Budget Footnotes  
A NEWSLETTER OF THE OHIO LEGISLATIVE SERVICE COMMISSION  
OCTOBER 2017  
VOLUME 41, NUMBER 2  
STATUS OF THE GRF  
STATUS OF THE GRF  
Highlights...................................1  
Revenues ..................................2  
Expenditures............................12  
HIGHLIGHTS  
Jean J. Botomogno, Principal Economist, 614-644-7758  
ISSUE UPDATES  
GRF sources ended the first quarter of FY 2018 with a  
Medication-Assisted Treatment  
Grant ....................................19  
Drug Abuse Response Team  
Grants ..................................19  
Clean Air Financing Project  
Awards .................................20  
Economic Impact of Ohio Grape  
and Wine Industry ................21  
School District Report Cards ...22  
Postsecondary Attainment Goal  
Dashboard............................23  
Nurse Education Grant  
positive variance of $82.3 million compared to the estimate  
published by the Office of Budget and Management (OBM)  
in September 2017. All GRF source categories were above  
estimates. GRF taxes as a whole performed relatively well.  
Total tax revenue came in $17.4 million above estimate,  
despite a shortfall from the nonauto sales and use tax, the  
largest contributor to GRF tax revenues.  
Ohio's unemployment rate went up to 5.4% in August,  
the highest rate since September 2014, from 5.2% in July.  
Ohio's rate was a full percentage point higher than the  
national rate, though nonfarm payroll employment  
increased in private service-providing and goods-  
producing sectors in August by a total of 11,000.  
Program ...............................23  
Land and Water Conservation  
Grants ..................................24  
EpiPen Settlement...................25  
TRACKING THE ECONOMY  
The National Economy ............27  
The Ohio Economy..................29  
Through September 2017, GRF sources totaled $8.18 billion:  
Revenue from the personal income tax was  
$16.5 million above estimate;  
Sales and use tax receipts were $6.7 million above  
estimate.  
Through September 2017, GRF uses totaled $8.97 billion:  
Legislative Service Commission  
77 South High Street, 9th Floor  
Columbus, Ohio 43215  
Program expenditures were $82.7 million below  
estimate;  
Expenditures from all program categories were  
below estimates except for Medicaid, which was  
above estimate by $5.5 million.  
Telephone: 614-466-3615  
AVAILABLE ON OUR WEBSITE: WWW.LSC.OHIO.GOV  
CLICK ON 'BUDGET CENTRAL/BUDGET FOOTNOTES'  
Ohio Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of September 2017  
(
$ in thousands)  
(
Actual based on report run in OAKS Actuals Ledger on October 2, 2017)  
STATE SOURCES  
TAX REVENUE  
Actual  
Estimate*  
Variance  
Percent  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use Taxes  
$120,009  
$660,263  
$780,273  
$117,300  
$647,700  
$765,000  
$2,709  
$12,563  
$15,273  
2.3%  
1.9%  
2.0%  
Personal Income  
Commercial Activity Tax  
Cigarette  
$778,628  
$10,155  
$86,912  
$32,922  
$6,399  
$5  
-$7,533  
$1  
-$1  
$4,600  
$4,073  
$1,570  
$72  
$0  
-$3  
$796,800  
$8,400  
$79,200  
$35,000  
$9,200  
$0  
$500  
-$200  
$0  
$5,300  
$3,800  
$1,300  
$0  
$0  
$0  
-$18,172  
$1,755  
$7,712  
-$2,078  
-$2,801  
$5  
-$8,033 -1606.7%  
$201  
-$1  
-$700  
$273  
$270  
$72  
$0  
-$3  
-2.3%  
20.9%  
9.7%  
-5.9%  
-30.4%  
---  
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  
100.5%  
---  
-13.2%  
7.2%  
20.8%  
---  
---  
---  
Total Tax Revenue  
$1,698,073  
$1,704,300  
-$6,227  
-0.4%  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$12  
$15,431  
$7,298  
$0  
$1,750  
$2,880  
$4,630  
$12  
$13,681  
$4,418  
---  
781.8%  
153.4%  
391.2%  
Total Nontax Revenue  
$22,741  
$18,111  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$0  
$0  
$0  
$0  
$0  
$0  
$0  
$0  
---  
---  
---  
TOTAL STATE SOURCES  
Federal Grants  
$1,720,815  
$780,003  
$1,708,930  
$751,299  
$11,885  
$28,703  
$40,588  
0.7%  
3.8%  
1.6%  
TOTAL GRF SOURCES  
$2,500,817  
$2,460,229  
*Estimates of the Office of Budget and Management as of September 2017.  
Detail may not sum to total due to rounding.  
October 2017  
2
Budget Footnotes  
Ohio Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2018 as of September 30, 2017  
(
$ in thousands)  
(
Actual based on report run in OAKS Actuals Ledger on October 2, 2017)  
Percent  
Change  
STATE SOURCES  
TAX REVENUE  
Actual  
Estimate*  
Variance  
Percent  
FY 2017**  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use Taxes  
$369,201  
$2,183,889 $2,189,100  
$2,553,090 $2,546,400  
$357,300  
$11,901  
-$5,211  
$6,690  
3.3%  
-0.2% $2,287,666  
0.3% $2,653,710  
$366,044  
0.9%  
-4.5%  
-3.8%  
Personal Income  
Commercial Activity Tax  
Cigarette  
$2,069,123 $2,052,600  
$16,523  
$9,277  
$1,751  
-$7,138  
-$3,278  
-$3,638  
0.8% $1,987,458  
4.1%  
19.1%  
-3.1%  
-8.0%  
-36.2%  
-97.4%  
$355,377  
$188,751  
$90,762  
$6,522  
$62  
-$4,875  
$27,337  
$11,326  
$15,449  
$12,225  
$1,570  
$2,377  
-$374  
$346,100  
$187,000  
$97,900  
$9,800  
$3,700  
$1,300  
$25,900  
$12,400  
$15,300  
$11,700  
$1,300  
$0  
2.7%  
0.9%  
-7.3%  
-33.4%  
-98.3%  
$298,382  
$194,700  
$98,612  
$10,220  
$2,370  
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  
-$6,175 -475.0%  
$1,278 -481.6%  
$1,437  
-$1,074  
$149  
$525  
$270  
$2,377  
-$374  
$29  
5.5%  
-8.7%  
1.0%  
4.5%  
20.8%  
---  
$23,457  
$11,918  
$18,021  
$11,788  
$1,542  
-$496  
16.5%  
-5.0%  
-14.3%  
3.7%  
1.8%  
579.0%  
44.8%  
-60.3%  
0.3%  
$0  
---  
-$678  
$29  
$0  
---  
$73  
Total Tax Revenue  
$5,328,752 $5,311,400  
$17,352  
0.3% $5,312,354  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$34  
$21,208  
$13,122  
$34,364  
$0  
$8,100  
$5,330  
$13,430  
$34  
$13,108  
$7,792  
---  
161.8%  
146.2%  
155.9%  
$9  
$9,127  
$49,180  
$58,316  
289.4%  
132.4%  
-73.3%  
-41.1%  
Total Nontax Revenue  
$20,934  
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  
$15,309  
$15,309  
---  
627.4%  
627.4%  
TOTAL STATE SOURCES  
Federal Grants  
$5,474,463 $5,421,059  
$2,708,707 $2,679,813  
$8,183,171 $8,100,872  
$53,404  
$28,894  
$82,298  
1.0% $5,385,979  
1.1% $3,132,170  
1.0% $8,518,149  
1.6%  
-13.5%  
-3.9%  
TOTAL GRF SOURCES  
*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.  
