Budget Footnotes  
A NEWSLETTER OF THE OHIO LEGISLATIVE SERVICE COMMISSION  
JULY 2016  
VOLUME 39, NUMBER 11  
STATUS OF THE GRF  
STATUS OF THE GRF  
Highlights...................................1  
Revenues ..................................2  
Expenditures............................15  
HIGHLIGHTS  
Ross A. Miller, Chief Economist, 614-644-7768  
ISSUE UPDATES  
FY 2016 ended with GRF revenue falling short of the  
Summary of FY 2016  
Expenditures ........................28  
Community-Police Relations  
Grants ..................................29  
Office of Budget and Management (OBM) forecast by  
nearly $789 million, most of which was due to federal  
grants related to lower than expected spending in Medicaid Infant Mortality  
Medicaid; GRF tax revenue was $216 million (1.0%) below  
estimate. Expenditures for the year were over $1.1 billion  
below estimate, though, with Medicaid accounting for  
Projects ................................30  
Naloxone Public Awareness  
Campaign.............................31  
Drug Law Enforcement  
Grants ..................................32  
Detention Alternatives and  
Enhancements .....................33  
Community Connectors  
Program ...............................34  
Straight A Fund........................34  
Agricultural Easement  
$
926 million of the negative spending variance.  
The GRF finished the fiscal year with an unobligated  
cash balance of $764.7 million. Up to $25 million of this total  
will be transferred to the Controlling Board Emergency  
Purposes/Contingencies Fund per H.B. 390 of the  
Awards .................................35  
Abandoned Gas Station  
Cleanup Grants ....................37  
1
31st General Assembly. The remainder will either be  
retained in the GRF to meet the required ending fund  
balance or transferred to the Budget Stabilization Fund.  
TRACKING THE ECONOMY  
The National Economy ............38  
The Ohio Economy..................43  
Simplified GRF Cash Statement, as of June 30, 2016  
(
$ in millions)  
Next Issue:  
Beginning Cash Balance  
$1,711.7  
$33,930.5  
$34,448.9  
$1,193.3  
$428.6  
September 2016  
Plus Actual Revenues, Transfers In, and Receivables  
Less Actual Expenditures and Transfers Out  
Ending Cash Balance  
Have a great summer!  
Legislative Service Commission  
7 South High Street, 9th Floor  
Columbus, Ohio 43215  
Less Encumbrances  
7
Unobligated Ending Cash Balance  
$764.7  
Plus Budget Stabilization Fund (BSF) Balance  
Combined GRF and BSF Unobligated Ending Balance  
$2,004.6  
$2,769.3  
Telephone: 614-466-3615  
AVAILABLE ON OUR WEBSITE: WWW.LSC.OHIO.GOV  
CLICK ON 'PUBLICATIONS/BUDGET FOOTNOTES'  
Ohio Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of June 2016  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on July 5, 2016)  
STATESOURCES  
Actual  
Estimate*  
Variance  
Percent  
TAX REVENUE  
Auto Sales  
$123,715  
$735,031  
$858,747  
$115,600  
$8,115  
7.0%  
Nonauto Sales and Use  
$782,900  
-$47,869  
-6.1%  
Total Sales and Use Taxes  
$898,500  
-$39,753  
-4.4%  
Personal Income  
Corporate Franchise  
Financial Institution  
Public Utility  
$775,976  
$348  
$762,600  
$0  
$13,376  
$348  
1.8%  
---  
$26,235  
$1,740  
$21,212  
$13  
$29,550  
$200  
-$3,315  
$1,540  
$2,612  
-$87  
-11.2%  
770.1%  
14.0%  
-86.9%  
-48.1%  
28.9%  
98.0%  
1632.8%  
---  
Kilowatt-Hour Excise  
Natural Gas Consumption (MCF)  
Commercial Activity Tax  
Petroleum Activity Tax  
Foreign Insurance  
Domestic Insurance  
Business and Property  
Cigarette  
$18,600  
$100  
$3,061  
$1,289  
-$43  
$5,900  
$1,000  
-$2,100  
$14,600  
$0  
-$2,839  
$289  
$2,057  
$238,394  
$3  
$252,994  
$3  
$151,882  
$4,938  
$3,891  
$297  
$76,500  
$5,800  
$4,000  
$0  
$75,382  
-$862  
98.5%  
-14.9%  
-2.7%  
---  
Alcoholic Beverage  
Liquor Gallonage  
Estate  
-$109  
$297  
Total Tax Revenue  
$2,102,585  
$1,815,250  
$287,335  
15.8%  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$8,970  
$285  
$5,750  
$6,213  
$2,829  
$14,792  
$3,220  
-$5,928  
$3,496  
$789  
56.0%  
-95.4%  
123.6%  
5.3%  
$6,325  
$15,580  
Total Nontax Revenue  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$112,735  
$112,735  
$0  
$142,900  
$142,900  
$0  
-$30,165  
-$30,165  
---  
-21.1%  
-21.1%  
TOTAL STATESOURCES  
Federal Grants  
$2,230,900  
$433,528  
$1,972,942  
$821,826  
$257,958  
-$388,299  
-$130,340  
13.1%  
-47.2%  
-4.7%  
TOTAL GRFSOURCES  
$2,664,428  
$2,794,768  
*Estimates of the Office of Budget and Management as of September 2015, including revisions in February 2016.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
2
July 2016  
Ohio Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2016 as of June 30, 2016  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on July 5, 2016)  
Percent  
Change  
STATESOURCES  
Actual  
Estimate*  
Variance  
Percent  
FY2015  
TAX REVENUE  
Auto Sales  
$1,346,315  
$9,001,684  
$1,330,800  
$9,042,500  
$15,515  
1.2%  
$1,316,600  
$8,643,630  
$9,960,230  
2.3%  
Nonauto Sales and Use  
-$40,816  
-0.5%  
4.1%  
Total Sales and Use Taxes  
$10,347,999 $10,373,300  
-$25,301  
-0.2%  
3.9%  
Personal Income  
Corporate Franchise  
Financial Institution  
Public Utility  
$7,799,334  
$33,234  
$213,451  
$103,253  
$338,007  
$60,725  
$1,255,325  
$6,888  
$8,017,000  
$0  
-$217,666  
$33,234  
$17,551  
-$2,147  
-$11,293  
-$7,275  
-$25,575  
$988  
-2.7%  
---  
$8,506,665  
$2,496  
-8.3%  
1231.6%  
17.2%  
5.9%  
$195,900  
$105,400  
$349,300  
$68,000  
$1,280,900  
$5,900  
9.0%  
-2.0%  
-3.2%  
-10.7%  
-2.0%  
16.7%  
-2.2%  
-4.7%  
---  
$182,134  
$97,473  
$292,327  
$74,735  
$853,987  
$5,533  
Kilowatt-Hour Excise  
Natural Gas Consumption (MCF)  
Commercial Activity Tax  
Petroleum Activity Tax  
Foreign Insurance  
Domestic Insurance  
Business and Property  
Cigarette  
15.6%  
-18.7%  
47.0%  
24.5%  
10.1%  
2.6%  
$293,526  
$258,276  
$102  
$300,000  
$271,000  
$0  
-$6,474  
-$12,724  
$102  
$266,627  
$251,647  
$55  
83.7%  
24.7%  
-3.8%  
$1,007,643  
$54,446  
$45,130  
$2,154  
$969,800  
$55,000  
$44,000  
$0  
$37,843  
-$554  
3.9%  
-1.0%  
2.6%  
---  
$808,164  
$56,574  
$43,365  
$3,071  
Alcoholic Beverage  
Liquor Gallonage  
Estate  
$1,130  
4.1%  
$2,154  
-29.9%  
1.9%  
Total Tax Revenue  
$21,819,492 $22,035,500  
-$216,008  
-1.0% $21,405,085  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$35,169  
$56,380  
$52,526  
$144,076  
$22,400  
$57,000  
$38,800  
$118,200  
$12,769  
-$620  
57.0%  
-1.1%  
35.4%  
21.9%  
$23,174  
$57,659  
$44,841  
$125,674  
51.8%  
-2.2%  
17.1%  
14.6%  
$13,726  
$25,876  
Total Nontax Revenue  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$322,243  
$322,243  
$0  
$334,000  
$334,000  
$0  
-$11,757  
-$11,757  
---  
-3.5%  
-3.5%  
$0  
$641,628  
$641,628  
---  
-49.8%  
-49.8%  
TOTAL STATESOURCES  
Federal Grants  
$22,285,810 $22,487,700  
$11,645,735 $12,232,485  
$33,931,545 $34,720,185  
-$201,890  
-$586,751  
-$788,642  
-0.9% $22,172,387  
-4.8% $9,301,325  
-2.3% $31,473,712  
0.5%  
25.2%  
7.8%  
TOTAL GRFSOURCES  
*Estimates of the Office of Budget and Management as of September 2015, including revisions in February 2016.  
Detail may not sum to total due to rounding.  
July 2016  
3
Budget Footnotes  
Ohio Legislative Service Commission  
REVENUES  
Jean J. Botomogno, Principal Economist, 614-644-7758  
Overview  
In the final month of FY 2016, GRF tax revenue was $287.3 million  
1
above estimates from OBM due to timing-related additional revenues  
from the domestic insurance tax and the cigarette tax, taxes which had  
2
large shortfalls the previous month. However, a shortfall of  
$
$
GRF sources for June and for FY 2016 through June, respectively.  
388.3 million in federal grants helped produce a negative variance of  
FY 2016 GRF  
sources were  
130.3 million for total GRF sources in June. Tables 1 and 2 above, show  
3
$
788.6 million  
Through June, FY 2016 GRF sources of $33.93 billion were  
$788.6 million below estimate, with deficits from both state sources and  
federal grants. GRF tax sources of $21.82 billion fell short of estimates by  
below  
estimate.  
$
$
216.0 million. Nontax revenue experienced a positive variance of  
25.9 million and transfers in were $11.8 million below anticipated  
revenue. Federal grants, which have been generally below estimate  
throughout the fiscal year, finished FY 2016 with a negative variance of  
$
586.8 million. Federal grants to the GRF are primarily related to the  
level of spending in the Medicaid program, and GRF FY 2016 Medicaid  
expenditures were $925.9 million below estimate.  
FY 2016 GRF  
tax revenue  
was  
For the month of June, the domestic insurance tax was  
$
238.4 million above estimate, partially reversing the timing-related  
$
216.0 million  
shortfall of $246.8 million in May. Also, the cigarette tax was $75.4 million  
above estimate, following a shortfall of $65.8 million last month. Also  
above anticipated levels were the personal income tax (PIT, $13.4 million),  
the kilowatt-hour tax ($2.6 million), the foreign insurance tax  
below  
estimate.  
($2.1 million), and the public utility tax ($1.5 million). Those positive  
variances were partially offset, however, by negative variances from the  
sales and use tax ($39.8 million), the financial institution tax  
(FIT, $3.3 million), the commercial activity tax (CAT, $2.8 million), and the  
1
OBM estimates were initially released in September 2015 and  
subsequently revised to accommodate enactment of S.B. 208 and H.B. 340 of the  
31st General Assembly.  
2 Monthly estimates did not reflect legislative changes that pushed from  
1
May to June revenue for these taxes in FY 2016, resulting in large negative  
variances for the two tax sources in May which were reversed in June.  
3 GRF sources consist of state-source receipts, which include tax revenue,  
nontax revenue, and transfers in, and federal grants, which are typically federal  
reimbursements for Medicaid and other programs.  
Budget Footnotes  
4
July 2016  
Ohio Legislative Service Commission  
alcoholic beverage tax ($0.9 million). Regarding the remaining GRF state  
sources in June, transfers in were $30.2 million below projected revenue  
and nontax revenues were $0.8 million above estimate.  
The chart below illustrates the cumulative performance of total GRF  
sources relative to estimates in each month of the fiscal year, broken down by  
its largest components. It shows federal grants has been below estimate most  
of the fiscal year, while the deficit for tax revenue emerged in the last fiscal  
quarter due to negative results from the PIT during the tax filing season.  
Chart 1: Cumulative Performance of GRF Sources in FY 2016  
(
Variance from Estimates, $ in millions)  
$
$
$
600  
400  
200  
$
0
-$200  
-$400  
-$600  
-$800  
-$1,000  
Tax Revenue  
Federal Grants  
Total GRF Sources  
Regarding tax sources, except for taxes on financial institutions  
(FIT and corporate franchise tax) and the cigarette tax, most other tax  
sources were below estimates for the fiscal year as a whole, as shown in  
the chart below. Interestingly, the negative variance for the PIT nearly  
matched the total shortfall of $216.0 million for the entire category.  
