8 The Internal Revenue Service (IRS) and the Department of Taxation started accepting and  
processing tax returns on February 12, 2021. Through February 19, 2021, IRS filing statistics indicate that  
3
7.9% fewer returns were processed, relative to the tax filing season in 2020.  
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  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Compared to the corresponding period in FY 2020, gross collections have been higher in  
FY 2021 due to the income tax filing delay. They grew $839.6 million, driven by increases of  
$
606.5 million from payments due with annual returns and $189.7 million for quarterly  
estimated payments. In addition, trust payments and employer withholding rose $46.2 million  
and $7.6 million, respectively. On the other hand, miscellaneous payments were below their  
FY 2020 levels by $10.4 million. FY 2021 refunds were lower than those in FY 2020 by  
$
100.6 million, but LGF distributions were higher by $18.3 million. Therefore, growth in PIT GRF  
revenue totaled $921.9 million relative to YTD receipts in FY 2020. Year-over-year growth in  
withholding receipts in CY 2020 had been limited through December 2020 because of a 4.0%  
reduction in withholding rates effective January 2020 due to the reduction of income tax rates  
for nonbusiness income enacted in H.B. 166. This limitation on growth in withholding receipts  
explains much of the weak growth in withholding receipts from FY 2020 shown in the table, but  
it no longer applies starting in January 2021. Though we might expect withholding growth to  
pick up during the remaining months of FY 2021, in fact revenue from withholding decreased in  
both January and February from the respective year-earlier months, despite withholding rates  
remaining the same.  
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  
-$17.5  
$115.6  
$20.2  
-0.3%  
17.7%  
32.6%  
1.0%  
$7.6  
0.1%  
Quarterly Estimated Payments  
Trust Payments  
$189.7  
$46.2  
32.8%  
128.3%  
409.6%  
-19.3%  
12.0%  
-8.8%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$7.5  
$606.5  
-$10.4  
$839.6  
-$100.6  
$18.3  
-$8.1  
-15.8%  
1.5%  
$117.7  
-$132.8  
$13.3  
Less Refunds  
-11.3%  
4.5%  
Less LGF Distribution  
GRF PIT Revenue  
6.4%  
$237.2  
3.8%  
$921.9  
16.5%  
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 2021 and estimated withholding receipts adjusted for the January  
2
adjustments affecting December but not January and February actual receipts). Payrolls are  
estimated to have increased about 1.8%, on average, in the last three months.  
020 decrease in the withholding tax rate through the first half of FY 2021 (meaning  
Budget Footnotes  
P a g e | 10  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
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%  
Actual  
Adjusted  
Commercial Activity Tax  
The third CAT payment by quarterly calendar taxpayers to the GRF in February returned  
376.9 million, an amount $25.0 million (7.1%) above estimate. This performance decreased  
$
the YTD negative variance of the CAT to $3.3 million (0.3%), down from $28.3 million at the end  
of January. Monthly GRF revenue was also $22.5 million (6.4%) above February 2020 revenue.  
For the fiscal year, GRF receipts of $1.21 billion through February were $33.9 million  
(
2.7%) below revenue during the first eight months of FY 2020. YTD FY 2021 gross collections  
totaled $1.54 billion, a decrease of $15.7 million (1.0%) from collections in the corresponding  
period last year. On the other hand, refunds and credits were $108.0 million this fiscal year, an  
increase of $24.4 million (29.2%) above those items in FY 2020. After a first-quarter shortfall,  
this tax source experienced a positive variance in the second quarter; January CAT receipts  
were poor, but remittances in the latest month, reflecting taxable gross receipts in the October  
to December period, are consistent with a continuing economic recovery.  
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%). Distributions to  
Fund 7047 and Fund 7081 were $185.4 million and $28.5 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 revenue from the cigarette and other tobacco products (OTP) tax totaling  
563.6 million was above estimate by $39.6 million (7.6%). This total included $496.4 million from  
$
the sale of cigarettes and $67.2 million from the sale of OTP. Revenue from this tax source  
Budget Footnotes  
P a g e | 11  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
continues to outpace projected receipts as the pandemic wears on; positive revenue variances  
over several months appear to be related to heightened consumption since March 2020.  
February receipts of $61.5 million were $0.6 million (1.0%) below estimate and $5.2 million  
(
7.9%) below revenue in the same month in 2020. The monthly decline relative to the same  
month a year ago was almost entirely due to a drop in cigarette revenue while revenue from OTP  
sales increased. Until January 2021, when receipts were also below revenue in the same month a  
year ago, previous months had seen year-over-year growth in total revenue from the tax.  
Through February, FY 2021 receipts grew $20.1 million (3.7%) relative to revenues in the  
corresponding period in FY 2020. Receipts from cigarette sales and OTP sales increased by  
$
7.2 million (1.5%) and $12.9 million (23.7%), 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. 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 in FY 2020) grows with OTP price increases.  
1
0
On a yearly basis, revenue from the cigarette tax usually trends downward, generally at  
a slow pace. It is unclear how long smokers will maintain this higher level of tobacco  
consumption, though the long-term annual decline in cigarette consumption may have  
resumed. In January and February 2021, revenue from the sale of cigarettes was below such  
revenue in the corresponding months last year.  
10 Of total receipts in FY 2020 of $82.4 million from the sale of OTP, the tax on vapor products  
contributed $3.7 million, or about 4%, according to the Department of Taxation.  
