Budget Footnotes  
A NEWSLETTER OF THE OHIO LEGISLATIVE SERVICE COMMISSION  
SEPTEMBER 2017  
VOLUME 41, NUMBER 1  
STATUS OF THE GRF  
STATUS OF THE GRF  
Highlights...................................1  
Revenues ..................................3  
Expenditures............................13  
HIGHLIGHTS  
Ross A. Miller, Chief Economist, 614-644-7768  
ISSUE UPDATES  
GRF tax revenue received during the first two months of  
FY 2018 was $23.6 million above the estimate published by 21 Century Community Learning  
the Office of Budget and Management (OBM) in  
st  
Center Grants.......................20  
Classroom-Based Intervention  
September 2017. In a welcome change from FY 2017,  
revenue from both the income tax and the commercial  
activity tax exceeded their respective estimates. There were  
negative variances from several other tax sources, but GRF  
tax revenue as a whole for the first two months of FY 2018  
was $3.5 million (2.8%) higher than tax receipts from the  
same months in FY 2017.  
Program................................20  
Community Connectors School  
Mentorship Grants................21  
Performance Audits .................22  
Southern Ohio Agricultural and  
Community Development  
Foundation ...........................22  
Family Violence Prevention and  
Services Act Grants..............23  
Community-Police Relations  
Grants ..................................24  
Telehealth Project in Knox  
Ohio's unemployment rate rose to 5.2% in July, from  
.0% in June. Though 5.2% is not a high unemployment rate  
5
and Logan County Nursing  
Facilities ...............................25  
by historical standards, it was 0.9 percentage point higher  
than the national rate in July.  
TRACKING THE ECONOMY  
Through August 2017, GRF sources totaled $5.68 billion:  
The National Economy ............27  
The Ohio Economy..................28  
Revenue from the personal income tax was  
34.7 million above estimate;  
$
Sales and use tax receipts were $8.6 million below  
estimate.  
Through August 2017, GRF uses totaled $6.14 billion:  
Legislative Service Commission  
Program expenditures were $157.3 million above  
estimate during the first two months of FY 2018;  
7
7 South High Street, 9th Floor  
Columbus, Ohio 43215  
Spending on property tax reimbursements was  
above estimate by $169.7 million, and spending on  
health and human services was above estimate by  
Telephone: 614-466-3615  
$
11.5 million;  
AVAILABLE ON OUR WEBSITE: WWW.LSC.OHIO.GOV  
CLICK ON 'BUDGET CENTRAL/BUDGET FOOTNOTES'  
Legislative Service Commission  
Other program expenditure categories were either below  
estimate or negligibly above it.  
OBM released monthly estimates for GRF sources and uses for  
FY 2018 in September. At the end of the Revenues and Expenditures  
sections in this issue, there are tables that summarize these estimates.  
The Revenues and Expenditures sections compare the actual  
sources and uses posted each month against OBM's estimates. Table 1  
compares the sources for each individual month and Table 2 compares  
the sources for the year to date. Likewise, Table 3 compares the uses for  
each individual month and Table 4 compares the uses for the year to  
date. The year-to-date tables (Tables 2 and 4) also show the sum of the  
sources and uses, respectively, for the same months in the previous  
fiscal year and the percent change from the previous fiscal year to the  
present fiscal year.  
For example, in this issue Table 1 compares the sources for the  
month of August, which were $2.64 billion, against OBM's estimates for  
August, which are $2.61 billion. August sources were above estimate by  
$
28.8 million (1.1%). In other words, GRF sources had a positive  
variance of $28.8 million in August. Table 2 shows that year-to-date  
sources (including both July and August) totaled $5.68 billion compared  
to an estimate of $5.64 billion. So, the year-to-date variance is a positive  
$
41.7 million. Table 2 also shows the sum of sources in July and  
August 2016 (FY 2017), which were $5.78 billion. Thus, year-to-date  
GRF sources are 1.7% ($99.3 million) lower than at the same time last  
fiscal year.  
Finally, there is a companion monthly Infographic publication that  
is designed to provide a quick glance at the variances of GRF sources  
and uses. Both the full version of Budget Footnotes and the Infographic are  
available on the LSC website (www.lsc.ohio.gov) by clicking on Budget  
Central and then selecting Budget Footnotes under the Budget  
Reference Documents heading.  
September 2017  
2
Budget Footnotes  
Ohio Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of August 2017  
(
$ in thousands)  
(
Actual based on report run in OAKS Actuals Ledger on September 8, 2017)  
STATE SOURCES  
TAX REVENUE  
Actual  
Estimate*  
Variance  
Percent  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use Taxes  
$135,726  
$681,506  
$817,232  
$125,000  
$672,500  
$797,500  
$10,726  
$9,006  
$19,732  
8.6%  
1.3%  
2.5%  
Personal Income  
Commercial Activity Tax  
Cigarette  
$691,984  
$291,227  
$85,712  
$33,509  
-$351  
$686,500  
$293,400  
$84,100  
$34,700  
$300  
$5,484  
-$2,173  
$1,612  
-$1,191  
-$651 -216.9%  
-$300 -100.0%  
$1,153  
$1,180  
-$1,040  
$1,169  
-$4  
0.8%  
-0.7%  
1.9%  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption (MCF)  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Business and Property  
Estate  
-3.4%  
$0  
$300  
$500  
$1,653  
$27,280  
$10,160  
$5,469  
$4,096  
$0  
$1,133  
-$374  
$31  
230.6%  
4.5%  
-9.3%  
27.2%  
-0.1%  
---  
---  
---  
---  
$26,100  
$11,200  
$4,300  
$4,100  
$0  
$0  
$0  
$0  
$0  
$1,133  
-$374  
$31  
Total Tax Revenue  
$1,968,761  
$1,943,000  
$25,761  
1.3%  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$0  
$5,438  
$5,409  
$10,846  
$0  
$6,020  
$2,020  
$8,040  
$0  
-$582  
$3,389  
$2,806  
---  
-9.7%  
167.8%  
34.9%  
Total Nontax Revenue  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$17  
$17  
$0  
$0  
$0  
$0  
$17  
$17  
---  
---  
---  
TOTAL STATE SOURCES  
Federal Grants  
$1,979,624  
$659,316  
$1,951,040  
$659,113  
$28,584  
$202  
1.5%  
0.0%  
1.1%  
TOTAL GRF SOURCES  
$2,638,940  
$2,610,153  
$28,786  
*Estimates of the Office of Budget and Management as of September 2017.  
Detail may not sum to total due to rounding.  
September 2017  
3
Budget Footnotes  
Ohio Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2018 as of August 31, 2017  
(
$ in thousands)  
(
Actual based on report run in OAKS Actuals Ledger on September 8, 2017)  
Percent  
Change  
STATE SOURCES  
TAX REVENUE  
Actual  
Estimate*  
Variance  
Percent  
FY 2017**  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use Taxes  
$249,191  
$1,523,626 $1,541,400  
$1,772,817 $1,781,400  
$240,000  
$9,191  
-$17,774  
-$8,583  
3.8%  
-1.2% $1,569,242  
-0.5% $1,814,831  
$245,589  
1.5%  
-2.9%  
-2.3%  
Personal Income  
Commercial Activity Tax  
Cigarette  
$1,290,495 $1,255,800  
$34,695  
$7,522  
-$5,961  
-$5,060  
-$477  
-$3,643  
$1,858  
$1,236  
-$1,073  
$849  
$252  
$0  
$2,304  
-$374  
$33  
2.8% $1,197,516  
7.8%  
18.9%  
-7.9%  
-4.2%  
-81.4%  
-97.6%  
243.8%  
16.9%  
-5.0%  
0.3%  
$345,222  
$101,839  
$57,840  
$123  
$337,700  
$107,800  
$62,900  
$600  
2.2%  
-5.5%  
-8.0%  
-79.5%  
-98.5%  
232.3%  
4.7%  
-8.7%  
8.5%  
3.2%  
---  
$290,252  
$110,567  
$60,347  
$662  
$2,370  
$773  
$23,382  
$11,918  
$10,818  
$7,954  
$0  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption (MCF)  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Business and Property  
Estate  
$57  
$3,700  
$800  
$2,658  
$27,336  
$11,327  
$10,849  
$8,152  
$0  
$26,100  
$12,400  
$10,000  
$7,900  
$0  
2.5%  
---  
873.7%  
$2,304  
-$374  
$0  
$0  
---  
-$298  
---  
$5 -8420.0%  
$33  
$0  
---  
-$17  
292.7%  
Total Tax Revenue  
$3,630,678 $3,607,100  
$23,578  
0.7% $3,531,079  
2.8%  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$0  
$5,777  
$5,846  
$11,623  
$0  
$6,350  
$2,450  
$8,800  
$0  
-$573  
$3,396  
$2,823  
---  
-9.0%  
138.6%  
32.1%  
$0 -100.0%  
$7,701  
-25.0%  
-84.5%  
-74.4%  
$37,715  
Total Nontax Revenue  
$45,416  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$111,347  
$111,347  
$0  
$96,229  
$96,229  
$0  
$15,118  
$15,118  
---  
15.7%  
15.7%  
$0  
$13,893  
$13,893  
---  
701.5%  
701.5%  
TOTAL STATE SOURCES  
Federal Grants  
$3,753,649 $3,712,129  
$1,928,705 $1,928,514  
$5,682,353 $5,640,643  
$41,520  
$191  
1.1% $3,590,388  
0.0% $2,191,259  
0.7% $5,781,647  
4.5%  
-12.0%  
-1.7%  
TOTAL GRF SOURCES  
$41,709  
*
Estimates of the Office of Budget and Management as of September 2017.  