Chart 2: FY 2016 Tax Revenue Performance by Type  
Sales  
and Use  
Utility  
FIT & CFT Taxes  
Insurance  
Taxes  
PIT  
CAT  
Cigarette  
$38  
Other  
$
100  
50  
$51  
$
$
0
($25)  
($21)  
($26)  
($19)  
-$50  
-$100  
-$150  
-$200  
-$250  
($218)  
July 2016  
5
Budget Footnotes  
Ohio Legislative Service Commission  
Compared to FY 2015, FY 2016 sources were $2.46 billion higher.  
Most of the increase was due to an accounting change related to  
Medicaid expenditures which pushed federal grants higher in FY 2016 by  
$
2.34 billion. Expenditures for individuals who became eligible for  
Medicaid through the Affordable Care Act (ACA) were made from the  
GRF, but in the past, such expenditures were debited from the Health  
Care Federal Fund (Fund 3F00), a non-GRF fund.  
Despite the shortfall from estimates illustrated above, GRF tax  
receipts were up $414.4 million from FY 2015. The taxes that contributed  
the most to year-over-year revenue growth were the sales and use tax,  
the CAT, and the cigarette tax. Sales and use tax revenue growth was  
largely reflective of increased consumer spending in FY 2016, while the  
growth in the CAT and cigarette tax revenue was more the result of  
policy changes. H.B. 64, the budget act, increased the share of CAT  
receipts credited to the GRF from 50% to 75% and raised the cigarette tax  
rate from $1.25 per pack of 20 cigarettes to $1.60 per pack. Despite  
employment gains in the state during FY 2016, PIT revenue fell by  
$
707.3 million from FY 2015, also due primarily to tax changes enacted in  
H.B. 64.  
Personal Income Tax  
GRF receipts of $776.0 million from the PIT in June were  
13.4 million (1.8%) above estimate. PIT revenue is comprised of gross  
$
collections, minus refunds and distributions to the Local Government  
Fund (LGF). Gross collections consist of employer withholdings,  
4
quarterly estimated payments, trust payments, payments associated  
with annual returns, and other miscellaneous payments. For the month,  
quarterly estimated payments were $30.5 million below estimate. That  
negative variance was partially offset by positive variances of  
$
7.8 million for employer withholdings and $5.7 million in taxes due  
with annual returns; in addition, refunds were $22.6 million below  
estimate.  
Monthly employer withholding growth remains at a slowed pace.  
H.B. 64 reduced income tax rates for all brackets by 6.3% for taxable  
years beginning in 2015. Due to this, the Department of Taxation  
announced a reduction in withholding rates of 3.1% for payroll ending  
4 Quarterly 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  
6
July 2016  
Ohio Legislative Service Commission  
on or after August 1, 2015. The effects of the changes enacted in H.B. 64  
5
and S.B. 208 have limited growth in withholding revenue from the tax;  
however, revenue growth for most of the year has also been lower than  
estimates which take into account the policy changes. The chart below  
illustrates the slowing growth of monthly employer withholdings as well  
as the deficit relative to estimates in recent months (actual figures in the  
chart are not adjusted for the August change in withholding rates).  
Chart 3: Monthly Withholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
6
5
4
3
2
1
0
%
%
%
%
%
%
%
-1%  
Actual  
Estimate  
For FY 2016, PIT revenues totaled $7.80 billion, $217.7 million (2.7%)  
below estimate, with all components contributing to the shortfall. FY 2016  
revenues from each component of the PIT relative to estimates and to  
FY 2015 revenues are detailed in the table below.  
FY 2016  
revenue from  
the PIT was  
When compared to FY 2015 receipts, and as expected, the impact of  
changes in recently enacted legislation on FY 2016 PIT revenue was  
mostly felt on taxes due with annual returns (-$318.5 million), quarterly  
estimated payments (-$137.0 million), and refunds to taxpayers  
$
217.7 million  
below  
estimate.  
(+$369.5 million).  
5
S.B. 208 enhanced the small business income deduction under the  
income tax for tax year 2015, resulting in lower estimated PIT revenues in  
January through June of 2016.  
July 2016  
7
Budget Footnotes  
Ohio Legislative Service Commission  
FY 2016 Year-to-Date Income Tax Revenue  
Variances and Changes by Component  
Year-to-Date Variance  
From Estimate  
Year-to-Date Changes  
From FY 2015  
Category  
Amount  
Percentage  
(%)  
Amount  
($ in millions)  
Percentage  
(%)  
(
$ in millions)  
-$64.9  
-$51.7  
-$2.0  
FY 2016  
Withholding  
-0.8%  
-5.1%  
-2.8%  
-12.6%  
-7.2%  
-2.2%  
0.1%  
$130.1  
-$137.0  
-$2.5  
1.6%  
Quarterly Estimated Payments  
Trust Payments  
-12.5%  
-3.6%  
-31.8%  
-5.3%  
-3.2%  
24.4%  
1.2%  
revenue from  
the PIT was  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
Less Refunds  
-$98.1  
-$8.0  
-$318.5  
-$5.8  
$
707.3 million  
below last  
-$224.7  
$1.7  
-$333.7  
$369.5  
$4.2  
year's revenue.  
Less LGF Distribution  
Income Tax Revenue  
-$8.7  
-2.3%  
-2.7%  
-$217.7  
-$707.3  
-8.3%  
Sales and Use Tax  
Total GRF sales and use tax receipts of $10.35 billion in FY 2016  
were $25.3 million (0.2%) below estimate but $387.8 million (3.9%) above  
FY 2015 receipts. A positive variance of $15.5 million for the auto portion  
of the tax partially offset a negative variance of $40.8 million for the  
nonauto sales and use tax. Though the sales and use tax tracked  
estimates remarkably closely, the final tally masks a significant  
slowdown in the latter part of the fiscal year, as this GRF source lost  
altitude in recent months, with poor performances by both the nonauto  
and the auto portions. Through December, the nonauto and the auto  
portions of the tax were ahead of projected receipts by $44.8 million  
(1.0%) and $25.5 million (3.9%). However, from January through June,  
the nonauto tax and the auto tax were $85.5 million (1.8%) and  
FY 2016 sales  
and use tax  
$
9.9 million (1.5%) below estimates, respectively.  
For analysis and forecasting, the sales and use tax is separated into  
receipts were  
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  
$
25.3 million  
below  
6
instead of the auto tax. In FY 2016, the nonauto portion accounted for 87%  
estimate.  
of the total sales and use tax collected, while auto collections were 13%.  
6 Taxes arising from leases are paid immediately upon the lease signing.  
The clerks of court generally make auto sales and use tax payments on Mondays  
for taxes collected during the preceding week on motor vehicles, watercraft, and  
outboard motors titled. Therefore, auto sales and use tax receipts mostly, but not  
perfectly, reflect vehicles sold and titled during the month.  
Budget Footnotes  
8
July 2016  
Ohio Legislative Service Commission  
Nonauto Sales and Use Tax  
June revenue of $735.0 million to the GRF from the nonauto sales  
and use tax was $47.9 million (6.1%) below estimate, thus concluding a  
dismal year for the nonauto sales and use tax. For the fiscal year,  
nonauto sales and use tax revenue of $9.0 billion was $40.8 million (0.5%)  
below estimate; though through May, the tax was still $7.1 million (0.1%)  
FY 2016  
nonauto sales  
above estimate. FY 2016 revenue was $358.1 million (4.1%) above and use tax  
revenue from the tax in FY 2015. In the first half of FY 2016, nonauto  
sales and use tax revenue was $201.5 million (4.6%) above receipts for  
the first half of FY 2015, but growth slowed to 3.7% in the second half of  
the fiscal year.  
receipts were  
$
40.8 million  
below  
estimates.  
The chart below shows year-over-year changes in nonauto sales  
and use tax monthly revenues on a three-month moving average. The  
chart illustrates nonauto sales and use tax revenues still growing but at a  
much slower pace than in prior months. Average growth over the most  
recent three months was 2.9%.  
Chart 4: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
1
1
2%  
0%  
8
6
4
2
0
%
%
%
%
%
Part of the slowdown in nonauto sales and use tax revenue can be  
explained by revenue from Medicaid health insuring corporations, whose  
collections made up about 9% of nonauto sales and use tax collections this  
fiscal year. This portion of the nonauto sales and use tax is generally  
correlated to GRF Medicaid spending which has been lower than expected  
by $925.9 million in FY 2016, and this may be responsible for part or all of  
the fiscal year's shortfall relative to estimate for nonauto sales and use tax.  
After several years of double digit growth, revenue from Medicaid health  
insuring corporations grew about 1.5% in FY 2016.  
July 2016  
9
Budget Footnotes  
Ohio Legislative Service Commission  
Auto Sales and Use Tax  
The GRF received $123.7 million in revenue from the auto sales  
and use tax in June, an amount $8.1 million (7.0%) above estimate but  
$
1.2 million (1.0%) below June 2015 revenue. For the fiscal year, revenue  
from this tax was $15.5 million (1.2%) above estimate, and $29.7 million  
2.3%) higher than in FY 2015. The yearly positive variance was achieved  
(
in the July to December period when the auto tax was 3.9% above  
estimate. In the January to June period, the tax was 1.5% below estimate.  
The chart below shows year-over-year changes in auto sales and  
use tax monthly revenues on a three-month moving average. The chart  
illustrates revenues growing at an uneven pace for most of FY 2016 but  
decreasing drastically in the last quarter. Auto sales and use tax receipts  
in the final quarter of FY 2016 were 5.3% below receipts in the  
corresponding period of FY 2015.  
Auto sales and  
use tax  
revenue was  
Chart 5: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
$
15.5 million  
(
Three-month Moving Average)  
above estimate  
in FY 2016.  
1
1
2%  
0%  
8
6
4
2
0
%
%
%
%
%
-2%  
-4%  
-6%  
-8%  
U.S. auto sales nationwide were very strong in 2015, setting an  
all-time record of 17.3 million for total light vehicle sales during a  
calendar year. However, first-half unit sales in 2016 have dropped  
slightly, falling off by about 1.3% compared to the January to June period  
in 2015. Recent data from the Ohio Bureau of Motor Vehicles indicate a  
stronger decline in Ohio: new motor vehicles titled fell by about 6%  
overall in the first half of 2016 compared to the corresponding period last  
year, with the drop-off accelerating to about 11% in the April to June  
quarter. For FY 2016, the number of new automobiles sold in Ohio  
declined 2.9% relative to FY 2015. However, 3.7% more used motor  
vehicles were sold and higher average prices contributed to increased  
auto sales and use tax receipts in FY 2016.  
Budget Footnotes  
10  
July 2016  
Ohio Legislative Service Commission  
Commercial Activity Tax and Petroleum Activity Taxes  
GRF receipts from the CAT in June were $3.1 million, $2.8 million  
(48.1%) less than anticipated and $0.9 million (22.0%) below revenue in  
June 2015. For the fiscal year, CAT revenues to the GRF totaled  
$
estimates was due, in part, to more credit claims than anticipated against  
the tax. Refunds totaled $39.0 million more in FY 2016 than in FY 2015.  
1.26 billion, $25.6 million (2.0%) below estimate. This shortfall relative to  
FY 2016 CAT  
revenue was  
$
25.6 million  
FY 2016 CAT GRF revenue was $401.3 million (47.0%) above that of  
FY 2015. The rise was entirely due to the law change in H.B. 64 that below  
7
increased the GRF share of total CAT receipts from 50% to 75%.  
Generally, CAT receipts are expected to grow yearly, except during  
periods of prolonged economic contraction. Weakness in collections this  
year can be explained, in part, by some economic softening, particularly in  
the industrial production sector, and the elimination of revenue from  
motor fuel sales (which were $28.0 million in FY 2015). For the year as a  
whole, estimated all-funds CAT revenue was only 0.1% above FY 2015  
actual collections of $1.72 billion; however, actual FY 2016 all-funds  
revenue came in at $1.69 billion, below the previous year's total.  
estimate.  
Beginning July 1, 2014, the CAT as applied to receipts from the sale  
or exchange of motor fuel was replaced by the PAT, which has a rate of  
.65% on a motor fuel supplier's adjusted gross receipts. OBM estimated  
FY 2016  
receipts from  
0
GRF revenue of $5.9 million for the PAT in FY 2016. GRF revenue from the the cigarette  
tax was $6.9 million, thus resulting in a positive variance of $1.0 million  
tax were  
(
above revenue in FY 2015. The increase is presumably due to the increase  
in oil prices during this fiscal year. All-funds revenue from the PAT was  
$
16.7%) for the fiscal year. FY 2016 GRF revenue was $1.4 million (24.5%)  
$
37.8 million  
above  
78.4 million. Of that total, $71.5 million was deposited in the Petroleum estimate.  
Activity Tax Public Highway Fund (Fund 5NZ0).  
Cigarette and Other Tobacco Products Tax  
GRF receipts from the cigarette and other tobacco products tax  
were $151.9 million in June, $75.4 million (98.5%) above estimate. The  
result reversed a timing-related negative variance of $65.8 million in May.  