Budget Footnotes  
P a g e | 12  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of February 2021  
($ in thousands)  
(Actual based on OAKS reports run March 2, 2021)  
Program Category  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$820,260  
$237,189  
$4,552  
$725,447  
$216,188  
$5,269  
$94,813  
$21,001  
13.1%  
9.7%  
Other Education  
-$717 -13.6%  
Total Education  
$1,062,002  
$946,904 $115,098  
12.2%  
Medicaid  
$614,529 $1,151,500 -$536,972 -46.6%  
$104,478 $111,386 -$6,908 -6.2%  
$719,007 $1,262,887 -$543,879 -43.1%  
Health and Human Services  
Total Health and Human Services  
Justice and Public Protection  
General Government  
$153,829  
$28,203  
$170,439  
$27,500  
-$16,610  
$702  
-9.7%  
2.6%  
Total Government Operations  
$182,032  
$197,940  
-$15,908  
-8.0%  
Property Tax Reimbursements  
Debt Service  
-$1  
$166,729  
$166,728  
$0  
$85,365  
$85,365  
-$1  
$81,364  
$81,363  
---  
95.3%  
95.3%  
Total Other Expenditures  
Total Program Expenditures  
Transfers Out  
$2,129,769 $2,493,095 -$363,326 -14.6%  
$0 $0 $0 ---  
$2,129,769 $2,493,095 -$363,326 -14.6%  
Total GRF Uses  
*September 2020 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2021 as of February 28, 2021  
($ in thousands)  
(Actual based on OAKS reports run March 2, 2021)  
Program Category  
Actual  
Estimate*  
Variance  
Percent FY 2020** Percent  
Primary and Secondary Education  
Higher Education  
$5,597,754 $5,483,724  
$1,555,859 $1,550,399  
$114,030  
$5,460  
2.1%  
0.4%  
$5,725,073  
$1,546,261  
-2.2%  
0.6%  
Other Education  
$53,727  
$56,513  
-$2,785  
$116,705  
-4.9%  
$60,785 -11.6%  
Total Education  
$7,207,340 $7,090,636  
1.6% $7,332,118  
-1.7%  
Medicaid  
$11,470,845 $13,006,809 -$1,535,964 -11.8% $10,949,244  
$944,976 $1,041,814 -$96,838 -9.3% $964,473  
4.8%  
-2.0%  
4.2%  
Health and Human Services  
Total Health and Human Services $12,415,821 $14,048,623 -$1,632,802 -11.6% $11,913,717  
Justice and Public Protection  
General Government  
$1,668,897 $1,747,625  
$292,846 $321,138  
$1,961,743 $2,068,762  
-$78,728  
-$28,292  
-$107,019  
-4.5%  
-8.8%  
$1,663,473  
$294,707  
0.3%  
-0.6%  
0.2%  
Total Government Operations  
-5.2% $1,958,180  
Property Tax Reimbursements  
Debt Service  
$904,344  
$816,869  
$933,578  
$735,603  
-$29,234  
$81,266  
$52,032  
-3.1%  
11.0%  
$905,292  
-0.1%  
$1,100,934 -25.8%  
Total Other Expenditures  
$1,721,213 $1,669,181  
3.1% $2,006,226 -14.2%  
-6.3% $23,210,241 0.4%  
-0.2% $663,620 -33.0%  
-6.2% $23,873,861 -0.5%  
Total Program Expenditures  
Transfers Out  
$23,306,117 $24,877,201 -$1,571,084  
$444,870 $445,900 -$1,030  
$23,750,987 $25,323,101 -$1,572,114  
Total GRF Uses  
*
*
September 2020 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2020.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 14  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on March 7, 2021)  
Month of February 2021  
Year to Date through February 2021  
Actual Estimate* Variance Percent  
Department  
Medicaid  
GRF  
Actual  
Estimate* Variance Percent  
$559,600 $1,085,990 -$526,391 -48.5% $11,017,079 $12,525,926 -$1,508,847 -12.0%  
Non-GRF  
$1,534,907 $1,455,915  
$78,992  
5.4%  
$7,391,741 $7,350,934  
$40,807  
0.6%  
All Funds  
$2,094,506 $2,541,905 -$447,399 -17.6% $18,408,820 $19,876,860 -$1,468,040  
-7.4%  
Developmental Disabilities  
GRF  
$49,613  
194,144  
243,757  
$59,460  
$193,501  
$252,961  
-$9,847 -16.6%  
$390,602  
$411,549  
-$20,947  
$59,326  
$38,379  
-5.1%  
3.6%  
1.9%  
$
$643  
0.3%  
$1,693,779 $1,634,452  
$2,084,381 $2,046,001  
Non-GRF  
All Funds  
$
-$9,204  
-3.6%  
Job and Family Services  
GRF  
$4,594  
$12,407  
17,002  
$5,315  
$10,565  
$15,879  
-$720 -13.6%  
$55,599  
$110,162  
$165,761  
$61,466  
$114,591  
$176,057  
-$5,867  
-$4,429  
-9.5%  
-3.9%  
-5.8%  
Non-GRF  
$1,843  
$1,122  
17.4%  
7.1%  
$
-$10,296  
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$722  
$735  
$5,783  
$6,518  
-$13  
-1.8%  
$7,565  
$23,516  
$31,081  
$7,868  
$29,049  
$36,917  
-$303  
-3.9%  
Non-GRF  
$4,461  
-$1,322 -22.9%  
-$1,335 -20.5%  
-$5,533 -19.0%  
-$5,836 -15.8%  
$
5,183  
All Funds  
All Departments:  
GRF  
$614,529 $1,151,500 -$536,972 -46.6% $11,470,845 $13,006,809 -$1,535,964 -11.8%  
Non-GRF  
All Funds  
$1,745,919 $1,665,763  
$80,156  
4.8% $9,219,197 $9,129,026  
$90,171  
1.0%  
$
2,360,448 $2,817,263 -$456,816 -16.2% $20,690,042 $22,135,835 -$1,445,793  
-6.5%  
*September 2020 estimates from the Office of Budget and Management and Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 15  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on March 7, 2021)  
Month of February 2021  
Year to Date through February 2021  
Payment Category  
Actual  
Estimate* Variance Percent  
Actual  
Estimate*  
Variance  
Percent  
Managed Care  
CFC†  
$1,643,117 $2,012,812 -$369,695 -18.4% $13,977,901 $14,892,567  
-$914,666  
-6.1%  
$605,112  
$500,426  
$242,588  
$80,293  
$214,698  
$0  
$732,797 -$127,685 -17.4% $4,869,106  
$675,153 -$174,726 -25.9% $4,090,063  
$5,204,865  
$4,603,718  
$2,069,394  
$667,830  
-$335,760  
-6.5%  
Group VIII  
ABD†  
-$513,655 -11.2%  
$266,990  
$86,737  
$251,135  
$0  
-$24,403  
-$6,444  
-9.1% $1,989,542  
-7.4% $642,891  
-$79,852  
-$24,939  
-$102,073  
$141,612  
-3.9%  
-3.7%  
-5.2%  
37.5%  
ABD Kids  
My Care  
-$36,437 -14.5% $1,866,714  
$0 --- $519,585  
$1,968,787  
$377,973  
P4P & Ins Fee†  
Fee-For-Service  
ODM Services  
DDD Services  
Hospital -  
HCAP&Other†  
$545,377  
$315,028  
$230,349  
$625,424  
$377,037  
$248,387  
-$80,047 -12.8% $5,380,525 $5,852,898  
-$472,373  
-$333,754 -10.9%  
$33,101 1.7%  
-8.1%  
-$62,009 -16.4% $2,716,198  
$3,049,952  
$1,987,130  
-$18,038  
-7.3% $2,020,232  
$
0
$0  
$0  
---  
$644,095  
$815,816  
-$171,721 -21.0%  
Premium Assistance  
$97,629  
$105,895  
-$8,266  
-7.8%  
$738,680  
$731,989  
$6,691  
0.9%  
Medicare Buy-In  
$62,535  
$61,020  
$1,515  
2.5%  
$494,816  
$477,832  
$16,984  
3.6%  
Medicare Part D  
$35,094  
$44,875  
-$9,781 -21.8%  
$1,193 1.6%  
$243,864  
$254,157  
-$10,293  
-4.0%  
Administration  
Total  
$74,325  
$73,132  
$592,937  
$658,381  
-$65,444  
-9.9%  
-6.5%  
$2,360,448 $2,817,263 -$456,816 -16.2% $20,690,042 $22,135,835 -$1,445,793  
*September 2020 estimates from the Office of Budget and Management and Department of Medicaid.  
