A monthly newsletter of the Legislative Budget Office of LSC

Volume: Fiscal Year 2021

Issue: October 2020

Highlights

–

Ross Miller, Chief Economist

September GRF tax revenue was $8.7 million (0.5%) higher than the estimate

published by the Office of Budget and Management (OBM) in September 2020. Tax

revenue ended the first quarter of FY 2021 $262.4 million above estimate. Only two

tax sources were below their estimates by more than $5 million: the commercial

activity tax (CAT) and the kilowatt-hour tax, by $23.5 million and $7.4 million,

respectively. Federal grants received during the quarter were $122.2 million below

estimate, but that was primarily due to Medicaid spending being below estimate by

$

116.0 million.

Ohio’s nonfarm payroll employment grew by 45,500 in August, but was still

48,700 below August 2019. Nearly one-third (31.8%) of the job losses over the last

4

year were in the leisure and hospitality sector. Ohio’s unemployment rate ticked

down to 8.9% in August, from 9.0% the prior month. The national unemployment

rate was 8.4% in August.

Through September 2020, GRF sources totaled $10.45 billion:



Revenue from the sales and use tax was $183.9 million above estimate;

Personal income tax (PIT) receipts were $84.2 million above estimate.

Through September 2020, GRF uses totaled $10.69 billion:



Program expenditures were $316.3 million below estimate;

Expenditures from all program categories were below estimates.

In this issue...

More details on GRF Revenues (p. 2), Expenditures (p. 13),

the National Economy (p. 27), and the Ohio Economy (p. 30).

Also Issue Updates on:

BroadbandOhio Connectivity Grants (p. 19)

Defense Manufacturing Grant (p. 20)

State Opioid Response Grant (p. 21)

Medicaid Telehealth Access (p. 21)

Motor Fuel Tax Revenue Increases (p. 22)

State Debt Refinancing (p. 23)

Anti-Heroin Task Force Program Grants (p. 25)

2

1^s^tCentury Community Learning Center Grants (p. 25)

National Guard Operation Steady Resolve (p. 26)

Available online at: www.lsc.ohio.gov/Budget Central

Legislative Budget Office of the Legislative Service Commission

Table 1: General Revenue Fund Sources

Actual vs. Estimate

Month of September 2020

($ in thousands)

(Actual based on report run in OAKS Actuals Ledger on October 1, 2020)

State Sources

Actual

Estimate*

Variance Percent

Tax Revenue

Auto Sales

Nonauto Sales and Use

Total Sales and Use

$148,303

$738,370

$886,673

$133,600

$752,100

$885,700

$14,703

-$13,730

$973

11.0%

-1.8%

0.1%

Personal Income

Commercial Activity Tax

Cigarette

Kilowatt-Hour Excise

Foreign Insurance

Domestic Insurance

Financial Institution

Public Utility

$887,978

$15,553

$89,911

$30,797

$6,808

$0

$900,100

$7,100

$73,800

$31,600

$6,800

$0

-$12,122

$8,453 119.1%

$16,111

-$803

$8

$0

-$2,367 -59.2%

-$44 -44.4%

-1.3%

21.8%

-2.5%

0.1%

---

-$6,367

$56

-$4,000

$100

Natural Gas Consumption

Alcoholic Beverage

Liquor Gallonage

Petroleum Activity Tax

Corporate Franchise

Business and Property

Estate

$121

$0

$121

-$997 -21.7%

$312 7.1%

-$1,022 -53.8%

---

$3,603

$4,712

$878

$91

$0

$4,600

$4,400

$1,900

$0

$91

$0

---

$11

---

Total Tax Revenue

$1,920,824 $1,912,100

$8,724

0.5%

Nontax Revenue

Earnings on Investments

Licenses and Fees

Other Revenue

$0

$5,099

$689

$0

$2,184

$65,800

$0

---

$2,915 133.5%

-$65,111 -99.0%

-$62,196 -91.5%

Total Nontax Revenue

$5,788

$67,984

Transfers In

$0

-$53,471

-$96,880

---

-2.7%

-8.9%

-4.9%

Total State Sources

Federal Grants

$1,926,613 $1,980,084

$989,526 $1,086,406

Total GRF Sources

$2,916,139 $3,066,490 -$150,351

*Estimates of the Office of Budget and Management as of September 2020.

Detail may not sum to total due to rounding.

Budget Footnotes

P a g e | 2

October 2020

Legislative Budget Office of the Legislative Service Commission

Table 2: General Revenue Fund Sources

Actual vs. Estimate ($ in thousands)

FY 2021 as of September 30, 2020

($ in thousands)

(Actual based on report run in OAKS Actuals Ledger on October 1, 2020)

State Sources

Tax Revenue

Auto Sales

Actual

Estimate*

Variance Percent FY 2020**

$77,423 18.9% $418,613

Percent

16.4%

$487,223

$409,800

Nonauto Sales and Use

$2,490,157 $2,383,700 $106,457

4.5% $2,325,404

7.1%

Total Sales and Use

$2,977,380 $2,793,500 $183,880

6.6% $2,744,017

8.5%

Personal Income

Commercial Activity Tax

Cigarette

Kilowatt-Hour Excise

Foreign Insurance

Domestic Insurance

Financial Institution

Public Utility

Natural Gas Consumption

Alcoholic Beverage

Liquor Gallonage

Petroleum Activity Tax

Corporate Franchise

Business and Property

Estate

$2,905,817 $2,821,600

$84,217

-$23,501

$23,493

-$7,420

3.0% $2,282,127

27.3%

-13.0%

9.3%

-8.6%

-23.2%

$347,599

$195,993

$82,180

$6,845

$824

$371,100

$172,500

$89,600

$8,400

$0

-6.3%

13.6%

-8.3%

$399,431

$179,389

$89,913

$8,919

-$1,555 -18.5%

$824

$3,123

-$460

-$2,509 -15.5%

$1,146

$1,838

-$1,022 -53.8%

$271

$15

---

44.0%

-1.4%

$1 164666.6%

-$9,506

-$3,977

$31,340

$13,691

$15,546

$14,738

$878

-$7,100

$31,800

$16,200

$14,400

$12,900

$1,900

$0

58.2%

-2.3%

7.2%

24.5%

11.2%

-51.1%

1131.1%

---

-69.8%

14.3%

$32,092

$12,770

$12,484

$13,249

$1,796

-$26

8.0%

14.2%

$271

---

$15

$0

$38

$11

$0

$11

Total Tax Revenue

$6,589,152 $6,326,800 $262,352

4.1% $5,766,691

Nontax Revenue

Earnings on Investments

Licenses and Fees

Other Revenue

$1

$11,496

$81,221

$92,718

$0

$7,601

$72,097

$1

$3,895

$9,124

$13,020

---

51.2%

12.7%

16.3%

$119

$8,605

$69,611

-99.3%

33.6%

16.7%

18.4%

Total Nontax Revenue

$79,697

$78,335

Transfers In

$79,832

$77,932

$1,900

2.4%

$75,480

5.8%

14.2%

39.6%

22.0%

Total State Sources

Federal Grants

$6,761,702 $6,484,429 $277,273

$3,687,287 $3,809,476 -$122,189

$10,448,989 $10,293,905 $155,084

4.3% $5,920,507

-3.2% $2,640,938

1.5% $8,561,445

Total GRF SOURCES

*

Estimates of the Office of Budget and Management as of September 2020.

*Cumulative totals through the same month in FY 2020.

Detail may not sum to total due to rounding.

Budget Footnotes

P a g e | 3

October 2020

Legislative Budget Office of the Legislative Service Commission

1

Revenues

–

Jean J. Botomogno, Principal Economist

Overview

FY 2021 GRF sources through September of $10.45 billion were $155.1 million (1.5%)

above the estimate released by OBM in September 2020. GRF sources consist of state-source

receipts, which include tax revenue, nontax revenue, and transfers in, and federal grants.²

Federal grants were the only GRF category posting a year-to-date (YTD) negative variance with a

shortfall of $122.2 million (3.2%). This shortfall was more than offset by positive variances of

$

262.4 million (4.1%) for GRF tax sources, $13.0 million (16.3%) for nontax revenue, and

$

and for FY 2021 through September, respectively.

1.9 million (2.4%) for transfers in. Tables 1 and 2 show GRF sources for the month of September

Through the end of September, three of the four largest tax sources had solid

performances. The sales and use tax and the PIT were $183.9 million and $84.2 million above

their respective estimates; a strong positive variance of $23.5 million for the cigarette tax

canceled out a deficit of the same amount for the CAT (which was due to reduced economic

3

activity tied to COVID-19-related measures in the prior quarter). Total revenues for the

remaining GRF tax sources were $5.7 million below the combined estimate. The financial

institutions tax (FIT), the liquor gallonage tax, and the alcoholic beverage tax were above their

respective YTD revenue targets by $3.1 million, $1.8 million, and $1.1 million. However, those

positive variances were offset by negative variances of $7.4 million for the kilowatt-hour tax,

$

2.5 million for the natural gas consumption tax, and $1.6 million for the foreign

insurance tax.

For the month of September, GRF sources totaled $2.92 billion, an amount $150.4 million

(4.9%) below projection, due to a shortfall of $96.9 million (8.9%) for federal grants and a

timing-related negative variance of $62.2 million (91.5%) for nontax revenue. The monthly

negative variance for nontax revenue reflects a payment made by JobsOhio in August that had

4

been expected in September. GRF taxes were $8.7 million (0.5%) above estimate, and no

transfers in occurred or were anticipated during the month. Regarding tax sources, the cigarette

tax, the CAT, and the sales tax were above anticipated revenue by $16.1 million, $8.5 million, and

$

1.0 million, respectively. Those positive variances were partially offset by negative variances of

¹This report compares actual monthly and year-to-date GRF revenue sources to OBM’s 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.

