Budget Footnotes  
A NEWSLETTER OF THE OHIO LEGISLATIVE SERVICE COMMISSION  
NOVEMBER 2017  
VOLUME 41, NUMBER 3  
STATUS OF THE GRF  
STATUS OF THE GRF  
Highlights...................................1  
Revenues ..................................2  
Expenditures............................12  
HIGHLIGHTS  
Ross Miller, Chief Economist, 614-644-7768  
ISSUE UPDATES  
October GRF tax revenue was remarkably close to the  
estimate published by the Office of Budget and Striving Readers Grant ............21  
Infant Mortality Report .............21  
Federal Vision 21 Grant...........22  
Save the Dream Ohio  
Program................................23  
Regional Workforce Training  
Grants...................................23  
Firefighter Gear and  
Management (OBM) in September 2017, having come in  
$
3.3 million (0.2%) above estimate. Similarly, for the first  
four months of FY 2018, GRF tax revenue was $20.6 million  
0.3%) above estimate. GRF expenditures are below  
estimated levels for the year to date through October.  
(
Equipment Grants ................24  
Ohio's unemployment rate declined to 5.3% in Behavioral Healthcare  
Workforce Grant...................25  
Crime Victim Services  
Grants...................................25  
Connected Vehicle  
September, from 5.4% in August. Though 5.3% is not a high  
unemployment rate by historical standards, it was  
1
.1 percentage point higher than the national rate in  
Technology Contract ............26  
September. Ohio nonfarm payroll employment increased  
by 10,500 during that month.  
TRACKING THE ECONOMY  
Through October 2017, GRF sources totaled The National Economy ............28  
The Ohio Economy..................30  
$10.83 billion:  
Revenue from the personal income tax was  
16.4 million above estimate;  
$
Sales and use tax receipts were $7.4 million above  
estimate.  
Through October 2017, GRF uses totaled $12.14 billion:  
Legislative Service Commission  
Program expenditures were $120.3 million below  
estimate during the first four months of FY 2018;  
7
7 South High Street, 9th Floor  
Columbus, Ohio 43215  
All program expenditure categories were below  
estimate except property tax reimbursements,  
which were $27.4 million above it primarily due to  
timing.  
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 October 2017  
(
$ in thousands)  
(
Actual based on report run in OAKS Actuals Ledger on November 1, 2017)  
STATE SOURCES  
TAX REVENUE  
Actual  
Estimate*  
Variance  
Percent  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use Taxes  
$122,017  
$700,826  
$822,843  
$112,400  
$709,700  
$822,100  
$9,617  
-$8,874  
$743  
8.6%  
-1.3%  
0.1%  
Personal Income  
Commercial Activity Tax  
Cigarette  
$638,659  
$61,434  
$78,741  
$28,263  
$144,598  
$1  
-$5,458  
$3,004  
$564  
$4,109  
$3,983  
$0  
$463  
$0  
$638,800  
$49,200  
$86,100  
$33,000  
$145,500  
-$700  
-$12,000  
$6,700  
$500  
$5,100  
$3,700  
$0  
$0  
$0  
-$141  
$12,234  
-$7,359  
-$4,737  
-$902  
$701  
$6,542  
-$3,696  
$64  
-$991  
$283  
$0  
$463  
$0  
0.0%  
24.9%  
-8.5%  
-14.4%  
-0.6%  
100.1%  
54.5%  
-55.2%  
12.8%  
-19.4%  
7.7%  
---  
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  
---  
---  
---  
$55  
$0  
$55  
Total Tax Revenue  
$1,781,258  
$1,778,000  
$3,258  
0.2%  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$15,763  
$441  
$1,207  
$17,411  
$15,000  
$1,465  
$50,540  
$67,005  
$763  
-$1,024  
-$49,333  
-$49,594  
5.1%  
-69.9%  
-97.6%  
-74.0%  
Total Nontax Revenue  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$0  
$0  
$0  
$0  
$0  
$0  
$0  
$0  
---  
---  
---  
TOTAL STATE SOURCES  
Federal Grants  
$1,798,669  
$851,747  
$1,845,005  
$885,991  
-$46,336  
-$34,244  
-$80,580  
-2.5%  
-3.9%  
-3.0%  
TOTAL GRF SOURCES  
$2,650,416  
$2,730,996  
*Estimates of the Office of Budget and Management as of September 2017.  
Detail may not sum to total due to rounding.  