P4P & Ins Fee - Pay For Performance, and Health insurance provider fee.  
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  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
EMexlanpey Cearnter,dDiriecttorures11  
Ivy Chen, Principal Economist  
Overview  
GRF program expenditures totaled $23.31 billion for the YTD through February 2021.  
These expenditures were $1.57 billion (6.3%) below the estimate released by OBM in early  
September 2020. Medicaids YTD variance was $1.54 billion (11.8%) as this category continued  
spending well below the estimates that were increased from the original H.B. 166 estimates by  
approximately $3 billion for all-funds spending as a response to the economic disruption caused  
by the COVID-19 pandemic. For the month of February, Medicaid was under these estimates by  
$
9
$
Education had a positive YTD variance at the end of February of $114.0 million (2.1%), which  
grew by $94.8 million during the month. Two other categories moved from negative to positive  
YTD variances in February: Debt Service ended the month with a positive YTD variance of  
537.0 million (46.6%). Negative YTD variances in Health and Human Services ($96.8 million,  
.3%) and Justice and Public Protection ($78.7 million, 4.5%) also increased in February, by  
6.9 million and $16.6 million, respectively. On the other hand, Primary and Secondary  
$
$
shown in the preceding Table 4, while Table 3 shows February variances.  
81.3 million (11.0%) and Higher Education ended the month with a positive YTD variance of  
5.5 million (0.4%). The remaining categories had negative YTD variances. YTD variances are  
In addition to program expenditures, total uses include transfers out. Transfers out  
totaled $444.9 million YTD and had a negative YTD variance of $1.0 million (0.2%) at the end of  
February. Combining program expenditures and transfers out, total GRF uses for the first eight  
months of FY 2021 were $23.75 billion. These uses were $1.57 billion (6.2%) below estimate.  
The rest of this section discusses both GRF and non-GRF variances in Medicaid and the GRF  
variances in Health and Human Services, Justice and Public Protection, Primary and Secondary  
Education, Debt Service, and Higher Education.  
Medicaid  
GRF Medicaid expenditures were below their monthly estimate in February by  
$
537.0 million (46.6%) and below their YTD estimate, by $1.54 billion (11.8%), at the end of  
February. Non-GRF Medicaid expenditures were above their monthly estimate, by $80.2 million  
4.8%), and above their YTD estimate, by $90.2 million (1.0%). Including both the GRF and  
(
non-GRF, all funds Medicaid expenditures were $456.8 million (16.2%) below estimate in  
February and $1.45 billion (6.5%) below their YTD estimate at the end of February. The  
Medicaid expenditure and caseload estimates used in this report were updated by the Ohio  
Department of Medicaid (ODM) for FY 2021. These updates were precipitated by the COVID-19  
pandemic and are thus different from the expenditure and caseload estimates outlined in  
11 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  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
H.B. 166. The updated expenditure estimates include approximately $3 billion in increases for  
the fiscal year, related to many 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% 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 February of $447.4 million (17.6%),  
and YTD expenditures also were below estimate, with a negative variance of $1.47 billion  
(
7.4%). ODODD had a February all funds negative variance of $9.2 million (3.6%) and ended the  
month with a YTD positive variance of $38.4 million (1.9%). The other sixsister agencies Job  
and Family Services, Health, Aging, Mental Health and Addiction Services, State Board of  
Pharmacy, and Education account for the remaining 1% of the total Medicaid budget. Unlike  
ODM and ODODD, the six sisteragencies incur only administrative spending.  
Table 6 shows all funds Medicaid expenditures by payment category. Expenditures were  
below their YTD estimates for three of the four payment categories as of the end of February.  
Managed Care had the largest negative variance of $914.7 million (6.1%), followed by Fee-For-  
Services negative variance of $472.4 million (8.1%), and Administrations negative variance of  
$
$
65.4 million (9.9%). Premium Assistance YTD expenditures were above estimate by  
6.7 million (0.9%).  
The impact of the COVID-19 pandemic began to show in March 2020s Medicaid  
caseloads, and the impacts have continued to show through monthly caseload increases in  
every month since. From March 2020 through February 2021, caseloads have increased by  
3
0,800 cases per month, on average. According to 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  
pandemic. Based on updated FY 2021 ODM estimates, Februarys caseload of 3.2 million  
enrollees is approximately 497,481 cases (13.6%) below estimate.  
Health and Human Services  
The Health and Human Services program category includes non-Medicaid GRF  
expenditures by 11 state agencies. This category had a negative variance of $6.9 million (6.2%)  
in February, increasing its YTD negative variance to $96.8 million (9.3%). Except for the  
Opportunity for Ohioans with Disabilities Agency, which had a positive YTD variance of  
$
1.4 million, all other agencies in this category had negative YTD variances at the end of  
February. The largest negative YTD variance by far was $64.6 million for the Ohio Department  
of Job and Family Services (ODJFS). This negative variance grew by $12.3 million in the month of  
February. ODJFSs negative variances were dominated by three appropriation items:  
600535, Early Care and Education, had a negative YTD variance of $25.5 million, which  
grew by $7.6 million in February;  
600450, Program Operations, had a negative YTD variance of $14.4 million, which grew  
by $2.9 million in February; and  
600523, Family and Children Services, had a negative YTD variance of $10.5 million,  
which fell by $0.2 million in February.  
Budget Footnotes  
P a g e | 18  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Item 600535 provides payments for publicly funded child care services. Item 600450  
supports the administrative functions of several offices within ODJFS. The uses of item 600523  
include providing funding to public children services agencies for child protection,  
supplementing federal Title XX funds provided to counties, and supporting foster parents.  
Justice and Public Protection  
The Justice and Public Protection program category includes GRF expenditures by  
2 state agencies. This category had a negative variance of $16.6 million (9.7%) in February,  
1
increasing its YTD negative variance to $78.7 million (4.5%). All but two agencies had negative  
YTD variances at the end of February. The two largest negative YTD variances were  
$
$
$
38.9 million for the Department of Rehabilitation and Correction (DRC), which grew by  
6.6 million in February, and $13.6 million for the State Public Defender (PUB), which grew by  
8.5 million in February.  
DRCs variance comes from its two largest appropriation items:  
501321, Institutional Operations, had a negative YTD variance of $21.8 million, which  
grew by $3.1 million in February; and  
505321, Institution Medical Services, had a negative YTD variance of $13.0 million,  
which grew by $3.3 million in February.  
Item 501321 is used for the operation of the states prisons, including facility  
maintenance, support services, security, and management. Item 505321 is used to provide  
medical services to prison inmates.  
PUBs variance comes from appropriation item 019501, County Reimbursement, which  
had a negative YTD variance of $13.2 million and a negative February variance of $8.4 million.  