²Federal grants are typically federal reimbursements for Medicaid and other human services

programs.

3

To slow the pandemic outbreak, the Governor issued an emergency declaration on

March 9, 2020, and various public health orders followed, including a stay-at-home requirement and

some business closures. Those measures reduced taxable gross receipts in the spring quarter, which was

the basis for the tax paid by quarterly CAT taxpayers in August 2020.

⁴In August 2020, nontax revenue was above estimate by $65.5 million due to the early payment.

Budget Footnotes

P a g e | 4

October 2020

Legislative Budget Office of the Legislative Service Commission

$

12.1 million for the PIT, $2.4 million for the FIT, and $1.0 million each for the alcoholic beverage

tax and the petroleum activity tax. Chart 1, below, shows cumulative YTD variances of GRF

sources in the first three months of FY 2021.

Chart 1: Cumulative Variances of GRF Sources in FY 2021

(

Variances from Estimates, $ in millions)

$

350

300

250

200

150

100

$

50

$0

-

$50

-

$100

$150

Jul-20

Federal Grants

Aug-20

Sep-20

Tax Revenue

Total GRF Sources

Compared to first-quarter GRF sources in FY 2020, YTD GRF sources rose $1.89 billion

5

(

22.0%), due to large increases in federal grants ($1.05 billion, 39.6%) and tax sources

$822.5 million, 14.3%). Nontax revenue and transfers in also rose, respectively, by $14.4 million

18.4%) and $4.4 million (5.8%). The increase in GRF tax sources was led by an increase of

$

623.7 million in PIT revenue and $233.4 million for the sales and use tax. The increase in PIT

revenue was primarily due to a delay in the tax filing deadline from April until July, as explained

in more detail in the PIT section below, while sales tax revenue has been supported by federal

income support programs, as explained further in the section on that tax. Also, revenue from the

cigarette tax, the FIT, the alcoholic beverage tax, and the liquor gallonage tax increased by

$

noticeable revenue declines were experienced by the CAT ($51.8 million), the kilowatt-hour

excise tax ($7.7 million), and the foreign insurance tax ($2.1 million).

16.6 million, $5.5 million, $3.1 million, and $1.5 million, respectively. On the other hand,

Sales and Use Tax

Through September, revenue from the sales and use tax totaled $2.98 billion. This

amount was $183.9 million (6.6%) above OBM projections, with $145.8 million of the overage

coming in July. YTD GRF revenue was also $233.4 million (8.5%) above FY 2020 receipts. In the

latest month, the performance of the tax weakened but was still positive. September GRF sales

⁵This growth is primarily due to a COVID-19-related temporary increase in the share of federal

reimbursements for Medicaid. The increase was authorized by the federal Coronavirus Aid, Relief, and

Economic Security (CARES) Act. The increased federal reimbursement accounted for $275.6 million of the

$

1.05 billion growth in federal grants, according to the Ohio Administrative Knowledge System (OAKS).

Budget Footnotes

P a g e | 5

October 2020

Legislative Budget Office of the Legislative Service Commission

tax revenue of $886.7 million was slightly above target. The auto sales and use tax had another

strong monthly positive variance, which came in $1.0 million larger than the revenue shortfall

from the nonauto sales and use tax, resulting in a positive variance of 0.1% for the combined

total sales and use tax. As mentioned in the previous edition of Budget Footnotes, a decrease in

employee compensation during 2020’s second quarter was more than offset by the increase in

unemployment compensation payments and other personal transfer receipts.⁶ Though

nationwide hiring slowed in September, employment for persons earnings above $60,000 a year

appears to be returning close to the prepandemic levels, while the bulk of job losses are

concentrated in households earning less than that amount. Since the April trough, inflation-

adjusted consumer spending had steadily increased, and recent data suggest it recovered to

about 95% of prepandemic levels.

For analysis and forecasting, revenue from the sales and use tax is separated into two

parts: auto and nonauto. Auto sales and use tax collections generally arise from the sale of motor

vehicles, but auto taxes arising from leases are paid at the lease signing and are mostly recorded

under the nonauto tax instead of the auto tax.

Nonauto Sales and Use Tax

YTD FY 2021 GRF nonauto sales and use tax receipts totaled $2.49 billion, an amount

106.5 million (4.5%) above estimate and $164.8 million (7.1%) above revenue in the first quarter

$

of FY 2020. The performance of the nonauto sales and use tax receipts so far has been

remarkable. The income support from the federal fiscal response to the pandemic essentially

eliminated the economic downdraft of the COVID-19 pandemic in July and August. However, the

impact of the federal income and employment support programs is waning, and this affected

September revenue. Nonauto sales and use tax revenue of $738.4 million was below estimate by

$

13.7 million (1.8%) and $9.4 million (1.3%) above revenue in September 2019. Generally, a large

part of a month’s nonauto sales and use tax revenue is from tax collection or tax remittance on

taxable sales in the previous month. The future performance of this tax source is likely to be

dependent on continued improvement in the Ohio labor market, any additional federal personal

transfer payments, and potential new restrictions if COVID-19 infections rise.

Chart 2 provides year-over-year growth in nonauto sales and use tax collections since

January 2020 and shows the rebound in nonauto sales and use tax revenue in recent months.

⁶To address the economic fallout from COVID-19, the U.S. Congress passed the CARES Act at the

end of March 2020. The Act included cash payments of up to $1,200 (plus $500 for each child age 16 or

under) for each qualifying adult, an additional $600 per week on top of any state-provided unemployment

benefits through July 31, 13 weeks of unemployment benefits above that of each state’s unemployment

program, and unemployment benefits for self-employed and “gig” workers. The payroll protection

program is a loan program intended to subsidize payroll costs for eight weeks after those loans, some of

which are forgivable, are made. In the months following passage of the CARES Act, other federal support

programs have been enacted or modified.

Budget Footnotes

P a g e | 6

October 2020

Legislative Budget Office of the Legislative Service Commission

Chart 2: Nonauto Sales and Use Tax Receipts Trend

Actual vs. Prior Year

(

Three-month Moving Average)

1

0.0%

5

0

.0%

-

5.0%

-

10.0%

15.0%

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

Jul-20

Aug-20 Sep-20

Auto Sales and Use Tax

Through September, FY 2021 auto sales and use tax receipts of $487.2 million were

77.4 million (18.9%) above estimate and $68.6 million (16.4%) above revenue in the

$

corresponding period in FY 2020. In September, auto sales and use tax revenue was

148.3 million, $14.7 million (11.0%) above estimate and $20.2 million (15.8%) above such

$

receipts in September 2019. Growth of more than 15% from the prior year in the absence of any

significant tax policy change is unusual. Auto sales tax revenue in July and September exceeded

that threshold and was also good in August (growth of 7.6%). Chart 3 shows year-over-year

growth in auto sales and use tax collections, the pandemic-related revenue declines earlier in the

calendar year from both low demand and low supply of vehicles, and the subsequent rebound in

the most recent months.

Chart 3: Auto Sales and Use Tax Receipts Trend

Actual vs. Prior Year

(

Three-month Moving Average)

3

2

1

0.0%

0

.0%

-

10.0%

20.0%

30.0%

40.0%

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

Jul-20

Aug-20 Sep-20

Budget Footnotes

P a g e | 7

October 2020

Legislative Budget Office of the Legislative Service Commission

Cheap credit and high demand for SUVs and pickup trucks drove the faster than expected

bounce back of the auto industry from lows in the spring quarter. In addition to the federal fiscal

income support and improvement in labor markets, the pandemic may have led persons avoiding

public transportation (either for work or leisure) to purchase motor vehicles. The increase in the

Ohio auto tax base in FY 2021 relative to the corresponding period in FY 2020 was due to a 14.2%

7

increase in the number of motor vehicles titled, according to data provided by the Ohio Bureau

of Motor Vehicles (BMV) shown below. Unit purchases of both new and used vehicles increased;

the taxable base for both new and used vehicles also rose.

Spending

$ in millions)

YTD FY 2021

Titles

115,248

Average Price

(

New vehicles

Used vehicles

$4,190

$36,361

$9,539

541,332

$5,163

Total

656,580

$9,354

$14,247

Growth from FY 2020

New vehicles

Used vehicles

8.1%

$394.9

$697.8

2.1%

0.0%

15.6%

Total

14.2%

$1,092.7

-0.8%

BMV data show that unit sales of new passenger vehicles decreased 3.1% but their

average price rose 5.6%; unit sales of new trucks rose 10.9% and their average price increased

3

passenger vehicles grew 10.7%, though the average price fell 1.4%, and unit sales of used trucks

jumped 18.0% and prices rose 0.8%.

.2%. Demand for previously owned vehicles was high during the quarter: unit sales of used

Personal Income Tax

YTD FY 2021 GRF receipts from the PIT of $2.91 billion were $84.2 million (3.0%) above

estimate and $623.7 million (27.3%) above such revenue in the first quarter of FY 2020. This large

year-over-year growth is directly attributable to the delay of income tax filings from April to July

2

020. Among measures designed to combat the impact of the COVID-19 pandemic, H.B. 197 of

rd

the 133 General Assembly authorized the Tax Commissioner to delay various state tax

payments, which he did, to match the extended deadline for federal income tax returns. Thus, in

July 2020, payments associated with annual returns of $501.9 million were $492.5 million above

8

such payments in July 2019; PIT GRF revenue for the month was $550.1 million (87.3%) above

receipts in July 2019.