*Cumulative totals through the same month in FY 2017.  
*
Detail may not sum to total due to rounding.  
September 2017  
4
Budget Footnotes  
Ohio Legislative Service Commission  
REVENUES  
Jean J. Botomogno, Principal Economist, 614-644-7758  
Overview  
GRF tax revenue through the first two months of FY 2018 was  
23.6 million (0.7%) above the estimate released by OBM in  
$
September 2017, which is an encouraging start to the new fiscal year. GRF FY 2018 GRF  
tax sources fell short of estimates by $849.2 million (3.7%) in FY 2017,  
driven down by large negative variances from the two largest sources, the  
personal income tax (PIT, $653.5 million) and the sales and use tax  
tax revenue  
was  
$
23.6 million  
($193.0 million). Through August in FY 2018, though the sales and use tax  
posted a shortfall of $8.6 million, the PIT was $34.7 million above above  
anticipated revenue, and the third largest tax source, the commercial  
estimate  
activity tax (CAT), posted a positive variance of $7.5 million.  
through  
August.  
For FY 2018 through August, total GRF sources1 of $5.68 billion  
were $41.7 million (0.7%) above estimates. In addition to the positive  
variance for tax sources, federal grants were on target, nontax revenues  
were $2.8 million (32.1%) above estimates, and transfers in exceeded  
projections by $15.1 million (15.7%). Tables 1 and 2 above, show GRF  
sources for August and for FY 2018 through August, respectively.  
In the month of August, GRF tax sources were $25.8 million above  
projected receipts. Other than the CAT, which experienced a shortfall of  
$
2.2 million, the major tax sources performed well. The sales and use tax,  
the PIT, and the cigarette tax were above estimates by $19.7 million,  
FY 2018 GRF  
$
5.5 million, and $1.6 million, respectively. Also above anticipated  
revenue were the taxes on financial institutions ($2.3 million), the public sources in the  
2
utility tax ($1.2 million), and the alcoholic beverage tax ($1.2 million).  
These positive variances were partially offset by negative variances of  
$
first two  
months were  
1.2 million for the kilowatt-hour tax and $1.0 million for the natural gas  
$99.3 million  
below such  
consumption tax.  
Year to date, FY 2018 total GRF sources of $5.68 billion were  
99.3 million (1.7%) below sources in FY 2017. Federal grants and nontax sources in  
$
FY 2017.  
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 About half of this positive variance was from the corporate franchise  
tax, a tax eliminated at the end of 2013. However, adjustments to prior tax filings  
continue to affect GRF revenues.  
September 2017  
5
Budget Footnotes  
Ohio Legislative Service Commission  
revenue decreased $262.6 million (12.0%) and $33.8 million, respectively,  
but tax receipts and transfers in were higher by $99.6 million (2.8%) and  
$
$
97.5 million (701.5%). PIT and CAT receipts grew by $93.0 million and  
55.0 million, respectively. On the other hand, revenue fell for the sales  
and use tax by $42.0 million and the cigarette tax by $8.7 million. The  
increase in CAT receipts was due in part to an increase in the share of  
CAT revenue allocated to the GRF enacted in Am. Sub. H.B. 49 of the  
1
from a policy change that decreased the nonauto sales and use tax base,  
as explained in the following section.  
32nd General Assembly, while the decline in sales tax revenue resulted  
The sales and  
use tax had a  
negative  
Sales and Use Tax  
variance of  
In the first two months of FY 2018, total GRF sales and use tax  
$
8.6 million in  
receipts of $1.77 billion were $8.6 million (0.5%) below estimate, and  
two months in  
42.0 million (2.3%) below receipts in FY 2017 through August. The auto  
FY 2018.  
$
sales tax fared well, while the nonauto portion of the tax underperformed.  
The sales and use tax struggled in FY 2017, ending the year $193.0 million  
(1.8%) below estimate, and posting revenue growth of just 2.6%.  
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 from leases are  
paid at the lease signing and are mostly recorded under the nonauto tax  
instead of the auto tax.3  
Through  
Nonauto Sales and Use Tax  
August in  
In August 2017, GRF revenue from the nonauto sales and use tax  
totaled $681.5 million, $9.0 million (1.3%) above estimate. This result  
partially offset a negative variance of $26.8 million (3.1%) in July. The  
FY 2018, the  
nonauto sales  
and use tax  
nonauto portion of the sales and use tax was historically weak last fiscal  
4
year, and through August 2017, this tax has fallen behind projections by was  
$
17.8 million (1.2%), continuing the pattern established earlier in 2017.  
$
17.8 million  
Compared to revenue in the same month in 2016, August nonauto sales  
and use tax revenue decreased $50.1 million (6.9%). Also, for the fiscal  
below  
estimate.  
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.  
4 Excluding the recession years of FY 2009 and FY 2010, the last time  
nonauto sales and use tax growth was below 2.5% was in FY 2007 (1.1%).  
September 2017  
6
Budget Footnotes  
Ohio Legislative Service Commission  
year, GRF receipts from the tax were $1.52 billion, $45.6 million (2.9%)  
below revenue in the corresponding period in FY 2017, due to a law  
reduction of the taxable base.  
Starting November 2010, nonauto sales and use tax receipts  
included revenue from the sales tax on Medicaid health insuring  
corporations (MHICs). Revenue attributable to MHICs grew to contribute  
about 9% of nonauto sales tax collections in FY 2017. This portion of the  
nonauto sales tax was generally correlated to GRF Medicaid spending.  
Beginning July 1, 2017, the tax was eliminated as federal rules required  
Ohio to discontinue applying the sales tax to MHICs, and the last MHIC  
payment was deposited in the GRF in July.  
H.B. 49, the main operating budget act for FYs 2018-2019 replaced  
the sales tax with a provider assessment on both Medicaid and  
non-Medicaid managed care companies, with proceeds deposited in a  
non-GRF fund. Accordingly, starting in August and for the rest of the  
fiscal year, negative growth in nonauto sales and use tax revenue is  
generally expected when compared to the corresponding month in  
FY 2017. However, after adjusting for the absence of MHIC revenue this  
year, monthly revenue growth on a year-ago basis would have been 2.0%  
for the remaining tax base in August.  
Chart 1: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
5
4
4
3
3
2
2
1
1
0
0
.0%  
.5%  
.0%  
.5%  
.0%  
.5%  
.0%  
.5%  
.0%  
.5%  
.0%  
Through  
August in  
FY 2018, the  
auto sales and  
use tax was  
$
9.2 million  
above  
Auto Sales and Use Tax  
estimate.  