Item 019501 is used to reimburse counties for their expenditures on indigent defense.  
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 had a positive variance of $94.8 million (13.1%) in February,  
increasing its positive YTD variance to $114.0 million (2.1%). Appropriation item 200550,  
Foundation Funding, dominates this categorys positive variances with a positive February  
variance of $94.8 million and a positive YTD variance of $151.6 million. Item 200550 is the main  
source of state funding for local schools. When developing expenditure estimates for FY 2021,  
agencies were instructed to withhold a certain amount of the FY 2021 appropriation as part of  
spending controls instituted by the Governor. A January 2021 executive order restored  
$
that spending from item 200550 will end the year above estimate. See the first Issue Update  
152.0 million of the amount that had been withheld for foundation funding. Therefore, it is likely  
article in this edition of Budget Footnotes for more information on the restoration of this funding.  
Debt Service  
The Debt Service program category went from a slightly negative YTD variance at the  
end of January to a positive YTD variance of $81.3 million (11.0%) at the end of February. This  
was caused by a payment expected to be made in March being made in February in  
appropriation item 230908, Common Schools General Obligation Bond Debt Service.  
Budget Footnotes  
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March 2021  
Legislative Budget Office of the Legislative Service Commission  
Higher Education  
The Higher Education program category includes all GRF expenditures by the  
Department of Higher Education (DHE), except for debt service. This category had a negative  
YTD variance at the end of January of $15.5 million, but a positive variance of $21.0 million  
(
0
$
9.7%) in February pushed the categorys YTD variance into positive territory ($5.5 million,  
.4%). Appropriation item 235501, State Share of Instruction, was above estimate by  
17.8 million for February and for the YTD. The January 2021 executive order restoring funding  
for primary and secondary education also restored $100.0 million for DHE, so this category may  
also end the year above estimate.  
Budget Footnotes  
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March 2021  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
Governor Partially Restores Reduction in FY 2021 Foundation  
Aid for School Districts  
Sarah Anstaett, LSC Fellow  
In January 2021, the Governor issued an executive order partially restoring FY 2021  
school district foundation aid that had been reduced to help balance the state budget in the  
wake of the economic disruption caused by the COVID-19 pandemic. The January 2021  
executive order restored $152 million of the $277.2 million that had been withheld in FY 2021  
under spending controls implemented by OBM. As a result, the reduction in FY 2021 foundation  
aid now stands at $125.2 million, or an average reduction of about $75 per pupil.  
ODE determined the revised FY 2021 funding reductions by restoring the $152 million in  
proportion to each districts share of the $277.2 million in net funding reduction for FY 2020.  
The initial funding reductions for that year, totaling $300.5 million, were based on a per-pupil  
amount adjusted for wealth, as measured by the state share index, and the funding caps on  
rd  
districts. H.B. 164 of the 133 General Assembly subsequently provided $23.3 million to limit a  
school districts FY 2020 funding reduction, after including certain federal emergency school  
relief funds, to no more than 6.0% of its original FY 2020 foundation aid amount. The chart  
below illustrates the revised FY 2021 foundation aid reductions by wealth quartile. In the chart,  
school districts are divided into four groups based on property valuation per pupil, each of  
which includes approximately 25% of total students statewide. Districts in quartile 1 are the  
least wealthy and districts in quartile 4 are the wealthiest.  
Chart 5: Average Per-Pupil FY 2021 Foundation Aid Reduction by Wealth Quartile  
$0  
-
-
-
-
-
-
-
-
-
$10  
$20  
$30  
$40  
$50  
$60  
$70  
$80  
$90  
-$52  
-$75  
-$84  
-$91  
-
$100  
1
2
3
4
Quartile ranked by wealth (from lowest to highest)  
Budget Footnotes  
P a g e | 21  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
As the chart shows, the average per-pupil funding reductions are generally lower for  
lower-wealth school districts due to the nature of the FY 2020 funding reduction methodology.  
FY 2021 average per-pupil reductions range from $52 for quartile 1 to $91 for quartile 3. The  
lower reduction of $84 per pupil for quartile 4 appears to be a residual effect of the H.B. 164  
payment that partially offset the funding reductions in FY 2020, the net amount of which is the  
starting point for the reductions in FY 2021. Nearly all of the H.B. 164 payment was received by  
districts in quartile 4.  
Federal CRRSA Act Provides Nearly $2 Billion in Emergency  
Relief Formula Funds for K-12 Schools  
Jason Phillips, Division Chief  
The federal Coronavirus Response and Relief Supplemental Aid (CRRSA) Act, 2021,  
enacted as part of the federal Consolidated Appropriations Act, 2021, and signed into law on  
December 27, 2020, will provide an estimated $1.99 billion in emergency relief formula funding  
for Ohios public elementary and secondary schools according to projections published by Federal  
Funds Information for States. This funding, drawn from the Elementary and Secondary School  
Emergency Relief (ESSER) Fund, supplements the $489.2 million Ohio received inESSER I funds  
under the federal CARES Act. State allocations ofESSER II funds under CRRSA are based on their  
relative share of funding in the most recent fiscal year under federal Title I, Part A, which provides  
funds to school districts and community schools (local education agencies, or LEAs) for  
educational services to disadvantaged students. ODE must distribute at least 90% of the states  
allocation, or $1.79 billion, to LEAs in proportion to each LEAs share of Title I, Part A funds in the  
most recent fiscal year, the same method used to distribute ESSER funds under the CARES Act.  
The chart below illustrates the estimated distribution of Ohios ESSER II funds by LEA type. As the  
chart shows, urban districts receive the largest share, at $859.2 million, or 48% of the total.  
Chart 6: Share of Federal ESSER II Funds by LEA Type ($ in millions)  
Total: $1.79 billion  
Community and  
Urban Districts,  
STEM Schools,  
$229.8  
(13%)  
$
859.2  
48%)  
(
Rural Districts,  
$
(
209.0  
12%)  
Small Town  
Districts,  
Suburban Districts,  
$
225.6  
12%)  
$
268.4  
15%)  
(
(
Budget Footnotes  
P a g e | 22  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
LEAs may use ESSER II funds for the same activities as ESSER I funds, including  
maintaining continuity of services and employment of existing LEA staff; purchasing educational  
technology to aid in educational interactions between students and teachers; coordinating and  
improving COVID-19 preparedness and response efforts; training LEA staff on sanitation and  
purchasing supplies to sanitize school facilities; providing mental health services and supports;  
addressing the needs of individual schools and the unique needs of low-income children,  
students with disabilities, and other vulnerable populations; and planning and implementing  
summer learning and supplemental afterschool programs. Funds received from ESSER I must be  
spent by September 30, 2022, and funds from ESSER II must be spent by September 30, 2023.  