⁷Titled motor vehicles include passenger vehicles, trucks, motorcycles, and other motor vehicles.

⁸In April 2020, this component was $697.8 million below anticipated revenue.

Budget Footnotes

P a g e | 8

October 2020

Legislative Budget Office of the Legislative Service Commission

PIT revenue to the GRF is comprised of gross collections, minus refunds and distributions

to the Local Government Fund (LGF). Gross collections consist of employer withholdings,

9

quarterly estimated payments, trust payments, payments associated with annual returns, and

other miscellaneous payments. The performance of the tax is typically driven by employer

withholdings, which is the largest component of gross collections (about 87% of gross collections

in FY 2020). Larger or smaller than expected refunds (which decrease gross collections) could also

greatly affect the monthly performance of the tax. The income tax filing delay introduced some

volatility in the monthly trends of most PIT components. However, this volatility for payments

with annual returns and for refunds is expected to decrease in the coming months as taxpayers

continue to file tax year 2019 tax returns.

September PIT revenue to the GRF of $888.0 million was $12.1 million (1.3%) below

anticipated revenue. Gross collections were $13.9 million (1.4%) above target. Though

employer withholding was $4.0 million below projection, the remaining components had

positive variances: $8.6 million for quarterly estimated payments, $4.1 million for payments

associated with annual returns, $3.9 million for trust payments, and $1.2 million for

miscellaneous payments. Refunds were $23.1 million above estimates, more than offsetting

the positive variance for gross collections. In addition, LGF distributions were $2.9 million

higher than their expected level.

For FY 2021, revenues from each component of the PIT relative to estimates and revenue

received in FY 2020 are detailed in the table below. FY 2021 gross collections were $51.2 million

above projections. Quarterly estimated payments and trust payments were above their

respective projections by $52.7 million and $13.9 million. Those positive variances were partially

offset by shortfalls of $9.4 million for payments due with annual returns, $3.1 million for

miscellaneous payments, and $2.9 million for employer withholding. Refunds were $47.4 million

below estimate, but LGF distributions were above expectation by $14.4 million, thus resulting in

a YTD positive variance of $84.2 million for the GRF.

Compared to the corresponding period last year, first-quarter gross collections grew

809.8 million, driven by an increase of $595.2 million from payments due with annual returns.

$

In addition, quarterly estimated payments, trust payments, and employer withholding increased

by $144.2 million, $45.4 million, and $28.2 million, respectively. However, miscellaneous

payments were $3.2 million lower than in FY 2020. Year-over-year growth in withholding receipts

in calendar year (CY) 2020 is limited because of a 4.0% reduction in withholding rates effective

January 2020 due to H.B. 166’s reduction of income tax rates for nonbusiness income. FY 2021

refunds and LGF distributions were higher than those in FY 2020 by $169.3 million and

$

to YTD receipts in FY 2020.

16.9 million, respectively. Therefore, growth in PIT GRF revenue totaled $623.7 million relative

⁹Quarterly 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 individual’s tax year and January of the

following year. Most estimated payments are made by high-income taxpayers.

Budget Footnotes

P a g e | 9

October 2020

Legislative Budget Office of the Legislative Service Commission

FY 2021 PIT Revenue Variance and Annual Change by Component

YTD Variance from Estimate

Changes from FY 2020

Category

Amount

$ in millions)

Percent

(%)

Amount

($ in millions)

Percent

(%)

(

Withholding

-$2.9

$52.7

$13.9

-$9.4

-0.1%

$28.2

$144.2

$45.4

1.3%

Quarterly Estimated Payments

Trust Payments

15.4%

30.7%

-1.4%

-17.3%

1.5%

57.5%

327.9%

1154.8%

-17.4%

31.7%

Annual Return Payments

Miscellaneous Payments

Gross Collections

$595.2

-$3.2

-$3.1

$51.2

-$47.4

$14.4

$84.2

$809.8

$169.3

$16.9

Less Refunds

-12.4%

13.4%

3.0%

101.3%

16.0%

Less LGF Distribution

GRF PIT Revenue

$623.7

27.3%

The chart below illustrates the growth of monthly employer withholdings on a

three-month moving average relative to one year ago. It shows both the actual change in

withholding receipts in FY 2021 and estimated withholding receipts adjusted for the decrease in

the withholding tax rate. Payrolls are estimated to have increased about 5.5%, on average, in the

first quarter of FY 2021, after their low point in the spring quarter.

Chart 4: Monthly Witholding Receipts Trend

Actual vs. Prior Year

(

Three-month Moving Average)

8

6

4

2

0

.0%

-

2.0%

4.0%

6.0%

8.0%

-

10.0%

12.0%

Jan-20

Feb-20 Mar-20 Apr-20 May-20 Jun-20

Jul-20

Aug-20 Sep-20

Actual

Adjusted

Budget Footnotes

P a g e | 10

October 2020

Legislative Budget Office of the Legislative Service Commission

Commercial Activity Tax

September receipts to the GRF from the CAT were $15.6 million, an amount $8.5 million

119.1%) above estimate, bringing the YTD negative variance for this tax source to $23.5 million

6.3%), down from $32.0 million in the first two months. For the quarter, GRF receipts from CAT

(

taxpayers were $347.6 million, $51.8 million (13.0%) below revenue in FY 2020 through

September. The first payment from quarterly CAT taxpayers in August, based on taxable gross

receipts from April to June 2020, was short of estimate by $30.4 million (9.9%). September is not

a big month for the CAT, but the monthly revenue partially reduced a good portion of the August

deficit. First-quarter gross collections totaled $505.8 million, a decrease of $51.0 million (10.1%),

relative to gross collections in FY 2020 through September. Refunds and credits were

$

credited to the Revenue Enhancement Fund (Fund 2280) was $3.3 million. (Moneys in the fund

help defray Ohio Department of Taxation costs of administering the CAT and other taxes.)

32.6 million, an increase of $10.5 million (32.1%) above those items in FY 2020. Revenue

Under continuing law, CAT receipts are deposited into the GRF (85.0%), the School District

Tangible Property Tax Replacement Fund (Fund 7047, 13.0%), and the Local Government

Tangible Property Tax Replacement Fund (Fund 7081, 2.0%). First-quarter distributions were

$

53.2 million and $8.2 million, respectively. The distributions to Fund 7047 and Fund 7081 are

used to make reimbursement payments to school districts and other local taxing units,

respectively, for the phase out of property taxes on general business tangible personal property.

Any receipts in excess of amounts needed for such payments are generally transferred back to

the GRF.

Cigarette and Other Tobacco Products Tax

YTD through September, FY 2021 revenue from the cigarette and other tobacco products

OTP) tax totaling $196.0 million was above estimate by $23.5 million (13.6%). This total included

(

$

of September, receipts from this tax source of $89.9 million were $16.1 million (21.8%) above

estimate and $9.9 million (12.4%) above revenue in September 2019.

169.7 million from the sale of cigarettes and $26.3 million from the sale of OTP. For the month

FY 2021 first-quarter receipts grew $16.6 million (9.3%) relative to revenues in the first

quarter of FY 2020. Receipts from cigarette sales and OTP sales increased by $11.0 million (6.9%)

and $5.6 million (27.3%), respectively. The increase in OTP revenue is due, in part, to additional

revenue from the vapor tax. H.B. 166 levied a tax of 10¢ per milliliter (or gram) of vapor product

(

depending on the form of the product) which is defined as any liquid solution or other substance

that contains nicotine and is depleted as it is used in an electronic smoking product. Of total

receipts in FY 2020 of $82.4 million from the sale of OTP, the new tax on vapor products

contributed $3.6 million, according to the Ohio Department of Taxation.

On a yearly basis, revenue from the cigarette tax usually trends downward, generally at a

slow pace. However, that historical trend has been suspended in the last six months. Through

March in FY 2020, receipts from the sales of cigarette stamps were 2.2% below such revenue in

the first nine months of FY 2019. In the April to June 2020 quarter, those receipts were flat

compared to receipts in the same quarter in FY 2019, and FY 2021 first-quarter receipts from the

cigarette base were unusually strong. Revenue increased by $1.6 million in July, $1.0 million in

August, and $8.3 million in September 2020, relative to the corresponding months in FY 2020.

The COVID-19 pandemic may have modified recent purchasing patterns and behavior: smokers

are spending less on travel and entertainment during the pandemic and thus have more

Budget Footnotes

P a g e | 11

October 2020

Legislative Budget Office of the Legislative Service Commission

disposable income for cigarettes. Fewer social interactions and more time at home allow for

more tobacco use occasions. Also, some smokers may also have switched back to traditional

cigarettes due to recent federal restrictions on e-cigarette flavors.

The OTP tax is an ad valorem tax, generally 17% of the wholesale price paid by wholesalers

for the product; thus, revenue from that portion of the tax base (about 9% of the total tax base)

grows with OTP price increases.

