Budget Footnotes

A NEWSLETTER OF THE OHIO LEGISLATIVE SERVICE COMMISSION

JANUARY 2017

VOLUME 40, NUMBER 5

STATUS OF THE GRF

Highlights...................................1

Revenues ..................................2

Expenditures............................13

HIGHLIGHTS

–

Ross Miller, Chief Economist, 614-644-7768

ISSUE UPDATES

GRF tax revenue was below estimate again in December.

Medicare Part D Clawback

For the first half of FY 2017, tax revenue was $296.6 million

below estimate, due to weakness in the two main sources of

tax revenue (see bullets below). December saw very weak

Payments .............................22

K-12 Student Count Data.........22

OhioMeansJobs Workforce

Supply Tool ..........................23

withholding revenue under the income tax; monthly Economic Development

Compliance Report...............24

withholding revenue was nearly $28 million below

December 2015. Withholding rates were the same in both

months, implying that Ohio payrolls were smaller this year

than last. This month's "Tracking the Economy" article

includes a comparison of recent economic forecasts for key

variables with the forecasts on which the budget for the

current biennium was based, shedding some light on

revenue weakness.

Vocational Rehabilitation

Employment .........................25

Youth Deer Hunting Season....25

Major/New Highway

Construction Projects ...........27

Justice Assistance Grant

Awards .................................27

TRACKING THE ECONOMY

The National Economy ............30

The Ohio Economy..................33

Through December 2016, GRF sources totaled

$17.09 billion:



Revenue from the personal income tax was

$182.9 million below estimate;



Sales and use tax receipts were $104.9 million below

estimate.

Through December 2016, GRF uses totaled $18.44 billion:

Legislative Service Commission



Program expenditures were $412.2 million below

estimate, due primarily to Medicaid ($404.6 million);

7

7 South High Street, 9th Floor

Columbus, Ohio 43215



Negative variances in several other spending

categories were partially offset by a $75.3 million

positive variance in primary and secondary

education.

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 December 2016

($ in thousands)

(Actual based on report run in OAKS Actuals Ledger on January 3, 2017)

STATE SOURCES

Actual

Estimate*

Variance

Percent

TAX REVENUE

Auto Sales

$106,935

$109,700

-$2,765

-2.5%

Nonauto Sales and Use

Total Sales and Use Taxes

$865,217

$858,700

$6,517

0.8%

$972,152

$968,400

$3,752

0.4%

Personal Income

$780,798

$471

$810,300

$0

-$29,502

$471

-3.6%

---

Corporate Franchise

Financial Institution

Public Utility

-$5,290

$168

$200

-$5,490

-$232

$1,368

$490

-2744.9%

-58.0%

6.5%

---

$400

Kilowatt-Hour Excise

Natural Gas Consumption (MCF)

Commercial Activity Tax

Petroleum Activity Tax

Foreign Insurance

Domestic Insurance

Business and Property

Cigarette

$22,268

$490

$20,900

$0

$8,059

$1,317

$59

$9,200

$1,800

-$600

$0

-$1,141

-$483

$659

-12.4%

-26.8%

109.8%

---

$0

---

$79,494

$5,189

$3,831

$123

$87,100

$5,100

$3,800

$0

-$7,606

$89

-8.7%

1.8%

0.8%

---

Alcoholic Beverage

Liquor Gallonage

$31

Estate

$123

Total Tax Revenue

$1,869,129

$1,906,600

-$37,471

-2.0%

NONTAX REVENUE

Earnings on Investments

Licenses and Fees

Other Revenue

$5

$671

$0

$855

$5

-$184

-$157

-$336

---

-21.5%

-7.8%

$1,841

$2,517

$1,998

$2,853

Total Nontax Revenue

-11.8%

TRANSFERS

Budget Stabilization

Other Transfers In

Total Transfers In

$0

$16,794

$0

$16,794

---

TOTAL STATE SOURCES

Federal Grants

$1,888,439

$1,194,908

$3,083,347

$1,909,453

$1,071,499

$2,980,952

-$21,013

$123,408

$102,395

-1.1%

11.5%

3.4%

TOTAL GRF SOURCES

*Estimates of the Office of Budget and Management as of August 2016.

Detail may not sum to total due to rounding.

Budget Footnotes

2

January 2017

Ohio Legislative Service Commission

Table 2: General Revenue Fund Sources

Actual vs. Estimate

FY 2017 as of December 31, 2016

($ in thousands)

(Actual based on report run in OAKS Actuals Ledger on January 3, 2017)

Percent

Change

STATE SOURCES

Actual

Estimate*

Variance

Percent

FY 2016

TAX REVENUE

Auto Sales

$689,237

$698,600

-$9,363

-1.3%

$675,971

2.0%

Nonauto Sales and Use

$4,642,461

$4,738,000

-$95,539

-2.0%

$4,558,527

1.8%

Total Sales and Use Taxes

$5,331,698

$5,436,600

-$104,902

-1.9%

$5,234,498

1.9%

Personal Income

$3,987,894

-$265

$4,170,800

$0

-$182,906

-$265

-4.4%

---

$4,202,479

$13,070

-$8,360

$51,619

$171,617

$17,164

$612,755

$3,362

-5.1%

-102.0%

-81.7%

-7.9%

Corporate Franchise

Financial Institution

Public Utility

-$15,191

$47,555

$182,706

$16,929

$618,715

$2,860

-$8,000

$51,100

$162,800

$17,000

$639,700

$3,000

-$7,191

-$3,545

$19,906

-$71

-89.9%

-6.9%

12.2%

-0.4%

-3.3%

-4.7%

3.2%

-86.7%

---

Kilowatt-Hour Excise

Natural Gas Consumption (MCF)

Commercial Activity Tax

Petroleum Activity Tax

Foreign Insurance

Domestic Insurance

Business and Property

Cigarette

6.5%

-1.4%

-$20,985

-$140

1.0%

-14.9%

10.4%

-84.5%

-1723.5%

-6.2%

$161,032

$53

$156,100

$400

$4,932

-$347

$145,911

$344

-$678

$0

-$678

$42

$438,905

$30,731

$23,231

$457

$442,800

$28,500

$22,400

$0

-$3,895

$2,231

$831

-0.9%

7.8%

3.7%

---

$468,091

$28,976

$22,407

$823

Alcoholic Beverage

Liquor Gallonage

6.1%

3.7%

Estate

$457

-44.5%

-1.3%

Total Tax Revenue

$10,826,630

$11,123,200

-$296,570

-2.7%

$10,964,797

NONTAX REVENUE

Earnings on Investments

Licenses and Fees

Other Revenue

$14,199

$12,014

$52,887

$79,100

$8,500

$10,830

$47,588

$66,918

$5,699

$1,184

$5,300

$12,182

67.0%

10.9%

11.1%

18.2%

$7,932

$9,837

79.0%

22.1%

38.8%

41.6%

$38,099

$55,868

Total Nontax Revenue

TRANSFERS

Budget Stabilization

Other Transfers In

Total Transfers In

$0

$32,102

$0

$22,300

$0

$9,802

---

44.0%

$0

$182,688

---

-82.4%

TOTAL STATE SOURCES

Federal Grants

$10,937,832

$6,147,200

$17,085,032

$11,212,418

$6,483,953

$17,696,371

-$274,585

-$336,753

-$611,339

-2.4%

-5.2%

-3.5%

$11,203,354

$6,322,788

$17,526,141

-2.4%

-2.8%

-2.5%

TOTAL GRF SOURCES

*Estimates of the Office of Budget and Management as of August 2016.

Detail may not sum to total due to rounding.

January 2017

3

Budget Footnotes

Ohio Legislative Service Commission

REVENUES

–

Jean J. Botomogno, Principal Economist, 614-644-7758

Thomas Kilbane, Economist, 614-728-3218

Overview

As shown by the underperformance of personal income and sales

taxes, the two largest GRF tax sources, FY 2017 has been characterized by

an apparent weakness in the Ohio economy compared to prior

expectations. Through December, FY 2017 GRF sources of $17.09 billion

were $611.3 million below the estimate released by the Office of Budget

and Management (OBM) in August 2016. In addition to a shortfall of

GRF tax

1

revenue was

$

37.5 million

below estimate $296.6 million from tax sources, federal grants were $336.8 million below

estimate. Total GRF sources have been below estimate throughout

in December.

FY 2017 due to a combination of tax revenue shortfalls and smaller than

expected federal grants, primarily related to the level of spending in the

2

Medicaid program, which has generally been lower than expected.

Tables 1 and 2, show GRF sources for December and for FY 2017 through

December, respectively.

For the month of December, GRF sources were $102.4 million

above estimate, with federal grants above estimate by $123.4 million.

However, GRF tax revenue was below estimate by $37.5 million. Sales

tax revenue and kilowatt-hour tax revenue were above projection by

$

3.8 million and $1.4 million respectively, but that was more than offset

by a $29.5 million shortfall for the personal income tax (PIT). The

cigarette and other tobacco products tax, the financial institutions tax

(FIT), and the commercial activity tax (CAT) also fell short of estimates

by $7.6 million, $5.5 million, and $1.1 million, respectively.

