Budget Footnotes  
A NEWSLETTER OF THE OHIO LEGISLATIVE SERVICE COMMISSION  
APRIL 2017  
VOLUME 40, NUMBER 8  
STATUS OF THE GRF  
STATUS OF THE GRF  
Highlights...................................1  
Revenues ..................................2  
Expenditures............................12  
HIGHLIGHTS  
Ross A. Miller, Chief Economist, 614-644-7768  
ISSUE UPDATES  
March GRF tax revenue was $202.9 million below the  
TANF Spending Plan...............19  
August 2016 estimate by the Office of Budget and ODODD Scorecard..................20  
University Action Plan  
Management (OBM). One-third of the shortfall was due to a  
Progress Report ...................21  
timing-related negative variance from the foreign insurance Choose Ohio First  
Scholarships.........................22  
tax, but revenue from the income tax and the sales tax was  
MARCS Grant Awards.............23  
below estimate by a combined $135.9 million.  
Mosquito Control Grants..........24  
Federal Law Enforcement  
Ohio payroll employment grew by 15,200 jobs in  
February. Income tax withholding during the January  
through March quarter was 3.5% greater than withholding  
during the corresponding months of 2016, which contrasts  
Grants ..................................24  
TRACKING THE ECONOMY  
The National Economy ............26  
favorably with essentially flat year-over-year growth for the The Ohio Economy..................30  
final quarter of calendar year 2016.  
Through March, GRF tax revenue totaled  
$15.86 billion, $614.6 million below OBM's  
August 2016 estimate;  
Through March, GRF program expenditures  
totaled $26.74 billion, $898.8 million below OBM's  
August 2016 estimate. Medicaid accounted for  
$
871.5 million of the total variance;  
The shortfalls in year-to-date GRF tax revenue and  
program expenditures have both exceeded OBM's  
January 2017 downward revision targets for the  
full fiscal year, which were established at  
Legislative Service Commission  
7
7 South High Street, 9th Floor  
Columbus, Ohio 43215  
Telephone: 614-466-3615  
$
592 million and $825 million, respectively.  
AVAILABLE ON OUR WEBSITE: WWW.LSC.OHIO.GOV  
CLICK ON 'PUBLICATIONS/BUDGET FOOTNOTES'  
Ohio Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of March 2017  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on April 3, 2017)  
STATE SOURCES  
Actual  
Estimate*  
Variance  
Percent  
TAX REVENUE  
Auto Sales  
$126,795  
$129,800  
-$3,005  
-2.3%  
Nonauto Sales and Use  
$651,153  
$688,600  
-$37,447  
-5.4%  
Total Sales and Use Taxes  
$777,948  
$818,400  
-$40,452  
-4.9%  
Personal Income  
$442,641  
$165  
$538,100  
$0  
-$95,459  
$165  
-17.7%  
---  
Corporate Franchise  
Financial Institution  
Public Utility  
$33,270  
$1,907  
$29,097  
$0  
$42,700  
$2,000  
$34,000  
$0  
-$9,430  
-$93  
-22.1%  
-4.6%  
-14.4%  
---  
Kilowatt-Hour Excise  
Natural Gas Consumption (MCF)  
Commercial Activity Tax  
Petroleum Activity Tax  
Foreign Insurance  
Domestic Insurance  
Business and Property  
Cigarette  
-$4,903  
$0  
$20,538  
$2,155  
$34,321  
$3  
$6,800  
$1,900  
$102,200  
$200  
$13,738  
$255  
202.0%  
13.4%  
-66.4%  
-98.6%  
---  
-$67,879  
-$197  
$0  
$0  
$0  
$80,042  
$4,064  
$3,408  
$4  
$77,800  
$5,100  
$3,300  
$0  
$2,242  
-$1,036  
$108  
2.9%  
-20.3%  
3.3%  
---  
Alcoholic Beverage  
Liquor Gallonage  
Estate  
$4  
Total Tax Revenue  
$1,429,563  
$1,632,500  
-$202,937  
-12.4%  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$10  
$30,589  
$371  
$0  
$32,205  
$705  
$10  
-$1,616  
-$334  
---  
-5.0%  
-47.4%  
-5.9%  
Total Nontax Revenue  
$30,970  
$32,910  
-$1,940  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$656  
$656  
$0  
$0  
$0  
$0  
$656  
$656  
---  
---  
---  
TOTAL STATE SOURCES  
Federal Grants  
$1,461,189  
$1,048,119  
$2,509,308  
$1,665,410  
$1,162,487  
$2,827,897  
-$204,221  
-$114,369  
-$318,590  
-12.3%  
-9.8%  
TOTAL GRF SOURCES  
-11.3%  
*Estimates of the Office of Budget and Management as of August 2016.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
2
April 2017  
Ohio Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2017 as of March 31, 2017  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on April 3, 2017)  
Percent  
Change  
STATE SOURCES  
Actual  
Estimate*  
Variance  
Percent  
FY 2016  
TAX REVENUE  
Auto Sales  
$1,015,342  
$6,834,289  
$7,849,631  
$1,018,300  
$6,992,200  
$8,010,500  
-$2,958  
-0.3%  
$992,249  
2.3%  
Nonauto Sales and Use  
Total Sales and Use Taxes  
-$157,911  
-2.3%  
$6,698,142  
2.0%  
-$160,869  
-2.0%  
$7,690,391  
2.1%  
Personal Income  
Corporate Franchise  
Financial Institution  
Public Utility  
$5,478,938  
$3,394  
$5,926,600  
$0  
-$447,662  
$3,394  
-$26,178  
-$1,598  
$16,016  
-$255  
-7.6%  
---  
$5,727,312  
$30,368  
$129,640  
$75,407  
$261,696  
$30,647  
$959,792  
$5,598  
-4.3%  
-88.8%  
-18.4%  
-4.1%  
4.1%  
$105,722  
$72,302  
$272,516  
$32,145  
$960,001  
$5,014  
$131,900  
$73,900  
$256,500  
$32,400  
$988,000  
$4,900  
-19.8%  
-2.2%  
6.2%  
-0.8%  
-2.8%  
2.3%  
6.0%  
-73.7%  
---  
Kilowatt-Hour Excise  
Natural Gas Consumption (MCF)  
Commercial Activity Tax  
Petroleum Activity Tax  
Foreign Insurance  
Domestic Insurance  
Business and Property  
Cigarette  
4.9%  
-$27,999  
$114  
0.0%  
-10.4%  
6.3%  
$336,770  
$158  
$317,700  
$600  
$19,070  
-$442  
$316,940  
$514  
-69.3%  
-841.0%  
-3.2%  
2.7%  
-$678  
$0  
-$678  
$92  
$667,262  
$42,856  
$34,786  
$494  
$658,200  
$41,000  
$33,700  
$0  
$9,062  
$1,856  
$1,086  
$494  
1.4%  
4.5%  
3.2%  
---  
$689,009  
$41,717  
$33,808  
$933  
Alcoholic Beverage  
Liquor Gallonage  
2.9%  
Estate  
-47.1%  
-0.8%  
Total Tax Revenue  
$15,861,313  
$16,475,900  
-$614,587  
-3.7%  
$15,993,862  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$24,083  
$56,244  
$54,634  
$134,961  
$17,200  
$53,010  
$54,050  
$124,260  
$6,883  
$3,234  
$584  
40.0%  
6.1%  
1.1%  
8.6%  
$16,606  
$53,635  
$45,240  
$115,480  
45.0%  
4.9%  
20.8%  
16.9%  
Total Nontax Revenue  
$10,701  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$92,844  
$92,844  
$0  
$31,800  
$31,800  
$0  
$61,044  
$61,044  
---  
192.0%  
192.0%  
$0  
$194,576  
$194,576  
---  
-52.3%  
-52.3%  
TOTAL STATE SOURCES  
Federal Grants  
$16,089,118  
$9,022,909  
$25,112,027  
$16,631,960  
$9,709,834  
$26,341,794  
-$542,842  
-$686,925  
-3.3%  
-7.1%  
-4.7%  
$16,303,918  
$9,310,931  
$25,614,849  
-1.3%  
-3.1%  
-2.0%  
TOTAL GRF SOURCES  
-$1,229,768  
*Estimates of the Office of Budget and Management as of August 2016.  