GRF revenue from the auto portion of the sales and use tax of  
135.7 million in August was above estimate by $10.7 million (8.6%). In  
$
July, however, the tax posted a negative variance of $1.5 million (1.3%).  
September 2017  
7
Budget Footnotes  
Ohio Legislative Service Commission  
Through August, FY 2018 auto sales tax receipts of $249.2 million were  
9.2 million (3.8%) above anticipated receipts, and $3.6 million (1.5%)  
$
above receipts in FY 2017. Despite the good start in FY 2018,  
year-over-year growth in auto sales tax collections has decelerated in the  
last few months, as seen in the chart below.  
Chart 2: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
8
6
4
2
0
.0%  
.0%  
.0%  
.0%  
.0%  
-
2.0%  
4.0%  
-
Nationwide, new vehicle (i.e., auto and light truck) sales have been  
unable to match their year-ago pace, and appear to be faltering despite  
increases in incentive spending by manufacturers. In August 2017, new  
vehicle sales dropped about 6% (on a seasonally adjusted annualized  
basis) compared to the same month last year, and for the eighth  
consecutive month, they were lower than in the corresponding month in  
2
016. Car sales have been declining for most of the year and are hovering  
around the levels of 2011. Light truck sales had been more resilient, but  
fell (compared to the previous year) for the second consecutive month in  
August, which has not occurred since 2009. Healthy light truck sales  
drove average sales tax collected per purchase higher in FY 2016 and  
FY 2017. A sustained decline in light truck sales would negatively impact  
auto sales tax revenue. For FY 2018 as a whole, OBM expects a decline of  
2
.5% in revenue from the Ohio auto sales and use tax when compared to  
FY 2017.  
September 2017  
8
Budget Footnotes  
Ohio Legislative Service Commission  
Personal Income Tax  
The PIT was the worst performer among GRF taxes in FY 2017,  
finishing the year 7.9% below estimate. In contrast, PIT GRF revenue of  
1.29 billion through August was $34.7 million (2.8%) above estimate,  
including positive variances of $29.2 million (5.1%) in July and  
$
After a poor  
$
5.5 million (0.8%) in August. Gross collections were $33.3 million (2.3%)  
above estimates, including positive variances of $26.5 million (1.9%) and FY 2017, the  
$
payments, respectively. FY 2018 PIT GRF receipts were also $93.0 million  
4.9 million (20.1%) for employer withholding and quarterly estimated  
PIT started  
FY 2018 with a  
good  
(7.8%) above receipts in FY 2017 through August, mostly from growth in  
employer withholding receipts.  
performance.  
PIT revenue is comprised of gross collections, minus refunds and  
distributions to the Local Government Fund (LGF). Gross collections  
5
consist of employer 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, which is the largest component of gross  
collections, however, a larger than expected amount of refunds also  
greatly affected the tax performance in FY 2017. Last year, employer  
withholdings were $235.3 million (2.7%) below projections, and refunds  
were $386.3 million (24.4%) above estimates.  
For August 2017, employer withholding and quarterly estimated  
payments were above projections by $8.8 million and $1.4 million,  
respectively. However, August refunds were $4.8 million more than  
anticipated, a reversal from July when this component was $6.4 million  
below estimate.  
For the year to date, FY 2018 revenues from each component of the  
PIT relative to estimates and to revenue received in FY 2017 are detailed in  
the table below. All components exceeded estimates with the exception of  
annual return payments.  
5 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.  
September 2017  
9
Budget Footnotes  
Ohio Legislative Service Commission  
FY 2018 Personal Income Tax Revenue  
Estimate Variances and Year-over-Year Changes by Component  
Variance  
Changes  
from Estimate  
from FY 2017  
Category  
Amount  
$ in millions)  
Percentage  
(%)  
Amount  
($ in millions)  
Percentage  
(%)  
(
Employer  
Withholding  
$26.5  
$4.9  
1.9%  
20.1%  
62.3%  
-6.3%  
19.4%  
2.3%  
$76.4  
$10.9  
$0.7  
5.8%  
60.1%  
46.5%  
-6.3%  
22.9%  
6.5%  
withholding  
revenue has  
been trending  
upward in the  
last six  
Quarterly Estimated Payments  
Trust Payments  
$0.8  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
-$0.9  
$2.1  
-$0.9  
$2.4  
$33.3  
-$1.5  
$0.1  
$89.3  
-$6.2  
$2.6  
Less Refunds  
-1.5%  
0.2%  
-5.9%  
4.0%  
months.  
Less LGF Distribution  
GRF PIT Revenue  
$34.7  
2.8%  
$93.0  
7.8%  
Gross collections were 6.5% above collections through August in  
FY 2017. Quarterly estimated payments increased 60.1% compared to such  
revenue in the first two months of FY 2017. However, if July and August are  
relatively small revenue months for this component of gross collections,  
September will be the first big month of the fiscal year. After slowing at the  
start of 2017, employer withholding growth has picked up since early spring.  
Employer withholding was 1.9% above estimate through August, a reversal  
of a negative variance of 2.0% in the last quarter of FY 2017, and experienced  
strong growth in the first two months of FY 2018 compared to FY 2017. The  
chart below illustrates the growth of monthly employer withholdings on a  
three-month moving average relative to one year ago.  
Chart 3: Monthly Withholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
8
7
6
5
4
3
2
1
0
%
%
%
%
%
%
%
%
%
September 2017  
10  
Budget Footnotes  
Ohio Legislative Service Commission  
Commercial Activity Tax  
The CAT finished FY 2017 on a strong note. After three fiscal  
quarters of disappointing and below-estimate receipts, CAT receipts in the  
fourth quarter of FY 2017 were 14.2% above estimate, and this tax source  
finished 1.1% above projections for the year as a whole. In FY 2018, GRF  
The CAT  
continues  
receipts of $345.2 million in the first two months were $7.5 million (2.2%) improvement  
above estimate. The first CAT payment of the fiscal year was due in  
August for quarterly return taxpayers. It provided $291.2 million to the  
GRF, an amount $2.2 million (0.7%) below estimate, partially offsetting a  
positive variance of $9.7 million (21.9%) in July.  
started in the  
last quarter of  
FY 2017.  
FY 2018 CAT receipts to the GRF were $55.0 million (18.9%) above  
receipts in FY 2017 through August 2016, of which $40.6 million is due to a  
law change in the main operating budget act for FYs 2018-2019. H.B. 49  
increased the share of CAT revenue credited to the GRF from 75% to 85%  
beginning July 1, 2017; and decreased the shares allocated to reimburse  
school districts from 20% to 13% (Fund 7047), and to other local taxing  
units from 5% to 2% (Fund 7081) for their loss of tangible personal  
property taxes. While the allocation change increases the amount of CAT  
receipts directly credited to the GRF, it reduces "excess" CAT receipts that  
are transferred back to the GRF. Under continuing law, CAT receipts  
deposited into Fund 7081 and Fund 7047 are used to make reimbursement  
payments to school districts and other local taxing units, respectively, for  
the phase-out of property taxes on general business tangible personal  
property. Any receipts in excess of amounts needed for such payments are  
transferred back to the GRF.  
Cigarette and Other Tobacco Products Tax  
August GRF revenue of $85.7 million from the cigarette and other  
tobacco products tax was $1.6 million (1.9%) above estimate but  
FY 2018  
1.4 million (1.6%) below revenue in August 2016. However in July,  
cigarette tax  
$
revenue from this tax was $7.6 million (32.0%) below estimate. Thus, for  
the fiscal year, the cumulative negative variance for the cigarette and other receipts were  
tobacco products tax totaled $6.0 million (5.5%).  
$
6.0 million  
For FY 2018 through August, of $101.8 million in total revenue,  
89.9 million was from the sale of cigarettes and $11.9 million from sales  
of other tobacco products. Total revenue was $8.7 million (7.9%) below  
collections in the corresponding period in FY 2017. Receipts from  
below  
$
estimate  
through  
cigarettes sales fell $9.5 million while those from other tobacco products August.  
grew $0.8 million. Revenue from the cigarette and other tobacco products  
tax usually trends downward, generally at a slow pace.  