Up to 10% of the states allocation, equating to $199.1 million, may be used for  
state-level activities. Of that, 0.5% may be used for administration and the remainder may be  
used to respond to emergency needs related to COVID-19, as determined by ODE. The CRRSA  
Act includes a maintenance of effort provision meant to prevent the federal funds from  
supplanting state spending, but the requirement may be waived by the U.S. Department of  
Education (USDOE) for states that experience a precipitous decline in financial resources.  
The CRRSA Act separately provides Ohio with $201.2 million in funding under the  
Governors Emergency Education Relief (GEER) Fund (referred to asGEER II; GEER I funds  
were provided under the CARES Act). Of this amount, $154.9 million is allocated for emergency  
assistance to nonpublic schools and the remaining $46.3 million may be distributed at the  
Governors discretion to provide emergency support through grants to LEAs or institutions of  
higher education that are determined to be the most significantly affected by COVID-19. This  
flexible funding may also be used to provide support to other educational institutions deemed  
essentialby the Governor for emergency educational services, the provision of child care or  
early childhood education, social and emotional support, and the protection of  
education-related jobs. According to ODE, GEER II funds will likely continue GEER I funding that  
supported educational entities not allocated ESSER funds, such as joint vocational school  
districts, county developmental disabilities boards, and educational service centers.  
Ohio Higher Education Institutions to Receive $474 Million in  
Direct Formula Funding from Federal CRRSA Act  
Jason Glover, Budget Analyst  
The federal CRRSA Act will provide 220 Ohio higher education institutions with  
approximately $474 million in financial relief to address the impacts of COVID-19. In general,  
each institutions allocation is determined by a formula that takes into account its relative share  
of federal Pell Grant recipients who were not exclusively distance learning prior to COVID-19  
(
federal Pell Grant recipients who were exclusively distance learning prior to COVID-19 (2%).  
Eligible higher education institutions will receive their allocations directly from USDOE.  
75%), its relative share of students not receiving Pell Grants (23%), and its relative share of  
An institution may use its allocation to defray expenses associated with COVID-19 or for  
student support activities that address needs related to COVID-19. In addition, an institution  
must use a portion of its allocation, equal to the same amount of financial aid grants that it was  
required to set aside for student aid under the federal CARES Act, to provide emergency  
financial aid grants to students for any component of the students cost of attendance or for  
Budget Footnotes  
P a g e | 23  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
emergency costs that arise due to COVID-19, such as tuition, food, housing, health care  
(
including mental health care), or child care.12 Institutions must prioritize students with  
exceptional need. The table below shows both the direct allocation and the minimum allocation  
for emergency financial aid grants to students by sector type of the states higher education  
institutions. Public universities receive roughly 47% of the state total. Community colleges  
receive the next highest share (27%) followed by private, nonprofit institutions (20%), private,  
for-profit institutions (4%), and Ohio technical centers (2%).  
CRRSA Act Formula Aid Allocations for Ohio Higher Education Institutions by Sector Type*  
Number of  
Institutions  
Minimum Allocation for  
Emergency Financial Aid  
Institution Sector Type  
Allocation  
$223,496,118  
Public universities  
Community colleges  
Private, nonprofits  
Private, for-profits  
Ohio technical centers  
Total  
14  
22  
73  
64  
47  
$99,641,229  
$38,171,485  
$42,829,789  
$17,851,938  
$3,972,613  
$125,793,212  
$95,634,865  
$17,851,938  
$10,968,059  
$473,744,192  
220  
$202,467,054  
*Allocations are based on information reported as of January 19, 2021  
In addition to the funds directly received from USDOE, Ohio higher education institutions  
may receive a portion of the $46.3 million the state is allocated from the CRRSA Act through the  
Governors Education Emergency Relief Fund, at the Governors discretion (see separate article  
discussing emergency relief formula funds for K-12 schools for additional details on this fund).  
ODE Publishes Literacy Data for the 2019-2020 and 2020-2021  
School Years  
Dan Redmond, Budget Analyst  
On January 29, 2021, ODE published its annual literacy report for grades kindergarten  
through four for the 2019-2020 school year. Based on the fall reading diagnostic assessments  
administered to students in grades K-3, ODE reports the majority of students in each grade  
were on track to reading at grade level at the beginning of the school year. These results are  
shown in the table below (data is not available for grade 4 due to the cancellation of the spring  
2
strategies in the Departments strategic plan for education: Each Child, Our Future.  
020 state tests). Literacy skill across all ages, grades, and subjects is on the ten priority  
12 A private, for-profit institution must use the full award amount for student aid.  
Budget Footnotes  
P a g e | 24  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Students Reading at or Below Grade Level, 2019-2020 School Year  
Students Reading  
at Grade Level  
Students Reading  
Below Grade Level  
% Below Grade  
Level  
Grade Level  
% at Grade Level  
Kindergarten  
Grade 1  
80,963  
86,779  
75,360  
77,108  
320,210  
44,368  
37,639  
46,660  
46,153  
174,820  
64.6%  
69.7%  
61.8%  
62.6%  
64.7%  
35.4%  
30.3%  
38.2%  
37.4%  
35.3%  
Grade 2  
Grade 3  
Total  
In addition to students reading at or below grade level, the report states that 29% of  
students in grades K-2 who were on a reading improvement and monitoring plan (RIMP)  
progressed to grade-level reading (data for grade three was not available due to the  
cancellation of the spring 2020 tests). RIMPs are required for all students reading below grade  
level. The full report, including specific literacy intervention services, can be found on the  
1
3
ODE website.  
In February 2021, ODE provided preliminary data from the fall 2020 administrations of  
the Kindergarten Readiness Assessment (KRA) and third grade English language arts (ELA) state  
test that provide some early indication of how students are faring academically in the wake of  
the COVID-19 pandemic. Among the key points, ODE reported that:  
Most students took the fall tests but participation was lower than normal 78% of  
kindergartners took the KRA and 81% of third grade students took the third grade ELA  
test compared to 93% and 95% participation rates in 2019, respectively. Those students  
that did not participate tended to be amongst the most vulnerable populations. These  
students were more likely to be students with disabilities, English learners, economically  
disadvantaged, or nonwhite, in the case of the KRA, and minority, economically  
disadvantaged, or residing in districts with low average achievement levels, in the case  
of the third grade ELA test.  
Overall scores are notably lower than past years, especially for minority and  
economically disadvantaged students. In the language and literacy domain of the KRA,  
the percentage of participating students identified as off-track increased from 39.7% in  
2
019 to 47.6% in 2020. Likewise, third grade ELA proficiency rates in the fall decreased  
from 45.1% in 2019 to 37.1% in 2020.  
Students learning in districts that used a fully remote education model as their primary  
education delivery model in fall 2020 tended to perform less well on the third grade ELA  
test than students attending school under fully in-person or hybrid education models. In  
13  
http://education.ohio.gov/getattachment/About/Annual-Reports/2020-2021-K-4-Literacy-  
Report.pdf.aspx?lang=en-US.  