Detail may not sum to total due to rounding.  
April 2017  
3
Budget Footnotes  
Ohio Legislative Service Commission  
REVENUES  
Jean J. Botomogno, Principal Economist, 614-644-7758  
Overview  
The conclusion of the third fiscal quarter in March 2017 did not  
change trends observed in the previous two quarters, and the continuing  
slide in tax revenues, despite relatively good information on the state of  
the economy as a whole, has been perplexing. On January 30, 2017, OBM  
revised downward its August 2016 estimates of FY 2017 GRF tax revenue  
by $592.2 million, which was consistent with revenue experiences  
throughout the fiscal year. However, the variance analyses in this issue  
of Budget Footnotes are based on the August estimates as OBM did not  
revise its monthly estimates for the remainder of FY 2017.  
FY 2017 GRF  
tax revenue  
was  
$
614.6 million  
Based on the August estimates, total GRF sources1 of $25.11 billion  
through March were $1.23 billion (4.7%) below projections, from  
below estimate  
through March. shortfalls of $614.6 million from tax sources and $686.9 million in federal  
grants, the latter primarily related to the level of spending in the  
Medicaid program. (See the "Expenditures" section of this publication.)2  
Those negative variances were partially offset by positive variances of  
$
and 2 above show GRF sources for March and for FY 2017 through  
March, respectively.  
61.0 million in transfers in and $10.7 million in nontax revenue. Tables 1  
For the month of March, GRF sources of $2.51 billion were  
$
$
318.6 million below the August estimate, with negative variances of  
114.4 million for federal grants and $202.9 million for tax sources. The  
performance of tax sources was affected by a negative variance of  
March GRF tax  
revenue was  
$
67.9 million from the foreign insurance tax (which partly reversed a  
timing-related surplus of $80.4 million in February). However, the  
negative variance in tax revenue was mainly affected by the personal  
income tax (PIT), which was $95.5 million below estimate, and the sales  
and use tax, which was short of anticipated receipts by $40.5 million. In  
addition, the financial institutions tax (FIT), the kilowatt-hour tax, and  
the alcoholic beverage tax were below target by $9.4 million, $4.9 million,  
and $1.0 million, respectively. The negative variances above were  
$202.9 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.  
2 Through March, FY 2017 GRF Medicaid spending was $871.5 million  
below estimate.  
Budget Footnotes  
4
April 2017  
Ohio Legislative Service Commission  
partially offset by positive variances of $13.7 million from the commercial  
activity tax (CAT) and $2.2 million from the cigarette and other tobacco  
products tax.  
The following chart illustrates the cumulative performance of total  
GRF sources relative to estimates through each month of FY 2017, broken  
down by its largest components. Despite a small positive contribution  
from the "other state revenue" component (light purple bar in the online  
version of the chart), the GRF's cumulative sources were $1,229.8 million  
below estimate through March, as labeled in the far right column.  
Chart 1: GRF Source Fiscal Year Cumulative Performance  
by Component  
Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17  
$
200  
$
0
-
$17.2  
-
-$200  
-$400  
-$600  
-$800  
$145.4  
-
$235.0 -$262.2  
-$611.3  
$713.7  
-
-
$845.7 -$911.2  
-$1,000  
-$1,200  
-$1,400  
-
$1,229.8  
Federal Grants  
Tax Revenue  
Other State Revenue  
Compared to the corresponding period in FY 2016, tax revenue in  
FY 2017 was $132.6 million (0.8%) lower. Though most of the revenue  
decrease was due to lower collections from the PIT ($248.4 million),  
receipts from the corporate franchise tax, the cigarette taxes, and the FIT  
decreased by $27.0 million, $21.7 million, and $23.9 million, respectively.  
On the other hand, sales and use tax revenue was $159.2 million higher  
than in FY 2016; and revenue also grew for the foreign insurance tax  
Sales and use  
tax receipts  
were  
(
$19.8 million) and the kilowatt-hour excise tax ($10.8 million).  
Sales and Use Tax  
For the first time in almost a year, sales and use tax revenue fell  
$
160.9 million  
below  
estimates  
below receipts in the corresponding month in the preceding year. In  
March, GRF monthly sales and use tax revenue of $777.9 million was through March  
$
40.5 million (4.9%) below estimate and also $9.8 million (1.2%) below  
in FY 2017.  
revenue in the same month last year. For the fiscal year to date, GRF sales  
and use tax receipts of $7.85 billion were $160.9 million (2.0%) below  
estimate, though they were $159.2 million (2.1%) above receipts in FY 2016  
April 2017  
5
Budget Footnotes  
Ohio Legislative Service Commission  
through March. The 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; both tax sources were below  
projections in March. 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  
3
instead of the auto tax.  
Chart 2: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Actual  
Estimate  
Nonauto Sales and Use Tax  
For the third time this fiscal year, monthly nonauto sales tax  
receipts were below receipts in the corresponding month in FY 2016.  
Nonauto sales and use tax revenue to the GRF was $651.2 million in  
March, an amount $37.4 million (5.4%) below estimate and $3.5 million  
Nonauto sales  
and use tax  
revenue was  
(0.5%) below revenue in March 2016. Collections from this segment of the  
$
157.9 million  
tax had been below the estimate every month this fiscal year, except in  
December. Comparing revenue, month by month, to revenue from the  
same month a year ago reveals growth, but the pace has decreased in the  
most recent months. For FY 2017 through March, nonauto sales and use  
tax revenue of $6.83 billion was $157.9 million (2.3%) below expectations,  
though receipts were $136.1 million (2.0%) above receipts in the  
corresponding period in FY 2016. Chart 2 above illustrates the year-over-  
below estimate  
through March  
in FY 2017.  
3 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  
6
April 2017  
Ohio Legislative Service Commission  
year growth of nonauto sales and use tax collections and its failure to meet  
estimates in FY 2017.  
Auto Sales and Use Tax  
Auto sales and  
After a strong performance that brought its revenue up to estimate  
for the year in February, the auto sales tax stumbled in March. For the use tax revenue  
month, the GRF received $126.8 million, an amount that was $3.0 million  
was $3.0 million  
below estimate  
through March  
(
2.3%) below expectations and $6.2 million (4.7%) below receipts in the  
same month in 2016. For the fiscal year, GRF revenue of $1.02 billion was  
3.0 million (0.3%) below estimates and $23.1 million (2.3%) above  
$
revenue in FY 2016 through March. As the chart below illustrates, the in FY 2017.  
year-over-year growth generally picked up in FY 2017 until it slowed in  
recent months.  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
6
4
2
0
.0%  
.0%  
.0%  
.0%  
Actual  
Estimate  
-2.0%  
-4.0%  
-6.0%  
Nationwide, vehicle sales appear to have also shifted into lower  
gear. The sales pace of light vehicles (autos and light trucks) fell to  
1
2
1
7.2 million units (seasonally adjusted annual rate) in the first quarter of  
017, down from 18.0 million in the final three months of 2016 and  
7.3 million a year ago in the corresponding quarter in 2016. CY 2017 first-  
quarter auto sales fell by 9.5% compared to the October-December  
quarter; the corresponding figure for light trucks was a more moderate  
decline of 1.5%. Relative to the same quarter a year ago, nationwide unit  
sales of light trucks were up 6.7%, while sales of autos fell 11.7%. Auto  
sales were 37% of all light vehicle unit sales during the first three months  
of 2017. In the same quarter a year ago, they were 42% of all unit sales,  
and in 2015 their share was 45% of total unit sales.  
April 2017  
7
Budget Footnotes  
Ohio Legislative Service Commission  
Personal Income Tax  
The performance of the PIT has been underwhelming through the  
first three fiscal quarters and the main culprit for the sustained weakness  
of GRF tax sources in FY 2017. Typically, fourth-quarter PIT receipts may  
be as high as a third of total PIT fiscal year receipts; thus results of the  
individual income tax filing season in April and receipts from the first  
and second quarterly estimated payments (due in April and June,  
respectively) will determine the extent of the fiscal year's results for this  
tax source and tax receipts as a whole.  
FY 2017 PIT  
revenue was  
March PIT GRF revenue was $442.6 million, $95.5 million (17.7%)  
below the August estimate. However, receipts were $22.9 million (5.5%)  
above revenue in March 2016. Through the end of March 2017, total  
FY 2017 GRF revenue from the PIT of $5.48 billion was $447.7 million  
$447.7 million  
below estimate  
through March.  