September 2017  
11  
Budget Footnotes  
Ohio Legislative Service Commission  
Summary of OBM Estimate for GRF Sources for FY 2018  
The table below shows the estimate released by OBM in  
September 2017 for GRF sources for FY 2018. As seen from the table, GRF  
sources are estimated to total $32.27 billion in FY 2018. Of this amount,  
$
21.85 billion, or about two-thirds, is expected to come from tax revenue,  
primarily the sales and use tax ($10.03 billion) and the personal income tax  
$7.98 billion). Approximately $9.74 billion, about 30%, is expected to  
(
come from federal grants.  
OBM Estimate for GRF Sources for FY 2018  
($ in thousands)  
As a % of Total  
Sources  
Revenue Source  
Estimates  
Sales and Use Tax  
$10,027,900  
$7,977,200  
$1,494,300  
$944,400  
31.1%  
24.7%  
4.6%  
Individual Income Tax  
Commercial Activity Tax  
Cigarette & Other Tobacco Products Tax  
Domestic and Foreign Insurance Taxes  
Utility Taxes  
2.9%  
$579,000  
1.8%  
$528,200  
1.6%  
Other Taxes  
$298,000  
0.9%  
Subtotal GRF Taxes  
Nontax Revenue and Transfers In  
Federal Grants  
$21,849,000  
$680,429  
67.7%  
2.1%  
$9,744,042  
$32,273,471  
30.2%  
100.0%  
Total GRF Sources  
September 2017  
12  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of August 2017  
(
$ in thousands)  
(
Actual based on OAKS reports run September 7, 2017)  
PROGRAM  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$658,789 $672,742 -$13,953  
-2.1%  
0.1%  
$180,074 $179,921  
$6,660  
$845,523 $860,341 -$14,819 -1.7%  
$153  
Other Education  
$7,678 -$1,019 -13.3%  
Total Education  
Medicaid  
$980,688 $984,625 -$3,937  
-0.4%  
Health and Human Services  
$106,282 $94,746 $11,536 12.2%  
Total Welfare and Human Services $1,086,970 $1,079,371  
$7,599  
0.7%  
Justice and Public Protection  
General Government  
$158,607 $159,880 -$1,272  
$29,029  
$187,637 $192,674 -$5,037 -2.6%  
-0.8%  
$32,794 -$3,765 -11.5%  
Total Government Operations  
Property Tax Reimbursements  
Debt Service  
$235,148  
$126,151 $126,239  
$361,299 $191,698 $169,601 88.5%  
$65,460 $169,688 259.2%  
-$87 -0.1%  
Total Other Expenditures  
Total Program Expenditures  
TRANSFERS  
$2,481,428 $2,324,084 $157,344  
6.8%  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$57,595  
$57,595  
$0  
$0  
---  
$45,141 $12,454 27.6%  
$45,141 $12,454 27.6%  
TOTAL GRF USES  
$2,539,023 $2,369,225 $169,798  
7.2%  
*September 2017 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
September 2017  
13  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2018 as of August 31, 2017  
(
$ in thousands)  
(
Actual based on OAKS reports run September 7, 2017)  
Percent  
Estimate* Variance Percent FY 2017** Change  
PROGRAM  
Actual  
Primary and Secondary Education  
Higher Education  
$1,440,759 $1,454,711 -$13,953  
$350,429 $350,276 $153  
$14,611 $15,630 -$1,019 $15,285  
$1,805,799 $1,820,618 -$14,819 -0.8% $1,831,813  
-1.0% $1,442,926  
-0.2%  
-6.2%  
-4.4%  
-1.4%  
0.0% $373,603  
Other Education  
-6.5%  
Total Education  
Medicaid  
$2,952,828 $2,956,764 -$3,937  
$227,840 $216,302 $11,538  
-0.1% $3,228,650  
5.3% $216,993  
0.2% $3,445,643  
-8.5%  
5.0%  
Health and Human Services  
Total Welfare and Human Services $3,180,668 $3,173,067  
$7,601  
-7.7%  
Justice and Public Protection  
General Government  
$432,140 $433,419 -$1,279  
$72,996 $76,761 -$3,765  
$505,136 $510,180 -$5,044 -1.0% $488,432  
-0.3% $411,340  
5.1%  
-5.3%  
3.4%  
-4.9%  
$77,092  
Total Government Operations  
Property Tax Reimbursements  
Debt Service  
$238,306  
$354,628 $354,716  
$592,934 $423,334 $169,601 40.1% $510,142 16.2%  
$68,618 $169,688 247.3% $135,496 75.9%  
-$87 0.0% $374,645 -5.3%  
Total Other Expenditures  
Total Program Expenditures  
TRANSFERS  
$6,084,537 $5,927,198 $157,339  
2.7% $6,276,030  
-3.1%  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$58,095  
$58,095  
$0  
$0  
---  
$29,483 -100.0%  
$45,641 $12,454 27.3% $212,614 -72.7%  
$45,641 $12,454 27.3% $242,096 -76.0%  
TOTAL GRF USES  
$6,142,632 $5,972,839 $169,793  
2.8% $6,518,126  
-5.8%  
*
September 2017 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2017.  
*
Detail may not sum to total due to rounding.  
September 2017  
14  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
$ in thousands)  
Actuals based on OAKS report run on September 8, 2017)  
(
(
Month of August 2017  
Year to Date Through August 2017  
Actual Estimate* Variance Percent  
Department  
Actual  
Estimate* Variance Percent  
Medicaid  
GRF  
Non-GRF  
$2,158,093 $2,189,020 -$30,926 -1.4% $4,093,761 $4,124,687 -$30,926 -0.7%  
$919,384 $923,208 -$3,824  
$1,238,709 $1,265,812 -$27,103  
-0.4% $2,832,105 $2,835,928 -$3,824  
-2.1% $1,261,656 $1,288,759 -$27,103  
-0.1%  
-2.1%  
Developmental Disabilities  
GRF  
Non-GRF  
$202,312 $271,195 -$68,883 -25.4%  
$46,200 $49,724 -$3,524 -7.1%  
$156,112 $221,471 -$65,359 -29.5%  
$473,648 $542,532 -$68,883 -12.7%  
$99,454 $102,978 -$3,524 -3.4%  
$374,194 $439,553 -$65,359 -14.9%  
Job and Family Services  
GRF  
Non-GRF  
$33,727  
$14,393  
$19,335  
$28,802  
$10,837  
$17,966  
$4,925 17.1%  
$3,556 32.8%  
$47,407  
$19,663  
$27,744  
$42,482  
$16,107  
$26,375  
$4,925 11.6%  
$3,556 22.1%  
$1,369  
7.6%  
$1,369  
5.2%  
Health  
GRF  
Non-GRF  
$1,253  
$320  
$933  
$3,280 -$2,027 -61.8%  
$301 $19 6.3%  
$2,979 -$2,046 -68.7%  
$3,399  
$643  
$2,756  
$5,426 -$2,027 -37.4%  
$624 $19 3.0%  
$4,802 -$2,046 -42.6%  
Mental Health and Addiction  
GRF  
Non-GRF  
$274  
$105  
$168  
$472  
$292  
$180  
-$198 -42.0%  
-$186 -64.0%  
$681  
$268  
$414  
$880  
$454  
$426  
-$198 -22.6%  
-$186 -41.1%  
-$12  
-6.6%  
-$12  
-$324 -23.0%  
$25 3.8%  
-$349 -45.7%  
-2.8%  
Aging  
GRF  
Non-GRF  
$510  
$273  
$237  
$834  
$248  
$586  
-$324 -38.8%  
$25 10.0%  
-$349 -59.5%  
$1,086  
$672  
$414  
$1,410  
$647  
$762  
Pharmacy Board  
GRF  
Non-GRF  
$35  
$0  
$35  
$1,400 -$1,365 -97.5%  
$0 $0 --  
$1,400 -$1,365 -97.5%  
$35  
$0  
$35  
$1,400 -$1,365 -97.5%  
$0 $0 --  
$1,400 -$1,365 -97.5%  
Education  
GRF  
Non-GRF  
$16  
$13  
$3  
$32  
$16  
$16  
-$16 -50.3%  
-$3 -16.9%  
-$13 -83.7%  
$29  
$22  
$7  
$45  
$25  
$20  
-$16 -35.3%  
-$3 -10.7%  
-$13 -66.0%  
Total GRF  
$980,688 $984,625 -$3,937 -0.4% $2,952,828 $2,956,764 -$3,937 -0.1%  
$1,415,532 $1,510,410 -$94,878 -6.3% $1,667,220 $1,762,097 -$94,878 -5.4%  
$2,396,220 $2,495,035 -$98,815 -4.0% $4,620,047 $4,718,862 -$98,815 -2.1%  
Total Non-GRF  
Total All Funds  
*Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
September 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 September 8, 2017)  
(
(
August  
Year to Date Through August 2017  
Actual Estimate* Variance Percent  
Payment Category  
Managed Care  
Actual  
Estimate* Variance Percent  
$930,124 $918,397 $11,727  
$343,821 $342,563 $1,257  
$199,971 $258,203 -$58,232 -22.6%  