In the first half

of FY 2017, GRF

tax revenue was

GRF tax revenue generally has been tracking below estimate

during FY 2017. The first quarter of the fiscal year ended with a

cumulative shortfall of $71.9 million (1.3%). Tax revenue performance

deteriorated further in the second quarter, such that the first half of

FY 2017 ended $296.6 million (2.7%) below estimate. The primary culprit

was the PIT, from which revenue was $182.9 million below estimate

through December. The sales and use tax was little better though:

$296.6 million

below estimate.

1

GRF sources consist of state-source receipts (tax revenue, nontax

revenue, and transfers in) and federal grants, which are typically federal

reimbursements for Medicaid and other programs.

²Medicaid spending from the GRF was $404.6 million below estimates in

the first half of FY 2017.

Budget Footnotes

4

January 2017

Ohio Legislative Service Commission

revenue from that tax was $104.9 million below estimate during the same

period.

Though the first half of the fiscal year was highlighted by the

underperformance of the PIT and the sales and use tax, other tax sources

3

that contributed significantly to the shortfall were the CAT, the FIT, the

cigarette tax, and the public utility tax. Partially offsetting those deficits

were surpluses from the kilowatt-hour tax, the foreign insurance tax, and

the alcoholic beverage tax.

The chart below depicts the declining performance of tax revenue

on a monthly basis (smoothed with a three-month average). Significant

underperformance began in the last quarter of FY 2016. OBM reduced its

revenue estimates for FY 2017, as compared with the forecast for the

current biennial budget, due to the FY 2016 underperformance. But

though the accommodating adjustments made to OBM's estimates for

FY 2017 initially limited the deficits, by this fiscal year's second quarter,

tax revenue was underperforming even those lowered expectations.

Chart 1: GRF Tax Revenue Performance Relative to Estimate

(

Three-month Moving Average)

FY 2017

6

4

2

0

.0%

-2.0%

-4.0%

-6.0%

-8.0%

In the first half

of FY 2017, GRF

sources were

$

611.3 million

below

The following chart illustrates the cumulative performance of total

GRF sources relative to estimates through each month of FY 2017, broken estimate.

down by its largest components. Despite a small positive contribution

from the "other state revenue" component (light blue bar in the online

³The GRF typically pays out refunds under the FIT during the first half of

a fiscal year as taxpayers make adjustments to previous tax filings. Receipts of

the FIT are typically expected at the end of January, March, and May.

January 2017

5

Budget Footnotes

Ohio Legislative Service Commission

version of the chart), the GRF's cumulative sources were $611.3 million

below estimate through the first half of FY 2017, as labeled in the far right

column.

Chart 2: GRF Source Fiscal Year Cumulative Performance

by Component

Jul-16

Aug-16

Sep-16

Oct-16

-$262.2

Nov-16

Dec-16

$

100

$

0

-

$17.2

-$100

-$200

-$300

-$400

-$500

-$600

-$700

-$800

-

$145.4

-

$235.0

-

$611.3

-

$713.7

Federal Grants

Tax Revenue

Other State Revenue

Compared to the first half of FY 2016, tax revenue in FY 2017 was

138.2 million (1.3%) lower. The majority of the decrease can be

$

attributed to the PIT, which collected $214.6 million less thus far in

FY 2017. Though sales and use tax revenue has been significantly below

estimate in FY 2017, revenue was still $97.2 million higher than in the

first half of FY 2016.

Sales and Use Tax

Sales and use

tax receipts

were

The sales and use tax in December was above estimate for the

first time in FY 2017. A slight positive variance from the nonauto sales

tax was partially offset by a smaller negative variance from the auto

portion of the tax. Overall, GRF monthly sales and use tax revenue of

$

104.9 million

$

(

972.2 million was $3.8 million (0.4%) above estimate, and $49.0 million

5.3%) above revenue in the same month last year. For the fiscal year to

date, GRF sales and use tax receipts of $5.33 billion were $104.9 million

1.9%) below projections (with both sources below estimates), but

97.2 million (1.9%) above receipts in FY 2016 through December. The

below

estimates in

the first half of

FY 2017.

(

$

sales and use tax is the largest state sourced revenue stream to the GRF.

For analysis and forecasting, the sales and use tax is separated

into two parts: auto and nonauto. Auto sales and use tax collections

generally arise from the sale of motor vehicles, but auto taxes arising

Budget Footnotes

6

January 2017

Ohio Legislative Service Commission

from leases are paid at the lease signing and are mostly recorded under

4

the nonauto tax instead of the auto tax.

Nonauto Sales and Use Tax

Nonauto sales and use tax revenue to the GRF was $865.2 million in

December, which was $6.5 million (0.8%) above estimate. Collections from

this segment of the tax had been below estimate in the first five months of

this fiscal year. Comparing revenue, month by month, to revenue from the

same month a year ago reveals growth, but growth that was steadily^N^oⁿ^a^u^t^o^s^a^l^e^s

declining until this month. For FY 2017 through December, nonauto sales^aⁿ^d^u^s^e^t^a^x

and use tax revenue of $4.64 billion was $95.5 million (2.0%) below revenue was

expectations, though receipts were $83.9 million (1.8%) above receipts in the_$₉₅_.₅_m_i_l_l_i_o_n

first half of FY 2016. The chart below illustrates the year-over-year growth of_b_e_l_o_w_e_s_t_i_m_a_t_e

nonauto sales and use tax collections and its failure to meet estimates in the

last 12 months. December nonauto sales and use tax revenue experienced a^t^h^r^o^u^g^h

boost from receipts attributed to Medicaid health insuring corporations December in

(MHICs). Through November in FY 2017, revenue from these corporations_F_Y₂₀₁₇_.

had declined 0.4% compared to receipts in the corresponding period in

FY 2016. However, at the end of December, total MHIC receipts ended up

5.1% above receipts in the first half of FY 2016. This portion of sales tax

collections is generally correlated to Medicaid spending, not necessarily

broader consumer spending trends. Collections from these corporations have

made up less than 9% of nonauto sales and use tax revenue in FY 2017.

Chart 3: Nonauto Sales and Use Tax Receipts Trend

Actual vs. Prior Year

(

Three-month Moving Average)

7

6

5

4

3

2

1

0

.0%

Actual

Estimate

⁴Taxes 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.

January 2017

7

Budget Footnotes

Ohio Legislative Service Commission

Auto Sales and Use Tax

First-half receipts from the auto sales and use tax in FY 2017 of

First-half auto

sales and use

tax revenue

$689.2 million were $9.4 million (1.3%) below estimate, but $13.3 million

(2.0%) above revenue in the corresponding period in FY 2016. For the

month of December, the GRF received $106.9 million from this tax. This

amount was $2.8 million (2.5%) below expectations, and $1.8 million

was $9.4 million

(1.6%) below receipts in the same month in 2015. As the chart below

below estimate illustrates, the pace of collections growth fell off sharply in the spring of

2

016, and year-over-year growth in FY 2017 has picked up in recent

in FY 2017.

months, but not as much as anticipated.

Chart 4: Auto Sales and Use Tax Receipts Trend

Actual vs. Prior Year

(

Three-month Moving Average)

1

0.0%

Actual

Estimate

8

6

4

2

0

.0%

-2.0%

-4.0%

-6.0%

In December, nationwide light vehicle (auto and light truck) sales

capped off the year on a strong note, and ended 2016 with total sales of

7.5 million units, matching the record year of 2015. Most notably in

1

calendar year (CY) 2016, low gasoline prices and rising construction

spending boosted light-truck sales relative to cars, resulting in a bumper

year for that category: light-truck sales were 10.6 million units, 7% above

sales in 2015, and a record 61% of light vehicle sales. On the other hand,

sales of cars were 6.9 million units, 9% below unit sales in the previous

calendar year. For CY 2016, though the total number of light vehicles

sold nationwide was roughly the same as in 2015, the mix of sales has

driven the average vehicle price higher this year.

Budget Footnotes

8

January 2017

Ohio Legislative Service Commission

Personal Income Tax

PIT GRF revenue was $780.8 million, $29.5 million (3.6%) below

estimate in December, the fifth straight month the tax has missed

projections. Receipts were also $68.9 million (8.1%) below revenue in

December 2015. First-half GRF revenue from the PIT of $3.99 billion was

FY 2017 PIT

revenue was

$

below PIT revenue in the corresponding period in FY 2016.

182.9 million (4.4%) below OBM's estimate, and $214.6 million (5.1%)

$

182.9 million

below estimate

through

PIT revenue is comprised of gross collections, minus refunds and

distributions to the Local Government Fund (LGF). Gross collections

consist of employer withholdings, quarterly estimated payments, trust

5

December.

payments, payments associated with annual returns, and other

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

employer withholdings, the largest component of gross collections.

Similarly to previous months, this component again missed projections in

December, this time by $34.3 million (4.4%), and revenue from employer

withholdings fell by 3.9% compared to that of December 2015. Refunds

had been another PIT component responsible for poor revenue this year,

but for the month, refunds were $5.1 million (14.5%) lower than

anticipated.

For FY 2017 through December, the PIT revenue shortfall was

mostly due to a negative variance of $144.1 million (3.4%) in employer

withholdings. Refunds were $43.9 million (17.1%) higher than expected,

thereby also contributing to the negative variance. In addition to the

Revenue from

employer

shortfall in employer withholding, collections from miscellaneous withholding was

payments and trusts were also below anticipated revenue, by

$

144.1 million

$

was higher than expected for quarterly estimated payments ($6.5 million)

and annual returns ($10.0 million).