For the fiscal year, GRF revenue totaled $1.01 billion, $37.8 million (3.9%)  
above estimate. Revenue from the tax on cigarettes and other tobacco  
7 Correspondingly, H.B. 64 reduced the share of CAT revenue credited to  
the School District Tangible Property Tax Replacement Fund (Fund 7047) from  
3
Tax Replacement Fund (Fund 7081) from 15% to 5%. These changes were  
5% to 20%, and the share credited to the Local Government Tangible Property  
effective July 1, 2015.  
July 2016  
11  
Budget Footnotes  
Ohio Legislative Service Commission  
products had run above estimate consistently throughout the fiscal year.  
Of the total revenue, sales of cigarettes provided $944.0 million, of which  
8
$
17.5 million was from the "floor tax." Sales of other tobacco products  
were $63.4 million.  
FY 2016 revenue was $199.5 million (24.7%) above FY 2015  
receipts. Cigarette receipts increased $198.0 million. Revenue from the  
other tobacco products category grew $1.5 million. Generally, cigarette  
tax receipts have exhibited a long-term downward trend; however,  
H.B. 64 increased the cigarette tax from $1.25 to $1.60 per pack of  
2
0 cigarettes, a 28% increase, which led to an increase in total revenues  
this year.  
Foreign and Domestic Insurance Taxes  
GRF foreign insurance tax receipts (paid by insurance companies  
whose headquarters are located outside of Ohio) of $293.5 million in  
FY 2016 were $6.5 million (2.2%) below estimate but $26.9 million (10.1%)  
higher than receipts in FY 2015. That increase is primarily due to a  
significant decrease in tax credits claimed by foreign insurers this year  
compared to FY 2015.  
FY 2016  
receipts from  
insurance taxes  
were  
$
19.2 million  
GRF domestic insurance tax receipts (paid by insurance  
companies whose headquarters are in Ohio) were $258.3 million in  
FY 2016, $12.7 million (4.7%) below estimate but $6.6 million (2.6%)  
above receipts in FY 2015. The yearly negative variance resulted from  
both higher credit claims this year and lower than anticipated premiums  
paid to domestic health insuring corporations. However, those  
premiums were still higher in FY 2016 than in FY 2015.  
below  
estimate.  
Utility-Related Taxes  
FY 2016  
Receipts from the public utility excise tax totaled $103.3 million  
in FY 2016, $2.1 million (2.0%) less than the estimate but $5.8 million  
5.9%) more than in FY 2015. Taxes paid by natural gas companies  
account for about 95% of total tax receipts from the public utility excise  
tax. MCF tax receipts of $60.7 million in FY 2016 were $7.3 million  
receipts from  
utility-related  
taxes were  
(
$
20.7 million  
(
10.7%) below estimate and $14.0 million (18.7%) below FY 2015  
below  
revenue. H.B. 153 (129th General Assembly) credited all receipts from  
this excise tax levied on natural gas distribution companies to the GRF  
starting in FY 2013.  
estimate.  
8 The "floor tax" is the additional $0.35 tax paid by tobacco dealers for  
cigarettes in inventory (for which the old tax rate had been paid) when the new  
tax rate went into effect on July 1, 2015.  
Budget Footnotes  
12  
July 2016  
Ohio Legislative Service Commission  
GRF receipts from the kilowatt-hour tax in FY 2016 were  
338.0 million, $11.3 million (3.2%) below estimate and $45.6 million  
15.6%) greater than FY 2015 receipts. The kilowatt-hour excise tax was  
$
(
credited 100% to the GRF effective July 1, 2015, due to changes enacted in  
H.B. 64, instead of 88% to the GRF, 9% to the School District Property Tax  
Replacement Fund (Fund 7053), and 3% to the Local Government Property  
Tax Replacement Fund (Fund 7054) as in prior law. From the amount  
FY 2016  
receipts from  
distributed to the GRF, a portion is subsequently transferred to the Public taxes on  
Library Fund (PLF, Fund 7065). The PLF received 1.70% of revenue from  
all GRF taxes in FY 2016, of which half is debited against the kilowatt-hour  
tax and half is debited against the nonauto sales and use tax.  
financial  
institutions  
were  
Financial Institutions and Corporate Franchise Taxes  
$
50.8 million  
H.B. 510 of the 129th General Assembly eliminated the corporate  
franchise tax (CFT) and the dealers in intangibles tax at the end of 2013  
and replaced both taxes with the FIT in TY 2014. The FIT specifies three  
tax rates: a rate of 0.8% which applies to the first $200 million of a  
taxpayer's total Ohio equity capital, a rate of 0.4% of equity capital  
between $200 million and $1.3 billion, and a rate of 0.25% which applies to  
the amount of total Ohio equity capital in excess of $1.3 billion.  
above  
expectations.  
Though GRF receipts were not anticipated from the CFT in  
FY 2016, adjustments to tax filings in previous years resulted in revenue of  
FY 2016  
$
33.2 million. GRF revenues from the FIT totaled $213.5 million,  
receipts from  
alcoholic  
$
17.6 million (9.0%) above estimates and $31.3 million (17.2%) above  
FY 2015 receipts. H.B. 510 specified revenue targets and prescribed a tax  
rate adjustment mechanism if yearly FIT revenue exceeded 110% or was  
less than 90% of certain target tax amounts. Receipts from the FIT were  
less than 110% of the $212 million target revenue specified in current law  
for FY 2016. Thus, the existing tax rates will remain.  
beverage taxes  
were  
$
0.6 million  
above  
Alcoholic Beverage and Liquor Gallonage Taxes  
estimate.  
Combined revenue from alcoholic beverage and liquor gallonage  
taxes of $99.6 million in FY 2016 were $0.6 million (0.6%) above estimate  
but $0.4 million (0.4%) below FY 2015 revenue.  
Receipts from the alcoholic beverage tax were $54.4 million in  
FY 2016, $0.6 million (1.0%) below estimate and $2.1 million (3.8%) below  
FY 2015 receipts. Beer and malt beverages generated about 78% of the total  
alcoholic beverage tax receipts in FY 2016. Compared to last year's results,  
receipts from both components of the alcoholic beverage tax declined:  
revenue from beer and malt beverages decreased $1.6 million (3.5%) and  
revenue from wine and mixed beverages declined $0.5 million (4.6%).  
July 2016  
13  
Budget Footnotes  
Ohio Legislative Service Commission  
Liquor gallonage tax receipts of $45.1 million in FY 2016 were  
1.1 million (2.6%) above estimate and $1.8 million (4.1%) higher than  
$
FY 2015 receipts. Liquor sales have increased steadily each year.  
Estate Tax  
H.B. 153 of the 129th General Assembly eliminated the estate tax  
starting with dates of death on or after January 1, 2013, thus no revenue  
was anticipated for this tax in FY 2016. However, due to the length of  
time required for settling certain estates, the state GRF received  
$
2.2 million from the estate tax. This amount was $0.9 million (29.9%)  
below FY 2015 receipts. The total estate tax revenue is shared by the state  
GRF (20%) and the municipality or township in which the decedent  
resided (80%).  
Earnings on Investments  
In FY 2016, GRF earnings on investments of $35.2 million were  
$
12.8 million (57.0%) above estimate and $12.0 million (51.8%) above  
FY 2015 earnings. Earnings on investments grew due to an increase in the  
amount of available state cash for investment and higher interest rates.  
Budget Footnotes  
14  
July 2016  
Ohio Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of June 2016  
($ in thousands)  
(Actual based on OAKS reports run July 1, 2016)  
PROGRAM  
Actual  
Estimate*  
Variance  
Percent  
Primary and Secondary Education  
Higher Education  
$337,033  
$181,562  
$3,470  
$314,971  
$22,062  
$7,950  
7.0%  
$173,612  
$4,581  
4.6%  
-24.3%  
5.9%  
Other Education  
-$1,111  
$28,901  
Total Education  
$522,065  
$493,165  
Medicaid  
$390,088  
$73,880  
$1,045,032  
$54,226  
-$654,944  
$19,654  
-62.7%  
36.2%  
-57.8%  
Health and Human Services  
Total Welfare and Human Services  
$463,968  
$1,099,258  
-$635,290  
Justice and Public Protection  
General Government  
$138,639  
$26,624  
$139,280  
$25,898  
-$640  
$725  
$85  
-0.5%  
2.8%  
0.1%  
Total Government Operations  
$165,263  
$165,178  
Property Tax Reimbursements  
Capital Outlay  
$28,242  
$0  
$274,609  
$0  
-$246,367  
$0  
-89.7%  
---  
Debt Service  
$57,055  
$85,297  
$55,734  
$330,343  
$1,321  
-$245,046  
2.4%  
-74.2%  
Total Other Expenditures  
Total Program Expenditures  
$1,236,593  
$2,087,944  
-$851,350  
-40.8%  
TRANSFERS  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$19,304  
$19,304  
$0  
$3,000  
$3,000  
$0  
$16,304  
$16,304  
---  
543.5%  
543.5%  
TOTAL GRFUSES  
$1,255,898  
$2,090,944  
-$835,046  
-39.9%  
*
October 2015 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
July 2016  
15  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2016 as of June 30, 2016  
($ in thousands)  
(Actual based on OAKS reports run July 1, 2016)  
Percent  
Change  
PROGRAM  
Actual  
Estimate*  
Variance  
Percent  
FY2015  
Primary and Secondary Education  
Higher Education  
$7,555,949  
$2,222,774  
$68,153  
$7,630,489  
$2,235,239  
$68,339  
-$74,541  
-1.0%  
-0.6%  
-0.3%  
-0.9%  
$7,246,517  
$2,139,555  
$52,934  
4.3%  
3.9%  
-$12,466  
-$186  
Other Education  
28.8%  
4.3%  
Total Education  
$9,846,875  
$9,934,067  
-$87,192  
$9,439,006  
Medicaid  
$16,995,860  
$1,283,641  
$18,279,501  
$17,921,724  
$1,343,369  
$19,265,093  
-$925,864  
-$59,728  
-$985,592  
-5.2%  
-4.4%  
-5.1%  
$14,863,212  
$1,249,822  
$16,113,034  
14.3%  
2.7%  
Health and Human Services  
Total Welfare and Human Services  
13.4%  
Justice and Public Protection  
General Government  
$1,983,765  
$362,353  
$1,982,473  
$385,186  
$1,291  
-$22,833  
-$21,542  
0.1%  
-5.9%  
-0.9%  
$1,850,280  
$340,119  
7.2%  
6.5%  
7.1%  
Total Government Operations  
$2,346,118  
$2,367,660  
$2,190,399  
Property Tax Reimbursements  
Capital Outlay  
$1,786,704  
$0  
$1,846,500  
$0  
-$59,796  
$0  
-3.2%  
---  
$1,801,479  
$0  
-0.8%  
---  
Debt Service  
$1,333,866  
$3,120,570  
$1,358,161  
$3,204,661  
-$24,295  
-$84,091  
-1.8%  
-2.6%  
$1,287,681  
$3,089,160  
3.6%  
1.0%  
Total Other Expenditures  
Total Program Expenditures  
$33,593,065  
$34,771,481  
-$1,178,417  
-3.4%  
$30,831,598  
9.0%  
TRANSFERS  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$425,500  
$430,331  
$855,831  
$425,500  
$385,431  
$810,931  
$0  
$44,900  
$44,900  
0.0%  
11.6%  
5.5%  
$0  
$629,876  
$629,876  
---  
-31.7%  
35.9%  
TOTAL GRFUSES  
$34,448,896  
$35,582,413  
-$1,133,517  
-3.2%  
$31,461,475  
9.5%  
*
October 2015 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
16  
July 2016  
Ohio Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on July5, 2016)  
Month of June 2016  
Year to Date Through June 2016  
Actual Estimate* Variance Percent  
52.9% $22,653,734 $23,784,934 -$1,131,199  
Department  
Medicaid  
Actual  
Estimate*  
Variance Percent  
$961,053  
-$645,341 -64.2% $16,422,115 $17,350,000  
$2,778,942 $1,817,889  
-4.8%  
-5.3%  
-3.2%  
GRF  
$360,622 $1,005,962  
-$927,885  
-$203,315  
Non-GRF  
$2,418,320  
$811,927 $1,606,394 197.8%  
$6,231,619  
$6,434,934  
Developmental Disabilities  
$189,903  
$24,335  
$166,981  
$33,665  
$22,921  
13.7%  
$2,388,795  
$490,630  
$2,511,943  
$488,324  
-$123,149  
$2,306  
-4.9%  
0.5%  
GRF  
-$9,330 -27.7%  
Non-GRF  
$165,568  
$133,317  
$32,251  
24.2%  
$1,898,165  
$2,023,619  
-$125,454  
-6.2%  
Job and Family Services  
$23,597  
$4,313  
$33,071  
$4,768  
-$9,474  
-28.6%  
$214,529  
$73,841  
$222,688  
$74,959  
-$8,158  
-$1,118  
-$7,040  
-3.7%  
-1.5%  
-4.8%  
GRF  
-$455  
-9.5%  
Non-GRF  
$19,284  
$28,303  
-$9,019 -31.9%  
$140,688  
$147,729  
Health  
GRF  
$2,445  
$416  
$2,344  
$308  
$101  
$107  
-$6  
4.3%  
34.7%  
-0.3%  
$25,648  
$3,978  
$26,263  
$3,320  
-$615  
-2.3%  
$658 19.8%  
Non-GRF  
$2,029  
$2,035  
$21,670  
$22,943  
-$1,273  
-5.5%  
Aging  
$408  
$321  
$88  
$508  
$263  
$245  
-$99  
-19.6%  
$6,106  
$3,549  
$2,557  
$7,130  
$3,385  
$3,745  
-$1,024 -14.4%  
GRF  
$58  
22.2%  
$164  
4.8%  
Non-GRF  
-$158 -64.2%  
-$1,188 -31.7%  
Mental Health and Addiction  
$276  
$82  
$865  
$65  
-$589  
-68.1%  
$5,038  
$1,748  
$3,290  
$6,661  
$1,737  
$4,924  
-$1,623 -24.4%  
GRF  
$17  
25.8%  
$11 0.6%  
-$1,634 -33.2%  
Non-GRF  
$194  
$800  
-$606 -75.7%  
Total GRF  
$390,088 $1,045,032  
$2,605,483 $976,626 $1,628,856 166.8%  
$2,995,571 $2,021,658 $973,913 48.2% $25,293,850 $26,559,618 -$1,265,768  
-$654,944  
-62.7% $16,995,860 $17,921,724  
-$925,864  
-5.2%  
-3.9%  
Total Non-GRF  
$8,297,990 $8,637,894  
-$339,905  
Total All Funds  
-4.8%  
*Estimates are fromthe Department of Medicaid.  