$375,266 $387,988 -$12,722 -3.3%  
$128,107 $111,061 $17,046 15.3%  
1.3% $1,831,282 $1,819,555 $11,727  
0.6%  
0.2%  
ACA - Managed Care  
DDD Services  
0.4% $689,503 $688,246 $1,257  
$466,319 $524,284 -$57,965 -11.1%  
Hospitals  
$470,522 $483,244 -$12,722  
$261,107 $244,061 $17,046  
$211,095 $224,721 -$13,626  
-2.6%  
7.0%  
-6.1%  
1.4%  
Nursing Facilities  
Physicians/All Other  
Behavioral Health  
Administration  
$85,250  
$90,441  
$98,714 -$13,464 -13.6%  
$87,489 $2,952 3.4%  
$219,731 $216,619  
$3,112  
$84,936 $116,063 -$31,127 -26.8%  
$138,576 $169,969 -$31,394 -18.5%  
Medicare Buy-In  
Medicare Part D  
Prescription Drugs  
Aging Waivers  
$49,453  
$38,570  
$23,940  
$36,797  
$9,544  
$50,205  
-$752  
-1.5%  
$99,618 $100,371  
-$752  
-0.7%  
-6.1%  
$43,633 -$5,063 -11.6%  
$32,959 -$9,019 -27.4%  
$78,341  
$60,216  
$70,432  
$23,304  
$83,404 -$5,063  
$69,235 -$9,019 -13.0%  
$36,574  
$223  
0.6%  
$70,209  
$223  
0.3%  
Home Care Waivers  
Total All Funds  
$11,185 -$1,641 -14.7%  
$24,943 -$1,639  
-6.6%  
$2,396,220 $2,495,035 -$98,815 -4.0% $4,620,047 $4,718,862 -$98,815 -2.1%  
*
Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
September 2017  
16  
Budget Footnotes  
Ohio Legislative Service Commission  
EXPENDITURES  
Russ Keller, Senior Economist, 614-644-1751  
Nicholas J. Blaine, Budget Analyst, 614-387-5418  
Overview  
GRF uses mainly consist of program expenditures, but also include  
transfers out of the GRF into other funds. As shown in Table 4, year-to-  
date uses (including both July and August) totaled $6.14 billion compared  
to an estimate of $5.97 billion, a positive difference of $169.8 million  
(2.8%). Year-to-date program expenditures had a positive variance of  
$
157.3 million at the end of August. Due to the time it takes to prepare  
monthly estimates, OBM's July estimates generally equal July actuals. As a  
result, the year-to-date variances shown in Table 4 are almost identical to  
the variances for August that are shown in Table 3.  
Year-to-date  
GRF uses  
Property Tax Reimbursements  
Property tax reimbursement payments were the most prominent totaled  
source for the positive year-to-date variance in GRF uses. GRF property  
tax reimbursement expenditures were $169.7 million above estimate in  
August. GRF dollars provided under this program category are used to  
make semiannual payments to school districts and other local  
governments. The payments based on the August 2017 property tax  
settlement will be made through the end of December. As funds are  
disbursed when county auditors request the payments, it is not unusual to  
see variances from month to month, especially in the early months of a  
payment cycle.  
$
6.14 billion,  
$
169.8 million  
above  
estimate.  
Medicaid  
Based on FY 2018 appropriations, about 55% of Medicaid  
expenditures will be made from the GRF. This GRF spending is funded by  
federal (66%) and state (34%) revenues. Of the remaining 45% of Medicaid  
expenditures that will be made from non-GRF funds, 74% (33% of the  
total) is from federal funds and the remaining 26% (12% of the total) is  
from state funds. Tables 5 and 6 compare actual Medicaid expenditures to  
estimates for GRF and non-GRF funds, providing a more complete picture  
of Medicaid expenditures than the GRF only comparison given in Tables 3  
and 4.  
Table 5 shows GRF and non-GRF Medicaid expenditures for the  
Ohio Department of Medicaid (ODM) and seven other agencies that also  
incur Medicaid costs. The Ohio Department of Developmental Disabilities  
(ODODD) has the second largest Medicaid budget after ODM. Both  
service and administrative spending are appropriated through ODODD's  
September 2017  
17  
Budget Footnotes  
Ohio Legislative Service Commission  
budget. The budgets of the other agencies Job and Family Services,  
Health, Aging, Mental Health and Addiction Services, State Board of  
Pharmacy, and the Ohio Department of Education (ODE) have only  
administrative spending.  
The Medicaid appropriations made in the State Board of Pharmacy  
and ODE's budgets are new in FY 2018. Appropriations for the  
State Board of Pharmacy are for integrating the Ohio Automated Rx  
Reporting System (OARRS) directly into electronic medical records and  
pharmacy dispensing systems. Funds are provided through a grant from  
the federal Centers for Medicare and Medicaid Services and expended  
through federal Fund 3HH0 appropriation item 658601, OARRS  
Integration Federal; the state share of the grant is expended through  
dedicated purpose Fund 4K90 appropriation item 658605, OARRS  
Integration State. Appropriations for ODE are for the Medicaid in  
Schools Program, expended through GRF appropriation item 657401,  
Medicaid in Schools Program, and federal Fund 3AF0 appropriation item  
6
were appropriated through ODM and provided to ODE though  
interagency cash transfer agreements.  
57601, Schools Medicaid Administrative Claims. In previous years, funds  
As can be seen in Table 5, for the first two months of FY 2018, GRF  
Medicaid expenditures were $2.95 billion, $3.9 million (0.1%) below  
estimates, while non-GRF Medicaid expenditures were $1.67 billion,  
$
94.9 million (5.4%) below estimates. All-funds Medicaid expenditures  
totaled $4.62 billion for the first two months of FY 2018, $98.8 million  
2.1%) below estimate.  
Table 6 details all-funds Medicaid expenditures by payment  
(
category. The two largest payment categories, Managed Care and ACA –  
6
Managed Care, were above year-to-date estimates by $11.7 million (0.6%)  
and $1.2 million (0.2%), respectively. Together, these two categories  
account for over half of Medicaid expenditures; of the approximately  
three million Ohioans enrolled in Medicaid, more than 80% of them  
receive services through managed care. These positive variances were  
more than offset by large negative variances in other categories, especially  
services provided by ODODD (labeled "DDD Services" in the table) at  
$
58.0 million and Administration at $31.4 million.  
6
ACA-Managed Care refers to managed care expenditures for  
individuals in the Medicaid expansion population (Group VIII).  
September 2017  
18  
Budget Footnotes  
Ohio Legislative Service Commission  
Summary of OBM Estimate for GRF Uses for FY 2018  
The table below shows the estimate released by OBM in  
September 2017 for GRF uses for FY 2018. For reporting purposes,  
agencies' GRF expenditures are grouped into nine program categories. As  
seen from the table, GRF program expenditures are estimated to total  
$
32.26 billion in FY 2018. Of this amount, over $14.82 billion will go to  
GRF uses are  
expected to  
total  
Medicaid and over $8.03 billion will go to Primary and Secondary  
Education. Together, these two program categories will account for more  
than 70% of the total program expenditures in FY 2018.  