Budget Footnotes

P a g e | 12

October 2020

Legislative Budget Office of the Legislative Service Commission

Table 3: General Revenue Fund Uses

Actual vs. Estimate

Month of September 2020

($ in thousands)

(Actual based on OAKS reports run October 6, 2020)

Program Category

Actual

Estimate*

Variance Percent

Primary and Secondary Education

Higher Education

$669,146

$196,351

$7,956

$750,194

$194,400

$9,481

-$81,048 -10.8%

$1,951

-$1,526 -16.1%

-$80,622 -8.5%

1.0%

Other Education

Total Education

$873,453

$954,075

Medicaid

$1,303,977 $1,488,036 -$184,059 -12.4%

$98,373 $97,838 $536 0.5%

$1,402,351 $1,585,874 -$183,523 -11.6%

Health and Human Services

Total Health and Human Services

Justice and Public Protection

General Government

$189,201

$27,793

$196,030

$43,227

-$6,829 -3.5%

-$15,434 -35.7%

Total Government Operations

$216,994

$239,257

-$22,263

-9.3%

Property Tax Reimbursements

Debt Service

$358,510

$237,970

$596,480

$300,767

$240,038

$540,805

$57,743

-$2,068

$55,675

19.2%

-0.9%

10.3%

Total Other Expenditures

Total Program Expenditures

Transfers Out

$3,089,278 $3,320,011 -$230,733

$670 $0 $670

$3,089,948 $3,320,011 -$230,063

-6.9%

---

Total GRF Uses

-6.9%

*September 2020 estimates of the Office of Budget and Management.

Detail may not sum to total due to rounding.

Budget Footnotes

P a g e | 13

October 2020

Legislative Budget Office of the Legislative Service Commission

Table 4: General Revenue Fund Uses

Actual vs. Estimate

FY 2021 as of September 30, 2020

($ in thousands)

(Actual based on OAKS reports run October 6, 2020)

Program Category

Actual

Estimate*

Variance Percent FY 2020** Percent

Primary and Secondary Education

Higher Education

$2,395,750 $2,470,100

-$74,350

-$6,382

-$162

-3.0% $2,176,112

10.1%

4.5%

$566,239

$25,379

$572,620

$25,541

-1.1%

-0.6%

$541,734

Other Education

$31,651 -19.8%

Total Education

$2,987,367 $3,068,261

-$80,894

-2.6% $2,749,497

8.7%

Medicaid

$5,265,222 $5,381,234 -$116,012

$329,919 $350,051 -$20,132

$5,595,142 $5,731,285 -$136,144

-2.2% $4,158,325

26.6%

10.8%

25.6%

Health and Human Services

Total Health and Human Services

-5.8% $297,636

-2.4% $4,455,961

Justice and Public Protection

General Government

$682,021

$102,633

$784,653

$711,151

$123,210

$834,361

-$29,130

-4.1%

$630,320

$111,008

$741,328

8.2%

-7.5%

5.8%

-$20,578 -16.7%

Total Government Operations

-$49,708

-6.0%

Property Tax Reimbursements

Debt Service

$498,980

$411,621

$910,601

$546,433

$413,690

$960,123

-$47,453

-$2,068

-8.7%

-0.5%

$601,005 -17.0%

$761,147 -45.9%

Total Other Expenditures

-$49,521

-5.2% $1,362,152 -33.1%

-3.0% $9,308,938 10.4%

-5.8% $656,601 -37.3%

-3.1% $9,965,540 7.3%

Total Program Expenditures

Transfers Out

$10,277,763 $10,594,030 -$316,267

$411,398 $436,900 -$25,502

$10,689,161 $11,030,930 -$341,769

Total GRF Uses

*

September 2020 estimates of the Office of Budget and Management.

*Cumulative totals through the same month in FY 2020.

Detail may not sum to total due to rounding.

Budget Footnotes

P a g e | 14

October 2020

Legislative Budget Office of the Legislative Service Commission

Table 5: Medicaid Expenditures by Department

Actual vs. Estimate

($ in thousands)

(Actuals based on OAKS report run on October 8, 2020)

Month of September 2020

Actual Estimate* Variance Percent

Year to Date through September 2020

Actual Estimate* Variance Percent

Department

Medicaid

GRF

$1,251,435 $1,433,518 -$182,083 -12.7% $5,093,640 $5,203,502 -$109,861

$908,369 $837,520 $70,849 8.5% $2,115,151 $2,160,690 -$45,538

2,159,804 $2,271,039 -$111,235 -4.9% $7,208,792 $7,364,192 -$155,400

-2.1%

Non-GRF

$

All Funds

Developmental Disabilities

GRF

$43,798

264,268

308,066

$43,139

$189,818

$232,957

$659

$74,450

$75,110

1.5%

39.2%

32.2%

$146,767

$710,477

$857,244

$146,817

$629,052

$775,870

-$51

$81,425

$81,374

0.0%

12.9%

10.5%

$

Non-GRF

All Funds

$

Job and Family Services

GRF

$7,924

$13,946

21,870

$10,392

$15,256

$25,648

-$2,468 -23.7%

-$1,310 -8.6%

-$3,778 -14.7%

$21,974

$40,003

$61,977

$27,739

$46,826

$74,565

-$5,765 -20.8%

-$6,823 -14.6%

-$12,588 -16.9%

Non-GRF

$

All Funds

Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education

GRF

$820

$987

$2,460

$3,447

-$167 -16.9%

-$1,133 -46.0%

-$1,300 -37.7%

$2,842

$9,039

$3,176

$10,668

$13,844

-$334 -10.5%

-$1,629 -15.3%

-$1,964 -14.2%

Non-GRF

$1,328

$

2,147

$11,880

All Funds

All Departments:

GRF

$1,303,977 $1,488,036 -$184,059 -12.4% $5,265,222 $5,381,234 -$116,012

-2.2%

1.0%

Non-GRF

All Funds

$1,187,911 $1,045,054

2,491,888 $2,533,090

$142,856

-$41,202

13.7% $2,874,670 $2,847,236

-1.6% $8,139,893 $8,228,471

$27,434

-$88,578

$

-1.1%

*September 2020 estimates from the Office of Budget and Management and Department of Medicaid

Detail may not sum to total due to rounding.

Budget Footnotes

P a g e | 15

October 2020

Legislative Budget Office of the Legislative Service Commission

Table 6: All Funds Medicaid Expenditures by Payment Category

Actual vs. Estimate

($ in thousands)

(Actuals based on OAKS report run on October 8, 2020)

Month of September 2020

Year to Date through September 2020

Actual Estimate* Variance Percent

Payment Category

Managed Care

Actual

Estimate* Variance Percent

$1,662,764 $1,732,814 -$70,050

-4.0% $5,158,380 $5,220,652 -$62,271

-1.2%

-2.3%

-0.2%

-0.6%

-0.8%

-1.2%

0.0%

CFC†

$602,334

$501,134

$251,567

$80,532

$237,099

-$9,903

$606,123

-$3,789

-0.6% $1,830,152 $1,873,690 -$43,538

Group VIII

ABD†

$542,089 -$40,955

-7.6% $1,527,436 $1,530,746

-$3,310

-$4,773

-$1,984

-$8,633

-$34

$256,333

$82,537

$245,732

$0

-$4,766

-$2,004

-$8,633

-$9,903

-1.9%

-2.4%

-3.5%

---

$756,230

$242,336

$721,760

$80,466

$761,002

$244,320

$730,393

$80,500

ABD Kids

My Care

P4P†

Fee-For-Service

ODM Services

DDD Services

$667,521

$320,316

$304,060

$43,146

$619,791 $47,730

$346,583 -$26,267

$227,993 $76,067

7.7% $2,523,234 $2,507,396 $15,838

-7.6% $1,066,296 $1,111,778 -$45,482

0.6%

-4.1%

11.1%

-3.4%

33.4%

$834,278

$622,660

$751,151 $83,127

$644,466 -$21,807

Hospital - HCAP&Other†

$45,215

-$2,070 -4.6%

Premium Assistance

Medicare Buy-In

Medicare Part D

$94,601

$59,825

$34,776

$94,003

$58,990

$35,013

$598

$835

0.6%

1.4%

$249,263

$179,367

$69,896

$246,194

$175,828

$70,366

$3,069

$3,539

-$470

1.2%

2.0%

-$237

-0.7%

Administration

Total

$67,002

$86,483 -$19,481 -22.5%

$209,016

$254,229 -$45,213 -17.8%

$2,491,888 $2,533,090 -$41,202

-1.6% $8,139,893 $8,228,471 -$88,578 -1.1%

*September 2020 estimates from the Office of Budget and Management and Department of Medicaid

†

P4P - Pay For Performance

CFC - Covered Families and Children; ABD - Aged, Blind, and Disabled; HCAP - Hospital Care Assurance Program;

Detail may not sum to total due to rounding.

Budget Footnotes

P a g e | 16

October 2020

Legislative Budget Office of the Legislative Service Commission

E_M_ex_l_a_np_e_y_Ce_a_rn_t_e_r_,d_D_i_ri_e_ct_t_o_rures¹⁰

–

Ivy Chen, Principal Economist

Overview

FY 2021 GRF program expenditures totaled $10.28 billion at the end of September. These

expenditures were $316.3 million (3.0%) below the estimate released by OBM in early September

020. The program category with the largest negative variance was Medicaid, which had a

negative YTD GRF variance of $116.0 million (2.2%) as a result of a negative variance of

184.1 million (12.4%) in September more than offsetting a positive variance of $68.0 million in

August. Primary and Secondary Education had the second largest negative YTD variance at

74.4 million (3.0%), which, like Medicaid, was caused by a negative September variance

$81.0 million, 10.8%) more than offsetting a positive August variance ($6.7 million, 0.7%).

2

$

(

Property Tax Reimbursements had the third largest negative YTD variance at $47.5 million (8.7%),

despite a positive September variance of $57.7 million (19.2%). All other program categories also

had negative YTD variances at the end of September. YTD variances are shown in the preceding

Table 4, while Table 3 shows September variances.