Detail may not sumto total due to rounding.  
July 2016  
17  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 6: All-Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
$ in thousands)  
Actuals based on OAKS report run on July 5, 2016)  
June Year to Date Through June 2016  
Estimate* Actual Estimate* Variance Percent  
$9,911,253 $10,552,236 -$640,984  
$1,397,804 $1,417,794 -$19,990  
(
(
Payment Category  
Managed Care  
Nursing Facilities  
DDD Services  
Hospitals  
Actual  
Variance Percent  
$782,146  
$118,535  
$178,446  
$1,141,151  
$81,252  
$92,216  
$24,413  
$40,106  
$42,687  
$14,240  
$27,280  
$9,504  
$868,319  
$120,045  
$162,579  
-$86,173  
-$1,510  
$15,867  
-9.9%  
-1.3%  
9.8%  
-6.1%  
-1.4%  
-4.5%  
-9.6%  
-5.3%  
$2,319,676 $2,428,599 -$108,923  
$2,858,358 $3,161,293 -$302,935  
$94,133 $1,047,018 1112.3%  
Behavioral Health  
Administration  
Aging Waivers  
Prescription Drugs  
Medicare Buy-In  
Physicians  
$89,596  
$100,064  
$25,832  
$34,765  
$38,101  
$15,920  
$27,573  
$12,926  
$348,266  
$83,539  
-$8,344  
-$7,848  
-$1,419  
$5,341  
$4,586  
-9.3%  
-7.8%  
-5.5%  
15.4%  
12.0%  
$1,078,279 $1,138,919  
-$60,640  
$837,318 $1,119,673 -$282,355 -25.2%  
$319,315  
$468,245  
$472,877  
$259,666  
$305,634  
$126,074  
$329,029  
$465,647  
$447,627  
$266,035  
$308,278  
$167,404  
-$9,714  
$2,598  
-3.0%  
0.6%  
5.6%  
-2.4%  
-0.9%  
$25,250  
-$6,370  
-$2,644  
-$1,680 -10.6%  
-$293 -1.1%  
-$3,422 -26.5%  
Medicare Part D  
Home Care Waivers  
ACAExpansion  
All Other  
-$41,330 -24.7%  
$337,118  
$106,476  
-$11,148  
$22,937  
-3.2%  
27.5%  
$3,832,435 $3,649,731  
$1,106,915 $1,107,353  
$182,704  
-$437  
5.0%  
0.0%  
-4.8%  
Total All Funds  
$2,995,571 $2,021,658  
$973,913  
48.2% $25,293,850 $26,559,618 -$1,265,768  
*
Estimates are fromthe Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
18  
July 2016  
Ohio Legislative Service Commission  
EXPENDITURES  
Russ Keller, Economist, 614-644-1751  
Nicholas J. Blaine, Budget Analyst, 614-387-5418  
Overview  
GRF program expenditures totaled $33.59 billion for FY 2016. These  
expenditures were $1.18 billion below the estimate released by OBM in  
October 2015. GRF transfers out totaled $855.8 million, $44.9 million above  
estimate. The largest GRF transfer out occurred at the beginning of the  
fiscal year when $425.5 million of the surplus from FY 2015 was  
transferred into the Budget Stabilization Fund. GRF uses as a whole  
totaled $34.45 billion in FY 2016, $1.13 billion below estimate. Tables 3 and  
GRF uses  
ended the year  
under estimate  
by  
4
show GRF uses for the month of June and for FY 2016, respectively.  
For reporting purposes, GRF program expenditures are grouped $1.13 billion,  
into ten categories. Medicaid, which comprises slightly more than half of  
all GRF program expenditures, was $925.9 million below its fiscal year  
estimate but 14.3% above FY 2015 expenditures. The combined  
expenditures from the other program categories were $252.6 million  
below OBM's fiscal year estimate and 3.9% above FY 2015 combined  
expenditures. Overall, GRF program expenditures in FY 2016 were  
largely because  
of a negative  
variance of  
$
925.9 million  
in Medicaid.  
$
2.76 billion (9.0%) higher than expenditures in FY 2015 due primarily to  
the inclusion in the GRF of Medicaid funding for those who qualify for  
Medicaid through the federal Affordable Care Act (ACA). Prior to  
FY 2016, Medicaid funding for those individuals was accounted for in  
non-GRF funds.  
Aside from Medicaid, three other program categories had negative  
variances over $50.0 million: Primary and Secondary Education  
(
and Human Services ($59.7 million). These negative variances as well as  
the positive variance in Transfers Out will be discussed briefly below.  
$74.5 million), Property Tax Reimbursements ($59.8 million), and Health  
In addition to program expenditures and transfers out, 45 state  
agencies encumbered a total of $428.6 million in GRF funding, as of  
June 30, 2016, for expenditure in FY 2017. These encumbrances were  
$
90.6 million above OBM's October 2015 estimate. The Encumbrances  
section of this report provides additional information on FY 2016 year-end  
encumbrances.  
July 2016  
19  
Budget Footnotes  
Ohio Legislative Service Commission  
Medicaid  
Medicaid is primarily funded by the GRF although it also receives  
funding from various non-GRF funds. As a joint federal-state program,  
both GRF and non-GRF Medicaid expenditures contain federal and state  
moneys. Overall, the federal and state shares of Medicaid expenditures  
are about 64% and 36%, respectively.  
Table 5 provides GRF and non-GRF Medicaid expenditures by  
agency. In June, a larger share of Medicaid payments came from  
non-GRF funds versus the GRF than was originally estimated by the  
Department of Medicaid (ODM). GRF Medicaid expenditures in June  
were $654.9 million below estimate, which increased the GRF Medicaid's  
year-to-date negative variance from $270.8 million at the end of May to  
Non-GRF  
Medicaid  
expenditures  
were under  
estimate by  
$
925.9 million (5.2%) at the end of June. Non-GRF Medicaid expenditures  
were $1.63 billion above the estimate for the month of June, which  
changed the non-GRF Medicaid's year-to-date variance from a negative  
$
339.9 million  
$
1.97 billion at the end of May to a negative $339.9 million (3.9%) at the  
in FY 2016,  
resulting in a  
negative  
end of June. The majority of this monthly variance was related to Upper  
Payment Limit (UPL) and Hospital Care Assurance Program (HCAP)  
payment timing; both payments are funded by non-GRF sources. A total  
of $1.06 billion ($451.9 million for UPL and $610.7 million for HCAP) was  
scheduled to be paid in May but was delayed until June. UPL allows the  
state to direct supplemental payments up to the difference between the  
Medicare and Medicaid amountsto service providers. Under HCAP,  
Ohio makes subsidy payments to hospitals that provide uncompensated  
care to low-income and uninsured individuals at or below 100% of the  
federal poverty level.  
all-funds  
variance of  
$
1.27 billion for  
the fiscal year.  
For the full fiscal year, GRF and non-GRF Medicaid expenditures  
were $17.00 billion and $8.30 billion, respectively, for a total of  
$
25.29 billion across all funds. FY 2016 all-funds Medicaid expenditures  
were $1.27 billion (4.8%) below estimate.  
ODM is primarily responsible for administering Medicaid, with  
the assistance of five other state agenciesDevelopmental Disabilities,  
Job and Family Services, Health, Aging, and Mental Health and  
Addiction Services. As seen from Table 5, ODM, the largest agency  
within this program category, also had the largest year-to-date variance.  
Through the end of FY 2016, ODM's GRF expenditures totaled  
$
16.42 billion, which was $927.9 million (5.3%) below estimate, and its  
non-GRF expenditures totaled $6.23 billion, which was $203.3 million  
3.2%) below estimate. Across all funds, ODM's expenditures were  
1.13 billion (4.8%) below their year-to-date estimate. GRF and non-GRF  
Medicaid expenditures from the Department of Developmental  
(
$
Budget Footnotes  
20  
July 2016  
Ohio Legislative Service Commission  
Disabilities (DDD), the second largest agency within this program  
category, totaled $2.39 billion through the end of FY 2016, which was  
123.1 million (4.9%) below estimate. Together, ODM and DDD account  
$
for about 99% of the Medicaid expenditure total.  
Table 6 details all-funds Medicaid expenditures by payment  
category. As seen from the table, Managed Care had the largest negative  
variance of the year at $641.0 million (6.1%). This negative variance is  
mainly due to new Managed Care rates, effective January 1. These rates  
were lower than projected, particularly those for the MyCare program.  
MyCare provides managed care services for Ohioans who receive both  
Medicaid and Medicare benefits. As previously predicted, the negative  
variance in the Managed Care category grew through the end of the fiscal  
year. In addition to the new rates, aged, blind, and disabled (ABD)  
caseloads in managed care were below estimate for the year. Per-member  
per-month cost for an ABD recipient is much higher than that of a  
non-ABD Medicaid recipient. While ABDs make up about 15% of all  
Medicaid recipients, they account for about half of all Medicaid  
expenditures.  
Two other payment categories that had significant negative year  
end variances were Hospitals ($302.9 million, 9.6%) and Administration  
($282.4 million, 25.2%). The negative variance for hospitals is primarily  
driven by lower than forecasted ABD caseload in fee-for-service, along  
with lower than anticipated per-member per-month costs. The negative  
variance for Administration continued through the end of the fiscal year  
in part due to a lower than expected demand for federal pass-through  
grants for electronic medical records. Additionally, a number of ODM  
information technology contracts were delayed.  
Both the ACA Expansion and Medicare Buy-In categories had  
noteworthy positive variances at the end of the fiscal year. All-funds  
expenditures from ACA Expansion totaled $3.83 billion for FY 2016,  
which was $182.7 million (5.0%) above estimate. This positive variance is  
driven by caseloads that were approximately 26,000 (4.0%) higher than  
anticipated. However, this caseload driven positive variance was offset to  
some extent by the lower Managed Care rates described above that are  
also applicable to individuals enrolled in the ACA expansion. All-funds  
expenditures in the Medicare Buy-In category through the end of FY 2016  
totaled $472.9 million, which was $25.3 million (5.6%) above estimate. This  
positive variance was driven by a larger than anticipated increase in  
Medicare Part B premiums for 2016. The Medicare Buy-in Program pays  
Medicare premiums, deductibles, and coinsurance for certain low-income  
Ohioans.  
July 2016  
21  
Budget Footnotes  
Ohio Legislative Service Commission  
Primary and Secondary Education  
For FY 2016, Primary and Secondary Education expenditures  
totaled $7.56 billion, $74.5 million (1.0%) below estimate. The Ohio  
Department of Education (ODE) is the only agency that is included in  
this program category. Most of the negative variance for ODE is due to  
timing. ODE encumbered $153.9 million for expenditure in FY 2017,  
which is $70.2 million above the level of encumbrances estimated by  
OBM. Foundation funding for schools is the largest program within the  
ODE budget. School foundation payments are mainly supported by GRF  
appropriation item 200550, Foundation Funding, which has the largest  
negative variance in ODE's budget in FY 2016 ($27.2 million).  