November 2017  
2
Budget Footnotes  
Ohio Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2018 as of October 31, 2017  
(
$ in thousands)  
(
Actual based on report run in OAKS Actuals Ledger on November 1, 2017)  
Percent  
Change  
STATE SOURCES  
TAX REVENUE  
Actual  
Estimate*  
Variance  
Percent  
FY 2017**  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use Taxes  
$491,217  
$2,884,715 $2,898,800  
$3,375,933 $3,368,500  
$469,700  
$21,517  
-$14,085  
$7,433  
4.6%  
-0.5% $3,035,584  
0.2% $3,511,554  
$475,971  
3.2%  
-5.0%  
-3.9%  
Personal Income  
Commercial Activity Tax  
Cigarette  
$2,707,782 $2,691,400  
$16,382  
$21,511  
-$5,608  
-$11,875  
-$4,180  
-$2,937  
$366  
-$2,258  
-$1,010  
-$841  
$808  
$270  
$2,840  
-$374  
$84  
0.6% $2,595,810  
4.3%  
23.9%  
-4.2%  
-10.9%  
-6.1%  
17.5%  
6.2%  
17.8%  
-4.2%  
-7.8%  
3.8%  
$416,811  
$267,492  
$119,025  
$151,120  
$63  
-$10,334  
$30,342  
$11,890  
$19,559  
$16,208  
$1,570  
$2,840  
-$374  
$395,300  
$273,100  
$130,900  
$155,300  
$3,000  
-$10,700  
$32,600  
$12,900  
$20,400  
$15,400  
$1,300  
$0  
5.4%  
-2.1%  
-9.1%  
-2.7%  
-97.9%  
3.4%  
-6.9%  
-7.8%  
-4.1%  
5.2%  
20.8%  
---  
$336,431  
$279,276  
$133,561  
$160,891  
$53  
-$11,019  
$25,764  
$12,411  
$21,205  
$15,618  
$1,542  
-$760  
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  
1.8%  
473.9%  
44.8%  
-66.0%  
0.4%  
$0  
---  
-$678  
$84  
$0  
---  
$248  
Total Tax Revenue  
$7,110,010 $7,089,400  
$20,610  
0.3% $7,081,909  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$15,797  
$8,155  
$27,824  
$51,775  
$15,000  
$9,565  
$55,870  
$80,435  
$797  
-$1,410  
-$28,046  
-$28,660  
5.3%  
-14.7%  
-50.2%  
-35.6%  
$14,191  
$10,796  
$49,981  
$74,968  
11.3%  
-24.5%  
-44.3%  
-30.9%  
Total Nontax Revenue  
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  
$7,273,133 $7,266,064  
$3,560,454 $3,565,804  
$10,833,586 $10,831,868  
$7,069  
-$5,350  
$1,718  
0.1% $7,172,186  
-0.2% $4,123,525  
0.0% $11,295,711  
1.4%  
-13.7%  
-4.1%  
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.  
November 2017  
3
Budget Footnotes  
Ohio Legislative Service Commission  
1
REVENUES  
Jean J. Botomogno, Principal Economist, 614-644-7758  
Overview  
For the first four months of FY 2018, GRF sources were nearly on  
target. Through October, GRF sources totaling $10.83 billion were Through  
$
1.7 million (0.0%) above OBM's estimates published in September 2017.  
October in  
Positive variances of $20.6 million for GRF tax sources and $15.1 million  
FY 2018, GRF  
sources were  
28.7 million in nontax revenue and $5.4 million for federal grants. GRF  
$
for transfers into the GRF were partially offset by negative variances of  
$
taxes and federal grants are expected to make up about 68% and 30%,  
respectively, of anticipated GRF sources for FY 2018. The latter mainly  
consists of federal reimbursements for Medicaid expenditures made from  
state GRF moneys.  
1.7 million  
above  
estimate.  
Tables 1 and 2 show GRF sources for October and for FY 2018  
through October, respectively. For the fiscal year to date, receipts from the  
auto sales tax, the personal income tax (PIT), and the commercial activity  
tax (CAT) were all above anticipated revenues. However, the nonauto  
sales and use tax, the largest GRF revenue source, continues to struggle,  
while the cigarette tax fell below revenue projections following a poor  
performance in October. All three utility-related taxes (kilowatt-hour tax,  
public utility tax, and natural gas consumption tax) were also below their  
respective estimates through the latest month.  
Through  
For the month of October, total GRF sources of $2.65 billion were  
October, GRF  
$
80.6 million below estimate, from shortfalls of $34.2 million in federal  
grants and $49.6 million in nontax revenue. Those negative variances were tax sources  
partially offset by a positive variance of $3.3 million for tax sources.  