In addition to program expenditures, total uses include transfers out. Transfers out

totaled $411.4 million YTD and had a negative YTD variance of $25.5 million (5.8%) at the end of

September. Combining program expenditures and transfers out, total GRF uses for FY 2021 were

$

The rest of this section discusses both GRF and non-GRF variances in Medicaid and the GRF

variances in Primary and Secondary Education and Property Tax Reimbursements.

10.69 billion at the end of September. These uses were $341.8 million (3.1%) below estimate.

Medicaid

GRF Medicaid expenditures were below their monthly estimate in September by

$

184.1 million (12.4%) and below their YTD estimate by $116.0 million (2.2%) at the end of

September. Non-GRF Medicaid expenditures were above their monthly estimate, by

142.9 million (13.7%), which brought the YTD expenditures to $27.4 million (1.0%) above

estimate. Including both the GRF and non-GRF, all funds Medicaid expenditures were

41.2 million (1.6%) below estimate in September and $88.6 million (1.1%) below their YTD

$

estimate at the end of September.

The impact of the COVID-19 pandemic began to show in March's Medicaid caseloads, and

the impacts have continued to show through monthly caseload increases since March. From

March through September of 2020, caseloads have increased by 39,400 cases per month, on

average. According to the Ohio Department of Medicaid (ODM), nearly all of the caseload

variance has been due to the suspension of routine redeterminations of eligibility and an increase

in the number of new applications and approvals, due to the economic impacts of the COVID-19

¹⁰This report compares actual monthly and YTD expenditures from the GRF to OBM’s estimates.

If a program category’s actual expenditures were higher than estimate, that program category is deemed

to have a positive variance. The program category is deemed to have a negative variance when its actual

expenditures were lower than estimate.

Budget Footnotes

P a g e | 17

October 2020

Legislative Budget Office of the Legislative Service Commission

pandemic. Based on FY 2021 ODM estimates, September's caseload of 3.1 million enrollees is

approximately 80,700 cases (2.6%) below estimate.

Table 5 shows GRF and non-GRF Medicaid expenditures for ODM, the Ohio Department

of Developmental Disabilities (ODODD), and six other “sister” agencies that also take part in

administering Ohio Medicaid. ODM and ODODD account for about 99.0% of the total Medicaid

budget. Therefore, they generally also account for the majority of the variances in Medicaid

expenditures. ODM had an all funds negative variance in September of $111.2 million (4.9%) and

YTD expenditures were also below estimate, with a negative variance of $155.4 million (2.1%).

ODODD had an all funds positive variance of $75.1 million (32.2%) in September and ended

September with a YTD positive variance of $81.4 million (10.5%). The other six “sister” agencies

–

Pharmacy, and Education – account for the remaining 1.0% of the total Medicaid budget. Unlike

Job and Family Services, Health, Aging, Mental Health and Addiction Services, State Board of

ODM and ODODD, the six “sister” agencies incur only administrative spending.

Table 6 shows all funds Medicaid expenditures by payment category. Expenditures were

below their YTD estimates for Managed Care and Administration by $62.3 million (1.2%) and

$

45.2 million (17.8%), respectively. Fee-For-Service (FFS) YTD expenditures were above estimate

by $15.8 million (0.6%), and Premium Assistance YTD expenditures were above estimate by

3.1 million (1.2%).

$

Primary and Secondary Education

The Primary and Secondary Education program category includes all GRF expenditures by

the Ohio Department of Education (ODE), except for Medicaid and Property Tax Reimbursement

expenditures. This category's negative September variance of $81.0 million (10.8%) more than

offset its positive August variance of $6.7 million (0.7%), resulting in a negative YTD variance of

$

74.4 million (3.0%). The category's negative September variance was caused mainly by variances

of $48.2 million in appropriation item 200550, Foundation Funding, and $30.7 million in

appropriation item 200573, EdChoice Expansion. The variances in both of these items were

caused by a timing issue related to scholarship payments and should be reversed in future

months.

Property Tax Reimbursements

This category of GRF expenditures reimburses school districts and other local

governments for their property tax losses due to property tax rollbacks and the homestead

exemption. Reimbursements are made twice a year. The current payment is based on a property

tax settlement conducted in August. Reimbursements will be made as counties request them

through December. Since payments are made at the request of the counties, this category often

has variances at the beginning of a cycle that are offset as the cycle draws to a close. At the end

of August, this category was under estimate by $105.2 million (42.8%). A positive variance of

$

variance of $47.5 million (8.7%) at the end of September, which should decrease even more by

the end of the calendar year.

57.7 million (19.2%) in September partially offset August's variance, resulting in a negative YTD

Budget Footnotes

P a g e | 18

October 2020

Legislative Budget Office of the Legislative Service Commission

Issue Updates

ODE Awards $50 Million in BroadbandOhio Connectivity Grants

–

Jason Glover, Budget Analyst

On September 2, 2020, ODE released the list of awardees for the $50.0 million

BroadbandOhio Connectivity Grant Program. Nearly 950 schools were awarded funds ranging

from $500 to just over $150,000. The table below shows the total award amounts by school type.

As the table shows, 470 traditional school districts received approximately $30.1 million (60.1%).

Next, 266 community and STEM schools received $12.5 million (25.0%), followed by 151

chartered nonpublic schools at $4.8 million (9.6%), 35 joint vocational school districts (JVSDs) at

$

1.8 million (3.6%), and 27 education service centers (ESCs) and county developmental

disabilities (DD) boards at $870,000 (1.7%). Schools were required to apply to ODE to receive the

funds. Eligible grant requests of less than $20,000 were approved for the full amount. However,

due to high demand, eligible requests over $20,000 were prorated at 60% of the difference

between $20,000 and the requested amount.

The BroadbandOhio Connectivity Grant Program uses $50 million of Ohio’s CARES Act

Coronavirus Relief Fund (Fund 5CV1) resources, approved by the Controlling Board in late July,

to help schools with the costs of remote learning. The program focuses on the following eligible

student groups: economically disadvantaged students, students defined by ODE as “vulnerable”

youth, those with chronic conditions, and students who do not have other access to the internet.

More specifically, grant funds may be used for home internet, hotspot/MiFi with a service plan,

mobile hotspots (including on buses), public Wi-Fi infrastructure, and other technology that

provides a connection for the student.

BroadbandOhio Connectivity Grant Funding by School Type

School Type

Traditional School Districts

Community and STEM Schools

Chartered Nonpublic Schools

Joint Vocational School Districts

ESCs and County DD Boards

Total

Number of Awardees Total Allocations

470

266

151

35

$30,052,586

$12,495,134

$4,790,869

$1,777,149

$866,861

27

949

$49,982,599

Budget Footnotes

P a g e | 19

October 2020

Legislative Budget Office of the Legislative Service Commission

U.S. Department of Defense Awards the State $5.0 Million for

Defense Manufacturing

–

Shannon Pleiman, Senior Budget Analyst

On September 17, 2020, the U.S. Department of Defense (DoD) awarded a $5.0 million

grant to the Development Services Agency (DSA) to improve defense manufacturing processes in

the state. The grant will be administered under DSA’s existing Ohio Manufacturing Extension

Partnership (MEP) Program and will be awarded to ten MEP partners as shown in the table below.

The first seven recipients listed in the table will use the grant funding to engineer and

implement “Industry 4.0” and advanced manufacturing technology at small- to medium-sized

defense manufacturers. Industry 4.0 refers to the use of interconnected digital technologies in

the manufacturing process, or the “internet of things.” The remaining three recipients will use

the award money to develop workforce credentials and training for Industry 4.0 equipment and

production process needs. Altogether, these organizations will use this funding over the next

three years to (1) undertake at least 26 advanced manufacturing projects, (2) credential at least

4

manufacturers in the defense supply chain.

00 new workers in advanced manufacturing, and (3) create at least 50 new products and 20 new

Defense Manufacturing Grant by MEP Program (Total: $5,000,000)

Total Grant

Amount

Total Grant

Amount

MEP Partner

FASTLANE

$600,000 Ohio Aerospace Institute

$300,000

Manufacturing Advocacy and

Growth Network

$600,000 Ohio State University – Center

for Design and Manufacturing

Excellence

TechSolve

$600,000 Ohio Manufacturing Association

$300,000 America Makes

$1,400,000

$300,000

Center for Innovative Food

Technology

Columbus State Community

College

$300,000 Lorain County Community

College and Automation and

Robotics Manufacturing Institute

$300,000

The federal grant is in response to the state being designated by DoD as a Defense

Manufacturing Community on August 16, 2020. The purpose of the designation is to support

long-term community investments that strengthen national security innovation and expand the

capabilities of defense manufacturing. In order for the state to receive the grant, a 25% match

was required (approximately $1.3 million) which brings the total funding for the initiative to

$

6.3 million. The matching funds are supported by $650,000 in state funds and $600,000 in

program income and partner contributions. The $650,000 in state funds will be paid from GRF

line item 195499, BSD Federal Programs Match, which provides state matching funds for federal

programs, including the MEP Program.