Encumbrances in item 200550 exceeded estimate by $24.8 million. Item  
ODE ended the  
fiscal year with  
a negative  
variance of  
$
74.5 million,  
largely due to  
timing.  
2
$
00437, Student Assessment, had the second largest negative variance at  
18.7 million, followed by item 200540, Special Education Enhancements,  
at $13.2 million and 200408, Early Childhood Education, at $7.1 million.  
Encumbrances exceeded estimates for these items also, by $16.7 million,  
$
14.0 million, and $8.8 million, respectively.  
Property Tax Reimbursements  
GRF expenditures for property tax reimbursements were  
$
246.4 million (89.7%) below the OBM estimate for the month of June.  
This negative variance reversed the positive year-to-date variance in this  
category at the end of May. The property tax reimbursement category  
ended FY 2016 with a negative variance of $59.8 million (3.2%).  
Expenditures in the program category were $1.79 billion for FY 2016,  
which was $14.8 million (0.8%) below FY 2015 amounts. This decline  
partially reflects property tax relief changes authorized by H.B. 59 of the  
1
1
30th General Assembly. H.B. 59 limited the application of the 2.5% and  
0% real property tax rollbacks approved at elections held on or after  
September 29, 2013. The act permitted the rollbacks to continue for  
existing and renewal levies, but they are no longer applied to new or  
replacement levies approved on or after the November 2013 election.  
Separately, H.B. 59 specified that homeowners turning 65 beginning in  
2
014 are subject to an income-based test to determine whether they can  
receive the homestead exemption.  
Health and Human Services  
GRF expenditures from the Health and Human Services  
program category for the year were $1.28 billion, $59.7 million (4.4%)  
below estimate. The Ohio Department of Job and Family Services  
(
ODJFS) accounted for the largest share ($24.8 million) of the category's  
negative year-to-date variance, followed by the Ohio Department of  
Budget Footnotes  
22  
July 2016  
Ohio Legislative Service Commission  
Mental Health and Addiction Services (ODMHAS) at $20.1 million and  
the Ohio Department of Health (ODH) at $9.3 million.  
Within the ODJFS budget, item 600528, Adoption Services, had the  
largest negative year-to-date variance. Expenditures from this item were  
$
4.2 million below estimate. According to ODJFS, the number of children  
who are eligible for federal adoption services has increased due to a  
change in federal regulations, which reduced the number of children who  
are paid for with state funding. Furthermore, the total number of children  
in adoption programs has decreased throughout the year. The second  
highest negative variance for FY 2016 was $4.1 million in item 600511,  
Disability Financial Assistance. This item is used to provide cash  
assistance to certain disabled people who are ineligible for other public  
assistance programs. Expenditures from item 600416, Information  
Technology Projects, and item 600321, Program Support, were also below  
their year-to-date estimate by $3.5 million and $2.9 million, respectively.  
Both line items were affected by invoice timing issues. Expenditures from  
item 600445, Unemployment Insurance Administration, were $3.4 million  
below their fiscal year estimate for similar reasons.  
Expenditures from 21 of the 23 ODMHAS GRF line items were  
below their estimates for FY 2016. The largest negative variance  
($10.7 million) occurred in item 336423, Addiction Services Partnership  
with Corrections. Item 336423 was a new line item established in FY 2016  
to fund programming and treatment services provided by ODMHAS  
inside of state correctional facilities. Timing issues and other factors  
related to program implementation affected expenditures from this item.  
The agency encumbered $2.7 million from this item for expenditure in  
FY 2017. The second largest ODMHAS negative variance was for item  
3
3
the new item included an appropriation increase to accompany multiple  
earmarks for targeted spending in programs, projects, or systems operated  
by governments and nonprofits. Timing issues affected the  
implementation of these new initiatives, and ODMHAS encumbered  
36504, Community Innovations ($4.8 million). Beginning in FY 2016, item  
36504 replaced an analogous item used by ODMHAS in prior years, and  
$
3.2 million for use in the next fiscal year.  
Although ODH's expenditures were above estimate by $4.9 million  
in the month of June, FY 2016 expenditures were $9.3 million below  
estimate. All but four of ODH's 22 line items were below their anticipated  
spending levels. The largest negative variance ($4.0 million) occurred in  
item 440459, Help Me Grow. This was largely due to timing, as ODH  
encumbered $3.9 million more than estimated in this item.  
July 2016  
23  
Budget Footnotes  
Ohio Legislative Service Commission  
Transfers Out  
GRF transfers out totaled $855.8 million during FY 2016, which  
was $44.9 million (5.5%) above the OBM year-to-date estimate. The  
positive variance was related to Medicaid. Specifically, $54.2 million in  
cash was transferred from the GRF to the Managed Care Performance  
Payment Fund (Fund 5KW0) pursuant to Section 327.80 of H.B. 64, which  
requires ODM to provide performance payments to Medicaid managed  
care organizations providing care and services to participants of MyCare,  
a program that is designed to improve access to and quality of care and  
services for individuals who are eligible for both Medicare and Medicaid.  
ODM is to withhold a percentage of each premium payment it pays to a  
managed care organization for a program participant. The withheld  
funds are then transferred from the GRF to Fund 5KW0 for performance  
payments. The appropriation for GRF appropriation item 615525,  
Medicaid/Health Care Services, is reduced by the transferred amount.  
Encumbrances  
As of June 30, 2016, state agencies encumbered a total of  
$
428.6 million in GRF appropriations for expenditure in FY 2017. An  
Outstanding  
GRF  
agency generally has five months to spend prior-year encumbrances for  
operating expenses, after which time they will lapse. An agency may  
encumber funds for purposes other than operating expenses beyond the  
five-month period, if approval is obtained from the Director of Budget  
and Management. Encumbrances for some grant and aid payments are  
encumbered for several months or sometimes years.  
encumbrances  
totaled  
$
428.6 million  
at the end of  
FY 2016.  
The table below summarizes the encumbrances by the fiscal year  
of the original appropriation. As seen from the table, the majority of the  
encumbrances were originally appropriated in FY 2016. However, small  
encumbrances remain from as early as FY 2007.  
FY 2016 Year-End Encumbrances by Fiscal Year for Which  
Appropriations Were Originally Made  
Fiscal Year  
007-2010  
Amount ($ in thousands)  
Percentage of Total  
2
$532  
$1,029  
0.1%  
0.2%  
2
2
2
2
2
2
011  
012  
013  
014  
015  
016  
$1,336  
0.3%  
$765  
0.2%  
$14,182  
$27,285  
$383,473  
$428,603  
3.3%  
6.4%  
89.5%  
100.0%  
TOTAL  
Budget Footnotes  
24  
July 2016  
Ohio Legislative Service Commission  
The encumbrance amounts vary greatly from agency to agency. As  
shown in the following table, ODE has the largest encumbrance amount at  
153.9 million, 35.9% of the total. The next five agencies with the largest  
encumbrances are ODJFS at $65.0 million (15.2% of the total), ODM at  
50.4 million (11.8%), the Department of Rehabilitation and Correction  
DRC) at $31.1 million (7.3%), the Development Services Agency (DSA) at Education  
$
$
(
$
$
$
25.3 million (5.9%), and the Department of Higher Education (DHE) at  
20.3 million (4.7%). Thirty-nine other agencies encumbered the remaining  
82.5 million (19.2%).  
accounted for  
3
5.9% of the  
total year-end  
GRF  
FY 2016 Year-End Encumbrances by Agency  
Agency  
Amount ($ in thousands)  
$153,938  
Percentage of Total  
35.9%  
encumbrances.  
Education  
Job and Family Services  
Medicaid  
$65,013  
15.2%  
$50,387  
11.8%  
Rehabilitation and Correction  
Development Services  
Higher Education  
$31,100  
7.3%  
$25,346  
5.9%  
$20,349  
4.7%  
All Other Agencies  
$82,470  
19.2%  
TOTAL  
$428,603  
100.0%  
Ohio Department of Education  
ODE encumbered $153.9 million for expenditure in FY 2017. Four  
appropriation items with significant encumbrances are: (1) item 200550,  
Foundation Funding, at $64.8 million, (2) item 200437, Student  
Assessment, at $30.0 million, (3) item 200408, Early Childhood Education,  
at $22.4 million, and (4) item 200540, Special Education Enhancements, at  
$
(
14.0 million. These four items' encumbrances account for $131.2 million  
85.2%) of the total. The remaining $22.7 million was encumbered in  
various other items.  
Funds encumbered in item 200550 will be used mainly to meet  
year-end school foundation payment adjustments. Foundation payments  
are allocated to districts based on a variety of data. Some of these data are  
not finalized until the following fiscal year. Funds are generally  
encumbered each year in order to make adjusted payments based on these  
updated data.  
Funds encumbered in item 200437 will be used to pay contractors  
for scoring the state's standardized tests and other bills not yet received  
from vendors. Funds encumbered in item 200408 will mainly be used to  
pay providers who provide early childhood education services to children  
from lower-income families. Funds encumbered in item 200540 will  
mainly be used for outstanding subsidy payments to providers of  
preschool special education services.  
July 2016  
25  
Budget Footnotes  
Ohio Legislative Service Commission  
Ohio Department of Job and Family Services  
ODJFS encumbered a total of $65.0 million for expenditure in  
FY 2017. The encumbrances in six appropriation items account for  
$
53.6 million (82.4%) of the total. These six items are: (1) item 655523,  
Medicaid Program Support Local Transportation ($13.1 million),  
(
(
2) item 655522, Medicaid Program Support - Local ($12.5 million),  
3) item 600416, Information Technology Projects ($9.8 million), (4) item  
6
00533, Child, Family, and Community Protective Services ($6.8 million),  
(5) item 600523, Family and Children Services ($5.7 million), and (6) item  
6
00321, Program Support ($5.6 million).  
Funds encumbered in items 655523 and 655522 will mainly be  
used for the remaining state share of Medicaid subsidies to county  
departments of job and family services. Item 655523 pays the state's share  
of Medicaid costs for local transportation services and item 655522 pays  
the state's share of Medicaid costs for local administrative services.  
Funds encumbered in item 600416 will be used mainly for the  
development, implementation, and maintenance of information  
technology systems used by ODJFS. Funds encumbered in items 600533  
and 600523 will be used primarily to provide funding to county agencies  
for child protective services. Finally, the encumbrances in 600321 are  
mainly for contracts with vendors to provide administrative support for  
the Food Assistance Program.  
Job and Family  
Services and  
Medicaid  
accounted for  
2
7.0% of the  
total year-end  
GRF  
Ohio Department of Medicaid  
ODM encumbered a total of $50.4 million for expenditure in  
FY 2017, including $38.0 million in item 651425, Medicaid Program  
Support State, and $12.4 million in item 651525, Medicaid/Health Care  
Services. Funds encumbered in item 651425 will be used mainly to pay  
ODM's outstanding personal services and contract expenses for  
administering the Medicaid program in Ohio. Over half of these  
outstanding expenses are related to the agency's information technology  
systems. Item 651525 is the primary funding source for Ohio Medicaid.  
Funds encumbered in this item will be used for subsidy payments to  
Medicaid providers as well as the Targeted Case Management (TCM)  
services provided by DDD through an interagency agreement. TCM  
services assist Medicaid recipients in gaining access to needed medical,  
social, educational, and certain other services.  
encumbrances.  
Department of Rehabilitation and Correction  
DRC encumbered $31.1 million for expenditure in FY 2017, of  
which $15.9 million occurred in item 505321, Institution Medical Services,  
and another $14.2 million in item 501321, Institutional Operations. Funds  
Budget Footnotes  
26  
July 2016  
Ohio Legislative Service Commission  
encumbered in item 505321 will be used to pay various outstanding bills  
for providing medical services to inmates. Funds were encumbered in  
item 501321 for a mix of purchased personal services, supplies,  
maintenance, repairs, equipment, materials, and other minor expenditures  
at DRC and institutions.  
Development Services Agency  
DSA encumbered $25.3 million for expenditure in FY 2017. These  
encumbrances are largely attributable to various economic development  
incentive grants that have been awarded but not yet disbursed. Many of  
DSA's grant programs are operated on a reimbursement basis, whereby  
grant recipients do not receive money from the state until a project has  
been completed or certain conditions have been met. For example, a  
grantee may be awarded grants in FY 2016 but not receive them until  
FY 2017 or later.  
Appropriation items 195453, Technology Programs and Grants, and  
1
95532, Technology Programs and Grants, had the two largest  
encumbrances at $8.7 million and $4.7 million, respectively. These funds  
will be used mainly to fund awards made under the Thomas Edison and  
Manufacturing Extension Partnership programs. Item 195532 has been  
discontinued; all encumbrances from that item are for funds appropriated  
before FY 2016. Item 195535, Appalachia Assistance, has the next largest  
encumbrance of $4.3 million. These encumbered funds will be used to  
provide financial assistance to projects in Ohio's Appalachian counties. In  
addition to these items, several other items within the DSA budget had  
smaller encumbrances.  