Among tax sources, the CAT and the auto sales tax were above  
anticipated receipts by $12.2 million and $9.6 million, respectively. In  
addition, net refunds to taxpayers from the financial institutions tax (FIT)  
were  
20.6 million  
above  
$
were $5.5 million when a disbursement of $12.0 million was expected, estimate.  
thus resulting in a positive variance of $6.5 million. These positive  
variances were partially offset by shortfalls of $8.9 million, $7.4 million,  
and $8.4 million recorded for the nonauto sales and use tax, the cigarette  
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.  
November 2017  
4
Budget Footnotes  
Ohio Legislative Service Commission  
tax, and the utility-related taxes, respectively. PIT revenue was almost on  
target, falling below estimate by just a small amount.  
For the fiscal year to date, the following taxes were above estimates:  
the sales and use tax ($7.4 million), the PIT ($16.4 million), the CAT  
(
$21.5 million), and the corporate franchise tax (CFT, $2.8 million). These  
positive variances were partially offset by combined shortfalls of  
15.1 million for utility-related taxes and $7.1 million for the foreign and  
$
the domestic insurance taxes; in addition, the cigarette tax posted a deficit  
of $5.6 million relative to estimate. The chart below illustrates the  
cumulative performance of total GRF sources in the first four months of  
the fiscal year.  
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  
Aug-17  
Sep-17  
Oct-17  
Total GRF Sources  
-
$10  
Federal Grants  
Tax Revenue  
Compared to GRF sources through October in FY 2017, FY 2018 Through  
year-to-date GRF sources of $10.83 billion were $462.1 million (4.1%)  
lower. Decreases of $563.1 million (13.7%) in federal grants and  
October,  
federal grants  
to the GRF  
$
23.2 million (30.9%) in nontax revenue were partially offset by increases  
in transfers in ($96.0 million, 627.4%) and tax receipts ($28.1 million,  
.4%).  
0
were over half  
This fiscal year, federal grants in the GRF will decline from FY 2017 a billion  
as an important source of Medicaid funding has shifted from the GRF to a  
dedicated purpose fund. Increases in tax sources were spearheaded by  
growth in receipts from the PIT ($112.0 million, 4.3%) and the CAT  
dollars less  
than in  
FY 2017.  
(
$80.4 million, 23.9%). On the other hand, revenue from the sales and use  
tax, cigarette tax receipts, and kilowatt-hour tax declined by  
135.6 million (3.9%), $11.8 million (4.2%), and $14.5 million (10.9%). The  
revenue increase for the PIT is due, in large part, to continued growth in  
$
November 2017  
5
Budget Footnotes  
Ohio Legislative Service Commission  
payroll employment and wages. 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.  
Sales and Use Tax  
Through October in FY 2018, total GRF sales and use tax receipts of  
$
3.38 billion were $7.4 million (0.2%) above estimate, and $135.6 million  
(3.9%) below receipts in the corresponding period last year. Continuing a  
trend established through the first fiscal quarter, revenue from the auto  
sales tax generally has been more than enough to overcome weaker  
performances from the nonauto portion of the tax. 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  
2
tax.  
Nonauto Sales and Use Tax  
The performance of the nonauto sales and use tax has been uneven  
in FY 2018. A large shortfall in July was followed by consecutive positive  
variances in August and September. In October, GRF revenue of  
Through  
October in  
FY 2018, the  
nonauto sales  
and use tax  
was  
$
700.8 million was $8.9 million (1.3%) below estimate, increasing this  
source's shortfall for the fiscal year to $14.1 million (0.5%), up from  
5.2 million at the end of the first fiscal quarter. Compared to revenue in  
the same month last year, nonauto sales and use tax revenue decreased  
47.1 million (6.3%). For the fiscal year through October, GRF receipts  
$
$
from this tax totaled $2.88 billion, $150.9 million (5.0%) below revenue in  
the corresponding period in FY 2017, due to a change in law that reduced  
the taxable base. Starting July 1, 2017, H.B. 49 replaced the sales tax on  
$
14.1 million  
below  
Medicaid health insuring corporations (MHICs) with a provider estimate.  
assessment on both Medicaid and non-Medicaid managed care  
companies, with proceeds deposited in a non-GRF fund. Sales tax revenue  
attributable to MHICs had grown to be a sufficiently large portion of  
2 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.  
November 2017  
6
Budget Footnotes  
Ohio Legislative Service Commission  
nonauto sales tax revenue overall by FY 2017, that negative growth in  
revenue from this tax source is generally expected this year when  
compared to the corresponding month in FY 2017.  