12.6 million and $3.8 million, respectively. On the other hand, revenue

below estimate

in FY 2017

through

Payrolls continue to grow year over year. Policy changes, which led

to reduced withholding rates, took effect in August 2015 and limited year- December.

over-year growth of employer withholdings throughout FY 2016. The

chart below illustrates the growth of monthly employer withholdings

relative to one year ago. The pace of growth increased early in FY 2017 as

the effects of policy changes were phased out of the year-over-year

calculations. However, growth remains sluggish and below OBM's

⁵Quarterly 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.

January 2017

9

Budget Footnotes

Ohio Legislative Service Commission

FY 2017 estimates. Through December, FY 2017 withholding growth was

almost flat.

Chart 5: Monthly Withholding Receipts Trend

Actual vs. Prior Year

(

Three-month Moving Average)

8

7

6

5

4

3

2

1

0

.0%

Actual

Estimate

-

1.0%

2.0%

-

FY 2017 revenues through December from each component of the

PIT relative to estimates and to revenue received in the corresponding

period of FY 2016 are detailed in the table below.

FY 2017 Year-to-Date Personal Income Tax Revenue

Estimate Variances and Year-over-Year Changes by Component

Year-to-Date Variance

from Estimate

Year-to-Date Changes

from FY 2016

Category

Amount

Percentage

Amount

Percentage

(

$ in millions)

(%)

($ in millions)

(%)

Withholding

-$144.1

$6.5

-3.4%

2.3%

$6.1

-$133.8

-$7.5

0.1%

-31.9%

-38.0%

-20.9%

-22.3%

-3.6%

Quarterly Estimated Payments

Trust Payments

-$3.8

-23.8%

12.9%

-31.5%

-3.1%

17.1%

-2.6%

-4.4%

Annual Return Payments

Miscellaneous Payments

Gross Collections

$10.0

-$12.6

-$144.0

$43.9

-$5.0

-$23.2

-$7.9

-$166.4

$44.9

Less Refunds

17.6%

1.8%

Less LGF Distribution

GRF PIT Revenue

$3.3

-$182.9

-$214.6

-5.1%

Cigarette and Other Tobacco Products Tax

For the first time in the fiscal year, year-to-date cigarette and other

tobacco products tax fell below estimate. December GRF revenue from

the cigarette and other tobacco products tax of $79.5 million was

$

7.6 million (8.7%) below estimate and $11.7 million (12.9%) below

revenue in December 2015. The size of the underperformance suggests it

Budget Footnotes

10

January 2017

Ohio Legislative Service Commission

is likely timing-related. For the first half of FY 2017, receipts from the tax

were $438.9 million, $3.9 million (0.9%) below estimate. Of the total

revenue, $407.3 million was from sales of cigarettes and $31.6 million was

from sales of other tobacco products. Compared to the first six months of

FY 2017

revenue from

FY 2016, receipts in FY 2017 were $29.2 million (6.2%) lower. Generally, the cigarette

cigarette tax receipts are trending downward long-term; however,

legislative changes led to increased receipts in the early months of

FY 2016. Thus, the year-over-year decline in FY 2017 revenue is larger in

percentage terms than the trend rate of decline.

tax was

6

$

3.9 million

below

estimate.

Commercial Activity Tax

December GRF revenue of $8.1 million from the CAT was

$

1.1 million (12.4%) below estimate, and $2.3 million (22.1%) below

revenue in December 2015. For the fiscal year to date, GRF receipts of

618.7 million were $21.0 million (3.3%) below estimate, and $6.0 million

1.0%) above receipts in the corresponding period last year, but only

$

(

because refunds claims were $22.5 million less this fiscal year.

FY 2017

The performance of the CAT has been lackluster in recent fiscal

quarters, and due to poor performance in FY 2016, OBM reduced its

estimate of yearly revenue growth for FY 2017 for this tax. The CAT was

revenue from

the CAT was

below estimates in FY 2016, and actual all-funds revenue was slightly $21.0 million

below FY 2015's total. Weakness in collections has continued this fiscal

below

year. According to OAKS, first-half gross collections were about 1.7%

below those in the corresponding period in FY 2016. The CAT is the third

estimate.

largest GRF tax revenue source.

Other Taxes

The foreign insurance tax generated $161.0 million during the first

half of FY 2017, $4.9 million (3.2%) above estimate. This tax is paid by

insurance companies headquartered in other states, based on premiums

they receive to provide insurance covering risks located in Ohio. The

revenue experience so far this year, while positive, reveals little about the

full fiscal year experience from the tax: payments received so far represent

advance payments based on previous year tax liabilities before credits.

Similarly, a very slight negative variance for the domestic insurance tax

(paid by insurance companies headquartered in Ohio) says little about the

6

H.B. 64 increased the cigarette tax from $1.25 to $1.60 per pack of

2

cigarettes in inventory at the time the new tax rate went into effect. Excluding the

0 cigarettes, effective July 1, 2015. This led to the payment of a "floor tax" for

effect of the floor tax, the year-over-year decline in tax revenue was about 0.6%.

January 2017

11

Budget Footnotes

Ohio Legislative Service Commission

full year experience: virtually all revenue from the tax is received in May

and June each fiscal year.

The kilowatt-hour tax generated $182.7 million during the first six

months of the year. This was $19.9 million (12.2%) above estimate, and

.5% higher than revenue during the comparable months of FY 2016. The

tax base generally is kilowatt hours of electricity used, i.e., it generally

does not depend on the price of electricity. A small part of the positive

variance, about $2 million to $3 million, is due to the overall poor

performance of GRF taxes overall this year. Half of the allocation of GRF

tax revenue to the Public Library Fund is debited against this tax for

accounting purposes, thus poor revenue performance overall makes this

tax look good. The remaining positive variance is likely due to the warm

autumn months, which may have increased household use of air

conditioning.

FY 2017

6

revenue from

the kilowatt-

hour tax was

$19.9 million

above estimate.

Budget Footnotes

12

January 2017

Ohio Legislative Service Commission

Table 3: General Revenue Fund Uses

Actual vs. Estimate

Month of December 2016

(

$ in thousands)

(

Actual based on OAKS reports run January 9, 2017)

PROGRAM

Actual

Estimate*

Variance

Percent

Primary and Secondary Education

Higher Education

$619,072

$605,606

$13,466

2.2%

$185,083

$7,968

$185,054

$4,604

$29

$3,365

0.0%

73.1%

2.1%

Other Education

Total Education

$812,123

$795,263

$16,859

Medicaid

$1,646,073

$105,419

$1,565,872

$120,053

$80,201

-$14,635

$65,567

5.1%

-12.2%

3.9%

Health and Human Services

Total Welfare and Human Services

$1,751,492

$1,685,925

Justice and Public Protection

General Government

$212,975

$31,984

$187,227

$32,307

$25,748

-$323

13.8%

-1.0%

11.6%

Total Government Operations

$244,959

$219,534

$25,425

Property Tax Reimbursements

Debt Service

$2,101

$16,747

$18,848

$36,417

$16,924

$53,341

-$34,317

-$177

-94.2%

-1.0%

Total Other Expenditures

-$34,493

-64.7%

Total Program Expenditures

$2,827,421

$2,754,063

$73,358

2.7%

TRANSFERS

Budget Stabilization

Other Transfers Out

Total Transfers Out

$0

---

TOTAL GRF USES

$2,827,421

$2,754,063

$73,358

2.7%

*

August 2016 estimates of the Office of Budget and Management.

Detail may not sum to total due to rounding.

January 2017

13

Budget Footnotes

Ohio Legislative Service Commission

Table 4: General Revenue Fund Uses

Actual vs. Estimate

FY 2017 as of December 31, 2016

(

$ in thousands)

(

Actual based on OAKS reports run January 9, 2017)

Percent

Change

PROGRAM

Actual

Estimate*

Variance

Percent

FY 2016

Primary and Secondary Education

Higher Education

$4,083,012

$1,145,504

$46,299

$4,007,742

$75,270

1.9%

$4,086,573

$1,113,119

$38,575

-0.1%

2.9%

$1,155,496

$44,956

-$9,992

$1,343

-0.9%

3.0%

1.3%

Other Education

20.0%

0.7%

Total Education

$5,274,814

$5,208,194

$66,620

$5,238,267

Medicaid

$9,110,179

$673,799

$9,514,816

$726,487

-$404,638

-$52,688

-$457,325

-4.3%

-7.3%

-4.5%

$9,302,506

$662,487

-2.1%

1.7%

Health and Human Services

Total Welfare and Human Services

$9,783,978

$10,241,303

$9,964,993

-1.8%

Justice and Public Protection

General Government

$1,108,123

$198,523

$1,098,084

$210,213

$10,039

-$11,690

-$1,651

0.9%

-5.6%

-0.1%

$1,017,087

$184,762

9.0%

7.4%

8.7%

Total Government Operations

$1,306,646

$1,308,297

$1,201,849

Property Tax Reimbursements

Debt Service

$900,987

$907,140

$919,983

$907,973

-$18,996

-$833

-2.1%

-0.1%

-1.1%

$898,795

$880,798

0.2%

3.0%

1.6%

Total Other Expenditures

$1,808,128

$1,827,956

-$19,829

$1,779,593

Total Program Expenditures

$18,173,566

$18,585,751

-$412,185

-2.2%

$18,184,702

-0.1%

TRANSFERS

Budget Stabilization

Other Transfers Out

Total Transfers Out

$29,483

$238,587

$268,070

$29,483

$250,623

$280,106

$0

-$12,036

0.0%

-4.8%

-4.3%

$425,500

$388,234

$813,734

-93.1%

-38.5%

-67.1%

TOTAL GRF USES

$18,441,635

$18,865,857

-$424,221

-2.2%

$18,998,436

-2.9%

*

August 2016 estimates of the Office of Budget and Management.