OBM also anticipates $66.0 million in GRF transfers out. The largest $32.61 billion  
transfer planned for this year occurred in August when $41.8 million was  
transferred to the Health and Human Services Fund (Fund 5SA4) per  
section 512.27 of H.B. 49. The second largest transfer is scheduled for  
October, during which $10.7 million will be transferred to the Tourism  
Fund (Fund 5MJ0) per section 512.60 of H.B. 49. In addition to program  
expenditures and transfers out, OBM estimated $276.7 million in year-end  
encumbrances from the GRF. After accounting for program expenditures,  
transfers out, and year-end encumbrances, OBM expects GRF uses to total  
for FY 2018.  
$
32.61 billion for FY 2018.  
OBM Estimate for GRF Uses for FY 2018 by Program Category  
($ in thousands)  
As a % of Total  
Program  
Program Categories  
Expenditures  
Expenditures  
1
- Medicaid  
$14,823,011  
$8,027,083  
$2,312,261  
$2,163,294  
$1,806,573  
$1,375,240  
$1,310,619  
$375,561  
45.9%  
24.9%  
7.2%  
6.7%  
5.6%  
4.3%  
4.1%  
1.2%  
0.2%  
100.0%  
--  
2
3
4
5
6
7
8
9
- Primary and Secondary Education  
- Higher Education  
- Justice and Public Protection  
- Property Tax Reimbursements  
- Debt Service  
- Health and Human Services  
- General Government  
- Other Education  
$70,555  
Total Program Expenditures  
$32,264,198  
$66,014  
Transfers Out  
Year-end Encumbrances  
$276,666  
--  
Total GRF Uses  
$32,606,878  
--  
September 2017  
19  
Budget Footnotes  
Ohio Legislative Service Commission  
ISSUE UPDATES  
ODE Awards $44.3 million in 21st Century Community  
Learning Center Grants  
Alexandra Vitale, Budget Analyst, 614-466-6582  
On August 11, 2017, the Ohio Department of Education (ODE) awarded  
44.3 million in new and continuing grants to 242 schools and community-based  
$
organizations under the 21st Century Community Learning Centers (21CCLC) Grant  
Program. This federally funded program awards grants to support community learning  
centers that provide academic enrichment services during nonschool hours or extended  
learning time as part of the school day, particularly for students in low-performing,  
high-poverty schools. In this latest round of funding, ODE awarded grants for 107 new  
programs and 135 continuing programs, totaling $21.2 million and $23.2 million,  
respectively. In awarding new grants, ODE prioritized programs in small town and  
rural areas.  
ODE distributes 21CCLC grant funds to recipients for a five-year period with a  
maximum of $200,000 per year for the first three years of the program and gradually  
reduced maximum amounts for the last two years as recipients must transition to other  
resources to sustain the program after the 21CCLC grant expires. Also, to continue  
receiving a grant, recipients must annually submit program data to ODE and undergo  
periodic evaluations of the program's effectiveness. Over 93% of the 107 new grantees  
received the maximum $200,000 in funding for this year. New grant recipients were  
concentrated in Cuyahoga, Hamilton, Perry, Mahoning, Franklin, Lorain, Tuscarawas,  
Montgomery, Muskingum, and Lucas counties. Together, these ten counties represent  
about two-thirds of the new grant awards. To see the full list of grant recipients, visit  
education.ohio.gov and search for "21st Century Community Learning Centers."  
$
2.5 million Approved for the Expansion of a Classroom-Based  
Intervention Program  
Rob Moore, Budget Analyst, 614-466-4280  
On August 21, 2017, the Controlling Board approved a $2.5 million contract for  
the expansion of a classroom-based intervention program known as the "Good Behavior  
Game." Currently, the Game is implemented in several Ohio schools and over  
3
,400 teachers have been trained in its usage. The Ohio Department of Mental Health  
and Addiction Services (OhioMHAS) entered into this contract to expand the Game's  
September 2017  
20  
Budget Footnotes  
Ohio Legislative Service Commission  
usage as part of its efforts to combat the opioid epidemic. Under the contract, up  
to 1,000 new elementary teachers will be trained to implement the Game and a social  
media campaign will be developed to promote it. In addition, up to 2,000 teachers  
currently using the Game will receive updated training.  
The Game teaches youth self-regulation and control and is designed to improve  
behavior and academic performance. It is also designed to reduce risk factors for drug  
abuse, cigarette smoking, and antisocial behaviors. As part of the Game, students are  
split into teams and rules of good behavior are explained. Each time one of the good  
behavior rules is broken, the team receives a check mark. Teams with four or fewer  
check marks win rewards. The goal is that students will learn to control impulses and  
delay gratification in order to achieve a larger goal. Research indicates that children  
exposed to the Game for one year had a 60% reduction in lifetime likelihood of opioid  
addiction.  
The grant funds to support this contract are provided through the federal  
2
1st Century Cures Act, which was signed into law on December 13, 2016. The Act  
provided approximately $970 million to states and territories to combat the opioid  
crisis. The amount each state received was based on a formula that considered a state's  
unmet need for opioid use disorder treatment and the number of overdose deaths. On  
April 24, 2017, OhioMHAS was awarded $26.1 million in 21st Century Cures Act funds.  
ODE Awards $9.9 million in Grants for Community Connectors Program  
Anthony Kremer, Budget Analyst, 614-466-5654  
On June 26, 2017, the Ohio Department of Education (ODE) awarded $9.9 million  
in matching grants to 116 community partnerships as part of the most recent round of  
funding for the Community Connectors school mentorship program. Created by  
H.B. 483 of the 130th General Assembly, Community Connectors supports  
programming in career advising and mentoring for students in low-performing, high-  
poverty schools. Eligible districts must partner with members of the business  
community, civic organizations, or the faith-based community to provide sustainable  
career services to students in grades 5-12. Under this round of funding, the state is  
providing $3 for every $1 in local funding with a maximum award of $100,000. Most of  
the awards ranged from $70,000 to $100,000, though one award was as small as $9,000.  
In all, 48 of the 116 partnerships received the full $100,000 in funding. Geographically,  
2
2 of the partnerships are located in Franklin County, 19 are located in Hamilton  
County, 11 are located in Cuyahoga County, six are located in Montgomery County,  
five are located in Summit County, and four are located in Lucas County. The full list of  
recipients is available online at: communityconnectors.ohio.gov. H.B. 49 provides  
$
4.0 million for the program in FY 2018 and FY 2019 using lottery profits appropriated  
in Fund 7017 appropriation item 200629, Community Connectors.  
September 2017  
21  
Budget Footnotes  
Ohio Legislative Service Commission  
Auditor of State Releases DOH and AGR Performance Audits  
Terry Steele, Senior Budget Analyst, 614-387-3319  
The Auditor of State recently released its final reports for performance audits  
conducted for the Department of Agriculture (AGR) and the Department of Health  
(DOH). Each final report contains a list of recommendations which, if adopted, could  
yield cost savings for the agency. The final audit findings for AGR identified  
approximately $492,000 in savings that could be realized through changes in facility  
utilization that more efficiently align facility supply and demand. The final audit  
findings for DOH identified nearly $1.2 million in potential savings, with over  
$
1.0 million of these savings coming from the Bureau of Vital Statistics. The primary  
recommendation is that the Bureau update its process for filing birth and death records  
in order to reduce paperwork and labor hours.  
S.B. 4 of the 129th General Assembly requires that the Auditor of State conduct  
four performance audits of at least four state agencies every biennium. The Auditor of  
State charges state agencies an hourly rate of $68 for performance audit services. These  
receipts are deposited into the Public Audit Expense Intrastate Fund (Fund 1090). Full  
audit reports can be found on the Auditor of State's website (www.ohioauditor.gov)  
under the "Audit Search" function.  
Southern Ohio Agricultural and Community Development Foundation  
Awards $2.7 million in Grants  
Shannon Pleiman, Budget Analyst, 614-466-1154  
In FY 2017, the Southern Ohio Agricultural and Community Development  
Foundation awarded $2.7 million under six grant programs designed to help tobacco  
farm families and rural communities of the 22 burley tobacco-producing counties in  
southern Ohio diversify into farming other crops or starting new business ventures. The  
table below shows the number of awards issued and the total amount by grant program  
in FY 2017.  