Monthly revenue growth on a year-ago basis, after adjusting for the  
decrease in the tax base described above, has been weak in FY 2018,  
averaging about 1.5% during the first four months. Chart 2 provides year-  
over-year growth in nonauto sales and use tax collections in 2017.3  
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  
Through  
October GRF revenue from the auto portion of the sales and use tax  
of $122.0 million was above estimate by $9.6 million (8.6%). This result October in  
increased the year-to-date positive variance for this source to $21.5 million  
FY 2018, the  
auto sales and  
use tax was  
(4.6%), up from $11.9 million at the end of September. Total revenue of  
$
491.2 million over the four months was $15.2 million (3.2%) above  
revenue in the corresponding period in FY 2017. Year-over-year growth in  
auto sales tax collections decelerated in the summer months, but turned  
up in October as shown in the chart below.  
$
21.5 million  
above  
For the month of October, U.S. light vehicle (i.e., auto and light  
truck) sales fell to a seasonally adjusted annualized rate of 18.1 million  
units, from 18.6 million in September, the latter from a surge mainly due  
estimate.  
3 Please note that to adjust for changes to the existing tax base, this chart  
excludes monthly revenue from MHICs starting in August 2016 in FY 2017 so  
that changes in nonauto sales and use tax revenue are on a comparable basis.  
November 2017  
7
Budget Footnotes  
Ohio Legislative Service Commission  
to replacement vehicle demand from areas affected by hurricanes Irma  
and Harvey. However, automakers are still dealing with excess  
inventories (75 days in October, the highest since 2009), despite increasing  
incentive spending. So far in FY 2018, U.S. light vehicle sales are below  
last year's levels. Car sales remain substantially down compared to a year  
earlier, though light truck sales are higher and increasing the average  
transaction price per vehicle.  
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%  
The sales trends are probably similar in Ohio so that, despite a  
decrease in unit sales compared to last year, auto sales tax receipts are still  
increasing when compared to FY 2017.  
PIT GRF  
revenue was  
$
16.4 million  
Personal Income Tax  
above  
October GRF PIT revenue of $638.7 million nearly hit expectations,  
missing the estimate by just $0.1 million (0.0%). As a result, the year-to-  
estimate in  
date fiscal year variance fell slightly to $16.4 million (0.6%). October 2017 FY 2018  
PIT receipts were also $30.3 million (5.0%) above October 2016 revenue.  
through  
PIT revenue is comprised of gross collections, minus refunds and  
October.  
distributions to the Local Government Fund (LGF). Gross collections  
4
consist of employer withholdings, quarterly estimated payments, trust  
4 Quarterly estimated payments are made by taxpayers who expect to be  
underwithheld by more than $500. Payments are due in April, June, and  
September of an individual's tax year and January of the following year. Most  
estimated payments are made by high-income taxpayers.  
November 2017  
8
Budget Footnotes  
Ohio Legislative Service Commission  
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, and to a lesser extent, the amount of refunds to taxpayers. For  
October 2017, employer withholding, miscellaneous payments, and  
estimated payments surpassed expectations by $17.9 million, $6.6 million,  
and $1.1 million, respectively. Partially offsetting these positive variances,  
taxes due with annual returns experienced a shortfall of $1.7 million.  
Additionally, refunds were $24.9 million above 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 of gross collections exceeded estimates with the  
exception of annual return payments. Refunds were larger than the  
estimate for the first four months, reducing the positive variance.  
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  
(%)  
(
Withholding  
$25.5  
$6.4  
0.9%  
3.3%  
$108.0  
$12.4  
$1.8  
4.1%  
6.5%  
Quarterly Estimated Payments  
Trust Payments  
$2.2  
22.8%  
-16.3%  
54.0%  
1.1%  
17.9%  
-16.3%  
58.8%  
4.1%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
-$11.5  
$10.1  
$32.8  
$15.6  
$0.9  
-$11.4  
$10.7  
$121.5  
$7.9  
Less Refunds  
7.3%  
3.5%  
Less LGF Distribution  
GRF PIT Revenue  
0.7%  
$1.7  
1.4%  
$16.4  
0.6%  
$112.0  
4.3%  
Revenue from  
Compared to corresponding receipts in FY 2017 through October, monthly  
receipts from employer withholding, quarterly estimated payments and  
employer  
miscellaneous payments were higher. However, payments with annual  
returns have been generally below such payments last year. Year-to-date  
refunds were also higher than in the corresponding period in FY 2017.  
withholding  
grew about  
Though employer withholding fell by about 2% in September 2017 compared 4% in FY 2018.  
to September 2016, for the fiscal year to date, growth is averaging about 4%.  
The chart below illustrates the growth of monthly employer withholdings on  
a three-month moving average relative to one year ago.  