Detail may not sum to total due to rounding.

Budget Footnotes

14

January 2017

Ohio Legislative Service Commission

Table 5: Medicaid Expenditures by Department

Actual vs. Estimate

($ in thousands)

(Actuals based on OAKS report run on January 6, 2017)

Month of December 2016

Year to Date Through December 2016

Department

Medicaid

Actual

Estimate*

Variance

$95,435

Percent

Actual

Estimate*

Variance

Percent

$2,070,765

$1,592,769

$477,996

$1,975,330

$1,500,325

$475,005

4.8%

6.2%

0.6%

$10,951,304 $11,512,507

-$561,203

-$374,931

-$186,272

-4.9%

-4.1%

-7.9%

GRF

$92,444

$2,991

$8,780,165

$2,171,139

$9,155,097

$2,357,410

Non-GRF

Developmental Disabilities

$191,099

$48,040

$211,275

$50,373

-$20,176

-$2,333

-9.5%

-4.6%

$1,244,897

$285,945

$958,952

$1,315,687

$290,331

-$70,790

-$4,386

-5.4%

-1.5%

-6.5%

GRF

Non-GRF

$143,059

$160,903

-$17,844

-11.1%

$1,025,357

-$66,405

Job and Family Services

$15,680

$4,347

$31,885

$14,212

$17,672

-$16,204

-$9,865

-$6,339

-50.8%

-69.4%

-35.9%

$109,741

$38,481

$71,260

$162,327

$64,094

$98,233

-$52,586 -32.4%

-$25,613 -40.0%

-$26,973 -27.5%

GRF

Non-GRF

$11,333

Health

GRF

$2,443

$423

$3,566

$340

-$1,123

$83

-31.5%

24.4%

-37.4%

$14,025

$1,947

$14,226

$1,704

-$202

$243

-1.4%

14.3%

-3.5%

Non-GRF

$2,021

$3,226

-$1,206

$12,078

$12,523

-$445

Aging

$665

$365

$300

$720

$422

$298

-$55

-$57

$2

-7.6%

-13.6%

0.8%

$3,866

$1,963

$1,902

$4,224

$1,971

$2,252

-$358

-8.5%

GRF

-$8

-0.4%

Non-GRF

-$350 -15.5%

Mental Health and Addiction

$516

$129

$387

$627

$200

$427

-$112

-$71

-$41

-17.8%

-35.4%

-9.6%

$2,925

$1,677

$1,247

$2,605

$1,620

$985

$320

$57

12.3%

3.5%

GRF

Non-GRF

$262

26.6%

Total GRF

$1,646,073

$635,095

$1,565,872

$657,532

$80,201

-$22,436

5.1%

$9,110,179

$3,216,578

$9,514,816

$3,496,759

-$404,638

-$280,181

-4.3%

-8.0%

Total Non-GRF

-3.4%

Total All Funds

$2,281,168

$2,223,403

$57,765

2.6%

$12,326,757 $13,011,576

-$684,819

-5.3%

*Estimates are from the Department of Medicaid.

Detail may not sum to total due to rounding.

January 2017

15

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 January 6, 2017)

December Year to Date Through December 2016

Variance

(

Payment Category

Managed Care

Nursing Facilities

DDD Services

Hospitals

Actual

Estimate*

$883,299

$121,456

$199,454

$235,040

$93,631

$97,038

$28,232

$34,435

$38,660

$15,133

$28,057

$13,248

$363,382

$72,337

Percent

8.6%

Actual

Estimate*

$5,372,293

$735,404

$1,267,783

$852,270

$603,674

$589,101

$174,728

$221,977

$230,564

$100,383

$166,737

$85,208

Variance Percent

$959,555

$126,467

$186,511

$243,247

$89,658

$63,648

$24,766

$29,885

$92,567

$11,107

$31,267

$9,303

$76,256

$5,011

$5,111,667

$748,128

$1,203,613

$761,087

$559,974

$454,864

$169,830

$196,953

$312,356

$87,566

-$260,627

$12,724

-4.9%

1.7%

-5.1%

4.1%

-$12,943

$8,207

-6.5%

3.5%

-$64,170

-$91,182 -10.7%

-$43,700 -7.2%

-$134,237 -22.8%

-$4,898 -2.8%

-$25,025 -11.3%

$81,792 35.5%

-$12,818 -12.8%

$10,265 6.2%

-$24,146 -28.3%

Behavioral Health

Administration

Aging Waivers

Prescription Drugs

Medicare Buy-In

Physicians

-$3,973

-$33,390

-$3,466

-$4,550

-4.2%

-34.4%

-12.3%

-13.2%

$53,907 139.4%

-$4,026

$3,210

-26.6%

11.4%

-29.8%

-9.1%

14.4%

2.6%

Medicare Part D

Home Care Waivers

ACA Expansion

All Other

$177,001

$61,062

-$3,945

-$32,926

$10,394

$57,765

$330,456

$82,732

$2,019,314

$463,343

$2,148,660

$462,794

-$129,346

$548

-6.0%

0.1%

-5.3%

Total All Funds

$2,281,168 $2,223,403

$12,326,757 $13,011,576

-$684,819

*

Estimates are from the Department of Medicaid.

Detail may not sum to total due to rounding.

Budget Footnotes

16

January 2017

Ohio Legislative Service Commission

EXPENDITURES

–

Russ Keller, Senior Economist, 614-644-1751

Nicholas J. Blaine, Budget Analyst, 614-387-5418

Overview

Through December, FY 2017 GRF uses as a whole totaled

$

in August 2016. GRF uses mainly consist of program expenditures but

also include transfers out. Year-to-date GRF program expenditures were $424.2 million

18.44 billion, $424.2 million (2.2%) below the estimate released by OBM_G_R_F_u_s_e_s_w_e_r_e

$

18.17 billion, $412.2 million (2.2%) below estimate, while transfers out

below estimate

for the first half

of FY 2017.

were $268.1 million, $12.0 million (4.3%) below estimate. Tables 3 and 4

show GRF uses for the month of December and for FY 2017 through

December, respectively. GRF program expenditures for the month of

December were $2.83 billion, $73.4 million (2.7%) above the estimate.

There were no transfers out in December.

Medicaid accounted for more than 95% of the total negative year-

to-date variance in GRF uses. For the first half of FY 2017, GRF Medicaid

expenditures were $404.6 million (4.3%) below estimate. Medicaid

spending for December exceeded OBM's monthly estimate by

$

80.2 million, which helped to narrow this year-to-date variance. Details

on Medicaid expenditures are provided below.

Health and Human Services had the second largest negative year-

to-date variance after Medicaid at $52.7 million, of which $14.6 million

occurred in the month of December. On the other hand, expenditures

from the Primary and Secondary Education category were $13.5 million

above estimate in December, which increased the category's positive year-

to-date variance to $75.3 million. These variances are also discussed

below.

Elsewhere, property tax reimbursement payments were below

estimate in December, by $34.3 million. This negative monthly variance

reversed the category's year-to-date variance from a positive $15.3 million

at the end of November to a negative $19.0 million at the end of

December. The reimbursement payments based on the August 2016

property tax settlement were largely completed by the end of November,

so December's variance was expected.

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

January 2017

17

Budget Footnotes

Ohio Legislative Service Commission

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. As seen from the table, across all funds Medicaid expenditures of

$

2.28 billion in December were above estimate by $57.8 million (2.6%).

GRF Medicaid expenditures of $1.65 billion were $80.2 million (5.1%)

above estimate while non-GRF Medicaid expenditures of $635.1 million

were $22.4 million (3.4%) below estimate. Through the first half of

FY 2017, across all funds, Medicaid expenditures totaled $12.33 billion,

$

684.8 million (5.3%) below the year-to-date estimate. GRF Medicaid

expenditures were $9.11 billion, $404.6 million (4.3%) below estimate,

while non-GRF Medicaid expenditures were $3.22 billion, $280.2 million

(8.0%) below estimate.

The Ohio Department of Medicaid (ODM) is primarily responsible

for administering Medicaid, with the assistance of five other state

agencies – Developmental 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 first half of FY 2017, ODM's

GRF expenditures totaled $8.78 billion, which was $374.9 million (4.1%)

below estimate, and its non-GRF expenditures totaled $2.17 billion,

which was $186.3 million (7.9%) below estimate. Across all funds, ODM's

expenditures were $561.2 million (4.9%) below the year-to-date estimate.

All-funds Medicaid expenditures from the Department of

Developmental Disabilities (DDD), the second largest agency within this

program category, totaled $1.24 billion through the first half of FY 2017,

which was $70.8 million (5.4%) below estimate. DDD's GRF Medicaid

expenditures of $285.9 million were $4.4 million (1.5%) below the year-

to-date estimate while its non-GRF year-to-date expenditures of

For the first

half of FY 2017,

Medicaid

expenditures

were below

estimate by

$

684.8 million,

including

404.6 million

$

from the GRF.