Budget Footnotes

P a g e | 20

October 2020

Legislative Budget Office of the Legislative Service Commission

Ohio Receives $96.2 Million State Opioid Response Grant

–

Ryan Sherrock, Economist

On August 21, 2020, the Ohio Department of Mental Health and Addiction Services

(OhioMHAS) announced that it received a $96.2 million federal State Opioid Response (SOR)

grant. SOR grant funds are used by states to combat the ongoing opioid epidemic. Specifically,

these funds will be used to increase access to medication-assisted treatment, reduce unmet

treatment need, and reduce overdose deaths through the provision of prevention, treatment,

and recovery supports for opioid use disorder. In addition, funds will be used to support

evidence-based prevention, treatment, and recovery support services for stimulant drugs,

including cocaine and methamphetamine, to address a rise in their usage. OhioMHAS estimates

that 20,000 Ohioans will receive services through these grant funds. In addition, OhioMHAS will

build and engage local and regional community partnerships to scale-up local supports necessary

for recovery.

These grant funds were awarded by the U.S. Substance Abuse and Mental Health Services

st

Administration as part of the 21 Century CARES Act. The total amount of funding available was

$

1.42 billion. States and territories received an award based on a formula that considered (1) the

proportion of state residents who meet criteria for dependence or abuse of heroin or pain

relievers, but have not received any treatment and (2) the proportion of drug poisoning deaths

in the state. Additionally, 15% of the funds were set-aside for the ten states with the highest

mortality rates related to drug poisoning deaths. These states include Ohio, as well as Delaware,

Kentucky, Maryland, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Washington

D.C., and West Virginia.

This was the third round of SOR funding awarded. In total, Ohio has received

235.1 million since the program’s inception in 2018. Past and current Ohio SOR efforts include

$

expanding prevention efforts related to naloxone distribution, increasing access to medication-

assisted treatment and recovery housing, and developing employment opportunities for persons

in recovery from opioid addiction.

Ohio Department of Medicaid Files Rules to Make Expanded

Access to Telehealth Permanent

–

Nelson V. Lindgren, Economist

On August 31, 2020, ODM filed a rule with the Joint Committee on Agency Rule Review

JCARR) to expand access to telehealth. This rule would make permanent the emergency rules

11

(

regarding telehealth, which were issued in March in response to the COVID-19 pandemic. The

rule expands the type of providers eligible to render telehealth services to include supervised

practitioners (e.g., trainees and aides), Medicaid School Program providers, audiologists, speech-

language pathologists, occupational therapists, physical therapists, home health and private duty

nurses in home health or hospice settings, dentists, dietitians, behavioral health practitioners,

and optometrists. The rule also provides fewer restrictions on patient and provider site locations.

¹¹Executive Order 2020-05D specified that these rules would become effective immediately,

March 19, 2020. The order was to expire 120 days from the effective date of the emergency rules or upon

the adoption of the rules through the normal JCARR process, whichever is sooner.

Budget Footnotes

P a g e | 21

October 2020

Legislative Budget Office of the Legislative Service Commission

In addition, the rule requires providers who utilize telehealth to include a modifier that reflects

the physical location of the patient and a place of service code that reflects the physical location

of the treating provider. ODM states that this is being done, in part, to improve access to care.

Between March 19 and September 1, 2020, more than 625,000 Medicaid members have used

telehealth services. Only 5,000 telehealth claims were submitted prior to the COVID-19

pandemic.

This rule is scheduled for a hearing before JCARR on October 1, 2020, and according to

ODM, is on track to become effective as the current emergency rules expire. Thus, if approved,

expanded telehealth access will be continued throughout the remainder of the COVID-19

pandemic and beyond, assuming continued federal flexibility.

Motor Fuel Tax Revenue Increased by $650 Million (33.6%) in

FY 2020, Although Consumption Decreased Due to COVID-19

–

Tom Middleton, Senior Budget Analyst

–

Eric Makela, Economist

Motor fuel tax (MFT) revenue increased $650 million (33.6%) in FY 2020, although

consumption decreased, as indicated in the table below. This increase was due to MFT rate

rd

increases enacted in H.B. 62 of the 133 General Assembly, the transportation budget bill for the

FY 2020-FY 2021 biennium. H.B. 62 increased the MFT rate by 10.5 cents per gallon for gasoline

and by 19 cents per gallon for other fuels, including diesel.¹² The increases became effective on

July 1, 2019, the start of FY 2020.

Motor Fuel Purchases and MFT Paid

Taxable Fuel Purchases (millions of gallons)

Motor Fuel Taxes Paid ($ in millions)

Fiscal

Quarter

% Change from

FY 2020

FY 2019

FY 2020

FY 2019

Q1

1,780.3

1,705.3

1,559.3

1,377.1

6,422.0

-1.1%

-3.3%

-4.1%

-23.0%

-8.0%

$714.9

$684.5

43.0%

40.0%

12.1%

33.6%

Q2

Q3

$631.8

Q4

$556.8

Total

$2,588.0

Source: Ohio Department of Taxation MVR Reports

¹²Taxable fuel includes gasoline, kerosene, diesel, compressed natural gas, and any other liquid

that can be used to fuel combustion engines. Year to year, about 75% of MFT revenue is derived from the

purchase of gasoline, about 25% is from diesel, and around 0.1% is from other fuels.

Budget Footnotes

P a g e | 22

October 2020

Legislative Budget Office of the Legislative Service Commission

Fuel consumption declined slightly through the first three quarters of FY 2020, compared

to FY 2019, but dropped precipitously (-23%) in the last quarter of FY 2020 largely due to the

COVID-19 pandemic reducing travel demands. Nationally during this quarter, inflation-adjusted

consumer spending on motor vehicle fuels, lubricants, and fluids reached its lowest quarterly

1

3

record since 1986.

Of all MFT revenue, about 60% is used by the Ohio Department of Transportation for state

road projects and to pay off highway bond debt, about 35% is allocated to political subdivisions

by formula for local road and bridge projects, and about 5% is distributed to other state agencies

for transportation-related purposes.

State Debt Refinancing Frees $363.6 Million in FY 2021 Budget

–

Eric Makela, Economist

During the month of June 2020, OBM announced the issuance of $780 million of general

obligation (GO) bonds. The Series 2020A and Series 2020B bonds, issued by the Ohio Public

Facilities Commission (OPFC), refinanced previously issued bonds at lower interest rates; the

move freed an additional $363.6 million in cash flow during FY 2021.¹⁴

As shown in the table below, the OPFC bonded debt service due for all programs in

FY 2021 was $1.14 billion prior to the June sale and $775.7 million after the bonds were

1

5

refinanced. The table displays estimated debt service from OPFC bonded debt from FY 2021 to

FY 2039 before and after OPFC’s debt restructuring in June, as well as the estimated effects on

GRF debt service expenditures during this period. Scheduled debt service payments for several

years between FY 2022 and FY 2039 increase due to the refinancing, but by less than the FY 2021

savings, resulting in a reduction in debt service paid during fiscal years 2021 through 2039 of

$

111.2 million.

The refunding bonds covered three different categories of debt usage: higher education,

common schools, and infrastructure improvement. A total of $292.5 million of bonds were issued

to refund previous debt issued for higher education facilities; approximately $271.8 million of

bonds were issued to refund debt incurred for common school capital investment; approximately

$

facilities capital projects. The refunded, or retired, debt was issued between 2009 and 2018.

215.8 million of bonds were issued to refund debt previously taken on to fund general public

16

¹³Based on consumer expenditure data from the Bureau of Economic Analysis and compiled by

IHS Markit.

¹⁴https://obm.ohio.gov/wps/portal/gov/obm/home/news-and-events/news-release-2020-06-29.

¹⁵Source: Ohio Office of Budget and Management.

¹⁶Subtotals may not add to total due to rounding.

Budget Footnotes

P a g e | 23

October 2020

Legislative Budget Office of the Legislative Service Commission

GRF Debt Service for OPFC Bonded Debt ($ in millions)*

Change in GRF Debt

Service Expenditure

Fiscal Year

Prior to Refunding Bonds

After Refunding Bonds

2

021

022

023

024

025

026

027

028

029

030

031

032

033

034

035

036

037

038

039

$1,139.4

$1,072.9

$984.7

$847.2

$746.0

$655.9

$567.1

$543.6

$519.1

$493.5

$489.1

$431.4

$345.6

$307.7

$255.9

$228.7

$194.2

$134.0

$73.1

$775.7

$1,074.1

$985.8

$912.1

$847.1

$702.6

$599.0

$538.7

$512.4

$494.2

$492.4

$434.7

$347.4

$309.5

$257.7

$230.6

$195.6

$134.9

$73.5

-$363.6

$1.1

$65.0

$101.0

$46.7

$31.9

-$4.9

-$6.7

$0.7

$3.3

$1.8

$1.3

$0.9

$0.4

Total

$10,029.1

$9,917.9

-$111.2

*Sums and differences may not total due to rounding.

Budget Footnotes

P a g e | 24

October 2020

Legislative Budget Office of the Legislative Service Commission

Controlling Board Approves Attorney General Appropriation

Increase for Federal Anti-Heroin Task Force Program Grants

–

Jessica Murphy, Budget Analyst

On September 14, 2020, the Controlling Board approved a request from the Ohio

Attorney General to appropriate an additional $2.5 million in FY 2021 to use two federal

Community Oriented Policing Services (COPS) Anti-Heroin Task Force (AHTF) Program grants

awarded subsequent to the enactment of the FY 2020-FY 2021 biennial budget.

The Attorney General’s Organized Crime Investigations Commission is using the grants for

investigative purposes to locate or investigate illicit activities, including activities related to the

distribution of heroin, fentanyl, carfentanil, or other opioids, the unlawful distribution of

prescription opioids, or unlawful diversion and distribution of prescription opioids. The

Commission authorizes task forces to investigate organized criminal activity that crosses city,

township, and county borders and to provide related technical, administrative, and prosecutorial

support.