(7.6%) below OBM's August estimate, and $248.4 million (4.3%) below  
PIT revenue in the corresponding period in FY 2016. PIT revenue is  
comprised of gross collections, minus refunds and distributions to the  
Local Government Fund (LGF). Gross collections consist of employer  
4
withholdings, quarterly estimated payments, trust payments, payments  
associated with annual returns, and other miscellaneous payments.  
The performance of the tax is typically driven by employer  
withholdings and refunds. In March, employer withholding was  
$
23.2 million below estimates, whereas refunds were $76.6 million higher  
than anticipated. On the other hand, quarterly estimated payments were  
above estimates by $3.7 million. For FY 2017 through March, the PIT  
revenue shortfall was due to refunds that were $271.5 million (25.8%)  
higher than expected. Also, employer withholding revenue was  
Revenue from  
employer  
$
192.2 million (3.0%) short of anticipated receipts. In addition to that  
withholding was  
negative variance, miscellaneous payments and revenue from trusts were  
lower than expected by $8.5 million (11.6%) and $5.7 million (19.4%).  
Partly offsetting those shortfalls, collections from quarterly estimated  
payments and annual return payments were above anticipated revenue  
by $8.0 million (1.6%) and $13.9 million (9.1%), respectively.  
$
192.2 million  
below estimate  
in FY 2017  
through March.  
Chart 4 below illustrates how a three-month moving average of  
monthly employer withholdings has grown relative to one year earlier.  
The pace of growth increased during early FY 2017, as the effects of  
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  
8
April 2017  
Ohio Legislative Service Commission  
policy changes (which led to reduced withholding rates in August 2015)5  
were phased out of the year-over-year calculations, but fell in the second  
fiscal quarter. PIT revenue began growing again in December and  
continued in the first quarter of 2017, though the tax is substantially below  
estimated revenue for the fiscal year as a whole.  
Chart 4: Monthly Withholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
8
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Actual  
Estimate  
-
1.0%  
2.0%  
-
FY 2017 revenues through March 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  
-$192.2  
$8.0  
-3.0%  
1.6%  
$85.3  
-$204.9  
-$9.4  
1.4%  
-28.3%  
-28.4%  
-9.3%  
-4.1%  
-2.1%  
7.8%  
Quarterly Estimated Payments  
Trust Payments  
-$5.7  
-19.4%  
9.1%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$13.9  
-$8.5  
-$17.1  
-$2.8  
-11.6%  
-2.5%  
25.8%  
-2.8%  
-7.6%  
-$184.4  
$271.5  
-$8.3  
-$148.9  
$95.3  
Less Refunds  
Less LGF Distribution  
GRF PIT Revenue  
$4.1  
1.5%  
-$447.7  
-$248.4  
-4.3%  
5 H.B. 64, the budget act for the current biennium, reduced income tax  
rates for all brackets by 6.3% for taxable years beginning in 2015, and the  
withholding rate reduction was implemented in August 2015.  
April 2017  
9
Budget Footnotes  
Ohio Legislative Service Commission  
FY 2017 gross collections were $148.9 million below collections  
through the first three quarters last year. Most of the decline was due to  
lower quarterly estimated payments ($204.9 million) as taxpayers  
adjusted the payments to lower tax rates and lower taxation of business  
income. On the other hand, payroll continued to grow and employer  
withholding increased by $85.3 million compared to the corresponding  
period last year.  
Cigarette and Other Tobacco Products Tax  
Through March, the cigarette and other tobacco products tax was  
the only major tax source that consistently outperformed expectations.  
March GRF revenue from the cigarette and other tobacco products tax of  
FY 2017  
revenue from  
the cigarette  
tax was  
$
80.0 million was $2.2 million (2.9%) above estimate and $0.6 million  
(0.7%) above revenue in March 2016; and for the fiscal year, receipts from  
the tax were $667.3 million, $9.1 million (1.4%) above estimate. Of the  
total revenue, $618.7 million was from sales of cigarettes and  
$9.1 million  
above  
$
48.6 million was from sales of other tobacco products. Compared to the  
corresponding period of FY 2016, receipts in FY 2017 were $21.7 million  
estimate.  
(
3.2%) lower. Generally, cigarette tax receipts are trending downward  
6
long term; however, legislative changes led to increased receipts in the  
early months of FY 2016. Excluding floor tax receipts, FY 2017 receipts  
were 0.8% below receipts in FY 2016.  
Commercial Activity Tax  
The third quarter of FY 2017 provided GRF receipts of  
$
341.3 million from the CAT, including $20.5 million in March. March  
receipts were $13.7 million (202.0%) above estimate, and $5.4 million  
35.4%) above revenue in the same month last year. For the fiscal year  
through March, CAT revenues to the GRF totaled $960.0 million,  
28.0 million (2.8%) below estimate, and almost flat compared to GRF  
FY 2017  
revenue from  
the CAT was  
(
$
$
28.0 million  
revenue in the corresponding period in FY 2016. According to OAKS,  
gross collections were $1.37 billion, $5.2 million (0.4%) below collections  
in the first three quarters of FY 2016. However, FY 2017 net collections  
were slightly above net collection in FY 2016 because refunds were lower  
this fiscal year by about $5 million.  
below  
estimate.  
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%.  
Budget Footnotes  
10  
April 2017  
Ohio Legislative Service Commission  
Though weakness in gross collections has continued this fiscal year,  
third-quarter gross collections were about 2.0% above collections in the  
third quarter in FY 2016. CAT gross collections were lower in the first and  
second quarters by 0.7% and 2.5%, respectively, when compared to the  
corresponding quarters in FY 2016.  
April 2017  
11  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of March 2017  
(
$ in thousands)  
(
Actual based on OAKS reports run April 3, 2017)  
PROGRAM  
Actual  
Estimate*  
Variance  
Percent  
Primary and Secondary Education  
Higher Education  
$861,114  
$890,003  
-$28,889  
-3.2%  
$185,876  
$7,002  
$187,359  
$3,579  
-$1,482  
$3,424  
-0.8%  
95.7%  
-2.5%  
Other Education  
Total Education  
$1,053,993  
$1,080,940  
-$26,948  
Medicaid  
$1,566,289  
$108,790  
$1,643,572  
$107,343  
-$77,282  
$1,447  
-4.7%  
1.3%  
Health and Human Services  
Total Welfare and Human Services  
$1,675,079  
$1,750,915  
-$75,836  
-4.3%  
Justice and Public Protection  
General Government  
$143,178  
$25,963  
$150,364  
$25,293  
-$7,186  
$670  
-4.8%  
2.7%  
Total Government Operations  
$169,140  
$175,656  
-$6,516  
-3.7%  
Property Tax Reimbursements  
Debt Service  
$233,181  
$155,511  
$388,692  
$124,500  
$155,819  
$280,320  
$108,681  
-$308  
87.3%  
-0.2%  
38.7%  
Total Other Expenditures  
$108,372  
Total Program Expenditures  
$3,286,904  
$3,287,831  
-$927  
0.0%  
TRANSFERS  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$13,095  
$13,095  
$0  
$0  
$0  
$0  
$13,095  
$13,095  
---  
---  
---  
TOTAL GRF USES  
$3,299,999  
$3,287,831  
$12,168  
