Ohio Legislative Service Commission
May. The change creates a large temporary deficit on the budget relative
to estimates until the payments are made in June. So far in FY 2016,
domestic insurance tax revenue to the GRF has been only $5.3 million,
but the total was estimated to be $271 million by fiscal year end.
The foreign insurance tax however, has mostly already been
collected for FY 2016. At this point in the year, only small adjustments
are made to settle accounts between the state and foreign insurers.
Revenue from the tax during May was below estimate ($10.3 million),
mostly as the result of more refunds granted than had been estimated.
For the fiscal year, revenue is $8.5 million (2.8%) below estimate.
Public Utility Excise and Natural Gas Distribution Taxes
Both of these taxes are typically collected quarterly, with May
being the final large collection month of the fiscal year. Both delivered
May revenue below estimates. Revenue from the natural gas tax was
26.7 million in May, $5.5 million (17.2%) below estimate. The natural gas
tax base is the amount of gas consumed by end users. The shortfall likely
reflects less, or more efficient, heating during the cold months of winter.
Due to a lag between gas usage and tax payment by distributors, the
effects of the winter heating season are usually reflected in the May
quarterly payment. For FY 2016, revenue from the tax is $7.2 million
(10.6%) below estimate, and without much collection expected in June,
both close to
almost certain to end the year with a deficit.
May revenue from the public utility excise tax was $26.1 million,
4.5 million (14.7%) below estimate. The public utility excise tax is based
on gross receipts for each utility company. Most of the revenue also
comes from natural gas companies. Therefore, the cause of the shortfall is
likely similar to the deficit from the natural gas production tax, but also
aided, at least in part, by cheap gas prices throughout FY 2016. For the
fiscal year to date, revenue from the tax is $3.7 million (3.5%) below
estimate. As with the natural gas tax, there are minimal public utility tax
collections expected in June, so the tax is almost certain to end the year
with a deficit.
Cigarette and Other Tobacco Products Tax
GRF receipts from the cigarette and other tobacco products tax
were $87.7 million in May, $65.8 million below estimate due to a timing
issue related to legislative changes which took effect for the first time in
FY 2016. In previous years, May was the largest collection date for the
tax, but after changes made in H.B. 64, the extra revenue will be collected
in June instead. Prior to May, revenue from the tax on cigarette and other
tobacco products had been running at or above estimate consistently