November 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 continues to perform relatively well in FY 2018. Year-to-  
date GRF CAT receipts of $416.8 million were $21.5 million (5.4%) above FY 2018 CAT  
estimate. For the month of October, GRF receipts of $61.4 million were  
GRF tax  
12.2 million (24.9%) above projected revenue, increasing the cumulative  
receipts  
through  
$
positive variance of $9.3 million achieved in the first fiscal quarter. The  
next payment by quarterly calendar taxpayers is due in November and  
will likely determine the performance of this tax in the first half of October were  
FY 2018.  
$21.5 million  
FY 2018 CAT receipts to the GRF were $80.4 million (23.9%) above  
receipts in FY 2017 through October 2016. More than half of this increase  
is due to the CAT allocation change enacted in the main operating budget.  
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. In other words, the CAT allocation change  
has no net effect on its total contribution to the GRF.  
above  
estimate.  
November 2017  
10  
Budget Footnotes  
Ohio Legislative Service Commission  
Cigarette and Other Tobacco Products Tax  
October GRF revenue of $78.7 million from the cigarette and other  
tobacco products tax was $7.4 million (8.5%) below estimate, due to poor  
tax collections from cigarette sales. Monthly revenue was also $5.8 million  
(
cumulative shortfall of $5.6 million (2.1%) through October, reversing a  
positive variance of $1.8 million in the first fiscal quarter.  
FY 2018  
cigarette tax  
6.9%) below revenue in October 2016. This performance resulted in a  
receipts fell  
$5.6 million  
For FY 2018 through October, total tax receipts of $267.5 million below  
included $243.0 million and $24.5 million, respectively, from sales of  
cigarettes and sales of other tobacco products. Total revenue was  
estimate  
through  
October.  
$
11.8 million (4.2%) below collections in the corresponding period in  
FY 2017. Receipts from cigarette sales fell $14.1 million while those from  
other tobacco products grew $2.3 million. Revenue from the cigarette and  
other tobacco products tax usually trends downward, generally at a slow  
pace.  
November 2017  
11  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of October 2017  
(
$ in thousands)  
(
Actual based on OAKS reports run November 1, 2017)  
PROGRAM  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$782,794 $782,597  
$197  
0.0%  
$179,742 $226,022 -$46,280 -20.5%  
$10,123 $7,279 $2,845 39.1%  
Other Education  
Total Education  
$972,659 $1,015,897 -$43,238 -4.3%  
Medicaid  
$1,365,831 $1,379,702 -$13,871 -1.0%  
$169,431 $180,972 -$11,541 -6.4%  
Health and Human Services  
Total Welfare and Human Services $1,535,262 $1,560,674 -$25,412 -1.6%  
Justice and Public Protection  
General Government  
$190,755 $201,885 -$11,130 -5.5%  
$33,385 $32,788 $597 1.8%  
Total Government Operations  
$224,140 $234,674 -$10,534 -4.5%  
Property Tax Reimbursements  
Debt Service  
$357,104 $315,437 $41,667 13.2%  
$85,201  
$85,267  
-$66 -0.1%  
Total Other Expenditures  
$442,305 $400,704 $41,601 10.4%  
Total Program Expenditures  
TRANSFERS  
$3,174,367 $3,211,949 -$37,582 -1.2%  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$40  
$40  
$0  
$0  
---  
$19,600 -$19,560 -99.8%  
$19,600 -$19,560 -99.8%  
TOTAL GRF USES  
$3,174,407 $3,231,549 -$57,142 -1.8%  
*September 2017 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
November 2017  
12  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2018 as of October 31, 2017  
(
$ in thousands)  
(
Actual based on OAKS reports run November 1, 2017)  
Percent  
Estimate* Variance Percent FY 2017** Change  
PROGRAM  
Actual  
Primary and Secondary Education  
Higher Education  
$2,849,618 $2,873,393 -$23,775 -0.8% $3,093,844  
-7.9%  
-5.7%  
-3.9%  
-7.4%  
$720,103  
$33,726  
$767,869 -$47,766 -6.2%  
$34,611 -$886 -2.6%  
$763,387  
$35,079  
Other Education  
Total Education  
$3,603,446 $3,675,873 -$72,427 -2.0% $3,892,310  
Medicaid  
$5,501,779 $5,510,122 -$8,342 -0.2% $6,132,338 -10.3%  
$453,358 $481,695 -$28,336 -5.9%  
$5,955,137 $5,991,816 -$36,679 -0.6% $6,590,572  
Health and Human Services  
Total Welfare and Human Services  
$458,235  
-1.1%  
-9.6%  
Justice and Public Protection  
General Government  
$764,822  
$128,640  
$893,462  
$791,596 -$26,774 -3.4%  
$137,226 -$8,586 -6.3%  
$928,823 -$35,360 -3.8%  
$746,886  
$134,237  
$881,122  
2.4%  
-4.2%  
1.4%  
Total Government Operations  
Property Tax Reimbursements  
Debt Service  
$770,881  
$859,165  
$743,473 $27,408  
3.7%  
$754,261  
$870,901  
2.2%  
-1.3%  
0.3%  
$862,369 -$3,203 -0.4%  
Total Other Expenditures  
$1,630,046 $1,605,842 $24,204  
1.5% $1,625,162  
Total Program Expenditures  
TRANSFERS  
$12,082,091 $12,202,353 -$120,262 -1.0% $12,989,167  
-7.0%  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$58,408  
$58,408  
$0  
$65,514  
$65,514  
$0  
---  
$29,483 -100.0%  
$223,869 -73.9%  
$253,352 -76.9%  
-$7,106 -10.8%  
-$7,106 -10.8%  
TOTAL GRF USES  
$12,140,499 $12,267,867 -$127,368 -1.0% $13,242,519  
-8.3%  
*
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.  