0.4%  
*
August 2016 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
12  
April 2017  
Ohio Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2017 as of March 31, 2017  
(
$ in thousands)  
(
Actual based on OAKS reports run April 3, 2017)  
Percent  
Change  
PROGRAM  
Actual  
Estimate*  
Variance  
Percent  
FY 2016  
Primary and Secondary Education  
Higher Education  
$6,293,444  
$1,733,246  
$62,196  
$6,293,493  
-$49  
0.0%  
$5,783,723  
$1,676,627  
$58,890  
8.8%  
$1,744,448  
$61,189  
-$11,201  
$1,008  
-0.6%  
1.6%  
3.4%  
5.6%  
7.6%  
Other Education  
Total Education  
$8,088,887  
$8,099,130  
-$10,243  
-0.1%  
$7,519,240  
Medicaid  
$13,397,130  
$1,041,294  
$14,438,424  
$14,268,617  
$1,094,066  
$15,362,682  
-$871,487  
-$52,772  
-$924,258  
-6.1%  
-4.8%  
-6.0%  
$13,667,431  
$1,024,944  
$14,692,375  
-2.0%  
1.6%  
Health and Human Services  
Total Welfare and Human Services  
-1.7%  
Justice and Public Protection  
General Government  
$1,577,353  
$285,897  
$1,600,612  
$301,928  
-$23,259  
-$16,031  
-$39,290  
-1.5%  
-5.3%  
-2.1%  
$1,540,326  
$269,875  
2.4%  
5.9%  
2.9%  
Total Government Operations  
$1,863,251  
$1,902,540  
$1,810,201  
Property Tax Reimbursements  
Debt Service  
$1,135,431  
$1,218,382  
$2,353,812  
$1,044,483  
$1,234,322  
$2,278,806  
$90,947  
-$15,941  
$75,007  
8.7%  
-1.3%  
3.3%  
$1,027,931  
$1,186,616  
$2,214,547  
10.5%  
2.7%  
6.3%  
Total Other Expenditures  
Total Program Expenditures  
$26,744,374  
$27,643,158  
-$898,784  
-3.3%  
$26,236,363  
1.9%  
TRANSFERS  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$29,483  
$256,256  
$285,739  
$29,483  
$269,541  
$299,023  
$0  
-$13,284  
-$13,284  
0.0%  
-4.9%  
-4.4%  
$425,500  
$406,003  
$831,503  
-93.1%  
-36.9%  
-65.6%  
TOTAL GRF USES  
$27,030,113  
$27,942,182  
-$912,069  
-3.3%  
$27,067,866  
-0.1%  
*
August 2016 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
April 2017  
13  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on April 6, 2017)  
Month of March 2017  
Year to Date Through March 2017  
Actual Estimate* Variance  
$17,036,457 $18,120,788 -$1,084,332  
Department  
Medicaid  
Actual  
Estimate*  
Variance  
Percent  
Percent  
$1,959,536  
$1,516,521  
$443,015  
$2,380,176  
$1,589,269  
$790,907  
-$420,640  
-$72,748  
-$347,892  
-17.7%  
-4.6%  
-6.0%  
-6.1%  
-5.6%  
GRF  
$12,911,008 $13,750,156  
-$839,148  
-$245,183  
Non-GRF  
-44.0%  
$4,125,449  
$4,370,632  
Developmental Disabilities  
$209,933  
$43,864  
$231,403  
$47,236  
-$21,470  
-$3,372  
-9.3%  
-7.1%  
-9.8%  
$1,873,228  
$425,497  
$1,982,029  
$432,133  
-$108,801  
-$6,636  
-5.5%  
-1.5%  
-6.6%  
GRF  
Non-GRF  
$166,069  
$184,167  
-$18,098  
$1,447,730  
$1,549,896  
-$102,165  
Job and Family Services  
$16,089  
$5,355  
$14,280  
$6,531  
$7,749  
$1,809  
-$1,176  
$2,985  
12.7%  
-18.0%  
38.5%  
$159,996  
$53,145  
$195,698  
$79,270  
-$35,701 -18.2%  
GRF  
-$26,126 -33.0%  
Non-GRF  
$10,734  
$106,852  
$116,427  
-$9,576  
-8.2%  
Health  
GRF  
$1,531  
$376  
$3,160  
$254  
-$1,629  
$123  
-51.6%  
48.3%  
-60.3%  
$20,865  
$2,923  
$20,277  
$2,491  
$588  
$432  
$156  
2.9%  
17.4%  
0.9%  
Non-GRF  
$1,155  
$2,906  
-$1,752  
$17,942  
$17,786  
Aging  
$455  
$173  
$282  
$514  
$282  
$232  
-$58  
-$109  
$50  
-11.3%  
-38.6%  
21.7%  
$5,409  
$2,807  
$2,602  
$5,765  
$2,816  
$2,949  
-$356  
-6.2%  
GRF  
-$9  
-0.3%  
Non-GRF  
-$346 -11.7%  
Mental Health and Addiction  
$410  
$0  
$195  
$0  
$215 110.6%  
$0 ---  
$215 110.6%  
$4,172  
$1,750  
$2,422  
$3,411  
$1,750  
$1,661  
$761  
$0  
22.3%  
0.0%  
GRF  
Non-GRF  
$410  
$195  
$761  
45.8%  
Total GRF  
$1,566,289  
$621,665  
$1,643,572  
$986,156  
-$77,282  
-4.7%  
$13,397,130 $14,268,617  
$5,702,997 $6,059,351  
-$871,487  
-$356,354  
-6.1%  
-5.9%  
Total Non-GRF  
-$364,491  
-$441,773  
-37.0%  
Total All Funds  
$2,187,955  
$2,629,728  
-16.8%  
$19,100,127 $20,327,967 -$1,227,841  
-6.0%  
*Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
14  
April 2017  
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 April 6, 2017)  
March Year to Date Through March 2017  
Estimate*  
(
Payment Category  
Managed Care  
Nursing Facilities  
DDD Services  
Hospitals  
Actual  
Variance  
-$68,499  
$10,770  
-$22,223  
-$332,464  
$2,188  
Percent  
-7.3%  
Actual  
Estimate*  
$8,189,333  
$1,098,958  
$1,914,071  
$1,879,035  
$909,515  
$815,752  
$264,360  
$333,798  
$354,184  
$152,044  
$253,381  
$128,574  
$3,335,411  
$699,552  
Variance  
-$633,843  
$39,018  
Percent  
-7.7%  
3.6%  
$868,472  
$122,377  
$198,555  
$213,057  
$98,821  
$71,670  
$28,424  
$28,513  
$48,431  
$12,530  
$40,806  
$9,919  
$936,971  
$111,607  
$220,778  
$545,521  
$96,633  
$86,084  
$29,035  
$33,814  
$41,306  
$15,884  
$29,307  
$13,407  
$397,686  
$71,695  
$7,555,489  
$1,137,976  
$1,812,316  
$1,748,397  
$853,188  
$671,370  
$258,750  
$290,113  
$457,461  
$127,996  
$295,795  
$92,501  
9.6%  
-10.1%  
-60.9%  
2.3%  
-$101,755  
-$130,638  
-$56,327  
-5.3%  
-7.0%  
-6.2%  
Behavioral Health  
Administration  
Aging Waivers  
Prescription Drugs  
Medicare Buy-In  
Physicians  
-$14,414  
-$610  
-16.7%  
-2.1%  
-$144,382 -17.7%  
-$5,609 -2.1%  
-$43,685 -13.1%  
$103,277 29.2%  
-$24,048 -15.8%  
$42,413 16.7%  
-$36,073 -28.1%  
-$5,301  
$7,126  
-15.7%  
17.3%  
-21.1%  
39.2%  
-26.0%  
-10.1%  
24.1%  
-16.8%  
-$3,354  
$11,499  
-$3,488  
-$40,271  
$17,268  
-$441,773  
Medicare Part D  
Home Care Waivers  
ACA - Managed Care  
All Other  
$357,415  
$88,964  
$3,071,273  
$727,501  
-$264,137  
$27,949  
-7.9%  
4.0%  
-6.0%  
Total All Funds  
$2,187,955 $2,629,728  
$19,100,127 $20,327,967 -$1,227,841  
*
Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
April 2017  
15  
Budget Footnotes  
Ohio Legislative Service Commission  
EXPENDITURES  
Russ Keller, Senior Economist, 614-644-1751  
Nicholas J. Blaine, Budget Analyst, 614-387-5418  
Overview  
For the first three quarters of FY 2017, GRF Medicaid expenditures  
Through  
totaled $13.40 billion. These expenditures were $871.5 million below the  
estimate released by OBM in August 2016. GRF Medicaid expenditures'  
7
March, GRF  
program  
negative year-to-date variance alone has exceeded the $825 million  
downward adjustment made by OBM in January for GRF program  
expenditures as a whole for the full fiscal year. 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. In recent years,  
the federal government reimburses about two-thirds of Ohio's all-funds  
Medicaid expenditures. The section that follows this overview provides  
898.8 million, more details on Medicaid expenditures.  
expenditures  
were below  
OBM's  
August 2016  
estimate by  
$
of which  
Year-to-date expenditures were also below OBM's August 2016  
estimates for all other program categories except for Property Tax  
Reimbursements and Other Education. The $90.9 million positive  
year-to-date variance in the Property Tax Reimbursements program  
category was due to timing; reimbursement payments were  
$871.5 million  
occurred in  
Medicaid.  