Department of Higher Education  
DHE encumbered $20.3 million for expenditure in FY 2017. The  
majority ($15.4 million) of the total was encumbered in item 235438,  
Choose Ohio First Scholarship, to pay the state's obligations to scholarship  
recipients. Another $2.2 million was encumbered in item 235563, Ohio  
College Opportunity Grant; these funds will be used for need‐based  
financial aid for public school students. The final significant encumbrance  
for DHE ($1.7 million) is in item 235591, Co-op Internship Program. These  
funds will be provided to institutions to support cooperative education  
and internship programs.  
July 2016  
27  
Budget Footnotes  
Ohio Legislative Service Commission  
ISSUE UPDATES  
FY 2016 Operating and Capital Expenditures Total $67.45 billion  
Melaney Carter, Assistant Deputy Director, 614-466-6274  
In FY 2016, the state of Ohio incurred a total of $67.45 billion in operating and  
capital expenditures. As seen from Table A, $62.01 billion (91.9%) of the total  
expenditures were authorized in the main operating budget. The transportation and  
capital budgets accounted for $4.02 billion (6.0%) and $1.12 billion (1.7%), respectively,  
of the total. The remaining $310.7 million (0.5%) was authorized in the Bureau of  
Workers' Compensation and Industrial Commission budgets.  
Table A. FY 2016 Operating and Capital Expenditures by Budget  
Budget  
Amount  
% of Total  
91.9%  
6.0%  
Main Operating  
Transportation  
Capital  
$62,006,627,087  
$4,017,099,451  
$1,115,302,761  
$310,733,517  
1.7%  
Workers' Compensation System  
0.5%  
TOTAL  
$67,449,762,816  
100.0%  
Table B shows FY 2016 expenditures by account category used in the state's  
accounting system. As seen from Table B, Subsidies and Shared Revenue is the largest  
spending area. In FY 2016, 87.7% ($29.45 billion) of the total GRF expenditures were  
distributed as subsidies to Medicaid service providers, schools, colleges and universities,  
local governments, and various other entities. Across all funds, this category's  
expenditures totaled $45.46 billion (67.4%). The vast majority of the expenditures incurred  
under the Capital Item category$3.66 billion (5.4%) across all funds supported the  
construction and maintenance of roads and bridges in the state as well as the construction  
and renovation of public K-12 schools and colleges and universities. Capital Item  
expenditures are mainly funded by bond proceeds. FY 2016 debt service payments totaled  
$333.4 million (1.0%) for the GRF and $1.66 billion (2.5%) across all funds.  
For FY 2016, state payroll costs (including both salaries and fringe benefits)  
amounted to $4.35 billion across all funds, of which $1.89 billion was supported by the  
GRF. In addition to Payroll, what commonly is referred to as the state government's  
operating expenses also include expenditures incurred under the Purchased Personal  
Services and Other, Supplies and Maintenance, and Equipment categories. For FY 2016,  
the state government's operating expenses totaled $7.70 billion across all funds, of  
which $2.77 billion came from the GRF. In percentage terms, these amounts represent  
1
1.3% and 8.3% of the respective totals.  
Budget Footnotes  
28  
July 2016  
Ohio Legislative Service Commission  
Table B. FY 2016 Operating and Capital Expenditures by Account Category  
Account Category  
GRF Only  
$1,887,612,022  
$419,954,746  
$438,215,915  
$26,836,223  
$29,448,540,209  
$0  
% of Total  
5.6%  
All Funds  
% of Total  
6.4%  
5
5
5
5
5
5
5
5
5
5
00 - Payroll  
$4,350,385,415  
$1,506,113,342  
$1,630,028,824  
$210,280,937  
$45,458,653,962  
$94,031,931  
10 - Purchased Personal Services & Other  
20 - Supplies and Maintenance  
30 - Equipment  
1.3%  
2.2%  
1.3%  
2.4%  
0.1%  
0.3%  
50 - Subsidies and Shared Revenue  
60 - Goods and Services for Resale  
70 - Capital Items  
87.7%  
0.0%  
67.4%  
0.1%  
$109,095  
0.0%  
$3,655,953,968  
$37,550,893  
5.4%  
90 - Judgments, Settlements, & Bonds  
91 - Debt Service  
$12,607,149  
$333,364,598  
$1,025,824,745  
0.0%  
0.1%  
1.0%  
$1,657,605,127  
$8,849,158,418  
$67,449,762,816  
2.5%  
95 - Transfers & Non-expense  
3.1%  
13.1%  
100.0%  
TOTAL $33,593,064,700  
100.0%  
Office of Criminal Justice Services Awards More than $400,000  
in Ohio Community-Police Relations Grants  
Maggie Wolniewicz, Budget Analyst, 614-995-9992  
On May 16, 2016, the Office of Criminal Justice Services announced the award of  
more than $400,000 in Ohio Community-Police Relations grants. Twenty law  
enforcement agencies and community-based organizations in 15 counties were awarded  
grants to improve and enhance relationships between communities and law  
enforcement agencies. The grants will be disbursed from non-GRF line item 768621,  
Community Police Relations, in the Department of Public Safety's budget. H.B. 64  
created this line item and funded it with a one-time $4.0 million cash transfer from the  
FY 2015 GRF ending balance for the purpose of implementing key recommendations of  
9
the Ohio Task Force on Community-Police Relations.  
Under the Ohio Community-Police Relations Grant Program, a law enforcement  
agency or community-based organization may apply for a grant award of up to $30,000.  
The grantee is required to provide a cash or in-kind match of at least 25% of the total  
project cost. The table below shows the 15 counties with agencies or organizations  
receiving awards for the grant period beginning July 1, 2016, and the total award  
amount. Three counties were awarded funding for more than one project: Hamilton (2),  
Medina (3), and Montgomery (3). Four projects (Cuyahoga, Erie, Mahoning, and  
Montgomery) were awarded the maximum grant of $30,000.  
9 The task force was created by Executive Order 2014-06K signed by Governor Kasich on  
December 12, 2014.  
July 2016  
29  
Budget Footnotes  
Ohio Legislative Service Commission  
Ohio Community-Police Relations Grant Awards by County  
(Total: $416,916)  
County  
Athens  
Award  
$16,404  
$29,999  
$12,143  
$30,000  
$30,000  
County  
Franklin  
Award  
$5,540  
County  
Miami  
Award  
$28,096  
$73,633  
$14,395  
$29,940  
$22,500  
Carroll  
Hamilton  
Lucas  
$29,058  
$18,758  
$30,000  
$46,449  
Montgomery  
Putnam  
Clermont  
Cuyahoga  
Erie  
Mahoning  
Medina  
Shelby  
Summit  
Note: Numbers may not add to total due to rounding.  
Medicaid Funds Infant Mortality Projects in Nine Counties  
Wendy Risner, Fiscal Supervisor, 614-644-9098  
On June 7, 2016, the Ohio Department of Medicaid (ODM) announced that  
2 projects in eight counties have received funding to help reduce infant mortality.  
4
These projects represent the second round of infant mortality projects funded by ODM.  
The first round, which occurred in March 2016, provided funds to four projects in  
Summit County. In total, ODM has provided approximately $22.5 million in nine  
counties. These counties have neighborhoods or communities within their jurisdiction  
with infant mortality rates that are amongst the highest in the state. The table below  
shows the amount each county received. For a complete list of projects funded, please  
refer to ODM's website (http://medicaid.ohio.gov/NEWS/PressReleases.aspx).  
Infant Mortality Project Funding  
County  
Amount  
Lucas  
Stark  
$3,230,000  
$2,968,154  
$2,960,000  
$2,837,000  
$2,480,344  
$2,441,748  
$2,300,000  
$1,715,138  
$1,555,177  
$22,487,561  
Cuyahoga  
Hamilton  
Butler  
Mahoning  
Franklin  
Montgomery  
Summit  
TOTAL  
Budget Footnotes  
30  
July 2016  
Ohio Legislative Service Commission  
Ohio's infant mortality rate for all races was 6.8 (number of infant deaths per  
10  
1
,000 live births) in 2014 compared to the national rate of 6.0 in 2013. The white infant  
mortality rate in 2014 was 5.3 and the Hispanic rate was 6.2 in Ohio compared to the  
national rate of 5.1 and 5.3 in 2013, respectively. During this same time period, the black  
infant mortality rate in Ohio was 14.3 compared to the national rate of 11.2. Ohio's goal  
is to obtain a rate of 6.0 or lower for every race or ethnic group.  
Naloxone Public Awareness Campaign Launched in 15 Counties  
Wendy Risner, Fiscal Supervisor, 614-644-9098  
On May 12, 2016, the Ohio departments of Health and Mental Health and  
Addiction Services launched a campaign to promote awareness of drug overdose  
symptoms and naloxone administration in Butler, Clark, Clermont, Cuyahoga,  
Franklin, Hamilton, Lorain, Lucas, Marion, Montgomery, Ross, Scioto, Stark, Summit,  
and Warren counties. Approximately 80% of fentanyl-related overdose deaths in Ohio  
occurred in these 15 counties. The campaign includes the use of billboards, as well as  
radio, mobile, and digital advertisements. Through these media, individuals will be  
directed to a website (stopoverdoses.ohio.gov) that provides information on  
community treatment programs and pharmacies that dispense naloxone kits without a  
prescription.  
According to the Centers for Disease Control and Prevention (CDC), fentanyl is a  
synthetic opioid that is 50 times more powerful than heroin. In Ohio, fentanyl-related  
deaths increased from 84 in 2013 to 502 in 2014. Additionally, in 2014, Ohio had the  
most fentanyl drug confiscations by law enforcement of any state1,245 confiscations  
followed by 630 confiscations in Massachusetts.  
Naloxone is a medication that reverses opioid overdoses by blocking the opioid's  
effect on the brain and restoring normal breathing patterns. It may be administered as a  
nasal spray or as an injection into a muscle. Ohio has taken several steps to increase the  
availability of naloxone throughout the state, including providing funding for Project  
DAWN sites (community-based sites that provide education and naloxone distribution  
kits), allowing pharmacists to dispense naloxone without a prescription (H.B. 4 of the  
1
31st General Assembly), and providing $500,000 per year in H.B. 64 for naloxone  
distribution to law enforcement and first responders.  
10 2  
013 was the last available year for national data.  
July 2016  
31  
Budget Footnotes  
Ohio Legislative Service Commission  
Criminal Justice Services Awards $5.5 million  
in Ohio Drug Law Enforcement Fund Grants  
Maggie Wolniewicz, Budget Analyst, 614-995-9992  
On May 9, 2016, the Office of Criminal Justice Services awarded $5.5 million in  
Ohio Drug Law Enforcement Fund grants to 40 drug task forces in 36 counties. The  
Drug Law Enforcement Fund (Fund 5ET0) receives its revenue from $3.40 of the  
$
are used to defray expenses that a drug task force incurs enforcing the state's drug laws  
and other state laws related to illegal drug activity.  
10 court fee imposed on an offender convicted of a moving traffic violation. The grants  
Under the Drug Law Enforcement Fund Program, a drug task force may apply  
for a grant award of up to $250,000. The task force is required to provide a local  
funding match of 25% of the projected operating costs in the time period covered by  
the grant. The table below shows those counties with one or more drug task forces  
receiving awards for the grant period beginning July 1, 2016, the number of project  
awards per county, and the total amount of funding received. Individual project  
awards ranged from $10,051 (Monroe County) to $250,000 (Franklin, Richland, and  
Summit counties).  
Ohio Drug Law Enforcement Fund Grant Awards by County  
(
Total: $5,543,291)*  
County  
Award  
County  
Hamilton (3)  
Hardin  
Award  
$490,497  
$11,517  
$14,685  
$105,603  
$117,334  
$239,369  
$12,678  
$249,990  
$46,001  
$225,221  
$171,037  
$10,051  
County  
Montgomery  
Ottawa  
Award  
Allen  
$170,738  
$57,661  
$67,772  
$105,162  
$22,404  
$250,000  
$217,288  
$13,948  
$187,227  
$250,000  
$207,571  
$23,938  
$208,162  
$157,398  
Auglaize  
Brown  
$12,593  
Jefferson  
Lake  
Portage  
Butler  
$41,578  
Richland  
Ross  
Clermont  
Columbiana  
Cuyahoga (3)  
Defiance  
Delaware  
Fairfield  
$195,445  
$143,614  
$556,694  
$186,603  
$146,255  
$202,534  
$250,000  
$174,724  
Lawrence  
Licking  
Sandusky  
Stark  
Logan  
Lorain  
Summit  
Lucas  
Trumbull  
Tuscarawas  
Warren  
Mahoning  
Medina  
Franklin  
Greene  
Monroe  
Wayne  
*All counties, unless otherwise noted in parentheses, received funding for one drug task force.  