October 2017  
3
Budget Footnotes  
Ohio Legislative Service Commission  
1
REVENUES  
Jean J. Botomogno, Principal Economist, 614-644-7758  
Overview  
GRF sources ended the first quarter of FY 2018 with a cumulative  
positive variance of $82.3 million (1.0%) compared to OBM's estimates First-quarter  
published in September 2017. All four GRF source categories were above  
GRF sources  
estimates: federal grants by $28.9 million (1.1%), tax revenue by  
were  
17.4 million (0.3%), nontax revenue by $20.9 million (155.9%), and  
$
$
transfers in by $15.1 million (15.7%). GRF taxes and federal grants are  
82.3 million  
expected to make up about 68% and 30%, respectively, of anticipated GRF above  
sources for FY 2018. The latter mainly consists of federal reimbursements  
for Medicaid expenditures made from the state GRF moneys.  
estimate.  
Tables 1 and 2 show GRF sources for September and for FY 2018  
through September, respectively. Overall, GRF taxes performed fairly well  
through the first quarter, despite a shortfall from the nonauto sales and  
2
use tax, the largest GRF revenue source. Receipts from the other major  
taxes the auto sales tax, the personal income tax (PIT), the commercial  
activity tax (CAT), and the cigarette tax were in positive territory.  
For the month of September, total GRF sources of $2.50 billion were  
40.6 million above estimate. Positive variances of $28.7 million for federal  
$
grants and $18.1 million for nontax revenue were partially offset by a  
negative variance of $6.2 million for tax sources. The PIT experienced a  
shortfall of $18.2 million; however, the remaining major tax sources had a  
good month. The sales and use tax, the CAT, and the cigarette tax were  
above estimates by $15.3 million, $1.8 million, and $7.7 million,  
respectively. On the other hand, the financial institutions tax (FIT), the  
foreign insurance tax, and the kilowatt-hour tax had negative variances of  
Tax sources  
performed  
relatively well  
through  
September in  
FY 2018.  
$
8.0 million, $2.8 million, and $2.1 million, respectively.  
For the fiscal year to date, the following taxes were noticeably  
above estimates: the sales and use tax ($6.7 million), the PIT  
($16.5 million), the CAT ($9.3 million), and the corporate franchise tax  
1 This report compares actual monthly and year-to-date GRF revenue  
sources to OBM's estimates. If actual receipts were higher than estimate, that  
GRF source is deemed to have a positive variance. Alternatively, a GRF source is  
deemed to have a negative variance if actual receipts were lower than estimate.  
2 Revenue from the sales and use tax has been poor and the tax fell short  
of estimates by $193.0 million in FY 2017, most of which ($187.0 million) was  
from the nonauto portion of the tax.  
October 2017  
4
Budget Footnotes  
Ohio Legislative Service Commission  
(CFT, $2.4 million). These positive variances were partially offset by  
shortfalls of $7.1 million for the kilowatt-hour tax, $6.2 million for the FIT,  
and a combined $6.9 million for the two insurance taxes. The chart below  
illustrates the cumulative performance of total GRF sources relative to  
estimates in the first quarter of FY 2018.  
Chart 1: Cumulative Variances of GRF Sources in FY 2018  
(
Variance from Estimates, in millions)  
$
$
$
$
$
$
$
$
$
90  
80  
70  
60  
50  
40  
30  
20  
10  
$
0
Jul-17  
Federal Grants  
Aug-17  
Tax Revenue  
Sep-17  
-
$10  
Total GRF Sources  
Compared to GRF sources for the first quarter of FY 2017, FY 2018  
year-to-date GRF sources of $8.18 billion were $335.0 million (3.9%) lower.  
Decreases of $423.5 million (13.5%) in federal grants and $24.0 million  
(
(
41.1%) in nontax revenue were partially offset by increases in transfers in  
$96.0 million, 627.4%) and tax receipts ($16.4 million, 0.3%). Notably, PIT  
and CAT receipts grew by $81.7 million (4.1%) and $57.0 million (19.1%),  
respectively, while sales and use tax receipts declined by $100.6 million  
(
3.8%). The increase in CAT receipts was due in part to an increase in the  
share of CAT revenue allocated to the GRF enacted in H.B. 49, the  
budget act for the current biennium, while the decline in sales tax  
revenue resulted from a policy change that decreased the nonauto sales  
and use tax base, as explained in the following section.  
The sales and  
use tax posted  
a positive  
variance of  
Sales and Use Tax  
$6.7 million in  
In the first three months of FY 2018, total GRF sales and use tax  
receipts of $2.55 billion were $6.7 million (0.3%) above estimate, but  
the first  
FY 2018.  
$
100.6 million (3.8%) below receipts in FY 2017 through September. quarter of  
Though the auto sales tax was above projected receipts, the performance  
of the nonauto portion of the tax has been subpar. 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  
October 2017  
5
Budget Footnotes  
Ohio Legislative Service Commission  
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  
3
tax.  
Nonauto Sales and Use Tax  
GRF revenue from the nonauto sales and use tax totaled  
$
660.3 million in September, $12.6 million (1.9%) above estimate. This tax  
also performed better than expected in August and came in $9.0 million  
above the estimate for the month. Despite good performances in August  
and September, however, the nonauto sales and use tax was below  
anticipated revenues by $5.2 million (0.2%) at the end of the first fiscal  
quarter, due to a large negative variance in July. Compared to revenue in  
the same month last year, September nonauto sales and use tax revenue  
Through  
September in  
FY 2018, the  
decreased $58.2 million (8.1%); and for the fiscal year, GRF receipts from nonauto sales  
this tax totaled $2.18 billion, $103.8 million (4.5%) below revenue in the  
and use tax  
corresponding period in FY 2017, due to a change in law that reduced the  
taxable base as explained below.  
was  
$5.2 million  
Starting November 2010, nonauto sales and use tax receipts  
included revenue from the sales tax on Medicaid health insuring  
below  
corporations (MHICs). Revenue attributable to MHICs grew to contribute estimate.  
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 for taxable transactions that  
occurred in June 2017. H.B. 49 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 effect of MHIC policy change on  
the nonauto sales and use tax base, monthly revenue growth on a year-  
ago basis would have only been 2.0% and 0.9%, respectively, in August  
and in September. The weakness of this tax source that started 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.  
October 2017  
6
Budget Footnotes  
Ohio Legislative Service Commission  
continues.4 The chart below provides year-over-year growth in nonauto  
sales and use tax collections in 2017.  
Chart 2: 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%  
Auto Sales and Use Tax  
September GRF revenue from the auto portion of the sales and use  
tax of $120.0 million was above estimate by $2.7 million (2.3%). Through  
September, FY 2018 auto sales tax receipts of $369.2 million were  
Through  
11.9 million (3.3%) above estimate, and $3.1 million (0.9%) above receipts  
September in  
$
in FY 2017. Despite a good start to the fiscal year, year-over-year growth  
in auto sales tax collections has decelerated in the last few months, as seen FY 2018, the  
in the chart below. According to most auto analysts, vehicle demand may  
auto sales and  
have peaked and is expected to remain flat or decline in future months.  
use tax was  
For the month of September, U.S. light vehicle (i.e., auto and light  
truck) sales surged to a seasonally adjusted annualized rate of 18.6 million  
units, marking the best sales month since July 2005. However, this surge  
$11.9 million  
above  
was mainly due to replacement vehicle demand from areas affected by estimate.  
recent hurricanes. Some forecasters have increased their annual new-  
vehicles sales forecast. However, due to the localized and transitory  
nature of this increase in demand, the nationwide sales jump in September  
or the rest of the calendar year would not result in increased Ohio auto  
sales and use taxes.  
4 The nonauto sales and use tax grew by 2.4% in FY 2017, compared with  
the average annual growth rate of 4.1% during the 15-year period from FY 2002  
to FY 2016.  
October 2017  
7
Budget Footnotes  
Ohio Legislative Service Commission  
Chart 3: 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%  
Personal Income Tax  
FY 2018 PIT GRF revenue of $2.07 billion was $16.5 million (0.8%)  
above estimate, due to positive variances of $29.2 million (5.1%) in July  
and $5.5 million (0.8%) in August. In contrast, September PIT revenue of  
After a poor  
FY 2017, first-  
quarter PIT  
$
778.6 million was $18.2 million (2.3%) below estimate. September 2017  
PIT receipts were also $11.3 million (1.4%) below September 2016 revenue.  