$

959.0 million were $66.4 million (6.5%) 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 for the year to date at $260.6 million (4.9%), shrinking notably

from the end of the previous month due to a positive variance of

$

76.3 million in December. The positive variance in December was

caused by an expenditure of $138.8 million for health insurer fees. These

fees had been estimated to total only $83.3 million and were originally

planned for November. Continued lower-than-expected spending in

other Managed Care areas offset much of this overage. As reported in

previous issues of Budget Footnotes, the negative year-to-date variance in

Budget Footnotes

18

January 2017

Ohio Legislative Service Commission

Managed Care has persisted through the first half of FY 2017 as actual

managed care rates that ran through CY 2016 were lower than expected.

The lower than forecasted managed care rates have also been the main

driving force behind the negative variance in the ACA Expansion category

(

$129.3 million, 6.0%). New rates took affect for CY 2017 on January 1.

The negative year-to-date variance in Administration

$134.2 million, 22.8%) continues to grow with a negative variance of

33.4 million in December. Approximately $8.0 million of the December

(

$

variance was due to ODM caseload driven contracts that have not been

billing as frequently as anticipated. Notably, billing for ODM's 1915(i)

home and community-based services plan contract has been late. Most of

the remaining December variance in this category was from lower than

expected spending by the Department of Job and Family Services

(

$16.2 million) and the Department of Developmental Disabilities

$7.0 million).

The negative year-to-date variance for Hospitals ($91.2 million,

1

0.7%) persisted through the first half of the year, but shrank slightly from

November. During December, $134.3 million in hospital upper payment

limit (UPL) payments and $37.2 million in physician UPL payments went

out, $9.3 million more than planned. However, the payments remain

under estimate year to date by $60.7 million. Hospital UPL allows the

state to direct supplemental payments, up to the difference between the

Medicare and the Medicaid amounts, to providers. Similarly, physician

UPL provides direct supplemental payments to hospital-based physicians.

The positive year-to-date variance in the Medicare Buy-In category

($81.8 million, 35.5%) more than doubled due to a positive variance of

$

53.9 million (139.4%) in December. The category's positive variance

initially resulted from a larger than anticipated increase in Medicare

Part B premiums for CY 2016. However, the large variance in December

was mostly due to two payments being posted that month. The payment

is due on the first of the month with a ten-day grace period. Whereas

payments have been posting in the month due, ODM has begun making

the payments a few days earlier, which causes them to post in the prior

month. This new payment schedule may result in 13 payments being

made during FY 2017. The Medicare Buy-in Program pays Medicare

premiums, deductibles, and coinsurance for certain low-income Ohioans.

January 2017

19

Budget Footnotes

Ohio Legislative Service Commission

Health and Human Services

Through December, expenditures from the Health and Human

Services program category totaled $673.8 million. These expenditures

were below estimate by $52.7 million (7.3%), of which $14.6 million

occurred in the month of December. The Ohio Department of Job and

Family Services (ODJFS) was the principal source for this variance as its

year-to-date spending was $34.0 million below estimate. The Ohio

Department of Health (ODH) and Ohio Department of Mental Health

and Addiction Services (OMHAS) accounted for $9.4 million and

$

3.5 million, respectively, of the category's total negative year-to-date

variance.

ODJFS expenditures were below estimate in 16 of 20 line items,

Expenditures in led by item 600535, Early Care and Education ($7.4 million). Prior to

December, this item had positive variances each month totaling

the Health and

$

1.3 million, but a negative variance of $8.7 million in December reversed

Human

that trend. This item is used in conjunction with other GRF and federal

appropriation items for publicly funded child care. Also having

significant negative year-to-date variances were item 600321, Program

Support ($5.6 million), item 600416, Information Technology Projects

Services

category were

below estimate

by $52.7 million

year to date.

(

$5.4 million), and item 600410, TANF/State Maintenance of Effort

$3.9 million). According to OBM, items 600321 and 600416 were below

estimate due to timing issues, whereas disbursements from item 600410

were below estimate due to lower than estimated program costs and a

decrease in Ohio Works First caseloads.

Year-to-date negative variances for ODH were widespread as

9 of 21 line items were below the OBM estimate. The most prominent

1

occurrences were for item 440418, Immunizations ($1.8 million), item

4

40416, Mothers and Children Safety Net Services ($1.7 million), item

40459, Help Me Grow ($1.6 million), and item 440473, Tobacco

Prevention, Cessation, and Enforcement ($1.3 million).

The principal source for lower than anticipated spending within

the OMHAS budget was item 336423, Addiction Services Partnership

with Corrections ($10.4 million), which was followed by item 336504,

Community Innovations ($2.9 million), and item 336421, Continuum of

Care Services ($2.2 million). The agency's negative variance was partially

offset by a positive variance in item 336412, Hospital Services

($8.5 million).

Budget Footnotes

20

January 2017

Ohio Legislative Service Commission

Primary and Secondary Education

GRF expenditures for Primary and Secondary Education were

619.1 million in December, $13.5 million (2.2%) above estimate. For the

first six months of FY 2017, program expenditures were $4.08 billion,

The positive

variance in

Primary and

$

75.3 million (1.9%) above the OBM estimate. The Ohio Department of

Education (ODE) is the only agency in this program category. Both the Secondary

monthly and year-to-date variances are largely attributable to item 200550,

Education

Foundation Funding, and to a lesser degree, item 200502, Pupil

Transportation. Item 200550 was above estimate by $5.0 million in

December and $72.4 million year to date. Item 200502 was above estimate

continued to

increase

by $7.1 million in December and $10.8 million year to date. Both line items reaching

disburse money based on a formula, and the expenditures often vary from

estimate as data inputs (e.g., school district enrollment and property

valuations) are received throughout the year. The positive year-to-date

variances in items 200550 and 200502 were offset somewhat by the overall

negative variance from ODE's other line items.

$

75.3 million

by the end of

December.

January 2017

21

Budget Footnotes

Ohio Legislative Service Commission

ISSUE UPDATES

CMS Releases Medicare Part D Clawback Payment Amounts

for January through September 2017

–

Ivy Chen, Principal Economist, 614-644-7764

On October 28, 2016, the Centers for Medicare & Medicaid Services (CMS)

released the January-September 2017 monthly Medicare Part D clawback payments per

beneficiary for each state. Ohio's payment is to be $149.75. This is $8.72 higher than the

$

141.03 assumed in H.B. 64. Based on a projected 208,483 beneficiaries each month

subject to the clawback, Ohio's total clawback payments will be $10.9 million higher for

the last two quarters of FY 2017 than what was anticipated ($8.72 per beneficiary per

month x 208,483 beneficiaries x 6 months).

The federal Medicare Prescription Drug Improvement and Modernization Act of

2

003 (MMA) requires states to share the cost of Medicare prescription drug coverage

(Medicare Part D) for individuals eligible for both Medicare and Medicaid (dual

eligibles). Prior to MMA, state Medicaid programs covered these costs. The states' share

of the costs that must be paid to the federal government is known as the "clawback."

Clawback payments are made monthly to the federal Medicare Program. A state's

monthly clawback amount is equal to the product of a three-part formula: (1) a state's

monthly count of dual eligibles, (2) CMS's estimate of the state's share of its per capita

expenditure (PCE) for Medicaid covered drugs, and (3) the phase-down percentage.

Each state's PCE is estimated by first increasing the state's 2003 PCE amount by the

estimated annual national growth in per capita prescription drug spending, and then

multiplying that result by the state's federal reimbursement rate for the year. The

phase-down percentage decreased from 90% in 2006 to 75% in 2015 and thereafter.

ODE Began Using Current Year Student Count Data for State Foundation

Payments to School Districts in November

–

Jason Glover, Budget Analyst, 614-466-8742

In the latter part of November 2016, the Ohio Department of Education (ODE)

began using current year K-12 student count data in the calculation of FY 2017 state

foundation payments to school districts. This marks the earliest point in the fiscal year

that current year data has been used for funding purposes since the state transitioned to a

Budget Footnotes

22

January 2017

Ohio Legislative Service Commission

student count based on annualized full-time equivalent (FTE) enrollment in FY 2015.⁷ In

FY 2015 and FY 2016, current year data was not used for funding purposes until the latter

parts of March and February, respectively. Until current year student count data is ready

for use, ODE uses data from the prior year to calculate state foundation payments.

In general, ODE attributed the earlier use of current year data to process

improvements that have come about as the new student count reporting system has

matured. For example, the student count process is now mostly automated. In the two

previous years, as implementation issues were being resolved, manual data processing

was required to a much greater degree. In addition, ODE implemented a system of

nightly error reports that allow a district to receive immediate feedback if there are

problems with the student count data it submits. Finally, ODE indicated that school

districts have gained familiarity with the new reporting process and format, leading to

quicker data reporting turnaround times.

Statewide, there are approximately 1.7 million FTE students in the state funding

system. In FY 2017, public districts and schools are slated to receive a total of

$

8.07 billion in state foundation aid. State foundation payments are primarily funded

through GRF revenues. A smaller portion is supported by lottery profits.