Budget Footnotes  
P a g e | 25  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
fully remote districts, proficiency rates on the fall third grade ELA test decreased about  
1
2 percentage points while falling by about eight and nine percentage points in districts  
primarily using fully in-person and hybrid models, respectively.  
Additional data regarding how the COVID-19 pandemic is impacting the 2020-2021  
school year is available on ODEs website.14  
2021 Federal Poverty Guidelines Update  
Wendy Risner, Division Chief  
The U.S. Department of Health and Human Services recently published the updated  
Federal Poverty Guidelines (FPG) standards for 2021. These guidelines are used to set  
eligibility criteria for many assistance programs, such as the Supplemental Nutrition  
Assistance Program (SNAP) and the Childrens Health Insurance Program (CHIP). Assistance  
programs often use a percentage of the FPG to determine eligibility (e.g., 138% or 200% FPG).  
The FPG is adjusted for household size and geographic region. The 48 contiguous states and  
the District of Columbia (DC) all use the same FPG while Alaska and Hawaii each have their  
own to account for higher costs of living in those regions. The table below shows the updated  
FPGs for the 48 contiguous states and DC.  
2
021 FPG for the 48 Contiguous States and DC  
Persons in Household Poverty Guideline  
$12,880  
1
2
3
4
5
6
$17,420  
$21,960  
$26,500  
$31,040  
$35,580  
Note: Add $4,540 for each additional household member.  
FPGs are published annually and become effective each January. The 2021 guidelines  
are calculated by taking the 2019 Census Bureaus poverty thresholds and adjusting them, using  
the Consumer Price Index, for price changes between 2019 and 2020. The FPG represents the  
minimum amount of income required to provide basic necessities such as food, clothing, and  
shelter.  
14 http://education.ohio.gov/Topics/Reset-and-Restart/Data-Insights-on-the-2020-2021-School-Year.  
Budget Footnotes  
P a g e | 26  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Controlling Board Increases ODA Appropriation to Support the  
Alzheimers Disease and Related Dementias Task Force  
Wendy Risner, Division Chief  
On January 25, 2021, the Controlling Board approved a request to increase the  
appropriation to the Ohio Department of Aging (ODA) by $4.4 million in FY 2021 to establish the  
Alzheimers Disease and Related Dementias Task Force. The Task Force, which was created by  
rd  
S.B. 24 of the 133 General Assembly, consists of 28 members. Of these, 19 are appointed by  
the Governor and include impacted individuals, medical providers, and representatives of  
advocate agencies. The remaining nine members are representatives of various state agencies  
and legislators. The responsibilities of the Task Force include examining the needs of individuals  
diagnosed with these conditions, the services available to them, and the ability of health care  
providers and facilities to meet current and future needs. In addition, the Task Force must make  
recommendations on a number of topics including trends in Ohios Alzheimers disease and  
related dementias populations, as well as policies to increase public awareness and early  
detection and to improve and enhance access to the healthcare system. Specifically, ODA also  
plans to: create statewide screening and risk assessment tools that will be used in all healthcare  
settings to identify risk factors such as elder abuse or other behaviors such as wandering, to  
implement a referral protocol that includes responsive interventions that can be used based on  
the severity of an individuals cognitive decline, and to design a toolkit for case managers to use  
to link services and interventions with specific high-risk behaviors.  
The funds to support this request come from the federal United States Centers for  
Medicare and Medicaid Services (CMS). CMS awarded each state up to $5.0 million in Money  
Follows the Person grant funds. These funds had to be used to increase the use of home- and  
community-based services for persons requiring long-term care.  
Controlling Board Approves $8.7 Million Appropriation Increase  
for Ohio EPAs H2Ohio Initiatives  
Jamie Doskocil, Fiscal Supervisor  
On January 25, 2021, the Controlling Board approved a request from the Ohio  
Environmental Protection Agency (Ohio EPA) to increase appropriation item 715695, H2Ohio, by  
8.7 million in FY 2021 in order to continue H2Ohio activities. The money is appropriated from the  
$
H2Ohio Fund (Fund 6H20) to support watershed planning, scientific research, and data collection.  
H.B. 166, which created Fund 6H20, appropriates additional funds for FY 2021 if  
authorized by the Controlling Board. The fund was originally seeded with a $172 million transfer  
of cash from the General Revenue Fund. Fund 6H20 also provides funding to the Ohio  
Department of Agriculture (AGR) and the Ohio Department of Natural Resources (ODNR).  
With the FY 2020 appropriation, Ohio EPA identified 17 projects for funding, as shown in  
the table below. Some projects were identified after the end of FY 2020 but are to be funded  
with FY 2020 appropriations. The increased FY 2021 appropriation allows Ohio EPA to select  
additional projects for funding before the end of FY 2021. Funds will be obligated and disbursed  
as the projects are completed at a future date. The new FY 2021 projects are currently being  
selected and will be announced when finalized.  
Budget Footnotes  
P a g e | 27  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Projects last 12 to 18 months depending on the type of work to be completed and the  
time it takes to secure any additional funding as necessary. Due to the COVID-19 pandemic,  
some projects were delayed. All projects are paid on a reimbursement basis. The Ohio Water  
Development Authority oversees wastewater and drinking water infrastructure projects.  
FY 2020 Ohio EPA H2Ohio Project List  
FY 2020  
FY 2021*  
Total  
Infrastructure Projects  
Pomeroy (Clean Water)  
Kunkle (Clean Water)  
West Milton (Clean Water)  
New Waterford (Drinking Water)  
Coshocton (Drinking Water)  
Pike Water (Drinking Water)  
Nobel (Clean Water)  
$500,000  
---  
---  
---  
---  
---  
---  
$500,000  
$500,000  
$500,000  
$500,000  
$500,000  
$1,000,000  
---  
$500,000  
$500,000  
$500,000  
$500,000  
$1,000,000  
$710,000  
$710,000  
Home Sewage Replacement Project  
Paulding County  
$250,000  
$250,000  
$250,000  
$250,000  
$250,000  
---  
---  
$250,000  
$250,000  
$250,000  
$250,000  
$250,000  
$250,000  
$250,000  
Putnam County  
---  
---  
---  
---  
Ottawa County  
Erie County  
Williams County  
Sandusky County  
$250,000  
Wood County  
---  
$250,000  
Other Project Areas  
Water Quality Monitoring Projects  
Lead Service Lines Projects  
Emerging Technologies  
H2Ohio Project Consultant  
$568,500  
---  
---  
$725,000  
$225,000  
---  
$568,500  
$725,000  
$225,000  
$314,925  
$7,793,425  
---  
$314,925  
$5,633,425  
Total  
$2,160,000  
*Amounts in this column represent moneys that were carried over from FY 2020; projects were identified and selected in FY 2021  
Budget Footnotes  
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March 2021  
Legislative Budget Office of the Legislative Service Commission  
First H2Ohio Incentive Payments Distributed by the Department  
of Agriculture  
Shannon Pleiman, Senior Budget Analyst  
On February 2, 2021, AGR distributed the first incentive payments to 154 farmers for  
completed and approved voluntary nutrient management plans (VNMPs) under the states  
H2Ohio water quality initiative. The incentive payments amount to approximately $197,000.  
