Week in Review: Oct. 20, 2024

FY24-25 BUDGET

Hundreds of millions of dollars in over-estimate sales tax collections reported by the state in September will likely be "largely offset" later this year, according to the October financial report from the Office of Budget and Management (OBM). The full monthly report elaborates on the dynamics first explained in preliminary revenue reports for September, which attributed the $565 million in unanticipated non-auto sales tax collections to the fact that revenue projections far overestimated the revenue losses from Ohio's first expanded sales tax holiday. In the biennial budget HB33 (Edwards) lawmakers replaced the disused Income Tax Reduction Fund with the new, expanded sales tax holiday, generally applicable to most items under $500. The holiday ran for 10 days and supplanted the shorter and more limited back-to-school sales tax holiday on clothing and school supplies. The back-to-school holiday will still take place in the future in years where revenue is not sufficient to support an expanded holiday. The General Assembly included more than $700 million in HB33 to offset revenue losses from the expanded holiday, which apparently was far more than necessary. The budget office predicted revenue of about $250 million for September -- when tax was collected for most August sales -- but actual collections exceeded $800 million. "The lack of Ohio precedent and absence of similarly structured holidays across the nation made the holiday's fiscal impact challenging to forecast. Assuming most of the year-to-date variance comes from the overestimated impact of the holiday, such variance will largely be offset by fiscal events occurring after September," the monthly report states.

BUSINESS/CORPORATE

The Ohio Department of Commerce (DOC) Division of Unclaimed Funds recently reminded banks and other businesses operating in the state of Ohio to submit their unclaimed funds reports to the division by Friday, Nov. 1, even if there are no funds to report. The Nov. 1 deadline covers accounts dormant as of June 30, 2024. Life insurance companies have a separate deadline of May 1, 2025 for accounts dormant as of Dec. 31, 2024. Dormant accounts are those which haven't had any activity or communication for a specific period of time based on the account. This includes three years for refund checks, five years for checking accounts and three years without an appointment for patient credits held by a physician. The four-step reporting process includes identifying inactive accounts; sending a letter to the owner when the funds are $50 or more; creating an unclaimed funds report; and submitting it along with the money.

TRANSPORTATION/INFRASTRUCTURE

Gov. Mike DeWine and the Ohio Department of Transportation (ODOT) recently announced more than $23 million for Ohio's Urban Transit Program. According to ODOT, the $23.1 million will be distributed among Ohio's 26 urban transit agencies. Funding will be used for a variety of purposes such as transit fleet expansion, replacement vehicles, preventive maintenance, facility upgrades, new equipment and technology, and operating assistance. ODOT's Office of Transit is administering the awards, which are funded through Ohio's General Revenue Fund. A list of grantees can be found at https://tinyurl.com/2mhsh237.