$
108.7 million (87.3%) above estimate in March. This program category is  
expected to finish the fiscal year below estimate due primarily to declines  
in homestead exemption payments. The Other Education program  
category had a small positive year-to-date variance of $1.0 million.  
Including Medicaid, year-to-date GRF program expenditures were  
$
898.8 million (3.3%) below OBM's August 2016 estimate.  
Tables 3 and 4 show GRF uses for the month of March and for  
FY 2017 through March, respectively. GRF uses mainly consist of  
program expenditures but also include transfers out. Including both  
program expenditures and transfers out, year-to-date GRF uses were  
$
912.1 million (3.3%) below OBM's August 2016 estimate.  
7
OBM revised FY 2017 disbursement estimates downward from  
$
35.89 billion to $35.07 billion as part of its executive budget submission on  
January 30, 2017. However, the variance analyses for this and future  
Expenditures reports will continue to be based on those compiled by OBM in  
August 2016.  
Budget Footnotes  
16  
April 2017  
Ohio Legislative Service Commission  
Medicaid  
Table 5 shows GRF and non-GRF Medicaid expenditures for the  
Ohio Department of Medicaid (ODM) and the five "sister" agencies –  
Developmental Disabilities, Job and Family Services, Health, Aging, and  
Mental Health and Addiction Services. Through March, all-funds  
Medicaid expenditures totaled $19.10 billion, $1.23 billion (6.0%) below  
Across all  
funds,  
estimate. Year-to-date GRF Medicaid expenditures were below estimate year-to-date  
by $871.5 million (6.1%), of which $77.3 million occurred in the month of  
March. As expected, non-GRF Medicaid expenditures in March were  
below estimate by a large amount ($364.5 million, 37.0%). As reported in  
the previous issue of Budget Footnotes, ODM made both its originally  
Medicaid  
expenditures  
were  
scheduled February ($314.0 million) and March ($314.0 million) HCAP $1.23 billion  
(Hospital Care Assurance Program) payments in February. Under HCAP,  
below  
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. For the year to date, non-GRF Medicaid  
expenditures were $356.4 million (5.9%) below estimate.  
estimate.  
Table 6 details all-funds Medicaid expenditures by payment  
category. As seen from the table, Managed Care continues to have the  
largest negative year-to-date variance, which grew another $68.5 million  
(7.3%) in March to $633.8 million (7.7%) for the year to date. Lower than  
forecasted managed care rates are the main culprits. Actual rates (which  
are set at the beginning of each calendar year) for calendar years 2016 and  
2
017 are both below the ones used in the estimate. Therefore, the negative  
variance in Managed Care will likely continue to grow in the last quarter  
of FY 2017. Lower than forecasted managed care rates are also the main  
reason behind the negative year-to-date variance in the ACA Managed  
Care category. This category's negative variance also grew in March by  
$
40.3 million (10.1%). For the year to date, ACA Managed Care registered  
the second largest negative variance at $264.1 million (7.9%).  
The third largest negative year-to-date variance occurred in the  
Administration category ($144.4 million, 17.7%). Approximately 40% of  
Medicaid's administrative spending is driven by service levels. Therefore,  
variances in spending in Administration often reflect variances in  
spending in the service categories. Variances in this category are also  
driven by timing issues as billing for various contracts can be difficult to  
predict.  
Hospitals had the fourth largest negative year-to-date variance at  
$
130.7 million (7.0%). As indicated earlier, the originally anticipated  
March HCAP payments were disbursed in February. As a result, in  
February this category registered the only positive year-to-date variance  
April 2017  
17  
Budget Footnotes  
Ohio Legislative Service Commission  
of this fiscal year at $201.8 million. As this timing issue was resolved in  
March, this category's variance returned to the trend it had for all other  
months of the fiscal year. These negative variances were mainly due to  
lower than anticipated spending for the aged, blind, and disabled (ABD)  
population.  
Medicare Buy-in, on the other hand, continues to spend more than  
originally anticipated, which partially offset the overwhelmingly  
negative year-to-date variances in various Medicaid payment categories.  
The positive variance in Medicare Buy-in grew another $7.1 million  
(17.3%) in March to a total of $103.3 million (29.2%) through March, due  
to larger than anticipated increases in Medicare Part B premiums for both  
calendar years 2016 and 2017. Due to a higher rate increase in calendar  
year 2017, the positive variance will likely grow at a faster rate in the  
second half of FY 2017 than in the first half. The Medicare Buy-in  
Program pays Medicare premiums, deductibles, and coinsurance for  
certain low-income Ohioans. Two other categories that had relatively  
large positive year-to-date variances are Medicare Part D ($42.4 million,  
1
6.7%) and Nursing Facilities ($39.0 million, 3.6%).  
Also worth noting, the All Other category had a positive  
year-to-date variance of $27.9 million (4.0%) due partly to payments for  
the new Comprehensive Primary Care (CPC) Program. Participating  
CPC practices are eligible to receive a per-member per-month incentive  
payment by engaging in activities that are known to improve patients'  
health. Payments average $4 per-member per-month. The first payments  
were made in February.  
Budget Footnotes  
18  
April 2017  
Ohio Legislative Service Commission  
ISSUE UPDATES  
Department of Job and Family Services Releases TANF Spending Plan  
Nicholas J. Blaine, Budget Analyst, 614-387-5418  
On March 9, 2017, the Ohio Department of Job and Family Services (ODJFS)  
released the Temporary Assistance for Needy Families (TANF) Spending Plan estimates  
for FY 2018 and FY 2019. The plan summarizes how the Department proposes to  
expend Ohio's federal TANF block grant allocation and meet maintenance of effort  
(MOE) spending requirements. TANF and MOE funds must first be used to provide  
cash assistance payments to low-income individuals; ODJFS provides this support  
through Ohio Works First. After budgeting for those payments, the funds may be used  
to provide short-term benefits and other services to eligible families, such as child care  
and food assistance. The table below summarizes these allocations, including both  
federal TANF moneys and MOE.  
TANF Spending Plan, in millions  
Category/Program  
Ohio Works First  
FY 2018  
$264.1  
$455.2  
$326.8  
$72.8  
$54.7  
$70.3  
$17.1  
$24.9  
$6.5  
FY 2019  
$251.0  
$472.2  
$326.8  
$72.8  
$57.5  
$70.3  
$17.1  
$24.9  
$6.5  
Child Care  
County Allocations  
Title XX Services  
State Administration  
Department of Education  
Food Banks  
Ohio Association of Food Banks  
Faith-Based Initiatives  
Kinship Permanency  
Independent Living  
Other  
$5.3  
$5.3  
$2.0  
$2.0  
$1.3  
$1.0  
Total  
$1,301.0  
$1,307.3  
*Figures may not sum due to rounding.  
Ohio's TANF block grant allocation is $728.0 million annually; to draw down the  
full amount, the state must spend at least $416.9 million in MOE. Total spending  
exceeds $1.15 billion in TANF resources annually due to a combination of spending in  
excess of the MOE and rolling over federal TANF funds from the previous fiscal year.  
April 2017  
19  
Budget Footnotes  
Ohio Legislative Service Commission  
The TANF Block Grant is expended through federal fund 3V60 appropriation item  
6
00689, TANF Block Grant. MOE payments are made from numerous appropriation  
items, most notably GRF appropriation items 600410, TANF State Maintenance of  
Effort, 600535, Early Care and Education, 200408, Early Childhood Education, and  
dedicated purpose fund 4A80 appropriation item 600658, Public Assistance Activities.  