The approved VNMPs encompass 98,000 farm acres in three of the targeted counties under the  
program: Auglaize, Hancock, and Putnam.  
Under AGRs H2Ohio Program, farmers located in the Maumee River Watershed are  
incentivized for implementing any of the seven conservation practices established under the  
program that have been proven to help reduce phosphorus runoff into the waterways.  
Developing and implementing VNMPs is one of these conservation practices. VNMPs are  
developed in collaboration with local soil and water conservation districts (SWCDs). The  
involvement of SWCDs provides farmers with recommendations on both soil fertility and  
environmental site risk for fields. This helps participating farmers to identify nutrient and  
sediment loss. SWCDs must approve of these VNMPs in order for farmers to receive the $2 per  
acre incentive payment under the program.  
Criminal Justice Services Awards $541,250 in Federal Law  
Enforcement Grants  
Maggie West, Senior Budget Analyst  
On February 10, 2021, the Department of Public Safetys Office of Criminal Justice  
Services announced the award of $541,250 in federal grants from the Edward Byrne Memorial  
Justice Assistance Grant Program for Law Enforcement (JAG LE) to 56 projects in 38 counties.15  
Under the JAG LE Program, law enforcement agencies that are not eligible for direct federal  
funding may apply for up to $20,000 for projects that reduce crime, increase public safety, and  
support the Ohio Incident-Based Reporting System (OIBRS). OIBRS allows criminal justice  
agencies to submit data directly to the state and federal government. Of the 56 funded projects,  
4
7 are renewal grants, meaning they had received funding in the prior years grant cycle.  
Around two-thirds of the funded projects involved the procurement of equipment,  
computer technology, and other materials directly related to law enforcement functions. The  
remaining projects involved: (1) hiring, training, and employing new additional law enforcement  
officers and necessary support personnel and (2) paying overtime to employed law  
enforcement officers and necessary support personnel to support additional hours worked. All  
JAG LE Program awards are for seven months of funding, beginning March 1, 2021. A cash  
match of 10% of the total project cost is generally required but may be waived under certain  
circumstances.  
15 A complete list of funded programs by county can be found at: https://www.ocjs.ohio.gov/  
links/Funding_Recommendations_Subgrant_List_by_County.pdf.  
Budget Footnotes  
P a g e | 29  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
Overview  
The national economy was buoyed by federal stimulus in the first couple months of  
the new year, as personal income (PI) jumped in January and employers added 379,000  
nonfarm payroll jobs in February. Inflation-adjusted gross domestic product (real GDP) grew  
at a 4.1% annualized rate in the fourth quarter of 2020, as personal consumption  
expenditures fell for goods and rose for services. Industrial production increased by a  
seasonally adjusted 0.9% in January, though growth was mixed among major industrial  
groups. Consumer prices continued to rise at a rate on the slow side of moderate and, as of  
January, were 1.4% greater than a year prior.16  
Consumer demand in Ohio and the surrounding areas was greater than expected in  
recent weeks, according to business contacts surveyed by the Federal Reserve Bank of  
Cleveland. Among Ohios small business community, there is a mix of current financial need and  
1
7
future optimism; while over 43% of Ohios small businesses have needed and received some  
form of financial assistance since late December, over 90% of small business owners believe the  
market for their business will return to prepandemic levels at some point. The market demand  
for pre-existing housing remains well above prepandemic levels, signaling a healthy appetite for  
mortgage debt; the dollar volume of existing home deals completed during January was 24.9%  
above its level in January 2020.  
The National Economy  
The U.S. economy added 379,000 nonfarm payroll jobs in February, though total  
employment remains around 9.5 million below its level in February 2020. The national monthly  
unemployment rate declined slightly to 6.2%. Chart 7 shows nonfarm payroll employment and  
chart 8 displays unemployment.  
Employment gains during the month were largely the result of an increase in leisure and  
hospitality jobs (+355,000), as an easing of COVID-19 restrictions improved the months labor  
market growth. Food services and drinking places (+286,000), accommodation (+36,000), and  
amusements, gambling, and recreation (+33,000) all posted job gains during the month. Other  
industries such as health care and social assistance (+46,000), retail trade (+41,000), and  
manufacturing (+21,000) also added jobs in February. Payroll employment changes in  
government education (-69,000) and construction (-61,000) were likely, at least in part, the  
result of pandemic- and weather-related distortions during the month, according to the Bureau  
of Labor Statistics.  
16 As measured by the consumer price index for all items.  
17 According to the U.S. Census Bureau’s Small Business Pulse Survey; data were collected during  
the final week of February.  
Budget Footnotes  
P a g e | 30  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
The February Employment Situation report offers an opportunity to review how the  
COVID-19 pandemic has affected payroll employment totals over the period of an entire year.18  
Employment in goods-producing industries has decreased by a seasonally adjusted 970,000 in  
the past year, while employment in private service-providing industries has slid by  
approximately 7,116,000. Total employment in February 2021 was just over 143 million, a 6.2%  
decrease from a year prior. The table below provides seasonally adjusted employment estimates  
by selected industry in February 2021, as well as the percent change from February 2020.  
National Payroll Employment and Annual Percent Change, by Industry  
February 2021 Payroll  
Employment  
Change from  
February 2020  
Industry  
Construction  
Manufacturing  
Durables  
7,340,000  
12,238,000  
7,600,000  
4,638,000  
27,079,000  
8,770,000  
20,698,000  
23,267,000  
13,464,000  
21,446,000  
2,865,000  
4,945,000  
13,636,000  
143,048,000  
-4.0%  
-4.4%  
-5.1%  
-3.2%  
-2.9%  
-1.2%  
-3.6%  
-5.3%  
-20.4%  
-6.1%  
+0.1%  
-6.8%  
-7.0%  
-6.2%  
Nondurables  
Trade, transportation, and utilities  
Financial activities  
Professional and business services  
Education and health services  
Leisure and hospitality  
Government  
Federal government  
State government  
Local government  
Total*  
*Note: Select industry categories do not round to total  
Februarys seasonally adjusted unemployment rate, at 6.2%, is the nations lowest since  
March 2020, when the unemployment rate was 4.4%. During the month, there were  
approximately 10.0 million unemployed persons. The nations employment-population ratio  
1
8 The Bureau of Labor Statistic’s Establishment Survey is based on the payroll data of businesses  
th  
during the payroll period that includes the 12 of the month. Thus, the survey in February 2020, the  
year-earlier month in the comparison shown in the table, was the most recent of which employment  
data were not potentially affected by government action intended to mitigate the spread of the virus.  