However, for the fiscal year to date, GRF revenue from the tax was revenue was  
$
81.7 million (4.1%) higher than in FY 2017.  
$
16.5 million  
PIT revenue is comprised of gross collections, minus refunds and  
above estimate  
in FY 2018  
through  
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 September.  
employer withholdings, which is the largest component of gross  
collections, and to a lesser extent, the amount of refunds to taxpayers. For  
September 2017, employer withholding and taxes due with annual returns  
were below projections by $18.9 million and $8.9 million, respectively.  
Partially offsetting these negative variances, miscellaneous payments were  
$
1.5 million above anticipated revenues and refunds were $7.7 million  
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.  
October 2017  
8
Budget Footnotes  
Ohio Legislative Service Commission  
below estimate. The first quarterly estimated payments for FY 2018, due in  
September, were on target. 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 of gross  
collections exceeded estimates with the exception of annual return  
payments, which ended the first quarter with a negative variance.  
Refunds were also lower than the estimate for the first quarter.  
FY 2018 Personal Income Tax Revenue  
Estimate Variances and Year-over-Year Changes by Component  
Variance  
Changes  
from Estimate  
from FY 2017  
Category  
Amount  
Percentage  
Amount  
Percentage  
(
$ in millions)  
(%)  
($ in millions)  
(%)  
Withholding  
$7.6  
$5.3  
0.4%  
2.9%  
$61.3  
$11.3  
$1.0  
3.1%  
6.3%  
Quarterly Estimated Payments  
Trust Payments  
$1.3  
15.1%  
-27.3%  
20.4%  
0.4%  
11.2%  
-27.3%  
24.0%  
3.0%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
-$9.8  
$3.5  
-$9.8  
$4.0  
$8.0  
$67.9  
-$17.0  
$3.2  
Less Refunds  
-$9.3  
$0.8  
-6.6%  
0.8%  
-11.4%  
3.3%  
Less LGF Distribution  
GRF PIT Revenue  
$16.5  
0.8%  
$81.7  
4.1%  
Employer  
withholding  
revenue  
Compared to corresponding receipts in FY 2017 through September,  
first-quarter receipts from employer withholding, quarterly estimated  
payments and miscellaneous payments were higher, though payments with  
annual returns were substantially below those of last year. Year-to-date  
growth  
refunds were also below their levels in the first quarter of FY 2017. Payrolls decreased in  
are still growing, but employer withholding growth slowed in September  
after it had picked up in the spring and summer months. The chart below  
illustrates the growth of monthly employer withholdings on a three-month  
moving average relative to one year ago.  
September.  
October 2017  
9
Budget Footnotes  
Ohio Legislative Service Commission  
Chart 4: Monthly Withholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
8
7
6
5
4
3
2
1
0
%
%
%
%
%
%
%
%
%
Commercial Activity Tax  
The CAT continued its recent trend and performed well in the first  
quarter of FY 2018. Year-to-date GRF CAT receipts of $355.4 million were  
FY 2018 CAT  
tax receipts to  
the GRF were  
$
$
9.3 million (2.7%) above estimate. September GRF receipts of  
10.2 million were $1.8 million (20.9%) above projected revenue,  
increasing the cumulative positive variance of $7.5 million realized in the  
first two months of the fiscal year.  
$9.3 million  
above estimate  
FY 2018 CAT receipts to the GRF were $57.0 million (19.1%) above  
receipts in FY 2017 through September 2016. This increase is mostly due to through  
the CAT allocation change enacted in H.B. 49. Actual net collections from  
September.  
the CAT only increased $19.9 million (4.9%) from first-quarter net  
collections in FY 2017. Growth in gross collections was higher,  
$
this year when compared to the first three months in FY 2017.  
30.9 million (7.2%), but tax receipts were reduced by increased refunds  
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  
October 2017  
10  
Budget Footnotes  
Ohio Legislative Service Commission  
such payments are transferred back to the GRF. In other words, the CAT  
allocation change has no net effect on its total contribution to the GRF.  
Cigarette and Other Tobacco Products Tax  
September GRF revenue of $86.9 million from the cigarette and  
other tobacco products tax was $7.7 million (9.7%) above estimate and also  
FY 2018  
2.8 million (3.3%) above revenue in September 2016. In the first two  
cigarette tax  
$
months of the fiscal year, the cumulative negative variance for the  
cigarette and other tobacco products tax totaled $6.0 million (5.5%). Thus, receipts were  
the tax's performance in September resulted in a positive variance of  
$1.8 million  
$
1.8 million (0.9%) for the fiscal quarter.  
above estimate  
through  
For FY 2018 through September, sales of cigarettes provided GRF  
revenue of $171.2 million and $17.6 million came in from sales of other  
tobacco products, for a total of $188.8 million. Total revenue was  
September.  
$
5.9 million (3.1%) below collections in the corresponding period in  
FY 2017. Receipts from cigarettes sales fell $6.2 million while those from  
other tobacco products grew $0.3 million. Revenue from the cigarette and  
other tobacco products tax usually trends downward, generally at a slow  
pace.  
October 2017  
11  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of September 2017  
(
$ in thousands)  
(
Actual based on OAKS reports run October 4, 2017)  
PROGRAM  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$626,065 $636,084 -$10,019 -1.6%  
$189,932 $191,571  
$8,991 $11,702  
-$1,639 -0.9%  
-$2,712 -23.2%  
Other Education  
Total Education  
$824,988 $839,358 -$14,370 -1.7%  
Medicaid  
$1,183,121 $1,173,655 $9,465 0.8%  
Health and Human Services  
$56,087 $84,420 -$28,333 -33.6%  
Total Welfare and Human Services $1,239,207 $1,258,076 -$18,868 -1.5%  
Justice and Public Protection  
General Government  
$141,928 $156,292 -$14,364 -9.2%  
$22,258 $27,698 -$5,439 -19.6%  
Total Government Operations  
$164,186 $183,989 -$19,804 -10.8%  
Property Tax Reimbursements  
Debt Service  
$175,471 $359,418 -$183,947 -51.2%  
$419,336 $422,386  
-$3,050 -0.7%  
Total Other Expenditures  
$594,806 $781,804 -$186,998 -23.9%  
Total Program Expenditures  
TRANSFERS  
$2,823,187 $3,063,227 -$240,040 -7.8%  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$273  
$273  
$0  
$273  
$273  
$0  
$0  
$0  
---  
0.0%  
0.0%  
TOTAL GRF USES  
$2,823,460 $3,063,500 -$240,040 -7.8%  
*September 2017 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
October 2017  
12  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2018 as of September 30, 2017  
(
$ in thousands)  
(
Actual based on OAKS reports run October 4, 2017)  
Percent  
Estimate* Variance Percent FY 2017** Change  
PROGRAM  
Actual  
Primary and Secondary Education  
Higher Education  
$2,066,824 $2,090,796 -$23,972 -1.1% $1,442,926 43.2%  
$540,361 $541,848 -$1,487 -0.3%  
$23,602 $27,332 -$3,730 -13.6%  
$373,603 44.6%  
$15,285 54.4%  
Other Education  
Total Education  
$2,630,787 $2,659,976 -$29,189 -1.1% $1,831,813 43.6%  
Medicaid  
$4,135,948 $4,130,420  
$5,528  
0.1% $3,228,650 28.1%  
$216,993 30.8%  
Health and Human Services  
$283,927 $300,722 -$16,795 -5.6%  
Total Welfare and Human Services $4,419,875 $4,431,142 -$11,267 -0.3% $3,445,643 28.3%  
Justice and Public Protection  
General Government  
$574,067 $589,711 -$15,643 -2.7%  
$95,254 $104,459 -$9,204 -8.8%  
$669,322 $694,169 -$24,848 -3.6%  
$411,340 39.6%  
$77,092 23.6%  
$488,432 37.0%  
Total Government Operations  
Property Tax Reimbursements  
Debt Service  
$413,777 $428,036 -$14,259 -3.3%  
$773,964 $777,102 -$3,138 -0.4%  
$1,187,741 $1,205,137 -$17,397 -1.4%  
$135,496 205.4%  
$374,645 106.6%  
$510,142 132.8%  
Total Other Expenditures  
Total Program Expenditures  
TRANSFERS  
$8,907,724 $8,990,425 -$82,700 -0.9% $6,276,030 41.9%  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$58,368  
$58,368  
$0  
$0  
---  
$29,483 -100.0%  
$212,614 -72.5%  
$242,096 -75.9%  
$45,914 $12,454 27.1%  
$45,914 $12,454 27.1%  
TOTAL GRF USES  
$8,966,092 $9,036,339 -$70,246 -0.8% $6,518,126 37.6%  
*
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.  