ODODD Releases FY 2017 Second Quarter Scorecard on Budget Initiatives  
Jacquelyn Schroeder, Budget Analyst, 614-466-3279  
On March 8, 2017, the Ohio Department of Developmental Disabilities (ODODD)  
released its 2017 Second Quarter Scorecard, which outlines ODODD's progress on  
implementing various budget initiatives included in H.B. 64. H.B. 64 provided an  
increase of approximately $300 million to ODODD for the creation of 3,000 new state-  
funded Medicaid waivers, which allow individuals with disabilities to receive care in  
their communities or in their homes rather than in intermediate care facilities (ICFs) or  
other long-term care facilities. Of the 3,000 new waivers, 1,864 were designated for  
individuals on a waiting list for waiver services. This includes 1,000 Self-Empowered  
Life Funding (SELF) waivers and 864 Individual Options (IO) waivers. According to the  
Scorecard, all of these designated waivers have been assigned to individuals. Once an  
individual is assigned a waiver, the county board of developmental disabilities arranges  
housing and providers so the individual may begin receiving services. Of the assigned  
waivers, 392 individuals with SELF waivers and 437 individuals with IO waivers are  
receiving services.  
The remaining 1,136 waivers were designated in the following manner: 800 exit  
waivers and 336 diversion waivers. Diversion waivers allow individuals who are  
seeking admission to an ICF the option of living in a community setting. Prior to  
admission to an ICF, an individual is counseled and informed of his or her options.  
According to the Scorecard, 235 preadmission counseling sessions have taken place and  
3
to move out of an ICF. All 800 exit waivers have been assigned. Thus far, 26 individuals  
with a diversion waiver and 84 individuals with an exit waiver are receiving services.  
8 individuals were assigned a diversion waiver. Exit waivers assist individuals seeking  
The Scorecard also provides various statistics regarding ICF downsizing and  
conversion, provision of day services by county DD boards, rental assistance provided,  
and community/integrated employment. The Scorecard can be found at the following  
link: http://dodd.ohio.gov/Communications/SiteAssets/Scorecard.Q2%20Final.pdf.  
Budget Footnotes  
20  
April 2017  
Ohio Legislative Service Commission  
Ohio Task Force on Affordability and Efficiency in Higher Education  
Evaluates Action Plans of Public Universities  
Edward M. Millane, Senior Budget Analyst, 614-995-9991  
In early February, the Ohio Task Force on Affordability and Efficiency in Higher  
8
Education released a report that evaluated progress made by the 14 public universities  
in 2016 with their action plans, which they had submitted in response to the  
October 2015 recommendations of the Task Force. The evaluation report assigned each  
public university a rating of "strong progress," "continued progress needed," or  
"
unacceptable" toward a five-year goal of establishing efficiency savings or new  
9
revenue sources that directly benefit students and toward each of the six other key  
recommendations of the Task Force. As shown in the table below, the majority of  
universities earned the middle rating, continued progress needed, on these seven  
measures. The strongest results were for providing financial advising and literacy and  
conducting operations review. Five universities earned the highest rating, strong  
progress, on both measures. Four universities earned the highest rating on producing a  
diagnostic to identify cost drivers and opportunities for efficiencies. However, this is  
also the measure with the greatest number of low ratings; four universities were rated  
unacceptable on this indicator.  
University Progress Report Ratings by Recommendation 2016  
Strong  
Progress  
Continued  
Progress Needed  
Recommendation  
Unacceptable  
Provide financial advising and literacy  
Conduct operations review  
Produce cost diagnostic  
Develop five-year goals  
5
5
4
3
3
1
1
9
7
0
2
4
0
0
3
3
6
11  
11  
10  
10  
Utilize joint contracts  
Utilize existing contracts  
Develop digital capabilities  
8
The full report can be read at: https://www.ohiohighered.org/affordability-  
efficiency/task-force select "Progress Report: An evaluation of how institutions responded to  
Action Steps to Reduce College Costs."  
9 According to the report, these universities proposed approximately $1.2 billion in  
efficiency savings and new revenue sources over the next five years in their action plans.  
April 2017  
21  
Budget Footnotes  
Ohio Legislative Service Commission  
Forty-Six Public and Private Colleges and Universities Participate in  
Choose Ohio First Program  
Adam Wefler, Budget Analyst, 614-644-1721  
With the Controlling Board's approval, in March 2017 the Department of Higher  
Education (DHE) awarded a total of $7.5 million in Choose Ohio First scholarships to  
3
2 of the 46 participating colleges and universities across the state. These competitive  
awards will be used by those colleges and universities to provide scholarships,  
averaging $4,000 per student, for Ohio residents pursuing degrees in STEMM (science,  
technology, engineering, mathematics, and medicine) fields or STEMM education. The  
Choose Ohio First Program was originally established in 2007 to increase the number of  
Ohio residents who pursue degrees in STEMM fields or STEMM education. Since then,  
4
6 public and private colleges and universities (see map below) have received the  
Choose Ohio First designation with enrolled scholars receiving scholarship moneys.  
These institutions provide support specifically targeted to Choose Ohio First scholars to  
increase retention and graduation rates of those scholars. The number of STEMM  
degrees awarded in Ohio increased by 51% from 26,644 in FY 2008 to 40,283 in FY 2016.  
Budget Footnotes  
22  
April 2017  
Ohio Legislative Service Commission  
State Fire Marshal Awards $3.0 Million in MARCS Grants  
Shannon Pleiman, Budget Analyst, 614-466-1154  
On March 2, 2017, the Division of the State Fire Marshal within the Department  
of Commerce announced nearly $3.0 million in awards under the Multi-Agency Radio  
Communications System (MARCS) Grant program. Overall, 166 fire departments in  
2
5 counties received awards, ranging from approximately $240 up to nearly $50,000, the  
maximum award amount under the program. The $3.0 million in awards represents the  
full amount set aside for the program for FY 2017. The table below shows the total  
MARCS Grant funding by county.  
MARCS Grant Funding by County, FY 2017  
Number of  
Fire  
Departments  
Number of  
Fire  
Departments  
Total  
Funding  
Total  
Funding  
County  
County  
Adams  
Ashland  
Belmont  
Brown  
8
1
$314,997  
$2,640  
Madison  
Meigs  
1
$3,120  
$6,960  
3
15  
1
$35,520  
$2,016  
Monroe  
Morgan  
Pike  
5
$10,320  
$14,640  
$43,900  
$320,938  
$87,600  
$38,880  
$206,586  
$6,000  
5
Coshocton  
Darke  
1
$2,400  
9
14  
8
$606,212  
$104,945  
$8,640  
Preble  
Putnam  
Ross  
9
Hancock  
Hardin  
12  
2
8
Harrison  
Highland  
Hocking  
Knox  
10  
3
$37,200  
$146,799  
$24,240  
$47,910  
$223,336  
Shelby  
Vinton  
Wayne  
Wood  
7
2
4
12  
16  
$75,360  
$627,524  
3
Licking  
7
Total $2,998,683  
The purpose of the grant program is to help offset the costs that local fire  
departments incur for MARCS-related radio user fees and equipment that ultimately  
promote interoperability between fire responders. The State Fire Marshal awards  
MARCS grants based on a variety of criteria including: (1) the fire department's annual  
budget, (2) the annual number of fire incidents, and (3) the resident population served  
by the department. Eligible grant recipients include volunteer fire departments, joint  
fire districts, and certain private fire companies that serve a population of 25,000 or less.  
Funding for both the MARCS grants and the equipment and training grants comes from  
taxes on insurance companies selling fire insurance in Ohio and from inspection fees,  
hotel permits, and fireworks licenses. The receipts from these various sources are  
deposited into the State Fire Marshal Fund (Fund 5460).  
April 2017  
23  
Budget Footnotes  
Ohio Legislative Service Commission  
Ohio EPA Awards Nearly $1.0 million in Mosquito Control Grants  
Jessica Murphy, Budget Analyst, 614-466-9108  
On February 22, 2017, the Ohio Environmental Protection Agency (Ohio EPA)  
announced the award of $996,900 in mosquito control grants to 40 local health  
departments and related governmental entities in 27 counties.1 The table below  
summarizes the grant totals by county. The purpose of these competitive grants is to  
support a larger statewide effort by the Ohio Department of Health to lessen the  
likelihood of an outbreak of mosquito-borne viruses such as Zika, West Nile, and La  
Cross Encephalitis. The grants are supported by money appropriated from the Scrap  
Tire Management Fund (Fund 4R50) which is primarily supported by a $0.50 per tire  
fee on the sale of tires, and the Environmental Protection Remediation Fund  
0
(Fund 5410), which is mainly supported by money collected from enforcement  
settlement actions.  