State Debuts Online Workforce Supply Tool for In-Demand Jobs

–

Edward M. Millane, Senior Budget Analyst, 614-995-9991

In December, a new online tool to help businesses gauge the number of newly

8

trained workers in in-demand fields debuted on the OhioMeansJobs website. The

Workforce Supply Tool (WST) provides businesses with historical data on and a

two-year projection for the number of graduates by education level for certain

in-demand occupations in Ohio, as well as background data on the occupation,

including actual earnings and the number of unemployment claims. WST users can

select occupation information on a statewide basis or from any one of the six JobsOhio

regions. WST currently includes information on 25 in-demand occupations, but,

according to the Ohio Department of Higher Education (ODHE), will expand to include

approximately 200 occupations early in 2017.

⁷Under the current methodology, students are counted based on the portion of the year

they are enrolled in public education and residing in the district. For example, a full-time

student who moves from one district to another one-quarter of the way through the school year

will be counted as 0.25 FTE in the first district and 0.75 FTE in the second district. Prior to

FY 2015, districts counted their students over a single week in October and then calculated the

daily average.

⁸To access the tool, go to OhioMeansJobs.com, click on the "Get Started" links under

either the "Individuals" or "Employers" sections and then click on the "Supply Tool" link or

access the tool directly at https://workforcesupply.chrr.ohio-state.edu/.

January 2017

23

Budget Footnotes

Ohio Legislative Service Commission

WST is supported by a $180,000 State Workforce Education Alignment Project

(

SWEAP) grant from the National Skills Coalition. In August 2015, the Controlling Board

established appropriation for ODHE for that same amount under Fund 5FR0 line item

35697, Workforce and Education Alignment Project, to fund the project. The project is a

2

joint effort of ODHE, the Ohio Department of Job and Family Services, the Ohio

Department of Education, and the Governor's Office of Workforce Transformation.

Attorney General Releases Economic Development Compliance Report

–

Jessica Murphy, Budget Analyst, 614-466-9108

On November 22, 2016, the Ohio Attorney General's Office released its

9

2

016 Economic Development Compliance Report, a required annual review of recipient

compliance with the terms and conditions of state awards for economic development

administered by the Ohio Development Services Agency (DSA). The report examined

3

29 awards with a performance period ending in calendar year 2015. Of those

recipients, 279 were determined to be substantially compliant, having met at least 90%

of the performance metrics set forth in their award agreement. The remaining

5

0 recipients were determined to be noncompliant. The performance metrics used to

determine compliance included the degree to which a recipient met, as applicable, their

commitments for creating or retaining jobs, training workers, or maintaining a certain

hourly wage. The overall compliance rate was 84.8%.

The report provides a breakdown of compliance rates for four main award

categories: workforce training grants (100.0%), project grants (86.3%), tax credits

(80.0%), and project loans (82.8%). The report also provides information on remedial

actions taken by DSA, which includes seeking grant reimbursements totaling $643,570

from eight recipients, reducing the tax credit rate or term for 15 recipients, and

increasing the loan interest rate for five recipients.

The table below shows the overall and award category compliance rates reported

in the 2011-2015 reviews. Except for 2012, the rates have trended upward with the

workforce training grant category consistently showing the highest compliance rate.

Economic Development Award Recipient Compliance Rates, 2011-2015

Award Category

Workforce Training Grant

Project Grant

2011

89.9%

48.6%

59.5%

42.0%

63.5%

2012

100.0%

49.5%

53.8%

55.8%

54.9%

2013

100.0%

74.4%

62.4%

57.1%

70.6%

2014

100.0%

76.3%

73.4%

81.3%

78.9%

2015

100.0%

86.3%

80.0%

82.8%

84.8%

Tax Credit

Project Loan

OVERALL

⁹The full report is available at: http://www.ohioattorneygeneral.gov/Files/Publications-

Files/Publications-for-Business/2016-Economic-Development-Accountability-Report.

Budget Footnotes

24

January 2017

Ohio Legislative Service Commission

OOD Vocational Rehabilitation Program Results in

Over 6,300 Employment Outcomes in FFY 2016

–

Nicholas J. Blaine, Budget Analyst, 614-387-5418

In October 2016, the Opportunities for Ohioans with Disabilities (OOD) agency

announced that over 6,300 individuals secured employment (and therefore have been

rehabilitated) through its Vocational Rehabilitation (VR) services in federal fiscal year

(

increase from FFY 2015. OOD saw the average cost per rehabilitation fall from $8,800 in

FFY 2015 to $7,500 in FFY 2016 and the average time to rehabilitation drop from

FFY) 2016. VR services were provided that year to nearly 30,000 individuals, a 3.9%

2

$

2.8 months to 19.4 months. On average, a rehabilitated worker earned approximately

11 per hour and worked about 27 hours per week in FFY 2016. The table below reflects

a trend for OOD of rehabilitating more workers over shorter periods of time, in part

reducing the cost per rehabilitation.

Vocational Rehabilitation Results, FFY 2013–FFY 2016

Rehabilitated

Workers

Months to

Rehabilitation

Cost Per Employment

Outcome

Average

Hourly Wage

Average Hours

Per Week

FFY

2

013

014

015

016

3,714

4,580

5,413

6,365

27.3

25.3

22.8

19.4

$10,152

$9,773

$8,772

$7,480

$10.27

$10.07

$10.34

$11.03

27.4

27.0

27.1

2

The state's VR program provides individuals with disabilities services and

supports to help them obtain and maintain employment. Disabilities may include

physical, intellectual, mental health, or sensory. VR services are available in all

8

8 counties and are customized for each individual through assessments and

one-on-one meetings with professional VR counselors. VR services are paid for by a mix

of state and federal funds, with $3.69 in federal match for every $1 in state spending.

In FY 2016, Ohio spent $27.5 million in state funds and $101.6 million in federal funds

for this purpose.

Young Hunters Tag Nearly 6,000 Deer During Ohio's Youth Deer Season

–

Tom Wert, Budget Analyst, 614-466-0520

Young hunters harvested a total of 5,930 deer during Ohio's two-day youth deer

hunting season on November 19 and 20. The number of deer harvested was down

7.9% compared to 2015's youth deer season, when 7,223 deer were tagged.

1

Coshocton County had the most successful youth hunters with 222 deer being

harvested. This was followed by Guernsey County (197), Tuscarawas County (178),

Muskingum County (162), and Meigs County (152). Hamilton County had 18 deer

January 2017

25

Budget Footnotes

Ohio Legislative Service Commission

harvested during the youth hunt, highest among the state's more urban counties. The

map below shows the number of deer harvested in each of Ohio's 88 counties during

the youth deer season.

2016 Youth Deer Season Harvest by County

Ohio's youth deer hunting season is open to anyone 17 years old and younger

who possesses a valid youth hunting license and valid youth deer permit and who is

accompanied by a nonhunting adult. Typically held the weekend prior to the

Thanksgiving holiday, the youth deer hunting season gives young hunters an

opportunity in the field prior to the statewide deer gun season beginning the Monday

after Thanksgiving. Youth hunting licenses and deer permits cost $10 and $12,

respectively. These fees are deposited to the credit of the Wildlife Fund (Fund 7015) and

used by the Department of Natural Resources to support the Division of Wildlife. As of

December 20, 2016, a total of 48,561 youth licenses and 51,591 youth deer permits had

been issued for the 2016-2017 hunting license year.

Budget Footnotes

26

January 2017

Ohio Legislative Service Commission

Ohio Department of Transportation Announces Major/New Highway

Construction Projects Up for Approval in 2017

–

Tom Middleton, Budget Analyst, 614-728-4813

On December 15, 2016, the Ohio Department of Transportation (ODOT)

announced that just over $466 million in highway project funding is proposed and up

1

0

for approval for calendar year (CY) 2017. This funding represents the Major/New

Construction Program component of ODOT's overall construction budget and must be

approved by the Department's Transportation Review Advisory Council (TRAC). The

Major/New Construction Program consists of highway projects that add capacity to the

state's network of roads and cost over $12 million.

The types of construction projects overseen by TRAC typically require several

years of planning and construction before they are completed. Thus, for this current

review period, TRAC is proposing commitments beyond the $466 million for CY 2017.

Approximately $841 million is proposed for Major/New projects over the

CY 2018-CY 2026 period. The Major/New projects under the draft list announced in

mid-December are subject to public comment before the final list is approved in

January.

All state funding of Major/New Construction projects are financed out of the

Highway Operating Fund (Fund 7002). The fund is comprised of three main sources of

revenue: (1) federal highway trust fund distributions, (2) ODOT's portion of revenue

from the 28-cent per gallon Ohio motor fuel tax, and (3) proceeds from bonds issued by

the state and backed by future federal highway and Ohio motor fuel tax revenues, as

well as some toll revenue collected on the Ohio Turnpike.

Criminal Justice Services Awards $4.0 million in Federal Edward Byrne

Memorial Justice Assistance Grants

–

Maggie Wolniewicz, Senior Budget Analyst, 614-995-9992

On November 14, 2016, the Department of Public Safety's Office of Criminal

Justice Services announced the award of $4.0 million in federal grants from the

Edward Byrne Memorial Justice Assistance Grant (JAG) Program to 128 projects in

5

6 counties.¹¹ Under the JAG program, units of local government, state agencies,

state-supported universities, statewide and local nonprofit or faith-based associations,

and law enforcement agencies may apply for new or renewal funding to support a

broad range of crime prevention and control activities in five program areas.

¹⁰The draft project list can be found on ODOT's website: www.dot.state.oh.us/trac.

¹¹A

complete list of funded programs by county can be found at

http://publicsafety.ohio.gov/links/FY2016_JAG_Recommended_for_Funding.pdf.