October 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 October 4, 2017)  
(
(
Month of September 2017 Year to Date Through September 2017  
Actual Estimate* Variance Percent Actual Estimate* Variance Percent  
$2,232,252 $2,236,362 -$4,110 -0.2% $6,326,012 $6,361,049 -$35,036 -0.6%  
$1,123,814 $1,114,178 $9,636 0.9% $3,955,919 $3,950,106 $5,812 0.1%  
-1.2% $2,370,094 $2,410,942 -$40,849 -1.7%  
Department  
Medicaid  
GRF  
Non-GRF  
$1,108,438 $1,122,184 -$13,746  
Developmental Disabilities  
$191,411 $208,599 -$17,188  
-8.2%  
$665,059 $751,130 -$86,071 -11.5%  
$148,480 $152,039 -$3,559 -2.3%  
$516,579 $599,091 -$82,512 -13.8%  
GRF  
Non-GRF  
$49,026  
$49,061  
-$35  
-0.1%  
$142,385 $159,538 -$17,153 -10.8%  
Job and Family Services  
$22,425  
$21,729  
$696  
3.2%  
$69,832  
$64,211  
$5,621  
$3,351 13.0%  
$2,270 5.9%  
8.8%  
GRF  
Non-GRF  
$9,405  
$13,020  
$9,610  
$12,119  
-$205  
$901  
-2.1%  
7.4%  
$29,068  
$40,764  
$25,717  
$38,494  
Health  
$3,725  
$1,946  
$1,779  
91.4%  
$7,124  
$7,373  
-$249 -3.4%  
GRF  
Non-GRF  
$419  
$3,306  
$322  
$1,624  
$97  
$1,681 103.5%  
30.2%  
$1,063  
$6,061  
$946  
$6,426  
$116 12.3%  
-$365 -5.7%  
Mental Health and Addiction  
$100  
$350  
-$251 -71.5%  
$781  
$1,230  
-$449 -36.5%  
GRF  
Non-GRF  
$100  
$0  
$225  
$125  
-$125 -55.7%  
-$125 -100.0%  
$367  
$414  
$679  
$551  
-$312 -45.9%  
-$137 -24.9%  
Aging  
$420  
$570  
-$150 -26.3%  
$1,506  
$1,980  
-$473 -23.9%  
GRF  
Non-GRF  
$223  
$197  
$248  
$322  
-$25 -10.1%  
-$125 -38.7%  
$895  
$611  
$895  
$1,085  
$0  
-$473 -43.6%  
0.0%  
Pharmacy Board  
$70  
$36  
$34  
95.3%  
$105  
$1,435  
-$1,330 -92.7%  
GRF  
$0  
$0  
$0  
--  
$0  
$0  
$0  
--  
Non-GRF  
$70  
$36  
$34  
95.3%  
$105  
$1,435  
-$1,330 -92.7%  
Education  
$134  
$23  
$110 470.9%  
$163  
$69  
$94 137.5%  
GRF  
Non-GRF  
$134  
$0  
$12  
$12  
$122 1041.9%  
-$12 -100.0%  
$156  
$7  
$37  
$32  
$119 324.4%  
-$25 -78.5%  
Total GRF  
$1,183,121 $1,173,655  
$9,465  
0.8% $4,135,948 $4,130,420  
$5,528  
0.1%  
Total Non-GRF  
Total All Funds  
$1,267,415 $1,295,960 -$28,545  
$2,450,536 $2,469,615 -$19,079  
-2.2% $2,934,634 $3,058,057 -$123,423 -4.0%  
-0.8% $7,070,583 $7,188,477 -$117,894 -1.6%  
*Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
October 2017  
14  
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 October 4, 2017)  
(
(
September  
Year to Date Through September 2017  
Actual Estimate* Variance Percent  
Payment Category  
Managed Care  
Actual  
Estimate* Variance Percent  
$999,089 $991,018  
$344,125 $342,308  
$8,071  
$1,818  
0.8% $2,830,371 $2,810,573 $19,798  
0.5% $1,033,628 $1,030,553 $3,075  
0.7%  
0.3%  
ACA - Managed Care  
DDD Services  
$187,593 $203,122 -$15,529 -7.6%  
$377,143 $381,088 -$3,945 -1.0%  
$644,052 $727,406 -$83,354 -11.5%  
$847,665 $864,333 -$16,667 -1.9%  
Hospitals  
Nursing Facilities  
Physicians/All Other  
Behavioral Health  
Administration  
$129,155 $124,501  
$4,654  
$84,338 -$1,186 -1.4%  
$86,595 $5,012 5.8%  
$95,079 -$13,308 -14.0%  
$50,473 -$915 -1.8%  
3.7%  
$390,262 $368,561 $21,700 5.9%  
$294,246 $309,058 -$14,812 -4.8%  
$311,338 $303,214 $8,124 2.7%  
$230,207 $265,049 -$34,842 -13.1%  
$83,151  
$91,607  
$81,771  
$49,557  
$39,749  
$24,243  
$33,792  
$9,559  
Medicare Buy-In  
Medicare Part D  
Prescription Drugs  
Aging Waivers  
$149,176 $150,843  
$118,091 $124,590  
-$1,667 -1.1%  
-$6,499 -5.2%  
$41,185 -$1,436 -3.5%  
$27,771 -$3,528 -12.7%  
$84,459 $97,006 -$12,547 -12.9%  
$104,224 $102,260 $1,964 1.9%  
$32,863 $35,030 -$2,167 -6.2%  
$32,050  
$10,086  
$1,741 5.4%  
-$528 -5.2%  
Home Care Waivers  
Total All Funds  
$2,450,536 $2,469,615 -$19,079 -0.8% $7,070,583 $7,188,477 -$117,894 -1.6%  
*
Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
October 2017  
15  
Budget Footnotes  
Ohio Legislative Service Commission  
6
EXPENDITURES  
Russ Keller, Senior Economist, 614-644-1751  
Nicholas J. Blaine, Budget Analyst, 614-387-5418  
Overview  
For the first quarter of FY 2018, GRF uses were largely in line with  
the estimate released by OBM in September 2017. Program expenditures,  
the main component of GRF uses, totaled $8.91 billion, $82.7 million below  
estimate. The smaller component, GRF transfers out, totaled $58.4 million,  
For the first  
quarter of  
12.5 million above estimate. Including both program expenditures and  
FY 2018, GRF  
uses were  
$
transfers out, GRF uses totaled $8.97 billion through September,  
$
70.2 million (0.8%) below estimate.  
Primary and Secondary Education had the largest negative year-to- $70.2 million  
date variance at $24.0 million (1.1%), of which $10.0 million occurred in  
the month of September. Health and Human Services had the second  
largest negative year-to-date variance. This program category's  
expenditures were $28.3 million below estimate in September, which  
turned the category's year-to-date variance from a positive $11.5 million at  
the end of August to a negative $16.8 million (5.6%) at the end of  
September. Justice and Public Protection also had a relatively large  
negative variance of $14.4 million in September, which resulted in the  
third largest negative year-to-date variance of $15.6 million (2.7%). Timing  
likely accounted for the majority of these variances.  
below  
estimate.  