November 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 November 6, 2017)  
(
(
Month of October 2017  
Year to Date Through October 2017  
Actual Estimate* Variance Percent  
Department  
Actual  
Estimate* Variance Percent  
Medicaid  
$2,032,379 $2,044,057 -$11,679  
-0.6% $8,358,391 $8,405,106 -$46,715 -0.6%  
GRF  
Non-GRF  
$1,306,442 $1,324,407 -$17,964  
-1.4% $5,262,361 $5,274,513 -$12,152 -0.2%  
0.9% $3,096,030 $3,130,593 -$34,563 -1.1%  
$725,936 $719,650 $6,286  
$236,625 $218,209 $18,417  
$52,954 $48,824 $4,130  
$183,671 $169,384 $14,287  
Developmental Disabilities  
8.4%  
$901,684 $969,339 -$67,655 -7.0%  
$201,434 $200,864 $571 0.3%  
$700,250 $768,475 -$68,225 -8.9%  
GRF  
Non-GRF  
8.5%  
8.4%  
Job and Family Services  
$12,414  
$15,108 -$2,694 -17.8%  
$5,695 -$427 -7.5%  
$9,413 -$2,267 -24.1%  
$82,246  
$79,319  
$2,927  
3.7%  
GRF  
Non-GRF  
$5,268  
$7,146  
$34,337  
$47,909  
$31,412  
$47,907  
$2,924  
$3  
9.3%  
0.0%  
Health  
$1,156  
$1,336  
-$180 -13.5%  
$8,280  
$8,709  
-$429 -4.9%  
GRF  
Non-GRF  
$268  
$888  
$271  
$1,066  
-$3 -1.1%  
$1,330  
$6,950  
$1,217  
$7,492  
$113 9.3%  
-$542 -7.2%  
-$177 -16.6%  
$441 127.2%  
$427 190.0%  
$13 11.0%  
-$156 -28.7%  
-$20 -7.8%  
-$136 -47.3%  
Mental Health and Addiction  
$787  
$347  
$1,569  
$1,577  
-$8 -0.5%  
GRF  
Non-GRF  
$652  
$135  
$225  
$122  
$1,020  
$549  
$904  
$673  
$116 12.8%  
-$124 -18.4%  
Aging  
$388  
$544  
$1,894  
$2,524  
-$630 -24.9%  
GRF  
Non-GRF  
$236  
$152  
$256  
$288  
$1,131  
$763  
$1,151  
$1,373  
-$20 -1.7%  
-$610 -44.4%  
Pharmacy Board  
$39  
$36  
$3  
8.6%  
$144  
$1,471  
-$1,327 -90.2%  
GRF  
Non-GRF  
$0  
$39  
$0  
$36  
$0  
$3  
--  
8.6%  
$0  
$144  
$0  
$1,471  
$0  
-$1,327 -90.2%  
--  
Education  
$10  
$47  
-$37 -79.2%  
$173  
$116  
$57 49.0%  
GRF  
Non-GRF  
$10  
$0  
$24  
$24  
-$14 -58.4%  
-$24 -100.0%  
$166  
$7  
$60  
$55  
$105 174.5%  
-$49 -87.7%  
Total GRF  
$1,365,831 $1,379,702 -$13,871  
$917,967 $899,982 $17,985  
-1.0% $5,501,779 $5,510,122  
-$8,342 -0.2%  
Total Non-GRF  
Total All Funds  
2.0% $3,852,602 $3,958,039 -$105,437 -2.7%  
0.2% $9,354,381 $9,468,161 -$113,780 -1.2%  
$2,283,798 $2,279,684  
$4,114  
*Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
November 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 November 6, 2017)  
(
(
Month of October 2017  
Year to Date Through October 2017  
Actual Estimate* Variance Percent  
Payment Category  
Managed Care  
Actual  
Estimate* Variance Percent  
$892,908 $913,312 -$20,404 -2.2% $3,723,279 $3,723,885  
$340,793 $341,793 -$1,000 -0.3% $1,374,422 $1,372,347  
-$606  
0.0%  
0.2%  
ACA - Managed Care  
DDD Services  
$2,075  
$231,696 $205,894 $25,801 12.5%  
$875,747 $933,300 -$57,553 -6.2%  
0.7% $1,055,841 $1,071,131 -$15,290 -1.4%  
4.9% $516,106 $488,509 $27,597 5.6%  
$405,757 $426,126 -$20,369 -4.8%  
$432,137 $413,931 $18,205 4.4%  
$317,181 $358,718 -$41,536 -11.6%  
Hospitals  
$208,175 $206,798  
$125,844 $119,947  
$1,377  
$5,897  
Nursing Facilities  
Physicians/All Other  
Behavioral Health  
Administration  
$111,510 $117,068 -$5,557 -4.7%  
$120,798 $110,717 $10,081 9.1%  
$86,974  
$49,011  
$41,183  
$31,280  
$32,063  
$11,563  
$93,669 -$6,694 -7.1%  
$50,667 -$1,656 -3.3%  
Medicare Buy-In  
Medicare Part D  