January 2017

27

Budget Footnotes

Ohio Legislative Service Commission

Funding for the projects ranged from $3,291 for a crime prevention program in

Logan County to three awards of $100,000 each for an offender reentry program in

Portage County, a multi-jurisdictional drug task force in Richland County, and a heroin

partnership project in Ross County. The following table lists, for each program area, the

number of projects funded and the total amount of funding awarded. All JAG program

awards are for 12 months of funding, beginning January 1, 2017. The required match

(cash or in-kind) is either 25%, 50%, or 75% depending on the number of years a project

has been funded, but may be waived under certain circumstances.

Federal JAG Awards by Program Area

Number of

Program Area

Projects

Total Funding

Multi-Jurisdictional Task Forces and Law Enforcement

Adult and Juvenile Corrections, Community Corrections, and Reentry

Courts, Defense, Prosecution, and Victim Services

Crime Prevention

59

19

23

24

3

$1,753,150

$786,528

$689,207

$624,285

$189,531

$4,042,702

Cross-agency and Cross-system Collaboration, Training, and Research

TOTAL

128

Note: Numbers may not add to total due to rounding.

Budget Footnotes

28

January 2017

Ohio Legislative Service Commission

TRACKING THE ECONOMY

–

Philip A. Cummins, Senior Economist, 614-387-1687

Ruhaiza Ridzwan, Senior Economist, 614-387-0476

Overview

U.S. economic growth continued through late 2016. Indicators for

Ohio's economy also show continued expansion, though growth has

slowed. U.S. inflation-adjusted gross domestic product (real GDP), the

Total nonfarm

total output of the economy, rose at a 3.5% annual rate in the third payroll

quarter, strongest in two years. The current business cycle expansion,

employment in

following the 2007-2009 recession, is one of the longest on record but has

been exceptionally slow, with real GDP growth averaging only 2.1% per

year. In 2015 and 2016, growth was predominantly in the service sector,

the U.S. rose

156,000 in

1

2

as industrial output fell reflecting in part weakness in mining including December.

oil and gas. The mining sector began to turn around last year. Also, a

strong dollar in foreign exchange markets has been an impediment for

U.S. manufacturing exports. Total employment nationwide continued to

grow through December, though less rapidly than in 2013-2015, and the

unemployment rate remained low. The nation's central bank in December

raised its short-term interest rate target by one-quarter percentage point,

its second monetary tightening after seven years of holding interest rates

at ultra-low levels.

An economic forecast summary is appended at the end of this

article. It compares the outlook in December 2016, for a few broad

measures of activity, with expectations in May 2015 ahead of the

Conference Committee on the current biennium's operating budget. The

1

3

projections, from forecasting firm IHS Economics, show slower growth

in Ohio incomes than previously anticipated, and zero growth in the

state's industrial output during both years of the biennium.

¹²Real GDP growth in all earlier post-World War II expansions was more

rapid than in the current expansion, and the median growth rate, 4.3% per year,

was more than twice as rapid. Business cycle turning points underlying this

analysis are as defined by the National Bureau of Economic Research, posted at

http://www.nber.org/cycles/cyclesmain.html.

¹³Formerly Global Insight.

January 2017

29

Budget Footnotes

Ohio Legislative Service Commission

The National Economy

Employment and Unemployment

Total nonfarm payroll employment in the U.S. rose 156,000 in

December and the unemployment rate edged up to 4.7%. Trends in

employment and unemployment are shown in Chart 6.

Chart 6: U.S. Employment and Unemployment

1

48

45

42

39

36

33

30

27

11

10

9

8

7

6

5

4

2

006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Nonfarm Payroll Employment Unemployment Rate (right scale)

Employment growth in December was mostly in the service

sector, particularly in health care, social assistance, and restaurants and

bars. In all of 2016, employment growth averaged 180,000 per month,

down from 224,000 per month on average during the previous three

years. Factory employment rose 17,000 in December but remained 63,000

below the peak in January 2016, highest in nearly seven years.

The nationwide

unemployment

rate in

Nationwide unemployment in December, persons without jobs

who had actively looked for work in the previous four weeks, totaled

about 7.5 million. Unemployment as a share of the labor force in

December was 4.7%, up from 4.6% in November, the lowest U.S.

unemployment rate since 2007.

December was

4

.7%.

A survey of hiring plans for the 2017 first quarter showed 19% of

U.S. employers plan to increase staff, and 6% expect to reduce

1

4

employment. These hiring projections are broadly in line with those one

and two years earlier, and stronger than earlier in the economic recovery.

1

4

ManpowerGroup Employment Outlook Survey, Q1:2017, published

December 13, 2016.

Budget Footnotes

30

January 2017

Ohio Legislative Service Commission

Production, Shipments, and Inventories

Real GDP grew at a 3.5% annual rate in the 2016 third quarter,

strongest since a 5.0% rate of growth in the 2014 third quarter. Growth

averaged only a 1.1% rate in last year's first half, and was 2.6% in 2015.

The upturn in third quarter growth resulted in part from a swing to

Real GDP grew

at a 3.5%

modest inventory building from liquidation in the second quarter, along annual rate in

with an exceptional jump reported for soybean exports. Consumer

spending grew at a 3.0% annual rate, with particular strength in durable

goods. Residential fixed investment fell for the second straight quarter,

after a strong 2015. Business fixed investment grew slowly, but with

the 2016 third

quarter,

strongest in

strength in construction of office buildings and factories.

two years.

Total industrial production fell 0.4% in November mainly

reflecting reduced utility output, as unseasonably warm weather cut

demand for heating. The index for total industrial production was 0.6%

lower in November than a year earlier, and nearly 3% below the all-time

peak two years ago mainly due to sharply lower output in the mining

sector including oil and gas. Mining output bottomed out in April 2016

and recovered more than 4% since then. Manufacturing output through

November fluctuated in a narrow range below its recent peak two years

ago, 6% short of the highest level on record reached in 2007.

Manufacturers that reported growth of production and new orders

in December were more widespread than the month before, in a survey of

purchasing managers by the Institute for Supply Management (ISM),

along with more frequent reports of higher prices paid for inputs. A

comparable ISM report for nonmanufacturing sectors of the economy also

showed expansion.

Consumer Spending and Incomes

Real consumer spending rose only 0.1% in November after a

similar increase in October, but appears to have strengthened in

December. Durable goods sales slowed in November, after large increases

in October and September, on lower light truck sales. Income gains

continued in 2016 through November but were smaller than in 2015,

particularly after adjustment for the modest uptick in inflation.

Sales of light vehicles were particularly strong during December,

boosted by heavy promotional activity according to a posting on the

1

5

WardsAuto website. Sales of light motor vehicles rose in all of 2016 to

7.5 million units, highest on record for the second consecutive year. Sales

1

of light trucks rose 7% in 2016. Car sales fell 9%.

¹⁵http://wardsauto.com.

January 2017

31

Budget Footnotes

Ohio Legislative Service Commission

Construction and Real Estate

Housing starts and issuance of building permits for new

residential units slowed in November, seasonally adjusted. Year-to-date

housing starts for 11 months were 5% higher than a year earlier,

consisting of a 10% increase in starts on new homes and a 4% decline in

starts on apartments. Apartment construction rose in the previous six

years. At a rate this year of fewer than 1.2 million units annually, starts

on new housing units have doubled since the recession low in 2009 but

remain short of building rates typical in years past.

Housing starts

for 11 months

were 5% higher

than a year

Total construction activity, in dollars of current purchasing power,

was 4% higher in January-November than a year earlier, as private

residential construction rose 5%, private nonresidential construction rose

earlier.

8

%, and public construction fell 1%. Office buildings accounted for

nearly half of the rise in private nonresidential construction.

Home sales rose in 2016. New home unit sales rose in November,

particularly in the Midwest, and year-to-date unit sales were 13% higher

than a year earlier. In 2015, new home sales rose 15%. Unit sales of homes

reported by the National Association of Realtors (NAR), generally

previously occupied homes, were 4% higher in January through

November of 2016 than a year earlier. This follows an increase in sales of

6

% in all of 2015. Listings of homes with realtors were described by NAR

as low relative to demand.

House prices in the U.S. averaged 6% higher in October than a

1

6

year earlier. The average house price in the nation rose in 2016 for the

fifth consecutive year, after four years of declining prices.

Mortgage interest rates have climbed sharply since the election,

with the rate on 30-year fixed-rate mortgages averaging 4.20% in the

January 5 week, higher by two-thirds of a percentage point in the past

1

7

nine weeks. More costly mortgage financing can be expected to erode

the ability of marginal borrowers to qualify for home purchases.

Inflation

The consumer price index (CPI) for all items rose 0.2% in

November to 1.7% above its level a year earlier, the largest year-over-

year increase in the all-items index in two years. More rapid increases in

this inflation measure reflect in part an upturn in energy prices this year.

Food prices, in contrast, have fallen over the past year, specifically food

¹⁶Federal Housing Finance Agency index.

¹⁷Freddie Mac weekly survey.

Budget Footnotes

32

January 2017

Ohio Legislative Service Commission

consumed at home. The CPI excluding food and energy rose 2.1% in the

year to November, the same rate of rise as in 2015.