Timing is also the main culprit behind the variances in Property  
Tax Reimbursements. After posting a large positive variance of  
$
169.7 million in August, Property Tax Reimbursements had an even  
larger negative variance of $183.9 million in September. This variance  
accounted for almost 77% of the total negative variance of $240.0 million  
in GRF program expenditures for the month. For the first quarter as a  
whole, the negative variance for Property Tax Reimbursements ranked the  
fourth largest at $14.3 million.  
Almost 46% of estimated GRF spending is expected to go to  
Medicaid in FY 2018. Through September, GRF Medicaid expenditures  
were $4.14 billion, $5.5 million (0.1%) above estimate. Based on FY 2018  
appropriations, about 55% of Medicaid expenditures will be made from  
6
This report compares actual monthly and year-to-date expenditures  
from the GRF to OBM's estimates. If a program category's actual expenditures  
were higher than estimate, that program category is deemed to have a positive  
variance. The program category is deemed to have a negative variance when its  
actual expenditures were lower than estimate.  
October 2017  
16  
Budget Footnotes  
Ohio Legislative Service Commission  
the GRF and the remaining 45% will be made from various non-GRF  
funds. Medicaid's variances, from both the GRF and non-GRF funds, are  
briefly discussed below.  
Medicaid  
Medicaid is a joint federal-state program. Both GRF and non-GRF  
Medicaid expenditures contain federal and state dollars. Federal  
reimbursements for Medicaid expenditures made from the state GRF are  
deposited into the GRF as revenue to help support the GRF  
appropriations for Medicaid. Federal reimbursements for Medicaid  
expenditures made from state non-GRF funds are deposited into various  
non-GRF funds for expenditures. In recent years, the federal government  
has reimbursed about two-thirds of Ohio's total Medicaid expenditures.  
Table 5 shows GRF and non-GRF Medicaid expenditures for the  
Ohio Department of Medicaid (ODM), the Ohio Department of  
Developmental Disabilities (ODODD), and six other "sister" agencies that  
also take part in administering Ohio Medicaid. ODM and ODODD  
account for about 99% of the total Medicaid budget. The other six  
agencies Job and Family Services, Health, Aging, Mental Health and  
7
Addiction Services, State Board of Pharmacy, and Education account for  
the remaining one percent. Unlike ODM and ODODD, the six "sister"  
agencies incur only administrative spending.  
As shown in Table 5, for the first quarter of FY 2018, GRF Medicaid  
expenditures were $5.5 million (0.1%) above estimate while non-GRF  
Medicaid expenditures were $123.4 million (4.0%) below estimate. Across  
all funds, Medicaid expenditures were $117.9 million (1.6%) below  
estimate. All-funds expenditures from ODODD and ODM were  
$
86.1 million (11.5%) and $35.0 million (0.6%), respectively, below their  
year-to-date estimates. These negative variances were partially offset by a  
positive year-to-date variance of $5.6 million (8.8%) from the Ohio  
Department of Job and Family Services.  
Table 6 shows all-funds Medicaid expenditures by payment  
category. Services provided by ODODD (labeled "DDD Services" in the  
table) had the largest negative year-to-date variance at $83.4 million  
(11.5%), followed by Administration at $34.8 million (13.1%). The smaller  
positive and negative year-to-date variances in other payment categories  
largely offset each other.  
7 The Medicaid appropriations made in the State Board of Pharmacy and  
the Department of Education are new in FY 2018. See the September issue of this  
report for more details on the Medicaid appropriations in these two agencies.  
October 2017  
17  
Budget Footnotes  
Ohio Legislative Service Commission  
Expenditures from Managed Care and ACA-Managed Care, the  
two largest payment categories, were largely on par with the estimates.  
Those expenditures were $19.8 million (0.7%) and $3.1 million (0.3%),  
respectively, above the estimates for the first quarter. The ACA-Managed  
Care category tracks managed care expenditures for individuals who  
became eligible for Medicaid through the federal Affordable Care Act.  
Overall, more than 80% of Ohioans enrolled in Medicaid receive services  
through managed care. Together, Managed Care and ACA-Managed Care  
account for over half of Medicaid expenditures.  
October 2017  
18  
Budget Footnotes  
Ohio Legislative Service Commission  
ISSUE UPDATES  
OhioMHAS Receives $2 Million Grant to Enhance  
Medication-Assisted Treatment  
Robert Moore, Budget Analyst, 614-466-4280  
On July 31, 2017, the Ohio Department of Mental Health and Addiction Services  
OhioMHAS) was awarded $2 million in federal Medication-Assisted Treatment  
(
Prescription Drug and Opioid Addiction Grant funds. The funds are to be used to  
enhance or expand access to medication assisted treatment (MAT) for individuals with  
an opioid use disorder. In Ohio, these grant funds will be provided to nine alcohol,  
drug addiction, and mental health (ADAMH) boards representing the following  
1
7 counties: Allen, Auglaize, Darke, Delaware, Fairfield, Hardin, Knox, Licking,  
Medina, Miami, Morrow, Portage, Richland, Sandusky, Seneca, Shelby, and Wyandot.  
These ADAMH boards were selected due to two major criteria: (1) the ADAMH board  
did not receive specific funding to expand MAT under Ohio's $26 million federal State  
Targeted Response to the Opioid Crisis Grant and (2) the number of unintentional  
overdose deaths in the ADAMH board's area was at least 90 or more between 2010 and  
2
015. Specific activities that will be funded include: the development of crisis response  
teams; on-boarding prescribers; paying for medication; expanding ambulatory detox  
and residential treatment; and enhancing care at hospitals, community health centers,  
and federally qualified health centers.  
The grant is administered by the federal Substance Abuse and Mental Health  
Services Administration (SAMHSA). Eligibility was limited to states with high rates of  
primary treatment admissions for heroin and opioids. SAMHSA anticipates these grant  
funds to increase the number of individuals receiving MAT services and integrated care  
and to decrease the usage of illicit drugs and nonprescribed opioids.  
Attorney General Announces $3 million in  
Drug Abuse Response Team Grants  
Joseph Rogers, Senior Budget Analyst, 614-644-9099  
On September 6, 2017, the Ohio Attorney General announced that 40 law  
enforcement agencies will receive a total of $3 million in Drug Abuse Response Team  
DART) grants. The purpose of the grants is to address Ohio's opioid epidemic by  
(
helping grant recipients replicate or expand successful law enforcement programs  
similar to (1) the DART in Lucas County or (2) the Quick Response Teams (QRTs) in  
October 2017  
19  
Budget Footnotes  
Ohio Legislative Service Commission  
Summit County and Colerain Township (Hamilton County). H.B. 49 appropriates  
$
1.5 million in GRF funding in each fiscal year of the FY 2018-FY 2019 biennium to be  
used by the Attorney General for this purpose.  
The grants were awarded at three levels based on the size of the population  
served by the law enforcement agency: up to $50,000 for an agency serving up to  
3
3
7,000 persons (Tier 1), up to $100,000 for an agency serving a population of between  
7,000 and 239,000 persons (Tier 2), and up to $125,000 for an agency serving a  
population of more than 239,000 persons (Tier 3). Based on this allocation method,  
ten Tier 1 law enforcement agencies were allocated $50,000 each. Twenty of the 24 Tier 2  
agencies were allocated $100,000 each; the other four Tier 2 agencies were allocated  
their requested amounts, which were less than the maximum amount of $100,000 for  
this tier. Six Tier 3 law enforcement agencies were allocated $125,000 each. The  
complete list of grant awards may be accessed at: www.ohioattorneygeneral.gov.  
The law enforcement agencies receiving grant funding are required to partner  
with a drug abuse treatment provider. Many of the grant recipients also include other  
partners such as fire departments, emergency management agencies, faith-based  
organizations, and children's services agencies. The officers and partners comprising  
these response teams assist overdose survivors in the recovery process. Team members  
visit survivors and offer counseling and referrals to drug rehabilitation facilities,  
detoxification facilities, ongoing drug treatment, and aftercare.  