The two COPS AHTF Program grants received by the Commission total $5.2 million:

1.5 million awarded in 2019 and $3.7 million awarded in 2020. The awards are for 24 months

$

and 36 months in duration, respectively. There is no required state match. The funding is not

intended for treatment programs or prosecution of heroin and other opioid-related activities.

The competition for the grants was limited to state law enforcement agencies with high rates of

primary treatment admissions for heroin, fentanyl, carfentanil, or other opioids.

ODE Awards $46 Million in 21^s^t Century Community Learning

Center Grants

–

Alexander Moon, Economist

In August 2020, ODE awarded $46.3 million in new and continuing grants for FY 2021 to

60 schools and community-based organizations under the 21 Century Community Learning

st

2

Centers (21CCLC) Grant Program. This federally funded program awards grants to support

community learning centers that provide academic enrichment services during nonschool hours

or extended learning time as part of the school day, particularly for students in low-performing,

high-poverty schools. In this latest round of funding, ODE awarded grants for 42 new programs

and 218 continuing programs, totaling $8.4 million and $37.9 million, respectively.

ODE distributes 21CCLC grant funds to recipients for a five-year period with a maximum

of $200,000 per year for the first three years of the program and gradually reduced maximum

amounts for the last two years as recipients must transition to other resources to sustain the

program after the 21CCLC grant expires. Also, to continue receiving a grant, recipients must

annually submit program data to ODE and undergo periodic evaluations of the program’s

effectiveness. Nearly all of the 42 new grantees received the maximum $200,000 in funding for

this year. Cuyahoga County is home to the largest number of new recipients, with seven, followed

by Hamilton (4), Stark (3), and Montgomery (3) counties. To see the full list of grant recipients,

st

visit education.ohio.gov and search for “21 Century Community Learning Centers.”

Budget Footnotes

P a g e | 25

October 2020

Legislative Budget Office of the Legislative Service Commission

Ohio National Guard Extends Operation Steady Resolve into

December 2020

–

Shaina Morris, Budget Analyst

On September 17, 2020, the Ohio National Guard announced the continuation of

Operation Steady Resolve, the name given its COVID-19 related missions, through December

020. From the time that the Governor activated the Ohio National Guard under U.S. Code

2

Title 32 in March until August 31, 2020, Ohio was authorized to be reimbursed by the federal

government at 100% of its mission costs to respond to COVID-19 and to “facilitate economic

1

7

recovery.” In August, a presidential order continued funding, but at a cost share of 75% and for

costs associated with “ . . . emergency assistance activities associated with preventing,

mitigating, and responding to the threat to public health and safety posed by the virus . . . ”

undertaken by the National Guard. These funds are provided by the Federal Emergency

Management Agency (FEMA) of the U.S. Department of Homeland Security and authorized

through December 31, 2020. The Ohio National Guard’s COVID-19 response has also received

CARES Act funding to support payroll and other expenses.

More than 400 Guard and State Defense Force members were initially activated in March

to assist with the rising demand for food bank services resulting from the COVID-19 pandemic

and increased unemployment. Operation Steady Resolve will continue into December with about

3

50 Guard members assisting 14 food bank locations and warehouses across the state. This

mission serves all 88 counties. Since activation, the Ohio National Guard has packed more than

3 million pounds of food and distributed more than 50 million pounds of food, as well as assisted

4

in providing more than 700,000 meals to citizens in need throughout the state.

In addition to the food bank mission, the Ohio National Guard is assisting community

pop-up COVID-19 testing centers, transporting sample collections to laboratories, providing

personal protective equipment warehousing and logistics, and providing quick response medical

teams for temporary assistance at nursing home facilities. Previous missions related to the

pandemic have included collaborating with regional partners to identify and develop alternate

care sites to expand medical capacity and to provide medical and operational support at state

and federal prisons.

¹⁷Activation under U.S. Code Title 32 means that the state’s Governor has been authorized or

directed by the President to mobilize or activate the National Guard. The National Guard personnel are

on active duty under state control, but with pay and benefits provided by the federal government.

Budget Footnotes

P a g e | 26

October 2020

Legislative Budget Office of the Legislative Service Commission

T_–_E_rr_i_c_Ma_a_kc_e_l_ak_,_Ei_c_on_n_o_mg_i_s_t the Economy

–

Phil Cummins, Senior Economist

Overview

The national economy continued to show signs of improving health in September. The

pace of recovery has slowed. Nonfarm payroll employment increased by 661,000 in September.

American employers have 22.7% of employed persons working remotely. Industrial production,

as measured by the Federal Reserve Board’s (FRB’s) industrial production index (IPI), was up 0.4%

in August, the fourth consecutive month of expansion. Gross domestic product adjusted for

inflation (real GDP) decreased at a 31.4% annual rate in the second quarter of 2020, according to

the Bureau of Economic Analysis (BEA).

Ohio employers added 45,500 nonfarm payroll workers in August, and the state’s

unemployment rate edged down to 8.9%; employment totals generally rose across industries.

The state’s real GDP fell at an annualized rate of 33.0% in the second quarter of 2020 in response

to COVID-19 and its fallout, leading to a sharp drop in wage income and proprietor’s income

during the quarter. The market for existing housing remains heated, as demand for homes

remains high despite challenges posed by the pandemic, and as of August 2020 the YTD dollar

volume of existing home sales in Ohio was 4.9% greater than in 2019.

The National Economy

Nonfarm payroll employment increased by 661,000 in September, and the national

unemployment rate declined by 0.5 percentage point, to a seasonally adjusted 7.9%. In April, at

the height of the national pandemic response, the unemployment rate stood at 14.7%. Rates of

unemployment decreased among all age and racial groups during September. The seasonally

1

8

adjusted number of persons in the civilian labor force decreased by 695,000 during the month.

The labor force participation rate declined for both men and women in September.¹⁹ The trend

in the national unemployment rate can be seen in Chart 6.

The increase in nonfarm payroll employment in September followed substantially larger

increases in May through August. Nevertheless, the recovery in employment in the latest five

months totaled only about half of the jobs lost in March and April. Among industries, seasonally

adjusted employment growth in September in leisure and hospitality (+318,000) and retail trade

(

September, seasonally adjusted, mostly the result of fewer than usual employees returning to

work with both local and state government education employers. Compared to September 2019,

seasonally adjusted employment has decreased in the significant majority of industries. Some

+142,000) was sizable, while employment increased in health care and social assistance

+108,000), professional and business services (+89,000), transportation and warehousing

+74,000), and manufacturing (+66,000). Government employment decreased by 216,000 in

¹⁸The civilian labor force equals employed persons plus unemployed persons who have searched

for work during the previous four weeks.

¹⁹The labor force participation rate equals the civilian labor force divided by the civilian,

noninstitutionalized adult population.

Budget Footnotes

P a g e | 27

October 2020

Legislative Budget Office of the Legislative Service Commission

exceptions are general merchandise stores (+212,000), couriers and messengers (+111,300), and

warehousing and storage (+60,600). The trend in national employment can be seen in Chart 5.

A new segment of the U.S. Census Bureau’s household survey attempts to document

pandemic-specific changes to work practices. In September, around 19.4 million persons

reported either not working or working fewer hours because their employer lost business due to

the pandemic. In addition, 22.7% of employed persons worked remotely during the month, down

from 24.3% in August.

Nationally, initial and ongoing claims for unemployment insurance (UI) remain elevated

but have declined significantly since the early onset of the pandemic. For the week ending

October 3, a seasonally adjusted 840,000 initial unemployment claims were filed, down 9,000

from the previous week and well above the average of about 213,000 weekly claims filed from

the last full week in December 2019 through March 7, 2020. Insured unemployment, a measure

of the number of continued UI claims, was 11.0 million during the week ended September 26,

down from a high of 24.9 million the week of May 9, and the lowest number of continued claims

since March.

Real GDP decreased at an annual rate of 31.4% nationally during the second quarter of

2

020, according to the third estimate released by the BEA. During the second quarter, personal

consumption expenditures (PCE) on goods decreased at a seasonally adjusted annual rate of

0.8%; the most notable decreases in this spending category were in clothing and gasoline and

1

energy goods. PCE on services decreased at a rate of 41.8% during the quarter, led by a drop in

spending on health care as consumers delayed elective procedures and hospitals focused on

pandemic readiness. After-tax corporate profits during the second quarter of 2020 were 18.8%

lower than during the same quarter a year prior.

The FRB’s Open Market Committee (FOMC) decided to keep the federal funds interest rate

steady at a range between 0% and 0.25% during their most recent meeting from September 15-16.

In a press release, the FOMC anticipated the committee would keep interest rates at this level until

the labor market approached maximum employment and inflation had trended above 2% for a

period of time. FRB members projected a drop in real GDP of between 3% and 4% in the four

quarters ending in the current quarter, followed by growth between 3.6% and 4.7% in the four

quarters of CY 2021, above the economy’s longer-run growth trend.²⁰

National industrial production, as measured by the FRB’s IPI, rose by a seasonally adjusted

.4% in August, following postcontraction growth of 1.0% in May, 6.1% in June, and 3.5% in July.

0

In August, the total IPI was 7.7% below its level a year prior. Among major industry groups,

manufacturing production increased by 1.0% in August; mining (-2.5%) and utilities (-0.4%)

contracted during the month.

The manufacturing purchasing managers index, derived from a survey of manufacturers

by the Institute for Supply Management, measured growth in September for the fourth

consecutive month, though employment decreased at more firms than it increased. Input prices

increased for the fourth straight month, and firms reported shortages of intermediate inputs

such as aluminum, capacitors, and lumber.

