Week in Review: Jan. 15, 2023

FY22-23 BUDGET

Tax collections exceeded forecasts by about $32 million in December, taking the FY23 surplus past half a billion dollars ahead of Gov. Mike DeWine's introduction of his next budget proposal at the end of January, according to preliminary data from the Office of Budget and Management (OBM). Strong income tax and Commercial Activity Tax (CAT) collections offset a slight miss in sales tax revenues to bring total collections 1.4 percent ahead of estimates. For the fiscal year so far, tax collections are up $510.3 million or 3.8 percent versus estimates, reaching almost $14 billion. The income tax generated $1.03 billion versus estimates of $997.6 million, a performance 3.9 percent or $39 million over forecasts. The CAT yielded $15.8 million versus $12.3 million expected.

The $6 billion spending bill that passed by the General Assembly during the lame duck session will go into effect without any line-item vetoes, Gov. Mike DeWine said Friday, Jan. 6. Speaking with reporters in the governor's ceremonial office following his cabinet swearing-in ceremony, DeWine said he signed 134-HB45 (Roemer-West) without blocking any provisions because the legislation included many of his administration's top priorities, some of which were only included because of a compromise with legislative leaders.

FY24-25 BUDGET

Ohioans and their tax preparers could more easily file and pay personal and school district income taxes online through a new portal under plans envisioned in the Ohio Department of Taxation's (ODT) FY24-25 budget request, now under consideration for inclusion in Gov. Mike DeWine's third biennial budget proposal. Among ODT priorities outlined in the budget request are completion of Project NextGen, the name for the new Ohio Tax System for administering the personal income tax and school district income tax.

ECONOMIC DEVELOPMENT

JobsOhio recently signed an agreement with Intel to reimburse up to $25 million in training costs for the company's Central Ohio semiconductor project. The workforce grant is part of a previously announced set of incentives offered by JobsOhio totaling up to $150 million, in addition to state and local government support. JobsOhio also signed eight other grant and loan agreements in December.

EDUCATION

Applications are open until Wednesday, Feb. 1 for a new tax credit program meant for businesses that offer work-based learning experiences to Ohio students. At the end of 2021, lawmakers passed and Gov. Mike DeWine signed 134-SB166 (Reineke), a broad career-technical education measure that included creation of a non-refundable income tax credit for employers equal to 15% of wages paid to a student participating in a career-technical education program. Up to $5 million in credits is available per biennium, and the law limits the amount issued per year to any employer to $5,000 per student. To get the credit, an employer will need a tax credit certificate from ODE. Information about the credit and application process is at https://tinyurl.com/2p9949bt.

EMPLOYMENT/UNEMPLOYMENT

The U.S. Bureau of Labor Statistics (BLS) said Friday that total nonfarm payroll employment increased by 223,000 in December, with the national unemployment rate falling from 3.7 to 3.5%. The number of unemployed persons also declined from 6 million to 5.7 million. BLS said that among the major worker groups, the unemployment rate for Whites fell to 3% during the month while rates for adult men, adult women, teenagers and other racial groups saw little change. The number of long-term unemployed (those jobless for 27 weeks or more) declined by 146,000 to 1.1 million in December. This measure is down from 2.0 million a year earlier. The long-term unemployed accounted for 18.5% of all unemployed persons.

STUDIES/POLLS

A recent Buckeye Institute report found Ohio was again 35th among U.S. states in "economic freedom," but Vice President of Policy Rea Hederman Jr. said "incremental progress" had been made on the tax code and occupational licensing, with more opportunities for improvement coming through the budget. Ohio was 35th for the third consecutive year in the report, which was released by the institute's Economic Research Center in partnership with the Fraser Institute in Canada. Economic freedom was measured by government spending, taxation and labor market restrictions. Data from 2020 was used as it is the latest year that was available.

WORKFORCE

Lt. Gov. Jon Husted announced Tuesday, Jan. 3 that 13 workforce partnerships will be receiving a total of $2.45 million through the third round of the Industry Sector Partnership (ISP) grant program, supporting local collaborations that bring more Ohioans into the workforce while meeting the needs of job creators. The selected partnerships focus on multiple in-demand industry sectors including information technology, manufacturing, health care, transportation and aerospace. "These partnerships connect educators and businesses and through that collaboration, a local job training network is created to help students prepare for the most in-demand careers available in their communities," Husted said.

Ohio Department of Job and Family Services (ODJFS) Director Matt Damschroder announced Thursday that ApprenticeOhio sponsors and employers have until Friday, March 31, 2023, to apply for grants to help cover training and tool costs incurred since July 1, 2020. The deadline was extended from Dec. 31, 2022, to allow more program sponsors and Ohio employers with registered apprentices in their workforces to apply. ODJFS oversees ApprenticeOhio, which registers programs that meet national criteria for quality and safety. Each ApprenticeOhio program is run by a sponsor: usually an employer, a group of employers or a labor/management committee. Apprentices learn skills needed for a job in the sponsor's industry through at least 2,000 hours of structured on-the-job training and 144 hours of classroom training, typically at a local college or university. Ohio has 319 occupations that offer apprenticeships in fields as diverse as aerospace, construction, energy, health care, manufacturing, computer programming, and more. For more information, visit http://Apprentice.Ohio.gov.