Ohio Air Quality Development Authority Awards Three Projects  
Financing Assistance in the First Quarter of FY 2018  
Tom Middleton, Senior Budget Analyst, 614-728-4813  
Through the first quarter of FY 2018, the Ohio Air Quality Development  
Authority (OAQDA) has announced the support of three clean air financing projects for  
small businesses. The support comes in the form of grants of up to $30,000 per project to  
cover closing costs or principal payments on loans to small businesses by private  
lenders arranged through OAQDA's Clean Air Resource Center. In total, $205,000 will  
be loaned under the three projects: (1) Keen's Body Shop of Columbus (Franklin  
County) will receive a loan of $110,000 for a new paint booth, (2) Ridge Cleaners of  
Avon Lake (Lorain County) will receive a $50,000 loan to install new dry cleaning  
equipment, and (3) Victory Machine and Fabrication of Botkins (Shelby County) will  
receive a $45,000 loan for a new paint booth. To qualify for this financing assistance,  
businesses must have fewer than 100 employees and comply with existing Clean Air  
Act requirements. An added benefit of financing clean air projects with OAQDA  
assistance is that, depending on the circumstances, the projects may be exempt from  
property and sales and use taxes for the life of the loan.  
October 2017  
20  
Budget Footnotes  
Ohio Legislative Service Commission  
The grant assistance provided by OAQDA is paid from Small Business  
Assistance Fund (Fund 5A00) appropriation item 898603, Small Business Assistance.  
Fund 5A00 receives revenue from a portion of Title V permit fees collected by the Ohio  
Environmental Protection Agency. H.B. 49 provided funding of $450,000 in each fiscal  
year of the FY 2018-FY 2019 biennium for this grant program under the OAQDA  
budget.  
Report Finds the Ohio Grape and Wine Industry Contributed $1.3 Billion  
to State's Economy in CY 2016  
Shannon Pleiman, Budget Analyst, 614-466-1154  
On September 12, 2017, the Ohio Grape Industries Committee within the  
Department of Agriculture released a report it commissioned on the overall economic  
8
impact of Ohio wine and wine grapes in 2016. The report found Ohio's grape and wine  
industry had a $1.3 billion economic impact on the state in CY 2016. Of this amount, the  
report attributed $1.1 billion to several factors including winery sales, retail and  
restaurant sales of Ohio wine, federal and state tax revenue, tourism, and indirect and  
induced revenue. The remaining economic impact was generated from wages, which  
amounted to approximately $263.8 million according to the report.  
The study also provides a snapshot of the grape and winemaking industry in  
Ohio. Overall, the study points out that the number of Ohio wineries increased from  
1
75 in 2012 to 265 in 2016. In contrast, the number of grape bearing acres in the state  
decreased from 1,900 acres to 1,500 acres over this time, according to the National  
Agricultural Statistics Service (NASS). Also according to NASS, Ohio is the sixth largest  
wine producer in the nation at 5.9 million total gallons produced in 2016. Most of the  
state's wineries, 90% according to the study, had sales or production of less than  
5
,000 gallons annually (approximately 2,100 cases).  
The Ohio Grape Industries Committee promotes the sale and production of  
grape products within the state by providing new information on growing techniques,  
marketing strategies, and identification of grape varieties suitable for cultivation in the  
state. The committee is funded by a two-cent per-gallon tax on all wine sales in Ohio  
that is deposited into the Ohio Grape Industries Fund (Fund 4960). Receipts from this  
source amounted to approximately $1.0 million in FY 2017.  
8 Frank, Rimerman + Co. LLP, The Economic Impact of Ohio Wine and Wine Grapes 2016.  
http://www.findohiowines.com/wp-content/uploads/2017/09/Ohio-2016-Economic-Impact-  
(
Report-FINAL.pdf (August 2017).)  
October 2017  
21  
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Ohio Legislative Service Commission  
ODE Releases Report Card Results for 2016-2017 School Year  
Anthony Kremer, Budget Analyst, 614-466-5654  
On September 14, 2017, the Ohio Department of Education (ODE) released report  
cards for public districts and schools for the 2016-2017 school year. These report cards  
represent the second year that A-F letter grades have been assigned for each of six  
components: Achievement, Graduation Rate, Progress, Gap Closing, K-3 Literacy, and  
Prepared for Success. The table below summarizes how the 608 school districts  
receiving report cards fared this past school year on the six component measures. All  
grades except for the one for the Prepared for Success component are derived from  
performance on the ten individually graded measures used to evaluate districts and  
schools for the four prior school years. The Prepared for Success component grade is  
9
based on six ungraded measures. Due to recent changes to state tests, the General  
Assembly has suspended many sanctions related to state test results for the 2014-2015,  
2
2
015-2016, and 2016-2017 school years. Beginning with the report cards for the  
017-2018 school year, the component grades will be used to assign an overall letter  
grade.  
School District Report Card Results, 2016-2017 School Year  
Component  
A
B
C
D
F
No Rating  
0%  
Graduation Rate  
Progress  
56%  
21%  
3%  
2%  
1%  
2%  
27%  
34%  
22%  
9%  
10%  
9%  
4%  
3%  
25%  
11%  
51%  
15%  
53%  
11%  
1%  
0%  
K-3 Literacy  
52%  
35%  
18%  
25%  
10%  
0%  
Achievement  
Gap Closing  
3%  
18%  
5%  
48%  
15%  
0%  
Prepared for Success  
0%  
As measured by the total percentage of As and Bs, school districts fared the best  
on the graduation rate and progress components, the latter of which measures the  
academic growth students are making from year to year. Based on the total percentage  
of Ds and Fs, school districts struggled most on the Prepared for Success component  
and with closing achievement gaps between certain designated groups and all students.  
However, grades improved considerably on the gap closing component compared to  
the previous year's results; the share of districts receiving Ds or Fs on this measure  
9 In general, the Prepared for Success component calculates a score for each district using a  
point system for students meeting certain levels of performance on college entrance, Advanced  
Placement, and International Baccalaureate exams; earning an honors diploma or an industry-  
recognized credential; or successfully participating in College Credit Plus.  
October 2017  
22  
Budget Footnotes  
Ohio Legislative Service Commission  
decreased by 29 percentage points. Grades improved even more on the K-3 literacy  
component; the share of districts receiving Ds or Fs on this measure decreased by  
5
9 percentage points.  
ODHE Announces Plans for Postsecondary Attainment Goal Dashboard  
Edward M. Millane, Senior Budget Analyst, 614-995-9991  
In July, the Ohio Department of Higher Education (ODHE) announced its plans  
to use a portion of a grant from the Lumina Foundation to support strategic initiatives  
to increase the state's postsecondary attainment rate to 65% by 2025. Among the  
initiatives is the development of a statewide data dashboard that will be used to  
monitor progress towards the 65% attainment goal. The dashboard is likely to be an  
online interactive tool that will display certain metrics that may be drilled down to the  
county, school district, or higher education institution level. According to ODHE, the  
data collection portion of the project is underway, but the design and build-out of the  
dashboard has yet to begin. ODHE estimates it will have a public version of the  
dashboard available sometime in spring 2018. In addition to the dashboard, ODHE will  
use the grant to work with businesses to align the attainment goal with employers'  
workforce needs, promote the value of high-value technical certificates and  
certifications, and increase the postsecondary attainment of the state's underrepresented  
and low-income populations.  
In April 2016, the Lumina Foundation awarded ODHE a $100,000 grant to  
support the agency's plan for setting the state's postsecondary attainment goals. That  
same year, the state established its goal that 65% of working-age Ohioans (ages 25 to 64)  
will have a degree, certificate, or other postsecondary workforce credential of value by  
2
025. The grant funds are appropriated in DPF Fund 5FR0 appropriation item 235650,  
State and Non-Federal Grants and Awards, which received an appropriation of  
500,000 in both FY 2018 and FY 2019. In addition, H.B. 49 requires ODHE to  
$
collaborate with the Ohio Department of Education to annually produce a report on the  
state's progress towards the 65% postsecondary attainment goal beginning in 2018.  