2017 Ohio EPA Mosquito Control Grant Awards by County  
(
Total: $996,900)  
County  
Award  
$19,400  
$17,000  
$43,700  
$8,000  
County  
Hamilton  
Award  
$62,100  
$50,000  
$25,500  
$31,000  
$16,000  
$49,950  
$95,400  
$47,350  
$6,000  
County  
Mahoning  
Award  
$15,700  
$62,350  
$17,200  
$49,950  
$16,250  
$40,000  
$60,000  
$30,100  
$58,250  
Allen  
Ashtabula  
Auglaize  
Coshocton  
Crawford  
Cuyahoga  
Darke  
Henry  
Portage  
Richland  
Seneca  
Shelby  
Stark  
Huron  
Knox  
$11,300  
$6,500  
Lawrence  
Licking  
Lorain  
Lucas  
$69,400  
$60,600  
$27,900  
Summit  
Williams  
Wood  
Franklin  
Geauga  
Madison  
Criminal Justice Services Awards $570,000  
in Federal Law Enforcement Grants  
Maggie Wolniewicz, Senior Budget Analyst, 614-995-9992  
On January 6, 2017, the Office of Criminal Justice Services (OCJS) awarded  
570,347 in federal grants from the Edward Byrne Memorial Justice Assistance Grant  
$
Program for Law Enforcement (JAG LE) to 67 law enforcement agencies in 36 counties.  
Of the total award, 83% ($475,800) will be used to purchase equipment and materials  
that are directly related to law enforcement functions, including body and cruiser  
10 Ohio EPA launched the mosquito control grant initiative in June 2016. In 2016 it  
awarded two rounds of grants totaling just over $1.0 million to 49 grantees in 45 counties.  
Budget Footnotes  
24  
April 2017  
Ohio Legislative Service Commission  
cameras, surveillance equipment, and radios. The remaining 17%, or $94,547, will be  
used for the hiring, training, and employment of law enforcement officers and other  
support personnel.  
Under the JAG LE program, law enforcement agencies that are not otherwise  
eligible for direct federal funding may apply for a maximum of $20,000 per project with  
a 10% cash match requirement. The following table shows those counties with law  
enforcement agencies that received awards in January 2017, the number of projects per  
county, and the total amount of funding received. Project awards ranged from $1,950 to  
$
17,665. All awards are for seven months of funding, beginning February 1, 2017 until  
August 31, 2017.  
Federal Law Enforcement Grant Awards by County  
(Total: $570,347)  
County  
# of Projects)  
County  
(# of Projects)  
County  
(# of Projects)  
Award  
Award  
Award  
(
Ashtabula (1)  
Belmont (1)  
Champaign (1)  
Clermont (2)  
Cuyahoga (5)  
Delaware (1)  
Fairfield (2)  
Franklin (1)  
Gallia (1)  
$13,220  
$4,406  
Hardin (2)  
Henry (1)  
$17,200  
$6,750  
Pickaway (1)  
Portage (4)  
Preble (1)  
$8,000  
$31,330  
$7,798  
$6,435  
Hocking (2)  
Jackson (2)  
Licking (4)  
Lucas (2)  
$17,985  
$12,389  
$33,604  
$18,772  
$6,840  
$18,911  
$43,822  
$9,000  
Stark (4)  
$33,050  
$19,184  
$17,184  
$14,348  
$11,130  
$10,859  
$5,665  
Summit (2)  
Trumbull (2)  
Tuscarawas (2)  
Union (1)  
$9,750  
Madison (1)  
Mahoning (4)  
Medina (2)  
Meigs (3)  
$14,041  
$10,000  
$15,548  
$9,649  
$31,694  
$16,654  
$14,500  
$12,622  
$10,000  
Van Wert (1)  
Vinton (1)  
Geauga (1)  
Greene (1)  
Miami (1)  
Warren (1)  
Wood (3)  
$11,160  
$26,867  
Hamilton (2)  
$19,980  
Morgan (1)  
April 2017  
25  
Budget Footnotes  
Ohio Legislative Service Commission  
TRACKING THE ECONOMY  
Philip A. Cummins, Senior Economist, 614-387-1687  
Ruhaiza Ridzwan, Senior Economist, 614-387-0476  
Overview  
Nationwide employment growth slowed sharply in March.  
Employment strengthened in January and February, in both the nation  
and Ohio. The March slowdown may have been at least in part a  
consequence of adverse weather in parts of the country. Consumer  
spending was weak in January and February, as demand for utility  
service was held down for part of the period by mild weather and as  
motor vehicle sales slowed. Manufacturing production strengthened  
early this year. Residential building and sales continued to advance.  
Inflation-adjusted gross domestic product (real GDP) likely rose again in  
the first quarter but at a subdued rate. Inflation has turned higher.  
In March, the nation's central bank tightened monetary policy  
slightly. It increased the target for federal funds, overnight borrowings  
1
3
between banks, by ⁄  
4
percentage point to a range of ⁄  
4
% to 1%. This  
increase followed 1⁄  
4 percentage point increases in the target range in  
December of 2015 and 2016. Prior to that, the central bank kept the  
interest rate target near zero for seven years. A majority of the members  
of the Federal Open Market Committee (FOMC), the decision-making  
body within the central bank, expected to raise the federal funds target  
two more times this year. The next FOMC meeting is May 2-3.  
The National Economy  
Employment and Unemployment  
In March, total nonfarm payroll employment in the U.S. rose by  
only 98,000, after downward-revised gains of 219,000 in February and  
2
4
shown in Chart 5.  
Year-to-date employment gains averaged 178,000 per month,  
about matching increases in 2016 when month-to-month increases  
16,000 in January. The unemployment rate fell 0.2 percentage point to  
.5%, lowest since 2007. Trends in employment and unemployment are  
In March, total  
nonfarm  
payroll  
employment in  
the U.S. rose by averaged 187,000. If continued for a full year, employment gains at these  
rates would increase total employment by about 1.6%, a slowdown from  
increases that averaged about 2.1% per year in 2014 and 2015.  
Employment in durable goods manufacturing and in mining reached  
low points last year and rose since. Most additions to the number of  
persons with jobs continue to be in private services.  
only 98,000.  
Budget Footnotes  
26  
April 2017  
Ohio Legislative Service Commission  
Chart 5: U.S. Employment and Unemployment  
1
1
1
1
1
1
1
1
48  
45  
42  
39  
36  
33  
30  
27  
11%  
10%  
9%  
8%  
7%  
6%  
5%  
4%  
2
007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  
Nonfarm Payroll Employment Unemployment Rate (right scale)  
The March slowdown in net hiring may be at least in part a  
consequence of bad weather, notably the storm that hit the East Coast last  
month. One indicator of this is the number of employees who would  
usually work full time but who instead worked part time in the March  
survey period because of bad weather. This number jumped to more than  
3
.1 million last month from 0.6 million in February, and 0.4 million that is  
more typical in the month of March. The adverse weather may have  
delayed some new hires from starting work. If the small employment  
increase in March was mainly due to weather effects, this slowdown may  
be reversed in April.  
Unemployment fell in March to 7.2 million persons, the fewest  
people counted as unemployed since 2007. The unemployed in February The nationwide  
included 1.7 million persons who had been out of work more than six  
unemployment  
months, the fewest since 2008. Employed persons included 5.6 million  
working part time who would have preferred to work full time but had  
their hours of work reduced or could not find full-time employment. The  
rate fell in  
March to 4.5%,  
number of these involuntary part-time workers was the lowest since 2008 lowest since  
but was high relative to numbers in earlier years.  
2007.  
A survey of hiring plans at U.S. employers shows that 22% plan to  
add to payrolls in the second quarter and only 3% expect to reduce  
staffing. On a seasonally adjusted basis, net hiring intentions are within  
the range in which they have varied for the past two years. Plans to add  
1
1
to payrolls are widespread across industries.  