Note: Numbers may not add to total due to rounding.  
Budget Footnotes  
32  
July 2016  
Ohio Legislative Service Commission  
Department of Youth Services Awards $1.8 million for  
Detention Alternatives and Enhancements Initiative  
Maggie Wolniewicz, Budget Analyst, 614-995-9992  
In May 2016, the Ohio Department of Youth Services announced the award of  
1.8 million in grants to fund 27 projects in 22 counties (see table below) as part of the  
$
Department's new Detention Alternatives and Enhancements Initiative, which is  
funded under GRF line item 470401, RECLAIM Ohio. Montgomery County was  
awarded funding for four projects. Trumbull and Warren counties were awarded  
funding for two projects each. The other 19 counties were each awarded funding for  
one project.  
The Department estimates that more than 5,000 youth will benefit from these  
grant awards, which will be used to:  
1
. Expand alternatives to secure detention, such as evening assessment and  
reporting centers, crisis shelters, respite services, and electronic  
monitoring (ten projects totaling $1.1 million);  
2
3
. Improve programs and support services provided to juveniles housed in  
detention facilities (six projects totaling $0.3 million);  
. Make physical plant improvements, including safety and security  
upgrades, at ten of Ohio's 38 county-operated juvenile detention centers11  
(11 projects totaling $0.4 million).  
Detention Alternatives and Enhancements Initiative Grant Awards by County  
County  
Award  
$21,386  
$14,500  
$56,051  
$92,480  
$88,231  
$288,058  
$17,954  
$28,100  
County  
Award  
$26,485  
$57,282  
$162,738  
$51,071  
$25,043  
$230,443  
$283,968  
$54,348  
County  
Award  
$120,508  
$44,858  
$25,000  
$58,240  
$33,714  
$47,535  
Allen  
Jefferson  
Summit  
Ashtabula  
Clermont  
Cuyahoga  
Delaware  
Fairfield  
Lorain  
Trumbull  
Union  
Lucas  
Madison  
Mahoning  
Marion  
Warren  
Wayne  
Williams  
Franklin  
Montgomery  
Muskingum  
TOTAL $1,827,993  
Hamilton  
11 Juvenile detention centers are secure facilities used for short-term care and custody of  
alleged and adjudicated juvenile offenders.  
July 2016  
33  
Budget Footnotes  
Ohio Legislative Service Commission  
ODE Awards $9.4 million in Grants for  
Community Connectors Program  
Jason Glover, Budget Analyst, 614-466-8742  
On June 10, 2016, the Ohio Department of Education (ODE) awarded  
9.4 million in matching grants to 108 community partnerships as part of the most  
$
recent round of funding for the Community Connectors school mentorship program.  
Created by H.B. 483 of the 130th General Assembly, Community Connectors supports  
programming in career advising and mentoring for students in low-performing,  
high-poverty schools. Eligible districts must partner with members of the business  
community, civic organizations, or the faith-based community to provide sustainable  
career services to students in grades 5-12. Under this round of funding, the state is  
providing $3 for every $1 in local funding with a maximum award of $100,000. Most  
of the awards ranged from $85,000 to $100,000 though one award was as small as  
$
13,000. In all, 46 of the 108 partnerships received the full $100,000 in funding.  
Geographically, 27 of the partnerships are located in Franklin County, 14 are located  
in Cuyahoga County, ten are located in Hamilton County, six are located in  
Montgomery County, and five are located in Lucas County. The full list of recipients  
is available online at communityconnectors.ohio.gov. H.B. 64 provides funding for the  
program using lottery profits appropriated in Fund 7017 appropriation item 200629,  
Community Connectors.  
Straight A Fund Governing Board Recommends over  
$
14.8 million in Straight A Fund Grants  
Anthony Kremer, Budget Analyst, 614-466-5654  
On June 20, 2016, the Straight A Fund Governing Board recommended over  
14.8 million in funding for 23 grant proposals in the fourth round of Straight A Fund  
$
grant awards. The grants will support projects that aim to increase student  
achievement, reduce spending, utilize a greater share of resources in the classroom, or  
use a shared services delivery model. City, local, exempted village, and joint  
vocational school districts, educational service centers, community schools,  
STEM schools, institutions of higher education, and education consortia representing  
partnerships among these groups were eligible to apply for the grants. Of the  
2
3 grants awarded, 12 were provided to education consortia of varying sizes and the  
remaining 11 were provided to individual applicants. Overall, 90 schools are  
represented among the applicants selected for funding. Grant amounts range from  
$
54,000 to about $996,000. The Governing Board's recommendations are slated to go to  
the Controlling Board for final approval on August 8, 2016. A list of grant awards and  
Budget Footnotes  
34  
July 2016  
Ohio Legislative Service Commission  
project descriptions is available on ODE's website.12 H.B. 64 funds the program  
through a transfer from FY 2015 GRF surplus revenues and appropriates the transfer  
to Fund 5RB0 line item 200644, Straight A Fund, in ODE's budget.  
Department of Agriculture Awards $7.6 million to Preserve Farmland in  
3
1 Counties under the Local Agricultural Easement Purchase Program  
Shannon Pleiman, Budget Analyst, 614-466-1154  
On June 9, 2016, the Ohio Department of Agriculture (AGR) announced  
approval for local sponsors to purchase agricultural easements on 65 farms,  
encompassing more than 8,000 acres in 31 counties through the Local Agricultural  
Easement Purchase Program (LAEPP). Approximately $7.6 million in funding will be  
awarded to support the purchase of these approved easements from AGR's allocation  
of the Clean Ohio Conservation Fund. The table below summarizes the approved  
easement purchases by county.  
The LAEPP allows landowners to voluntarily sell easements on their farms to the  
state. Under the easement, the land remains privately owned and managed but its use is  
restricted to agricultural production permanently. The process is overseen by local  
sponsor organizations that score applications and forward their funding  
recommendations to AGR. Sponsor organizations can be counties, cities, townships, soil  
and water conservation districts, or land trusts. Eligible farms must be at least 40 acres,  
in active use, enrolled in the Current Agricultural Use Valuation Program, and not in  
the direct path of development. In addition, farm owners must show proper  
stewardship of the land and have support from local government for their farmland to  
qualify. Payments from the Clean Ohio Fund are capped at $2,000 per acre with a  
maximum of $500,000 per farm. Statewide, as of December 31, 2015, LAEPP easements  
had been purchased on 294 farms in 55 counties totaling 52,419 acres.  
12 http://education.ohio.gov/getattachment/Media/Media-Releases/90-Ohio-Schools-Recommended-  
to-Receive-Straight-A/Straight-A-Fund-FY17-Summary-Page.pdf.aspx.  
July 2016  
35  
Budget Footnotes  
Ohio Legislative Service Commission  
Agricultural Easement Awards  
County  
Ashland  
Number of Farms  
Total Acres  
80  
Award Amount  
$45,385  
1
1
2
6
1
2
3
1
2
4
1
1
3
1
3
3
1
3
2
1
2
4
5
1
1
1
4
1
1
1
2
65  
Brown  
129  
237  
1,299  
78  
$83,748  
Champaign  
Clark  
$198,213  
$385,515  
$45,914  
Clinton  
Delaware  
Fairfield  
Fayette  
Fulton  
260  
270  
220  
395  
520  
94  
$330,605  
$513,574  
$332,571  
$152,569  
$134,624  
$172,578  
$87,084  
Greene  
Hamilton  
Highland  
Holmes  
Huron  
98  
218  
87  
$117,812  
$162,935  
$200,640  
$418,916  
$217,211  
$827,999  
$163,335  
$69,530  
Knox  
223  
249  
240  
522  
232  
47  
Licking  
Logan  
Madison  
Marion  
Medina  
Mercer  
Miami  
244  
527  
376  
233  
28  
$475,024  
$625,532  
$350,681  
$215,993  
$29,046  
Montgomery  
Pickaway  
Portage  
Preble  
127  
613  
86  
$173,700  
$625,238  
$46,822  
Sandusky  
Seneca  
Stark  
15  
$15,134  
Trumbull  
Warren  
84  
$79,320  
193  
8,024  
$258,512  
$7,555,760  
TOTAL  
Budget Footnotes  
36  
July 2016  
Ohio Legislative Service Commission  
Development Services Agency Awards Nearly $1.1 million in First Round of  
Grants under the Abandoned Gas Station Cleanup Grant Program  
Tom Middleton, Budget Analyst, 614-728-4813  
The Development Services Agency (DSA) recently awarded nearly $1.1 million  
in the first round of grants under the Abandoned Gas Station Cleanup Grant Program.  
The Controlling Board approved the release of the grant funding on June 6, 2016. This  
new grant program aims to cover cleanup and remediation costs associated with  
underground storage tanks. The abandoned gas stations must be classified as Class C  
release sites where the person responsible can no longer be located or is financially  
unable to undertake the required remediation of the site. Grants may be up to $100,000  
for a property assessment or up to $500,000 for actual cleanup and remediation.  
Altogether, there were seven grants approved under this initial round of funding, as  
summarized in the table below.  
Abandoned Gas Station Cleanup Grants, Round 1  
Recipient  
City of Bexley  
County  
Franklin  
Grant Amount  
$500,000  
$100,000  
$100,000  
$100,000  
$100,000  
$95,628  
Use of Grant  
Cleanup and remediation  
Cleanup  
Ashtabula County Port Authority  
City of Mansfield  
City of Sandusky  
City of Toledo  
Ashtabula  
Richland  
Erie  
Cleanup  
Cleanup  
Lucas  
Cleanup  
Adams County  
Adams  
Meigs  
Property assessment  
Cleanup  
Village of Syracuse  
TOTAL  
$80,000  
$1,075,628  
The Abandoned Gas Station Cleanup Grant Program was created in H.B. 64.  
This act appropriated $20 million for these grants under capital line item C19507,  
Service Station Cleanup. The source of funding is unobligated cash remaining in the  
1
3
Clean Ohio Revitalization Fund (Fund 7003) transferred to the Service Station  
Cleanup Fund (Fund 7100). DSA estimates that approximately $30 million in  
unobligated grant funding under the Clean Ohio Revitalization Program will be  
available for the Abandoned Gas Station Cleanup Grant Program. It anticipates that a  
second round of awards will be announced in July 2016. As of November 2015, there  
were 486 Class C release sites in the state. These sites are designated by the Bureau of  
Underground Storage Tank Regulations, an entity within the Ohio Department of  
Commerce.  
13 Between 2002 and 2013, DSA awarded around $400 million in grant funding under the  
Clean Ohio Revitalization Program.  
July 2016  
37  
Budget Footnotes  
Ohio Legislative Service Commission  
TRACKING THE ECONOMY  
Thomas Kilbane, Economist, 614-728-3218  
Overview  
June employment gains offered support to the domestic economy  
as "Brexit" presents new international risks to the U.S. economic outlook  
see Monetary Policy and Financial Markets). Nationwide consumer  
(
spending and the residential real estate market were strong in late  
spring, while industrial production and business investment remained  
weak. Given the uncertainties, at its June meeting the Federal Reserve  
chose to hold its short-term interest rate target steady, waiting for  
confirmation from future data that the economy is strong enough that a  
rate rise would be appropriate.  
Ohio's economy continues to grow. Amid varying measures of  
employment growth, Ohio's labor force is reported to be increasing at a  
record pace. The statewide housing market is booming as well. Total  
year-to-date 2016 home sales activity and the average sales price were  
both substantially higher through May than one year ago. A new  
U.S. Bureau of Economic Analysis (BEA) release on state-level  
production ranked Ohio second in the nation for inflation-adjusted gross  
domestic product (real GDP) growth rate in the fourth quarter of 2015.  
The National Economy  
Employment and Unemployment  
Nonfarm payroll employment grew by 287,000 in June, more than  
in any earlier month in 2016. The gains come after employment was  
nearly unchanged in May (+11,000). Over the last six months,  
employment growth was still at a slowed pace compared to 2015  
Employment  
grew in June by  
more than any  
previous  
(172,000 average monthly gain in 2016, 229,000 in 2015), but the big  
growth in June calms fears, at least momentarily, that the labor market  
had been heading for something worse. Continuing recent trends, June  
employment gains came almost entirely in the service sector, especially  
the industries of leisure and hospitality, health care and social assistance,  
and professional and business services.  
month in 2016.  
Pay growth also continued at a rate higher than levels from 2010  
to mid-2015. Average hourly earnings were up 2.6% from one year ago.  
The chart below shows year-over-year employee earnings growth in the  
private sector since 2009. Although increases are still below those prior to  
the 2007-2009 recession, pay began to rise more substantially in the  
Budget Footnotes  
38  
July 2016  
Ohio Legislative Service Commission  
fourth quarter of 2015. Low inflation rates, particularly since the drop in  
energy prices in the second half of 2015, have contributed to an even  
sharper increase in real income growth relative to prior periods.  