Budget Footnotes  
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March 2021  
Legislative Budget Office of the Legislative Service Commission  
was 57.6% in February 2021, compared with 61.1% a year prior, the result of a decline in  
household employment totals and an increase in the civilian population.19  
Nationally, real GDP increased by a seasonally adjusted, annualized 4.1% in the fourth  
quarter of 2020, the second straight quarter of recovery following a record contraction (-31.4%)  
in the years second quarter. Real GDP contracted by 3.5% in 2020, according to a revised  
estimate. During the fourth quarter of 2020, personal consumption expenditure (PCE) on goods  
fell at a 0.9% annualized rate; PCE on goods was up 3.9% during the year. PCE on services was  
up 4.0% in the fourth quarter but dropped 7.3% total during 2020. Real fixed investment during  
2
020 increased on residential projects (+6.0%) but decreased on nonresidential projects  
(-4.0%), as compared to 2019 expenditure levels.  
Personal income increased by a seasonally adjusted 10.0% in January 2021.20 Among the  
major components of PI, compensation of employees grew 0.7%, a pace comparable to that of  
the September through December 2020 period. Proprietors incomes declined (-0.5%) for the  
third straight month. By far, the largest components of the PI increase during the month were  
personal current transfers, including economic impact payments of up to $600 per qualified  
person and increased unemployment compensation. These initiatives were part of H.R. 133, a  
federal spending package passed on December 27 which provided a further stimulus payment  
to qualified taxpayers and supported temporary enhanced unemployment benefits, in addition  
to boosting an array of funding programs in the areas of business, education, healthcare,  
agriculture, and infrastructure development.  
Nationally, industrial production, as measured by the Federal Reserve Boards  
industrial production index (IPI), increased by a seasonally adjusted 0.9% in January;  
production increased in all major market groups during the month.21 Between January 2020  
and January 2021, total industrial production declined 1.8%. Among the major market groups,  
production activity in the last year has increased only in consumer goods, while the IPIs for  
business equipment, nonindustrial supplies, construction, and materials all indicate a decline  
in activity. Year-over-year, industrial output among major industry groups has increased only  
in utilities (+6.6%), while mining (-11.5%) and manufacturing (-1.0%) activity has decreased.  
Consumer prices, as measured by the consumer price index (CPI) for all items, increased  
.3% in January, following rises of 0.2% in November and December. The CPI for all items was  
.4% greater in January 2021 than a year prior. Excluding the more volatile food and energy  
0
1
sub-indexes, measured CPI price levels were 1.4% above their level a year ago, as increases in  
the price of food were approximately canceled out by a decrease in the cost of energy. Among  
secondary categories, the January 2021 price index for medical care services was up 2.9% on a  
year-over-year basis, while the price indexes for shelter (+1.6%) and used cars and trucks  
(+10.0%) have also risen in the last year.  
19  
The employment-population ratio is the proportion of the civilian noninstitutionalized  
population aged 16 years and over that is employed.  
20 Growth percentages in this paragraph are at seasonally adjusted, annualized rates.  
21 Major market groups include final products (with subcategories for consumer goods and  
business equipment), nonindustrial supplies, construction, and materials.  
Budget Footnotes  
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March 2021  
Legislative Budget Office of the Legislative Service Commission  
Chart 7: 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  
2021  
U.S. Employment  
Ohio Employment (right scale)  
Chart 8: U.S. and Ohio Unemployment Rates  
% of Labor Force  
1
1
1
8.0%  
5.0%  
2.0%  
9
6
3
.0%  
.0%  
.0%  
2
016  
2017  
2018  
2019  
Ohio  
2020  
2021  
United States  
The Ohio Economy  
The initial release of January 2021 Ohio employment and unemployment rate data is  
currently scheduled for Friday, March 12, with data for all 50 states to be released the following  
Monday, March 15. For information on Ohios labor market during 2020, please refer to the  
Ohio Department of Job and Family Services Ohio Labor Market Information website or to  
previous editions of Budget Footnotes.22  
22 https://ohiolmi.com/?page85481=1&size85481=48; https://www.lsc.ohio.gov/pages/budget/  
documents/budgetfootnotes.aspx.  
Budget Footnotes  
P a g e | 33  
March 2021  
Legislative Budget Office of the Legislative Service Commission  
Nearly a year into the states official COVID-19 response, some businesses continue to  
be affected by a shift in social norms and cautious attitudes toward the virus. The Census  
Bureaus Small Business Pulse Survey compiles data from a poll of small businesses in all  
states.23 During the week of February 22 to February 28, 13.1% of Ohios small businesses  
changed their level of employment; 4.1% of the companies hired additional workers while 9.0%  
decreased the number of payroll positions. Since the last week of December, over 43% of the  
states small businesses have received financial assistance.24 The Census Bureau also polled  
business owners on the amount of time they expect to pass before their business returns to  
believe a full return will take more than six months, while 8.8% of small business owners have  
either closed their business or think operations will never return to normal.  
normal operations. Approximately 18.8% anticipate a full return in six months or less, 42.6%  
The housing market began 2021 on a strong note, according to the Ohio Association of  
Realtors. Just under 9,400 housing units were sold during the month of January, an 8.8%  
increase from a year prior. The total dollar volume of existing home sales during the month was  
$
1.98 billion, approximately 24.9% above its level last January.  
Economic activity in the Cleveland Federal Reserve District remained below  
prepandemic levels in the recent survey period, according the Federal Reserve Boards Beige  
2
5
Book. However, contacts noted that customer demand was better than expected and that the  
districts economy regained momentum. During the survey period, upward wage pressure was  
stronger than at any other point in the pandemic, and the cost of production materials such as  
timber, steel, and other mineral commodities continued to increase significantly. The Federal  
Reserves contacts noted consumer spending in restaurants improved somewhat following an  
easing of curfews. The housing market remained strong during the period, as a low stock of  
existing homes spurred some consumers to move forward with new home construction.  
Banking contacts noted that federal initiatives such as the Paycheck Protection Program  
boosted lending but that demand for the program was notably lower than in 2020. Consumer  
and business demand was high for freight services during the survey period, with the strong  
levels of demand being derived from strength in the import markets and continued demand  
from home construction suppliers.  
23 The Small Business Pulse Survey team conducts polls of businesses with at least $1,000 in  
revenue that employed between one and 499 persons during the sampling timeframe period (active on  
the national Business Register in April 2020).  
24 Sources include federal programs, state programs, incentives offered by financial institutions,  
support from family and friends, and an “other sources” category.  
25 The Federal Reserve Bank of Clevelands district consists of all of Ohio, western Pennsylvania,  
eastern Kentucky, and the northern panhandle of West Virginia. Comments here are derived from the  
latest edition of the Beige Book, a Federal Reserve publication that summarizes reports from business  
and industry contacts outside of the Federal Reserve System collected on or before February 22, 2021.  
Budget Footnotes  
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March 2021