11 ManpowerGroup Employment Outlook Survey: Q2-2017.  
April 2017  
27  
Budget Footnotes  
Ohio Legislative Service Commission  
Production, Shipments, and Inventories  
Real GDP growth picked up in last year's second half, after slow  
growth in late 2015 and the 2016 first half. The total output of the  
economy rose at an upward revised 2.1% annual rate in last year's fourth  
quarter, following growth at a 3.5% rate in the third quarter. In the three  
quarters before that, growth averaged only about a 1.0% annual rate. The  
strengthening in the 2016 second half reflected inventory rebuilding,  
modest growth of nonresidential fixed investment and of exports instead  
of declines, and stronger growth of consumer spending. Since the start of  
the current economic expansion in 2009, real GDP growth has averaged  
only a 2.1% annual rate, the slowest of any expansion in the past seven  
decades. Sluggish expansion is foreseen continuing this year; the Federal  
Reserve Bank of Atlanta's GDPNow analysis of monthly source data  
anticipates growth in the 2017 first quarter at a weak 1.2% annual rate.12  
Manufacturing  
production, in  
the industrial  
production  
Manufacturing production, as measured in the industrial  
production index, rose 0.6% in January and 0.5% in February, after little  
growth in 2016. Mining output also grew strongly in the first two months  
of this year. However, total industrial production, combining output of  
factories, mines, and utilities, was about flat on balance in the first two  
months of 2017 as the unusually warm weather held down utility output.  
Annual revision of the indexes, based on more complete source data,  
shows greater weakness in 2015 than previously estimated, particularly  
in durable goods manufacturing and mining.  
index, rose  
0
.6% in January  
and 0.5% in  
February.  
A survey of purchasing managers at manufacturers showed  
continued expansion in March in new orders, production, and order  
backlogs, accompanied by widespread reports of higher prices for raw  
materials. Comments from survey respondents generally indicated  
favorable business conditions. A comparable survey of purchasing  
managers with business and government entities other than  
manufacturers also showed continued expansion.13  
Consumer Spending and Incomes  
Inflation-adjusted consumer spending fell 0.1% in February after  
declining 0.2% in January. This marked slowdown follows real growth of  
nearly 3% in 2016 and more than 3% in 2015. The weakness in January  
and February appears to reflect in part a retreat in motor vehicle sales  
from a record pace in late 2016 to a near-record pace, and in part slow  
12 Forecast as of April 4, from https://www.frbatlanta.org/cqer/research/  
gdpnow/?panel=1.  
1
3
These monthly surveys are conducted by the Institute for Supply  
Management.  
Budget Footnotes  
28  
April 2017  
Ohio Legislative Service Commission  
utility sales as a result of the mild winter weather. Employee  
compensation and income from most other sources continued to grow  
through February. Real disposable personal income was 2.3% higher in  
February than a year earlier.  
Sales of light motor vehicles slowed in March. The sales pace fell to  
a 16.5 million unit seasonally adjusted annual rate from 17.5 million in  
January and February, and 18.0 million in the 2016 fourth quarter. In view  
of continued growth of consumers' incomes, the sales slowdown may  
prove temporary.  
Construction and Real Estate  
Housing markets continued vigorous in early 2017, with tight  
inventories helping to push prices higher. New home unit sales in January  
and February were 7% higher than a year earlier. Year-to-date home sales  
reported by the National Association of Realtors, generally previously  
occupied homes, were 3% higher.  
Starts on construction of new housing in January and February  
were at an annual rate of 1.27 million units, seasonally adjusted. Starts on  
both homes and apartments were higher in this year's first two months  
than a year earlier. Year-to-date housing starts were 7% higher than in  
January-February 2016, continuing the uptrend underway for the past  
eight years that has resulted in more than a doubling in the number of  
units started, from the lowest level on records kept since 1959.  
A nationwide index of housing prices published by the Federal  
Housing Finance Agency was 5.7% higher in January than a year earlier.  
Prices have risen in most months since 2011. This index is based on repeat  
sales of the same houses, using data on transactions in single-family  
properties owned or insured by Fannie Mae or Freddie Mac.  
The personal  
consumption  
expenditures  
deflator was  
The dollar value of year-to-date construction spending was 3%  
higher through February than a year earlier. Private residential  
construction was 6% higher and private nonresidential construction was 2.1% higher in  
7
February 2016.  
% higher, while public construction was 8% lower than in January and  
February than  
a year earlier,  
its largest  
Inflation  
Inflation measured by the change in the personal consumption  
increase since  
expenditures deflator rose in February. This index was 2.1% higher in  
February than a year earlier, its largest increase since 2012. Excluding  
food and energy, the personal consumption expenditures deflator was  
2
012.  
1
.8% higher than in February 2016, one of the largest increases in this  
inflation measure since 2012.  
April 2017  
29  
Budget Footnotes  
Ohio Legislative Service Commission  
The consumer price index (CPI) rose 0.1% in February to 2.7%  
higher than a year earlier. The small one-month change resulted in part  
from a decline in the gasoline price. But the change from a year earlier  
was the most rapid since 2012. Excluding food and energy prices, the CPI  
was 2.2% higher than a year earlier, the index's 15th consecutive month  
in a 2.1% to 2.3% range.  
The producer price index for final demand, an indicator of  
inflation in prices charged by wholesalers and manufacturers, rose 0.3%  
in February to 2.2% higher than a year earlier, its largest year-over-year  
increase since 2012. At earlier stages in the production process, price  
increases have accelerated over the past year.  
The Ohio Economy  
Employment and Unemployment  
In February,  
Ohio's total  
nonfarm  
In February, the state's total nonfarm payroll employment,  
seasonally adjusted, increased for the fourth consecutive month, by  
5,200 jobs, or 0.3%, from January's revised total. The state's  
1
unemployment rate rose slightly from 5.0% in January to 5.1% in  
February, the highest level since March 2015. In comparison, the U.S.  
unemployment rate was 4.7% in February. The state's unemployment  
rate has not been lower than the U.S. unemployment rate since December  
payroll  
employment  
increased for  
the fourth  
consecutive  
month.  
2
015. The number of unemployed Ohioans grew by 7,000 from 287,000 in  
January to 294,000 in February. From a year earlier, the number of  
unemployed Ohioans increased by 9,000. Chart 6 shows trends in Ohio's  
payroll employment and unemployment rate over the last ten years.  
Chart 6: Ohio Employment and Unemployment Rates  
5
5
5
5
5
5
5
.6  
.5  
.4  
.3  
.2  
.1  
.0  
12%  
1
1
9
1%  
0%  
%
8%  
7
6
5
%
%
%
4%  
Nonfarm Payroll Employment  
Unemployment Rate (right scale)  
Budget Footnotes  
30  
April 2017  
Ohio Legislative Service Commission  
In February, the increase in employment was due to increases in  
both goods-producing industries and private service-providing  
industries. Increases in construction (+6,300) and manufacturing (+900)  
outweighed job losses in mining and logging (-200). Increases in private  
service-providing industries were largely in leisure and hospitality  
(+4,000), in educational and health services (+3,900), and in trade,  
transportation, and utilities (+2,000). Government employment decreased  
by 1,000, all in state government, which lost 3,100 jobs. In the 12 months  
prior to February, Ohio's total nonfarm payroll employment increased by  
4
5,400 or 0.8%. Most of job gains over the year were in educational and  
health services (+13,600), in trade, transportation, and utilities (+9,900), in  
construction (+8,900), and in nondurable goods manufacturing (+7,200).  
The largest decrease in employment was in government with a total  
decrease of 4,600 jobs compared to a year earlier. The decreases were in  
state government (-3,800) and local government (-1,500).  
Personal Income  
Ohio's personal income rose 0.8% in the fourth quarter of 2016  
compared with 0.9% in the third quarter, according to estimates of the  
U.S. Bureau of Economic Analysis. Nationwide, average state personal  
income increased 0.9% in the fourth quarter of 2016, down from 1.1% in  
the third quarter. For the entire year of 2016, Ohio's personal income rose  
3
.0%, below the national average increase of 3.6%. Personal income  
growth in Ohio and most other states resulted mainly from higher net  
earnings. In 2016, Ohio's personal income growth ranked 31st in the  
nation (from highest percent change to lowest).  
Ohio Home Sales  
In February, the number of home sales in Ohio decreased by 0.1%  
compared to a year earlier, according to the Ohio Association of Realtors.  
In the first two months of 2017, existing home sales increased by 0.7%  
compared to the first two months in 2016. The average sale price in  
January and February was $153,331, 7.4% higher than in the  
corresponding months a year earlier.  
April 2017  
31  
Budget Footnotes