Ohio Legislative Service Commission
Jean J. Botomogno, Principal Economist, 614-644-7758
On January 30, 2017, OBM revised downward its August 2016
estimates of FY 2017 GRF tax revenue by $592.2 million. Expected
receipts from the largest three sources of GRF tax revenues, the personal
income tax (PIT), the nonauto sales and use tax, and the commercial
activity tax (CAT), were reduced by $333.9 million, $199.2 million, and
revenue experiences through the first seven months of the fiscal year.
The variance analyses in this issue of Budget Footnotes are based on the
August estimates as OBM did not revise its monthly estimates for the
below estimate. remainder of FY 2017. Based on the earlier estimates, GRF sources of
32.0 million, respectively. The downward revisions were consistent with
tax revenue was
22.60 billion through February were $911.2 million (3.9%) below
projections, from shortfalls of $411.7 million from tax sources and
572.6 million in federal grants, the latter primarily related to the level of
spending in the Medicaid program. (See the Expenditures section of this
publication.) Those negative variances were partially offset by positive
variances of $60.4 million in transfers in and $12.6 million in nontax
revenue. Tables 1 and 2 above show GRF sources for February and for
FY 2017 through February, respectively.
For the month of February, GRF sources were $65.4 million below
the August estimate, with negative variances of $44.7 million for federal
grants and $23.5 million for tax sources. Regarding tax sources, the
foreign insurance tax posted a timing-related positive variance of
80.4 million. In addition, the cigarette tax, the corporate franchise
below estimate tax (CFT), and the public utility tax were ahead of anticipated receipts by
4.7 million, $3.4 million, and $1.9 million, respectively. However, those
positive variances were offset by shortfalls of $76.9 million for the PIT,
12.2 million for the financial institutions tax (FIT), and $25.5 million for
the CAT. Sales tax revenue essentially met the estimate.
GRF sources consist of state-source receipts (tax revenue, nontax
revenue, and transfers in) and federal grants, which are typically federal
reimbursements for Medicaid and other programs.
2 The GRF typically pays out refunds under the FIT during the first half of
a fiscal year as taxpayers make adjustments to previous tax filings. Receipts of
the FIT are typically expected at the end of January, March, and May.