September 2017  
22  
Budget Footnotes  
Ohio Legislative Service Commission  
Southern Ohio Agricultural and Community Development Foundation Awards Issued in FY 2017  
Program  
Program Description  
Awards Issued  
Total  
Agricultural Development  
Helps tobacco farmers undertake  
projects that expand or diversify their  
businesses into nontobacco-related  
agricultural markets  
39  
$841,185  
Economic Development  
Targeted toward communities affected  
by the reduction in demand for tobacco  
and provides financial assistance to  
projects that create or expand job  
opportunities for residents  
7
$750,000  
Young Farmer  
Supports young farmers incorporating  
technology and conservation practices  
into their farming activities  
23  
$445,055  
$149,571  
Educational Assistance  
Provides education and training  
assistance to tobacco farmers to help  
them make the transition from tobacco  
production to other crops  
139  
Educational Excellence  
Provides grants for tuition, on-campus  
room and board, and books for  
undergraduate students pursing a  
bachelor's degree  
22  
$164,490  
Environmental and Water  
Quality  
Provides grants to farmers for expenses  
and permanent improvements that  
improve water quality  
6
$54,280  
TOTAL  
236  
$2,674,581  
Since FY 2010, the Foundation's grant programs and operating expenses have  
been supported by an endowment fund and the investment and interest earnings  
associated with that fund. The money in the endowment fund is not subject to the  
General Assembly's appropriation process. Previously, the Foundation was  
appropriated funding based on the stream of revenue derived from the 1998 Tobacco  
Master Settlement Agreement between the states and major tobacco manufacturers.  
Ohio's share of these proceeds was securitized and set aside for public school and  
higher education facilities construction.  
Criminal Justice Services Awards $2.6 million in Federal Family  
Violence Prevention and Services Act Grants  
Jessica Murphy, Budget Analyst, 614-466-9108  
On July 6, 2017, the Office of Criminal Justice Services (OCJS) announced the  
award of $2.6 million in federal Family Violence Prevention and Services Act (FVPSA)  
grants for 56 projects in 43 counties. The grants were awarded to nonprofit and faith-  
based associations to establish, maintain, and expand projects that prevent incidents of  
September 2017  
23  
Budget Footnotes  
Ohio Legislative Service Commission  
family violence or provide immediate shelter and related assistance for family violence  
victims and their dependents. In addition to shelter operations and staffing, grants  
provide support for activities such as safety planning, crisis counseling, information  
and referral, and legal advocacy.  
Both new and continuation projects were eligible for a grant award of up to  
$
50,000. Each organization that receives FVPSA funds is required to provide an in-kind  
or cash match of at least 35% for new projects, and at least 20% for projects which have  
previously received funding. All but one of the 56 grants awarded were for the latter.  
Individual project awards range from $28,070 to the $50,000 maximum. The average  
award was $47,222. A list of project awards can be found on the office's website:  
www.ocjs.ohio.gov.  
Each year, FVSPA formula grants administered by the Family Youth and  
Services Bureau of the U.S. Department of Health and Human Services fund more than  
1
,600 domestic violence agencies and programs, collectively serving over one million  
adult and child victims nationwide. Of the total $151 million appropriated for FVPSA in  
federal fiscal year 2017, Ohio received approximately $3.1 million. The remainder of  
Ohio's funding after the $2.6 million is used to fund the 56 project awards, $491,012, will  
be used to cover a portion of the grant program's administrative costs ($156,771) and to  
make additional grant awards for similar projects ($334,241). OCJS administers this  
federal grant at the state level, and there is no state match requirement.  
Criminal Justice Services Awards Community-Police Relations Grants  
Maggie Wolniewicz, Senior Budget Analyst, 614-995-9992  
On July 28, 2017, the Office of Criminal Justice Services announced the award of  
537,128 in Community-Police Relations grants to 13 law enforcement agencies and  
$
seven community organizations in 12 counties. The grants are part of an effort by the  
Ohio Collaborative Community-Police Advisory Board to improve relationships  
between law enforcement agencies and the communities they serve. Funded projects  
include community-policing initiatives, training, juvenile-mentoring programs,  
education and awareness tools, and evidence-based policing strategies. Money for this  
purpose is being drawn from the remainder of $4.0 million appropriated during the  
FY 2016-FY 2017 biennium to implement key recommendations of the Ohio Task Force  
on Community-Police Relations. The table below shows those counties with one or  
more award recipients, the number of projects per county, and the total amount of  
funding received. Individual project awards range from $5,478 (Medina County) to  
$
40,000 (Franklin, Hamilton, Montgomery, and Stark counties).  
September 2017  
24  
Budget Footnotes  
Ohio Legislative Service Commission  
The 12-member Collaborative Advisory Board, which was established by  
Executive Order on April 29, 2015, is charged with creating statewide uniform  
standards for law enforcement agencies regarding the use of force (including the use of  
deadly force), as well as agency employee recruitment and hiring practices. Board  
members are appointed by the Governor and include law enforcement experts,  
community members, elected officials, academia, and members of the faith-based  
community.  
Community-Police Relations Grant Awards by County* (Total: $537,128)  
County  
# of Projects)  
County  
(# of Projects)  
County  
(# of Projects)  
Award  
Award  
Award  
(
Cuyahoga (3)  
Franklin (4)  
Guernsey  
$73,868  
$119,843  
$9,749  
Lucas  
$37,783  
$39,996  
$18,850  
$40,000  
Pickaway  
Portage  
Ross (2)  
Stark  
$8,000  
$12,504  
$56,535  
$40,000  
Mahoning  
Medina (2)  
Montgomery  
Hamilton (2)  
$80,000  
*Unless otherwise noted, the awarded amount is going to a single recipient. In the case of five counties, the awarded total  
includes grants to two or more recipients.  
Telehealth Project in Knox and Logan County Nursing Facilities Begins  
Ivy Chen, Principal Economist, 614-644-7764  
On August 1, 2017, a two-year Telehealth Project was launched to increase  
quality of life for complex nursing home residents at two nursing facilities located in  
Knox and Logan counties. Both counties are primarily rural in nature. In addition,  
Logan County is designated as a Health Professional Shortage Area, which means there  
are too few primary care, dental, and mental health providers for the population. These  
factors make access to healthcare professionals challenging for residents. As a result,  
transporting residents for medical care is often necessary, but is costly for the provider  
and can negatively impact the health of a resident. The Telehealth Project seeks to  
increase healthcare access by providing telehealth equipment, including video/audio  
technology and specialized digital medical instruments, to these facilities. This  
equipment will allow specialists at distant locations to examine a resident at any time of  
the day or night. In addition to the equipment, the Project will track the care  
coordination (e.g., number of primary and specialty physician visits, emergency visits,  
and hospital admissions and readmissions) of at least 50 residents at each location  
during the 18 months preceding the Project and during the implementation period. The  
residents selected will have complex healthcare issues, such as congestive heart failure,  
chronic obstructive pulmonary disease, pneumonia, or stroke. The Project proposes to  
reduce emergency room visits, as well as hospital admissions and readmissions, by 10%  
September 2017  
25  
Budget Footnotes  
Ohio Legislative Service Commission  
for selected residents, which will increase resident quality of life and decrease  
healthcare costs.  
The federal Centers for Medicare and Medicaid Services (CMS) approved  
approximately $220,000 for this project. These funds come from civil monetary penalties  
imposed on nursing homes that do not meet federal health and safety standards. States  
are required to use civil monetary penalties to improve residents' outcomes in  
Medicaid- or Medicare-certified nursing homes. The Ohio Department of Medicaid  
recommended the Project to CMS and will receive quarterly progress reports and a final  
report that evaluates project outcomes and results.  
September 2017  
26  
Budget Footnotes  
Ohio Legislative Service Commission  
TRACKING THE  
ECONOMY  
Phil Cummins, Senior Economist, 614-728-3218  
Overview  
The national  
The national economy continues to expand in the 2017 third  
unemployment  
rate has  
quarter and inflation remains low. Payroll employment rose again in  
August, though not as rapidly as earlier in the year, as unemployment  
ticked higher but was still low. Total industrial production rose in July  
fluctuated in a  
despite a drop in manufacturing activity due to slower motor vehicle narrow 4.3%  
output in the month. Growth of U.S. inflation-adjusted gross domestic  
product (real GDP) picked up in the second quarter. In Ohio, employment  
continues to trend higher, but not as rapidly as nationwide. The statewide  
unemployment rate remained above the national rate in July for the  
eleventh consecutive month.  
to 4.4% range  
since April.  