²⁰Projections derived from Table 1 of the Federal Reserve Board’s “Projection Materials”:

https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20200916.pdf.

Budget Footnotes

P a g e | 28

October 2020

Legislative Budget Office of the Legislative Service Commission

The rise in prices for goods and services continued in August, as the consumer price index

(CPI) for all items increased by 0.4% during the month. During August, the price of food increased

by 0.1% while the price of energy increased by 0.9%. Prices of commodities, less food and energy

commodities, increased by 1.0%, the largest monthly increase of the year. Compared with a year

earlier, prices for all items were 1.3% higher in August, while prices for all items less food and

energy were up 1.7% year over year.

Chart 5: U.S. and Ohio Nonfarm Payroll Employment

(

in millions)

1

53.9

48.5

43.1

37.7

32.3

26.9

5.7

5.5

5.3

5.1

4.9

4.7

2

016

2017

2018

2019

2020

U.S. Employment

Ohio Employment (right scale)

Chart 6: U.S. and Ohio Unemployment Rates

% of Labor Force

1

8.0%

5.0%

2.0%

9.0%

6.0%

3.0%

2

016

2017

2018

2019

Ohio

2020

United States

Budget Footnotes

P a g e | 29

October 2020

Legislative Budget Office of the Legislative Service Commission

The Ohio Economy

Ohio’s economy added a seasonally adjusted 45,500 nonfarm payroll jobs in August, and

the state unemployment rate decreased by 0.1 percentage point, to 8.9%. States with the highest

unemployment rates during the month were Nevada (13.2%) and Rhode Island (12.8%). The

states with the lowest unemployment rates during the month were Nebraska (4.0%) and Utah

(

the decrease occurred in the months immediately following the initial rollback of COVID-19

4.1%). Ohio’s unemployment rate has declined from a high of 17.6% in April, though much of

lockdown orders. Chart 6 displays Ohio’s unemployment rate.

Nonfarm payroll employment in Ohio increased across a range of industries in August.

Among private sector industries, the most job gains were measured in educational and health

services (+12,300), professional and business services (+7,500), and trade, transportation, and

utilities (+6,800). The seasonally adjusted number of manufacturing jobs increased by 4,500, with

gains almost evenly split between durable goods (+2,300) and nondurable goods (+2,200)

segments. Total job gains in the private sector in August were 37,700. Payroll employment by the

federal government in Ohio increased by 8,200 in August, likely due to a rise in the number of

temporary Census workers. Chart 5 shows Ohio nonfarm payroll employment.²¹

Ohio’s real GDP fell at a seasonally adjusted, annualized rate of 33.0% during the second

quarter of 2020, according to new data released by the BEA; the rate of contraction among all

2

states in the Great Lakes region was 32.8%. Among industries, reductions in activity in durable

goods manufacturing and in health care and social assistance had the greatest impact on the

measured decrease in Ohio’s GDP. Shutdowns in response to the health crisis brought about

economic strain across the nation, as real GDP contracted at more than a 21% rate in each state.²³

The personal income (PI) of Ohioans increased at a seasonally adjusted annual rate of

th

3

7.8% during the second quarter of 2020, an increase in total personal income that ranked 20

2

4

among states. During the first quarter of this year, PI grew at a rate of 3.6%. During the second

quarter, net earnings, equal to worker compensation plus proprietors’ income minus

government social insurance taxes, plummeted at a 28.3% rate, while income from dividends,

interest earnings from financial holdings, and rent payments decreased at an 8.5% rate.

Unemployment compensation and other transfer payments soared, accounting for the overall

increase in PI.

Earlier this year, Opportunity Insights, a consortium of businesses, nonprofits, and

academic institutions, began collaborating to publish select indicators of economic recovery from

2

5

the recent economic contraction. In the week ending September 25, the number of job postings

²¹During the COVID-19 pandemic, the Ohio Department of Job and Family Services produced a

county-level count of job-posting trends by occupation and employer. The County Job Trends Report is

available on the Department’s website at: ohiolmi.com/Home/COVID-19.

²²States in the Great Lakes region are Illinois, Indiana, Michigan, Ohio, and Wisconsin.

²³The annual rate of GDP change was 20.4% in the District of Columbia.

²⁴Personal income is direct income from wages and salaries, rental income, business income,

income received from ownership of financial assets, and government transfers.

²⁵https://tracktherecovery.org/.

Budget Footnotes

P a g e | 30

October 2020

Legislative Budget Office of the Legislative Service Commission

was down 31.2% compared to January 4-31.²⁶ Opportunity Insights’ measures of consumer

spending suggest that, as of September 20, Ohioan’s weekly spending on restaurants and hotels

was down 20.5% compared to January, while spending on transportation was down 48.6%.

Spending on general merchandise and groceries were up 15.4% and 20.8%, respectively, during

2

7

the same time frame.

According to the Ohio Association of Realtors, both the dollar value and number of

transactions for existing homes were greater in August 2020 than in August 2019. The total

number of existing home sales during the month was 4.2% above that a year prior, while the

average sale price was 12.3% greater. Despite some logistical challenges caused by the current

health crisis, the YTD dollar volume of existing home sales reached $21.2 billion in August, a 4.9%

increase over 2019.

Economic Forecast Update

The table below updates the economic forecast published in this space in July. Economic

weakness in this year’s first half was severe, but less so than it appeared to be three months ago.

Real GDP nationwide plunged at about a 31% annual rate in the April-June quarter, the sharpest

fall on record but short of the 42% rate of decline anticipated at that time. Other measures of

the economy in the nation and Ohio generally show similar patterns, as COVID-19-related

economic shutdowns depressed activity.

The table compares the current outlook for the economy with the outlook last year, as

predicted in forecasts from IHS Markit released in September of this year and in May 2019. The

May 2019 predictions as well as other variables were inputs to forecasts by LBO economists of

GRF revenues, for use by the legislature in enacting H.B. 166, the current biennium’s main

operating budget act.

As noted here three months ago, economic forecasts are inherently uncertain. This is so

even in the best of times. Current uncertainty is exacerbated by the COVID-19 pandemic. Efforts

to tamp down flare-ups of infections as they occur, and the extent of success in researching

effective treatments and vaccines, will substantially influence the future course of sales,

production, and employment

Figures shown in the table below are percent changes from the average of the four

quarters in FY 2019 to that for FY 2020 and from FY 2020 to FY 2021, except that unemployment

rates are averages for the four quarters of the fiscal year indicated.

On a fiscal year basis, comparing the May 2019 forecast with the September 2020

forecast, overall growth of U.S. real GDP was lower by 3.4 percentage points for FY 2020 and by

2

.1 percentage points for FY 2021. Downward revisions for Ohio real GDP were 3.8 percentage

points and 1.4 percentage points, respectively, for those years. Wage and salary income was also

revised sharply lower for both the nation and the state, but total PI growth is estimated to have

been stronger in FY 2020 than anticipated in May 2019 because of federal fiscal support through

²⁶All dates in this paragraph are in reference to the year 2020.

²⁷Consumer spending data for the Opportunity Insights project is based on purchase data from

consumer credit and debit card purchases. As compared to data published by the BEA, the sample is

smaller and is based on the state where the cardholder lives, rather than where the transaction occurs.

Budget Footnotes

P a g e | 31

October 2020

Legislative Budget Office of the Legislative Service Commission

expanded unemployment compensation and other transfer programs. Inflation, on average, is

generally below rates expected in May 2019.

Revisions to IHS Markit Economic Forecast for FY 2020 and FY 2021

Forecast for FY 2020 as of Forecast for FY 2021 as of

May

019

September

2020

May

2019

September

2020

Variable Name (National)

U.S. real GDP growth

2

2.3%

-1.1%

1.7%

5.1%

1.6%

-1.9%

6.0%

2.0%

-0.1%

2.8%

1.8%

1.7%

-1.9%

7.5%

U.S. wage & salary growth

U.S. PI growth

4.6%

4.3%

2.5%

1.4%

3.5%

4.7%

5.0%

2.0%

0.9%

3.5%

U.S. CPI inflation

U.S. nonfarm employment growth

U.S. unemployment rate

Forecast for FY 2020 as of Forecast for FY 2021 as of

May

2019

September

2020

May

2019

September

2020

Variable Name (Ohio)

Ohio real GDP growth

1.7%

-2.1%

0.2%

5.4%

-3.2%

6.8%

1.1%

-0.3%

2.1%

2.0%

-2.1%

8.1%

Ohio wage & salary growth

Ohio PI growth

4.0%

4.1%

0.9%

4.1%

3.7%

4.2%

0.2%

4.1%

Ohio nonfarm employment growth

Ohio unemployment rate

Chart 7 below shows the September 2020 quarterly forecast for Ohio real GDP.

Quarter-to-quarter changes are shown in the chart at annual rates, for FY 2019, FY 2020, and

FY 2021. BEA’s initial estimate, published subsequent to the forecast shown in the chart, is that

Ohio real GDP fell in the second quarter at a 33% annual rate, a smaller decline than anticipated

in IHS Markit’s forecast. Ohio real GDP is expected to begin recovering in FY 2021, but not to rise

above its prerecession peak until the last quarter of FY 2022.

Budget Footnotes

P a g e | 32

October 2020

Legislative Budget Office of the Legislative Service Commission

Chart 7: Ohio Real GDP

40%

30%

20%

10%

0%

-

10%

20%

30%

40%

FY 2019

FY 2020

FY 2021

Budget Footnotes

P a g e | 33

October 2020