Prescription Drugs  
Aging Waivers  
$198,187 $201,510  
$159,273 $164,932  
-$3,324 -1.6%  
-$5,658 -3.4%  
$40,342  
$34,595 -$3,315 -9.6%  
$32,156 -$93 -0.3%  
$12,726 -$1,163 -9.1%  
$4,114 0.2% $9,354,381 $9,468,161 -$113,780 -1.2%  
$841  
2.1%  
$115,739 $131,601 -$15,862 -12.1%  
$136,287 $134,416 $1,872 1.4%  
$44,426 $47,755 -$3,330 -7.0%  
Home Care Waivers  
Total All Funds  
$2,283,798 $2,279,684  
*
Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
November 2017  
15  
Budget Footnotes  
Ohio Legislative Service Commission  
5
EXPENDITURES  
Russ Keller, Senior Economist, 614-644-1751  
Nicholas J. Blaine, Budget Analyst, 614-387-5418  
Overview  
Tables 3 and 4 show GRF uses for the month of October and for  
FY 2018 through October, respectively. GRF uses were $3.17 billion in  
October, $57.1 million below the estimate released by OBM in  
September 2017. GRF uses mainly consist of program expenditures but For the first  
also include transfers out. Through October, FY 2018 GRF program  
four months  
expenditures totaled $12.08 billion, $120.3 million below estimate; GRF  
transfers out totaled $58.4 million, $7.1 million below estimate; and GRF  
uses as a whole totaled $12.14 billion, $127.4 million below estimate.  
of FY 2018,  
GRF uses were  
$
127.4 million  
Among the nine program categories, Higher Education had the  
largest negative variance, $47.8 million, for the first four months of below  
FY 2018, which largely was due to a negative variance of $46.3 million in  
estimate.  
October. Other program categories with notable year-to-date negative  
variances include Health and Human Services ($28.3 million), Justice and  
Public Protection ($26.8 million), and Primary and Secondary Education  
($23.8 million).  
Cumulative  
expenditures  
from  
Property  
Tax  
Reimbursements were $27.4 million above the year-to-date estimate,  
which partially offset the negative variances in the other categories.  
GRF Transfers Out  
GRF transfers out totaled about $40,000 during October, which was  
19.6 million (99.8%) below the OBM estimate. This monthly transfer Cash transfers  
$
activity also created a $7.1 million (10.8%) negative year-to-date variance.  
OBM expected two transfers to occur in October, but only one, an  
unplanned transfer to the State Lottery Commission's Deferred Prizes  
Trust Fund (Fund 8710), materialized.  
out of the GRF  
were below  
estimate in  
October by  
Of the two planned transfers that did not occur, the larger was a  
$
10.2 million transfer to the Development Services Agency's TourismOhio $19.6 million.  
Fund (Fund 5MJ0) per section 512.60 of H.B. 49. The actual amount for  
Fund 5MJ0 is dependent on sales tax growth in the prior fiscal year for  
5
This report compares actual monthly and year-to-date expenditures  
from the GRF to OBM's estimates of those expenditures. 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.  
November 2017  
16  
Budget Footnotes  
Ohio Legislative Service Commission  
categories related to tourism. The Tax Commissioner must calculate and  
certify this amount to the Director of Budget and Management before the  
transfer can occur. A smaller transfer of $8.9 million for an upgrade to the  
Ohio Administrative Knowledge System (OAKS), the state's accounting  
system, was also not completed as expected in October.  