The National Economy  
Total nonfarm payroll employment in the U.S. rose 156,000 in  
August, and unemployment as a percent of the labor force edged up to  
4
.4%, as shown in Chart 5. The U.S. Bureau of Labor Statistics (BLS)  
indicated that Hurricane Harvey had no discernible effect on these data  
due to the timing of collecting the data.  
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)  
September 2017  
27  
Budget Footnotes  
Ohio Legislative Service Commission  
Employment gains so far this year averaged 176,000 per month, a  
little less than average monthly increases in 2016 of 187,000. In August, Real GDP rose  
employment rose in mining, construction, and manufacturing, in the  
goods-producing sector, and in professional and technical services and  
health care, among service-providing industries.  
The unemployment rate has fluctuated in a narrow 4.3% to 4.4%  
range since April. Unemployment rates were last this low in 2001 and  
at a 3.0%  
annual rate in  
this year's  
second  
before. In August, 7.1 million people were counted as unemployed. Labor quarter.  
force participation, the share of the working-age population either with  
jobs or actively seeking work, was at 62.9% in August, up from a recent  
low of 62.4% in 2015 but well below a peak of 67.3% in 2000.  
Real GDP rose at a 3.0% annual rate in this year's second quarter,  
revised upward on stronger gains than initially estimated in consumer  
spending and nonresidential fixed investment. The economy's growth  
rate in the April-June period was the highest since the first quarter of  
2
1
015, and above the 1.2% rate of expansion in this year's first quarter and  
.5% for all of last year. The second quarter expansion was more than  
accounted for by growth of consumer spending at a 3.3% rate and  
nonresidential fixed investment at a 6.9% rate. Exports also rose, but  
residential building and government spending fell. Inflation remained  
subdued in the second quarter, as the GDP price index rose at only a 1.0%  
annual rate, following a rise at a 2.0% rate in the first quarter and 1.3% last  
year.  
Industrial production rose 0.2% in July, but manufacturing activity  
fell 0.1% and was only 1.2% higher than a year earlier. The drop in  
manufacturing activity was due to a substantial fall in motor vehicle  
output.  
The statewide  
average  
Prices paid by households, as measured by the consumer price  
index (CPI), rose 0.1% in July to 1.7% higher than a year earlier. The CPI  
for all items less food and energy was also higher by 1.7% in July,  
compared with a year earlier.  
unemployment  
rate in Ohio  
rose to 5.2% in  
July, highest  
since  
The Ohio Economy  
The statewide average unemployment rate in Ohio rose to 5.2% in  
July, highest since November 2014 when it was also at that level. Total  
nonfarm payroll employment rose 1,600 in July to 47,500 (0.9%) above its  
year-earlier level, mostly due to higher employment in private service-  
providing industries. Trends in Ohio unemployment and employment are  
shown in Chart 6.  
November2014.  
September 2017  
28  
Budget Footnotes  
Ohio Legislative Service Commission  
Chart 6: Ohio Employment and Unemployment Rates  
5
5
5
5
5
5
5
4
.6  
.5  
.4  
.3  
.2  
.1  
.0  
.9  
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)  
Statewide average unemployment is up from its low in recent  
years of 4.7% of the labor force in August to October 2015. Since then, the  
state's labor force, persons who either are employed or actively looking  
for work, rose 88,000 (1.6%) while the number employed increased 56,000  
(1.0%). Consequently, the number counted as unemployed rose 32,000 to  
a total of 300,000, the most in nearly three years.  
Industries in which Ohio payroll employment has grown in the  
latest 12 months include health care and social assistance, accommodation  
and food services, wholesale trade, construction, and professional,  
scientific, and technical services. Retail trade and transportation,  
warehousing, and utilities have shed jobs.  
In addition to numbers of employees, the payroll data from BLS  
include private sector average hours paid per week and earnings per  
hour. The data can be used to construct a proxy for workers' incomes  
from private sector payroll jobs. Other types of income are not included,  
such as the value of employer benefits that these workers receive as well  
as income from public sector jobs, self-employment, pensions, and other  
sources. As shown in Chart 7, income from private payroll jobs has grown  
more than 4% in each of the past two fiscal years, even though growth in  
the number of jobs has slowed, as a result of more rapid increases in  
average hourly earnings. This pattern continued at the start of FY 2018.  
September 2017  
29  
Budget Footnotes  
Ohio Legislative Service Commission  
Chart 7: Ohio Total Private Payrolls  
1
0%  
Income from  
private payroll  
jobs has  
8
6
4
2
0
%
%
%
%
%
grown more  
than 4% in  
-2%  
-4%  
-6%  
-8%  
each of the  
past two fiscal  
years as a  
2
009 2010 2011 2012 2013 2014 2015 2016 2017  
July  
2018  
result of more  
rapid  
State Fiscal Years  
Employment  
Average Weekly Hours  
Average Hourly Earnings  
increases in  
average hourly  
earnings.  
Among Ohio metropolitan areas, payroll employment growth in  
the year ended in July was strongest in Cincinnati at 3.0%. The  
unemployment rate in July in the Cincinnati area was low at 4.7%. The  
Ohio metropolitan area with the lowest unemployment rate in July was  
Columbus at 4.4%. Payroll employment growth in the latest 12 months in  
Columbus, at 2.2%, exceeded that in most other areas of the state. The  
area with the weakest employment change was Youngstown-Warren-  
Boardman, where the number of payroll jobs fell 1.3% in the latest  
1
highest in the state at 7.9%. Payroll employment also fell in the past  
2 months. The unemployment rate in that metropolitan area in July was  
Ohio's real  
1
2 months in the Weirton-Steubenville metropolitan area, by 1.2%, and GDP rose at a  
unemployment there was high at 6.8% of the labor force.  
1
.4% annual  
Initial claims under the unemployment insurance program in Ohio  
are near the lowest level of the past 30 years, on a downward trend  
underway for more than seven years. Similarly, continued claims also  
continue on a downtrend begun in 2010.  
rate in this  
year's first  
quarter.  
Ohio's real GDP rose at a 1.4% annual rate in this year's first  
quarter, a little higher than U.S. real GDP growth at a 1.2% annual rate. In  
all of last year, Ohio's GDP rose 1.7%, also slightly more than nationwide  
GDP growth of 1.5%. By industry, Ohio's incrementally higher growth  
appears mainly attributable in the first quarter to stronger manufacturing,  
and last year to an upturn in mining activity in the state.  
September 2017  
30  
Budget Footnotes  
Ohio Legislative Service Commission  
The number of homes sold in Ohio in July was 2.6% fewer than a  
year earlier, in figures published by the Ohio Association of Realtors.  
Year-to-date unit sales were 0.8% above sales in the year-earlier period.  
The average sales price in this year's first seven months, at about $172,000,  
was 5.3% higher than a year earlier.  
Growth of business activity in the region picked up in July and  
August, according to the latest Beige Book, a summary of commentary  
7
published by the Federal Reserve. Activity in manufacturing rose  
slightly, though production fell at motor vehicle assembly plants,  
attributed largely to retooling shutdowns to produce new models.  
Consumer spending also strengthened slightly. Residential sales  
increased, though apartment construction slowed. Nonresidential  
builders report sizable backlogs including office buildings and  
infrastructure. Upward pressures on wages were noted in factory,  
construction, and energy industries. Price increases were reported in  
construction and freight transportation.  
7 The Beige Book, a compilation of sections written by the 12 Federal  
Reserve banks, summarizes information from business and industry contacts  
outside the central bank. Regional information above is for the Cleveland Federal  
Reserve District which includes all of Ohio as well as parts of three adjacent  
states. The latest Beige Book is based on reports collected through  
August 28, 2017.  
September 2017  
31  
Budget Footnotes