Inflation has also picked up at the wholesale and manufacturing

levels. The producer price index (PPI) for final demand rose 1.3% in the The CPI in

year to November, also largest in two years, and also due partly to higher

November was

.7% above its

energy prices this year. Food prices at wholesale have generally declined

since 2014. The PPI for final demand excluding food and energy rose 1.6%

in the year to November, up from only 0.2% in 2015.

1

level a year

earlier, the

largest year-

over-year

Financial Markets

Longer-term U.S. interest rates rose in the second half of 2016 and

broad stock market measures climbed to new highs. Ten-year Treasury

note yields rose more than a percentage point from lows in July, and rose increase in two

particularly sharply around the time of and following the November

years.

election. Markets appear to expect more expansionary fiscal policy to

result from the election outcome, including some combination of tax cuts,

spending increases, or both. Such a fiscal boost could add to economic

activity as well as raise inflation.

As widely expected, the Federal Reserve's Open Market Committee

(FOMC) raised its target for short-term interest rates by one-quarter

percentage point at its meeting in December. The central bank set the

target range for federal funds, overnight loans between banks, at 0.5% to

0

.75%. It previously raised its target in December 2015, from a range of

zero to 0.25% where it had been held since December 2008. The FOMC

reported that committee members expect to increase the short-term

interest rate target during 2017 by 0.75 percentage point, up from a 0.50

percentage point rise anticipated at the September FOMC meeting, as

indicated by the committee members' median forecasts.

The Ohio Economy

Employment and Unemployment

Total nonfarm payroll employment in Ohio, seasonally adjusted,

rose by 9,100 (0.2%) in November from the revised total in October,

following a decrease of 2,100 jobs from September to October. In

November, the state's nonfarm payroll employment was 49,800, or 0.9%

higher than in November 2015. So far in 2016, employment gain averaged

2

,800 per month compared to 6,700 per month in 2015. The state's

unemployment rate was 4.9% in November, same as in October, but was

slightly higher than in November 2015. Chart 7 below shows Ohio's

trends in employment and the unemployment rate over the last ten years.

January 2017

33

Budget Footnotes

Ohio Legislative Service Commission

The state's unemployment rate in November was 0.3 percentage

point higher than the U.S. unemployment rate of 4.6%. In November,

unemployment rates in 18 states were significantly lower than in October

while unemployment rates in 32 states and the District of Columbia

Total nonfarm

payroll

18

remained stable. The number of unemployed workers in Ohio was

employment in 278,000 in November, 2,000 fewer than in October, but 9,000 more than in

November 2015.

Ohio rose 9,100

in November to

49,800 higher

Chart 7: Ohio Employment and Unemployment Rates

than in

5.6

12%

1

9

1%

0%

%

November 2015.

5

.5

.4

.3

.2

.1

.0

8%

7%

6%

5%

4%

Nonfarm Payroll Employment

Unemployment Rate (right scale)

Ohio Personal Income

In the third quarter of 2016, Ohio's personal income, seasonally

adjusted, grew 1.2% from the previous quarter, following 1.2% growth in

1

9

the second quarter and a 0.4% decline in the first quarter. Ohio's growth

from the second to the third quarter was led by increased earnings in the

health care and social assistance industry and in state and local

government. Nationwide, state personal income growth averaged 1.1%

in the third quarter of 2016, down from 1.2% in the second quarter.

Ohio's personal income growth ranked 15th among states in the nation

¹⁸Rates deemed stable by the Bureau of Labor Statistics include both

those that were unchanged and statistically insignificant changes of -0.2 to

+

0.2 percentage point.

¹⁹Corresponding annual rates of change are +4.8% in the third quarter,

5.0% in the second quarter, and -1.7% in the first quarter.

+

Budget Footnotes

34

January 2017

Ohio Legislative Service Commission

(

from highest growth to lowest). In the first three quarters of 2016, Ohio's

personal income grew 2.0%, less than nationwide growth for the period of

.6%.

2

Ohio Home Sales

In November, the number of existing homes sold in the state

increased by 16.5% compared to November 2015, according to the Ohio

Association of Realtors. Existing home unit sales rose by 5.3% in the first

The number of

unemployed

1

1 months of this year compared with the corresponding months of 2015. workers in Ohio

The statewide sales price of homes sold in the first 11 months of 2016

averaged $163,899, 5.2% higher than the corresponding months a year

earlier.

was 278,000 in

November,

2,000 fewer

Ohio Population

than in

Ohio's population was 11,614,373 as of July 1, 2016, an increase of

.1% from July 1, 2015, according to U.S. Census Bureau estimates. Ohio's

population remained the seventh largest among the 50 states and the

October, but

0

9,000 more

District of Columbia with 3.6% of the nation's total population. The fastest than in

growing state was Utah, followed by Nevada, Idaho, and Florida. Eight

November 2015.

states, including West Virginia, Pennsylvania, and Connecticut, lost

population with Illinois losing the largest number of people.

Economic Forecasts

The tables below compare the December baseline economic

forecasts from IHS Economics with that organization's forecasts released

in May 2015. The earlier predictions were used by LSC in projecting

FY 2016-FY 2017 state revenues for the Conference Committee hearings

on the operating budget in June 2015. The updated forecasts generally

show slower growth of Ohio's economy than did the earlier predictions.

Economic forecasting is inevitably an uncertain process, and consequently

forecasts for state tax revenues are also uncertain.

Years shown in the tables are calendar years. Quarterly changes,

the first and third lines in each table, are from the preceding quarter, and

are stated at annual rates. Changes shown in the second and fourth lines

compare average values for the four quarters ending in the second

calendar quarter, coinciding with Ohio's fiscal year, with average values

for the four quarters one year earlier. The fifth and sixth lines in each table

show the change in expectations for each quarter and year between the

May 2015 and December 2016 forecasts.

January 2017

35

Budget Footnotes

Ohio Legislative Service Commission

Ohio Personal Income

IHS Economics predicts that personal income in the state will

continue to grow through the end of 2017 but not as rapidly as projected

earlier. In the current fiscal year, personal income is expected to increase

3

.4%, revised down from 4.3% growth anticipated in May 2015.

Ohio Personal Income Growth

2

Q2

015

Q3

-----------------------------------percent change at annual rate------------------------------------

4.4 3.7 2.9 3.1 4.7 3.9 4.0 4.4 5.7 4.7 4.7 4.5

4.2 3.6 4.3

-0.9 5.7 3.8 5.2 -1.7 4.2 3.8 4.2 3.8 4.5 4.3 4.3

4.1 3.2 3.4

-5.3 2.0 0.9 2.1 -6.4 0.3 -0.2 -0.2 -1.9 -0.2 -0.4 -0.2

-0.1 -0.4 -0.9

2016

Q2 Q3

2017

Q2 Q3

Forecast

Q1

Q4

Q1

Q4

Q1

Q4

-

Conference

Committee

December

2

016

Change

pct. pts.)

(

Ohio Wages and Salaries

Wages and salaries in Ohio, a key driver of predictions for

withholding tax revenue, are also expected to increase more slowly in the

current economic forecast than predicted earlier. In the current fiscal

year, wages and salaries in the state are expected to grow 3.5%, revised

from 4.2% in the IHS Economics baseline forecast released in May 2015.

Ohio Wage & Salary Growth

2

Q2

015

Q3

-----------------------------------percent change at annual rate------------------------------------

4.5 4.6 4.4 4.0 4.1 4.2 4.3 4.2 4.6 4.2 4.4 4.3

4.7 4.3 4.2

-1.1 6.6 3.6 9.8 -4.1 4.8 4.6 2.8 4.3 4.8 4.6 4.5

4.5 3.9 3.5

-5.6 2.0 -0.8 5.8 -8.2 0.6 0.3 -1.4 -0.3 0.6 0.2 0.2

-0.2 -0.4 -0.7

2016

Q2 Q3

2017

Q2 Q3

Forecast

Q1

Q4

Q1

Q4

Q1

Q4

-

Conference

Committee

December

2

016

Change

pct. pts.)

(

Ohio Industrial Production

Industrial production, the total of manufacturing, mining, and

utility output, is estimated monthly for the nation by the Federal

Reserve, the nation's central bank. At the state level, an approximation to

industrial production is constructed by IHS Economics using the national

index values and employment in each industry at the state and national

levels. As is evident in the following table, industrial production in Ohio

Budget Footnotes

36

January 2017

Ohio Legislative Service Commission

is thought to have been unchanged in FY 2016 and is projected to be flat

again in the current fiscal year. Both projections are sharp downward

revisions from the predictions in May 2015, ahead of the Conference

Committee on the budget for the current biennium. LSC uses forecasts of

industrial production primarily in forecasting revenue from the CAT.

Ohio Industrial Production Growth

2

Q2

015

Q3

-----------------------------------percent change at annual rate------------------------------------

1.5 -1.4 3.6 3.5 3.9 3.8 4.7 4.6 4.0 2.9 2.8 2.9

3.8 2.4 4.1

-0.8 -2.0 2.0 0.4 -1.9 -2.8 3.6 -2.3 1.7 1.8 3.1 2.6

3.4 0.0 0.0

-2.3 -0.6 -1.6 -3.1 -5.8 -6.6 -1.1 -6.9 -2.3 -1.1 0.3 -0.3

2016

Q2 Q3

2017

Q2 Q3

Forecast

Q1

Q4

Q1

Q4

Q1

Q4

-

Conference

Committee

December

2

016

Change

pct. pts.)

(

-0.4

-2.4

-4.1

January 2017

37

Budget Footnotes