Board of Nursing Announces $3.0 million for  
Nurse Education Grant Awards  
Nicholas J. Blaine, Budget Analyst, 614-387-5418  
On August 11, 2017, the Ohio Board of Nursing announced 17 nursing education  
program awards totaling $3.0 million over the 2017-2019 grant cycle (see table below).  
The grants are provided to programs that partner with health care facilities, community  
health agencies, or other education programs to increase nursing student enrollment  
October 2017  
23  
Budget Footnotes  
Ohio Legislative Service Commission  
capacity. Funds may be used to purchase educational equipment or to hire or contract  
with clinical faculty and instructional personnel. Grants are awarded to pre-licensure  
programs for licensed practical nurses (LPNs) and registered nurses (RNs), as well as  
post-graduate education programs. The grant program is funded by ten dollars of each  
nursing license renewal fee, which is deposited into the Nurse Education Grant  
Program Fund (Fund 5AC0). A grant recipient may not receive more than $200,000 in  
each grant cycle. Funds are typically disbursed quarterly.  
Nursing Education Grant Program Awards  
September 1, 2017 to August 31, 2019  
Program Name  
LPN Pre-Licensure Programs  
Award  
$454,050  
$200,000  
$199,772  
$54,278  
Collins Career Technical Center Practical Nursing Program  
North Central State College Practical Nurse Program  
Tri-Rivers Center for Adult Education in Nursing  
RN Pre-Licensure Programs  
$1,059,450  
Capital University, Department of Nursing  
Cleveland State University School of Nursing  
Galen College of Nursing  
$200,000  
$200,000  
$200,000  
$198,828  
$198,585  
$62,037  
Ashland University Dwight Schar College of Nursing and Health Sciences  
Xavier University  
Firelands Regional Medical Center School of Nursing  
Post-Graduate Programs  
$1,513,500  
$200,000  
$200,000  
$200,000  
$200,000  
$199,714  
$199,325  
$199,223  
$115,238  
Aultman College of Nursing and Health Sciences  
Mercy College of Ohio  
The University of Toledo College of Nursing  
Youngstown State University, Bachelor of Science in Nursing Program  
Xavier University  
Ashland University Dwight Schar College of Nursing and Health Sciences  
Malone University School of Nursing & Health Sciences  
The Ohio State University College of Nursing  
TOTAL  
$3,027,000  
Ohio to Receive Nearly $2.8 Million in Federal Land  
and Water Conservation Fund Grants  
Tom Wert, Budget Analyst, 614-499-0520  
On September 21, 2017, the U.S. Department of the Interior National Park Service  
NPS) announced that Ohio would receive nearly $2.8 million in grants from the Federal  
Land and Water Conservation Fund (LWCF). The LWCF grant program provides up to  
0% reimbursement assistance for the state and local governments for the acquisition,  
(
5
October 2017  
24  
Budget Footnotes  
Ohio Legislative Service Commission  
development, and rehabilitation of recreational areas, including administrative costs. In  
Ohio, the program is administered by the Department of Natural Resources (DNR),  
which reviews LWCF grant applications and submits recommended projects to the NPS  
for final approval. To be eligible, projects must be in accord with the Ohio Statewide  
Comprehensive Outdoor Recreation Plan. Funding for approved projects is distributed  
under Land and Water Conservation Fund (Fund 3B60) appropriation item 725653,  
Federal Land and Water Conservation Grants.  
DNR released the list of recommended local park projects for the grants in  
April, 2017. In all, DNR recommended more than $2.5 million in LWCF grants for  
1
4 local parks projects across the state. Those projects are summarized in the table  
below.  
LWCF Grant Recommendations for FY 2017  
County  
Applicant  
Project  
Schoonover Park Improvements  
Riverside Park Master Plan  
East Palestine City Park Tennis Courts  
Nelson Russ Park Project  
Amount  
$300,000  
$118,000  
$55,837  
$161,543  
$300,000  
$57,214  
$162,500  
$300,000  
$56,517  
Allen  
City of Lima  
Clermont  
Columbiana  
Cuyahoga  
Cuyahoga  
Darke  
City of Milford  
Village of East Palestine  
City of Fairview Park  
Cleveland Metroparks  
Village of Versailles  
City of Vermilion  
Brecksville Upland Preserve  
Municipal Pool Improvements  
Vermilion Beach Extension  
Maple Highlands Trail - South  
Reservoir Park Pathway  
Erie  
Geauga  
Henry  
Village of Middlefield  
Village of Deshler  
Elyria Parks and Recreation  
Department  
Lorain  
Lucas  
West Park Spray Park  
$69,770  
Springer Farm Wetland Restoration/Park  
Development  
Metroparks of the Toledo Area  
$300,000  
Portage  
Tuscarawas  
Union  
Portage Park District  
City of New Philadelphia  
Village of Richwood  
Trail Lake Acquisition  
$300,000  
$196,000  
Tuscora Park Tennis Court Renovation  
Lake Baccarat Pedestrian Path  
$150,000  
TOTAL $2,527,381  
Ohio to Receive $19.6 million in EpiPen Settlement Agreement  
Joseph Rogers, Senior Budget Analyst, 614-644-9099  
In August 2017, the Ohio Attorney General announced that the state of Ohio will  
receive $19.6 million in restitution as part of a settlement agreement resolving federal  
allegations that Mylan, Inc. knowingly underpaid rebates owed to the state Medicaid  
programs for the purchase of EpiPens, a branded epinephrine auto-injector drug. About  
October 2017  
25  
Budget Footnotes  
Ohio Legislative Service Commission  
$
4.2 million of these moneys will be credited to the Medicaid Support and Recoveries  
Fund (Fund 5DL0). Moneys in Fund 5DL0 are used by the Department of Medicaid to  
offset Medicaid GRF spending and help support Ohio Medicaid's administrative costs.  
The remainder will be used to pay back the federal government for a portion of  
Medicaid reimbursements related to EpiPen purchases and to cover attorney fees and  
investigation costs incurred by the Ohio Attorney General's Medicaid Fraud and  
Control Unit.  
The EpiPen settlement totals $465 million, of which $213.9 million is shared  
among the 50 states' Medicaid programs. The remainder goes to the federal  
government. Mylan was accused of violating the False Claims Act by knowingly  
misclassifying EpiPen as a generic drug to avoid paying rebates owed to Medicaid  
under the Medicaid Drug Rebate Program which was enacted by Congress to ensure  
that state Medicaid programs are not susceptible to price gouging by manufacturers of  
drugs that are available from only a single source. Accordingly, these single-source, or  
brand-name, drugs are subject to a higher rebate that must be paid to Medicaid  
compared to generic drugs originating from multiple manufacturers. The federal  
government alleged that Mylan improperly avoided paying state Medicaid programs  
the higher rebate for brand name drugs by misclassifying EpiPen as a generic drug. The  
U.S. Department of Health and Human Services estimated that Mylan's Medicaid  
overcharges may have totaled nearly $1.3 billion from 2006 through 2016.  
October 2017  
26  
Budget Footnotes  
Ohio Legislative Service Commission  
TRACKING THE  
ECONOMY  
Phil Cummins, Senior Economist, 614-387-1687  
Ruhaiza Ridzwan, Senior Economist, 614-387-0476  
Overview  
Indicators on the economy are mixed, affected to varying degrees  
by the impacts of the recent hurricanes, both for measures of activity and  
of prices. On balance, apart from these temporary disruptions, economic  
activity appears to be continuing to advance across a broad range of  
industries. The nation's unemployment rate declined to a 16-year low in  
September, even as total nonfarm payroll employment fell due to effects  
of hurricanes. Total industrial production fell in August due to hurricane  
and other weather effects. Inflation-adjusted gross domestic product (real  
GDP) for the nation rose in the second quarter at the most rapid pace in  
over two years. Finished goods inflation ticked higher in the latest month;  
however, it remains tame on a year-over-year basis. Price pressures were  
more widespread at earlier stages of production.  