Chart 6: U.S. Private Nonfarm Employee Earnings Growth  
Chart _: U.S. Private Nonfarm Employee Earnings Growth  
4
4..00%%  
3..55%%  
3..00%%  
2..55%%  
2..00%%  
1..55%%  
3
3
2
2
1
11..00%%  
22000099  
22001100  
22001111  
22001122  
20210313  
20210414  
20210515  
20210616  
In June, the national labor force14 and unemployment rate both  
increased after declining in May. The unemployment rate in June was  
4
.9%, up from 4.7% in May, which was the lowest mark since 2007.  
Monetary Policy and Financial Markets  
At their June  
meeting,  
Federal  
At the conclusion of its June 14-15 meeting, the Federal Open  
1
5
Market Committee (FOMC) decided to maintain the target range for the  
1
6
federal funds rate at 0.25% to 0.5%. The committee last made a change in  
December when it moved the target range from near zero to its current Reserve  
status. Since then, plans for the pace of future rate rises have continually  
been softened. At the June meeting, 15 of 17 FOMC participants  
anticipated that 1.0% or below will be an appropriate target by the end of  
officials chose  
not to raise  
their interest  
rate target.  
2
016, a lower level than when the committee reported projections in  
March.  
14 The labor force is the U.S. civilian noninstitutional population age 16  
and over who are either currently employed or unemployed but looked for work  
in the last four weeks.  
15 The FOMC is the committee within the Federal Reserve that decides  
U.S. monetary policy.  
16 The federal funds rate is the short-term interest rate at which depository  
institutions lend reserve balances to other depository institutions overnight. The  
FOMC sets a target rate and the Federal Reserve uses monetary tools with the  
goal of moving the actual rate to the target.  
July 2016  
39  
Budget Footnotes  
Ohio Legislative Service Commission  
Among the factors influencing the FOMC's decision was  
uncertainty regarding the U.K. referendum on European Union (EU)  
1
7
membership. The vote (June 23, after the FOMC meeting) revealed 52%  
of U.K. voters preferred to leave the EU, sparking financial market  
volatility worldwide. Across the next two business days, broad U.S.  
equity market indices fell approximately 5-6%, only to nearly recoup all  
losses by the end of the month. Underpinning the volatility was  
ambiguity regarding Brexit's effect on the international and U.S.  
economies. On June 30, the S&P 500 stock index closed 2.7% higher than  
it opened the year, while the Dow Jones Industrial Average was 2.9%  
higher. Despite the month-end rally in equities, U.S. government bond  
yields remained near historic lows in the aftermath of the U.K. vote.  
The U.K. voted  
to leave the  
EU, prompting  
uncertainty  
regarding its  
economic  
effects.  
Consumer Spending  
After slowing during the first quarter of 2016, consumer spending  
popped in April and May, rising faster than in any two-month period  
since early 2014. During April and May of this year, real consumer  
spending (adjusted for price changes) rose at an average pace of 0.5% per  
month. During the first quarter of 2016, that rate was just 0.1%.  
Consumer sentiment surveys remained at high levels through June,18  
though responses were collected prior to financial market disturbances  
related to the results of the U.K. referundum on EU membership.  
Sales of motor vehicles slowed overall in June. Through the first  
six months of 2016, cars and light trucks sold at an average seasonally  
adjusted annual rate of 17.1 million units, compared to the last six  
months of 2015 when the rate was 17.8 million units. Despite the drop,  
2
016 sales have remained strong relative to historical rates, especially for  
light trucks. While June sales of cars were down 16.2% from their peak  
sales month in 2015, light truck sales persisted at a near record pace (see  
chart below), falling only 4.4% from its peak month in 2015.  
17 Minutes of the FOMC, June 14-15, 2016, and comments by Chair Janet  
Yellen.  
18 The June edition of the University of Michigan's Index of Consumer  
Sentiment, Current Conditions Index, and Index of Consumer Expectations was  
published June 24.  
Budget Footnotes  
40  
July 2016  
Ohio Legislative Service Commission  
Chart 7: Light Motor Vehicle Unit Sales (Monthly)  
1
1
2.0  
0.0  
8
6
4
2
0
.0  
.0  
.0  
.0  
.0  
2
010  
2011  
2012  
Autos  
2013  
2014  
2015  
2016  
Light Trucks  
Real Estate  
Demand has pushed home sales high and has combined with  
limited supply to push home prices even higher. According to the Nationwide  
National Association of Realtors, the nationwide median sales price of  
existing home  
existing homes (the bulk of residential unit sales) reached an all-time high  
in May, while the pace of sales was the highest in over nine years  
median sales  
price reached  
(measured at a seasonally adjusted annual rate). Through May,  
year-to-date sales of existing homes in 2016 were 5.8% higher than the an all-time high  
same period in 2015. May's nationwide median sales price was up 4.7%  
from one year ago.  
in May.  
Sales of new homes jumped in April and May as well, reaching a  
pace not seen since early 2008. While a much smaller share of total  
residential sales, new homes typically lead existing homes as a market  
indicator by a month or two (approximately the time it takes to close a  
mortgage). The pace of starts on new home construction has varied within  
a narrow range since last summer after approximately doubling in the  
previous four years.  
Mortgage rates continued to fall, hitting lows not seen since May  
2
013. The average 30-year fixed rate mortgage was down to 3.41% the  
week of July 7, 2016, according to the Freddie Mac Primary Mortgage  
Market Survey.  
Production  
Real GDP rose at a 1.1% annual rate in this year's first quarter,  
revised higher again upon a third estimate from the BEA. Real GDP grew  
by 2.4% in each of 2014 and 2015 but beneath that pace in five of the last  
July 2016  
41  
Budget Footnotes  
Ohio Legislative Service Commission  
six quarters through the first quarter of this year. The slowdown was due  
in part to the energy sector, but business investment outside of energy  
has slowed as well. BEA will report second quarter 2016 growth near the  
end of July.  
More current monthly production reports paint a mixed picture of  
production in the second quarter. Indices based on surveys of purchasing  
1
9
managers indicated that economic activity in the manufacturing and  
nonmanufacturing sectors both expanded in each month of the second  
quarter, but the Federal Reserve's measure of total industrial production  
decreased in May and was down 0.4% since the beginning of 2016.  
Industrial production has been weighed down by falling mining activity  
(which includes the energy sector) for nearly two years. Manufacturing,  
which constitutes about 78% of industrial production, has been fairly  
stagnant as well. In May, the index for total manufacturing production  
was at approximately the same level as July 2014 and down 0.2% since  
January 1.  
Weekly  
combined U.S.  
rig counts (oil  
and natural  
gas) rose  
U.S. mining production has fallen sharply since around the  
beginning of 2015, but according to Baker Hughes rig count data, it is  
possible that could finally be changing. After dropping consistently each  
week through mid-May, total U.S. rig count (including both oil and  
natural gas) has risen each week since the end of May through July 1. On  
July 1, the oil rig count was up 8% during the brief rally from its low  
point in May, and the gas rig count was up 9% from its low point.  
throughout  
June.  
Inflation  
Consumer prices rose in each of March, April, and May. This is  
nothing new for core prices (excluding food and energy); the price index  
for personal consumption expenditures less food and energy (core PCE)  
has increased each month since December 2008. But volatile energy  
prices have swung topline inflation measures positive and negative for  
over two years. With energy prices rising in each of the last three months  
through May, overall consumer prices (as measured by the price index  
for PCE) rose at a seasonally adjusted annual rate of 2.2% over the same  
period. Prior to that three-month period, overall price levels in February  
were virtually unchanged from July 2015. It remains to be seen if  
inflation can hold at the recent three-month pace for any length of time.  
PCE prices have not increased by at least 1.0% year over year in three  
straight months since 2014. In May 2016, the year-over-year increase  
(from May 2015) was just 0.9%.  
1
9
Institute for Supply Management manufacturing index and  
nonmanufacturing index.  
Budget Footnotes  
42  
July 2016  
Ohio Legislative Service Commission  
The Ohio Economy  
Employment and Unemployment  
Ohio added 9,200 jobs20 in May, continuing the trend of job growth  
in the state, though the pace of growth has slowed this year. In 2016  
through May, Ohio has added 2,300 jobs per month as compared to  
6
,700 per month in all of 2015. During May, healthcare and social  
assistance, and accommodation and food services were the largest sources  
of added jobs, as has been the case over the past few years. During the last  
1
2 months, the healthcare and social assistance industry added 23,000 jobs  
in Ohio, while accommodation and food services added 16,400.  
Data on the state's labor force show record increases this year  
through May. Since the end of 2015, Ohio has added 132,000 people  
(seasonally adjusted) to its labor force, by far the largest five-month gain Since the end  
in the U.S. Bureau of Labor Statistics (BLS) records for Ohio since at least  
1
looking for work. During and since the most recent recession, the percent  
of Ohioans who are part of its labor force has declined substantially due  
of 2015,  
32,000 people  
have been  
21  
976. The labor force includes people who are employed or actively  
1
to many factors including economic cyclical effects and long-term added to  
demographic changes. Prior to the recession, Ohio's rate of labor force  
Ohio's labor  
2
2
participation was higher than the national rate for much of the 2000s, as  
seen in the chart below. The recent surge has raised Ohio's rate back  
above the nation's rate.  
force.  
20 Nonfarm payroll employment, seasonally adjusted.  
21 There is some reason to question the time frame in which the large labor  
force increase has taken place. BLS routinely adjusts raw survey results for a  
number of reasons, including to stabilize the data series over time. It is possible  
the magnitude of the labor force increase, which jumped in January and  
subsequent months, partially reflects the effects of these adjustments. Of note, a  
nationwide labor force increase has been observed during the same time,  
including similar large jumps in several other states including Michigan, Indiana,  
and Illinois.  
2
2
The labor force participation rate is the percentage of the civilian,  
noninstitutional population, age 16 and over, which is in the labor force.  
July 2016  
43  
Budget Footnotes  
Ohio Legislative Service Commission  
Chart 8: Ohio and U.S. Labor Force Participation Rate  
6
6
6
6
6
6
6
8.0  
7.0  
6.0  
5.0  
4.0  
3.0  
2.0  
2
000  
2002  
2004  
2006  
Ohio  
2008  
2010  
2012  
2014  
2016  
United States  
The unemployment rate, measured as a percentage of the labor  
force, fell in May in Ohio for the first time since last August. In May 2016,  
5
.1% of Ohio's labor force were unemployed, down from 5.2% in April.  
The rate had previously risen from 4.6% in September 2015 in part due to  
the steep increase in labor force participation. In total, over the last  
1
1
2 months, over 100,000 more Ohioans are working, and about  
8,000 more Ohioans are counted as unemployed (but actively looking  
for work), signaling that many newcomers to the labor force have likely  
had success finding jobs.  
Personal Income and Production  
Ohio's personal income grew by 0.9% in the first quarter of 2016.  
Wages and salaries grew faster than dividends, interest, and rent for the  
second straight quarter. State earnings grew fastest during the quarter in the  
real estate and construction industries. Ohio's personal income also grew  
faster in late 2015 than previously thought. Over the last four quarters,  
Ohio's personal income grew 4.7%, faster than the U.S. as a whole (4.4%).  
Ohio ranked  
second highest  
among states  
in fourth  
Production in Ohio ended 2015 well, ranking second highest  
among states for real GDP growth during the fourth quarter  
(
2.9% annual rate, seasonally adjusted). Production in Ohio's real estate  
quarter 2015  
real GDP  
and manufacturing industries contributed the most to growth during the  
quarter. For all of 2015 however, Ohio ranked much closer to average for  
state real GDP growth rates, coming in 21st with 1.8% growth during the  
calendar year. However, that was enough to beat the growth rate in each  
of its neighboring states. Of its five neighbors, Pennsylvania and Indiana  
came the closest to Ohio, growing at 1.7% during 2015. Eight of the top  
ten states with the fastest growing production during the year are west of  
the Mississippi River.  
growth rate.  
Budget Footnotes  
44  
July 2016  
Ohio Legislative Service Commission  
Housing  
A strong winter real estate market in Ohio has translated into a  
strong spring and early summer season as well. Ohio home sales in May  
were the highest May on record since the Ohio Association of Realtors  
began tracking the figure in 1998, a period which included high activity  
fueled by the real estate bubble of the mid-2000s. Through May, 2016  
Ohio home sales were up 8.8% over the same period in 2015. Home  
values are up from 2015 as well. The statewide average sales price in  
2
months of 2015. Columbus area average sales price topped the list of  
local markets at $197,992.  
016 through May was $156,106, 5.0% higher than in the first five  
July 2016  
45  
Budget Footnotes