In Ohio, employment rose in August, continuing an uptrend.  
Unemployment also increased. The state's personal income grew in the  
second quarter but less rapidly than nationwide. Year-to-date home sales  
rose, compared with last year, and average selling prices increased.  
In September,  
the nationwide  
average  
The National Economy  
In September, the nationwide average unemployment rate fell to  
4
.2%, lowest since 2001. Total nonfarm payroll employment fell 33,000,  
unemployment  
the first month in which this measure declined since 2010. The  
U.S. Bureau of Labor Statistics (BLS) said the weakness likely was a result rate fell to  
of Hurricane Harvey and Hurricane Irma. The unemployment rate and  
4
.2%, lowest  
employment are shown in Chart 5.  
since 2001.  
In the survey on which the unemployment statistics are based,  
persons who have jobs are not counted as unemployed even if they do not  
work at all during the week when the survey is conducted. The report for  
September showed 1.5 million people with jobs but not at work that week  
due to bad weather, the highest this measure has been since 1996. BLS  
does not think the hurricanes affected the national unemployment rate.  
October 2017  
27  
Budget Footnotes  
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)  
A separate survey for payroll employment does not count as  
employed persons who are not paid for the survey period. BLS reported a  
drop of 105,000 in September in employment in food services and  
drinking places, and noted that a large majority of workers in the industry  
are not paid for days when they are not at work. BLS said employment  
growth was below trend in some other industries, but also that job gains  
likely occurred for rebuilding and recovery following the hurricanes.  
Real GDP  
growth in this  
year's second  
quarter was  
revised upward  
to a 3.1%  
Real GDP growth in this year's second quarter was revised upward  
to a 3.1% annual rate, highest in more than two years. So far this year,  
consumer spending continued to expand, business investment  
strengthened, and U.S. exports rose. On the other hand, residential fixed  
investment slowed in the second quarter and government spending  
slowed in both the first and second quarters. The pace of inventory  
accumulation was below that last year.  
annual rate,  
highest in more  
The industrial production index fell 0.9% in August, the largest than two years.  
monthly decline since the 2007-2009 recession. The Federal Reserve  
estimated that Hurricane Harvey cut both manufacturing and mining  
output, and accounted for roughly 0.75 percentage point of the decline in  
total industrial output. Industrial production rose in each of the previous  
six months, by 0.4% on average. In addition to hurricane effects, cooler  
weather than usual for August particularly on the East Coast reduced  
demand for air conditioning, cutting seasonally adjusted utility output.  
These temporary weather-related effects can be expected to reverse in the  
months ahead.  
October 2017  
28  
Budget Footnotes  
Ohio Legislative Service Commission  
The consumer price index (CPI) rose 0.4% in August, its largest  
increase since January, and was 1.9% higher than a year earlier. The  
monthly increase was almost entirely a result of increases in prices for  
gasoline, by 6.3%, and shelter, by 0.5%. The increase in prices for shelter  
was the largest since October 2005. The CPI excluding food and energy  
rose 0.2% in August to 1.7% above a year earlier. Hurricane effects on the  
CPI were described as very small. A related inflation measure, the  
personal consumption expenditures deflator, was 1.4% higher in August  
than a year earlier, and was 1.3% higher excluding food and energy.  
Following its September meeting, the Federal Open Market  
Committee (FOMC), the monetary policy-setting group within the  
country's central bank, announced that it is starting in October the  
gradual process of reducing the Federal Reserve's huge holdings of  
U.S. Treasury, agency, and mortgage-backed securities, accumulated  
during and after the 2007-2009 recession. The announcement also said the  
FOMC is holding unchanged its short-term interest rate target range for  
federal funds at 1% to 1.25%.1 This target range was increased starting in  
December 2015 from zero to 0.25%, where it had been held for  
seven years. Short-term interest rates remain exceptionally low.  
0
The Ohio Economy  
In August, Ohio continued to add more jobs while its  
unemployment rate increased for the third consecutive month. Chart 6 In August, Ohio  
below shows trends in the state's payroll employment and unemployment  
rate over the last ten years.  
continued to  
add more jobs  
while its  
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%  
unemployment  
rate increased  
for the third  
consecutive  
month.  
2
007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  
Nonfarm Payroll Employment Unemployment Rate (right scale)  
1
0
Federal funds are loans, mostly overnight, between depository  
institutions of dollar reserves held at Federal Reserve banks.  
October 2017  
29  
Budget Footnotes  
Ohio Legislative Service Commission  
Ohio's unemployment rate went up from 5.2% in July to 5.4% in  
August, the highest rate since September 2014. Ohio's unemployment rate  
was 4.9% in August of last year. The number of unemployed Ohioans was  
3
11,000 in August, an increase of 11,000 from July. Compared with a year  
earlier, the number of unemployed Ohioans was 29,000 higher. In  
comparison, the U.S. unemployment rate was 4.4% in August, nearly the  
same in July (4.3%), and 4.9% in August 2016. Ohio's unemployment rate  
in August was higher than in all but three other states.  
Unemployment rates vary widely among Ohio's 88 counties. In  
general, most counties with the highest rates of unemployment were on  
the eastern, southern, and northern edges of the state. In August,  
3
8 counties (43%) had unemployment rates at or higher than the  
statewide unemployment rate of 5.4%. The lowest rate was in  
Mercer County (3.2%) and the highest rate was in Meigs County (8.5%).  
In August, Ohio's nonfarm payroll employment totaled 5,545,200,  
an increase of 5,200 from July's revised total of 5,540,000, seasonally  
adjusted. Total employment in August was at its highest level since  
June 2001. The increase in employment from July to August was the result  
Ohio's  
unemployment  
rate of 5.4% in  
of increases in private service-providing industries (+7,600) and goods- August was  
producing industries (+3,500). Government employment fell (-5,900).  
Increases in the private service-providing sector were recorded in leisure  
and hospitality, educational and health services, and other services.  
Increases in the goods-producing sector were in construction and  
manufacturing. Government employment declined at the state, local, and  
federal levels.  
higher than in  
all but three  
other states.  
Compared to a year ago, total nonfarm payroll employment  
increased by 57,100. The greatest increases in employment in Ohio were  
in educational and health services (+21,800), leisure and hospitality  
(+18,700), financial activities (+8,800), construction (+8,100), professional  
and business services (+7,900), other services (+2,900), and nondurable  
goods manufacturing (+1,600). The decrease mainly occurred in trade,  
transportation, and utilities (-10,200).  
Ohio's personal income rose 0.4% in the second quarter of 2017,  
following 1.2% growth in the first quarter, according to estimates of the  
U.S. Bureau of Economic Analysis. Nationwide, average state personal  
income increased 0.7% in the second quarter of 2017, down from a 1.4%  
increase in the first quarter. Personal income growth in Ohio and most  
other states was led by higher net earnings from work. The leading  
contributor to Ohio's personal income growth in the second quarter was  
increased earnings in the healthcare and social assistance industry and the  
finance and insurance industry. Ohio's personal income growth in the  
October 2017  
30  
Budget Footnotes  
Ohio Legislative Service Commission  
second quarter of 2017 was lower than all of its neighboring states except  
for West Virginia. Personal income grew 0.8% in Indiana, Kentucky,  
Michigan, and Pennsylvania while West Virginia had 0.3% growth.  
Ohio's residential real estate market remained strong. In August,  
the number of existing homes sold in Ohio increased by 2.5% compared to  
August 2016, according to the Ohio Association of Realtors. In the first  
eight months of 2017, existing home unit sales increased by 1.0%  
compared to the corresponding months in 2016. The statewide average  
sales price of homes sold in January through August 2017 averaged  
$
172,952, or 5.5% higher than the corresponding period a year ago.  
October 2017  
31  
Budget Footnotes