Higher Education  
October expenditures for Higher Education were $179.7 million,  
which was $46.3 million (20.5%) below OBM's estimate. The Department  
of Higher Education (DHE) is the only agency that is included in this  
program category. Negative variances were widespread for both the  
month and year-to-date expenditures of DHE. The largest FY 2018  
variance was for item 235563, Ohio College Opportunity Grant, the state's  
primary need-based financial aid program. Expenditures for this item  
were below the year-to-date estimate by $13.1 million. Item 235535, Ohio  
Agricultural Research and Development Center, and item 235511,  
Cooperative Extension Service, also had significant negative variances of  
$
12.1 million and $8.0 million, respectively. These items support two of  
the Ohio State University's land-grant university mandates.  
Health and Human Services  
GRF expenditures for Health and Human Services were  
$
453.4 million through October, $28.3 million (5.9%) below estimate. This  
negative variance widened from the previous month as October spending  
was $11.5 million below OBM's estimate. The Ohio Department of Job and  
Family Services (ODJFS) had the largest negative variance in October and  
for the year to date at $23.9 million and $31.8 million, respectively. The  
Ohio Department of Mental Health and Addiction Services (ODMHAS)  
partially offset this negative variance with positive variances of  
Except for  
Property Tax  
Reimburse-  
$
12.4 million and $8.7 million for October and the year to date, ments, all  
respectively.  
program  
Expenditures for several ODJFS line items were significantly below  
categories had  
negative year-  
to-date  
12.0 million for the year. Item 600416, Information Technology Projects,  
their monthly and year-to-date estimates. Item 600410, TANF State  
Maintenance of Effort, was below by $11.9 million for the month and  
$
was below by $3.1 million for the month and $6.4 million for the year. variances at  
Item 600445, Unemployment Insurance Administration, was below by  
the end of  
3.1 million for the month and $4.2 million for the year. Timing issues are  
October.  
$
not uncommon for these line items. Most of the other items in the agency's  
budget also had negative monthly and year-to-date variances.  
The positive variances for ODMHAS were largely attributable to  
item 336421, Continuum of Care Services. This line item is used to  
November 2017  
17  
Budget Footnotes  
Ohio Legislative Service Commission  
distribute funds to local boards of alcohol, drug addiction, and mental  
health. October expenditures were $17.2 million above OBM estimate,  
which in turn yielded a $14.2 million positive variance for FY 2018.  
Partially offsetting these variances, item 336423, Addiction Services  
Partnership with Corrections, was below its year-to-date estimate by  
$
$
3.4 million, most of which was due to a negative October variance of  
2.8 million.  
Justice and Public Protection  
GRF expenditures from the Justice and Public Protection program  
category were $764.8 million through October, $26.8 million (3.4%) below  
estimate. This negative variance widened from the previous month as  
October spending was $11.1 million below OBM's estimate. The negative  
variance in October was caused by a timing-related negative variance of  
$
8.5 million from the Department of Rehabilitation and Correction (DRC)  
which increased DRC's negative year-to-date variance to $20.3 million.  
These negative variances were driven by DRC line item 501321,  
Institutional Operations, which had a negative year-to-date variance of  
$
22.7 million. In addition to DRC, the Department of Youth Services  
($3.9 million) and the Judiciary/Supreme Court ($2.3 million) had  
significant negative year-to-date variances.  
Primary and Secondary Education  
The Primary and Secondary Education program category,  
consisting of spending by the Department of Education (ODE) had a  
negative year-to-date variance of $23.8 million at the end of October,  
largely due to a negative variance of $39.3 million in item 200511,  
Auxiliary Services, which was partially offset by a positive variance of  
$
19.0 million in item 200550, Foundation Funding. Item 200511 is used to  
make periodic payments to school districts for certain services provided to  
chartered nonpublic schools. The estimates had a payment being made in  
October, but this payment will likely be made in November instead.  
Item 200550 is mainly used to provide bimonthly payments to school  
districts as determined by the state's school funding formula. This item  
generally experiences variances throughout the year as ODE collects and  
applies various data used in the funding formula.  
Property Tax Reimbursements  
Expenditures from the Property Tax Reimbursements program  
category were $357.1 million in October, $41.7 million (13.2%) above  
estimate. This positive monthly variance changed the category's  
year-to-date variance from a negative $14.3 million (3.3%) at the end of  
November 2017  
18  
Budget Footnotes  
Ohio Legislative Service Commission  
September to a positive $27.4 million (3.7%) at the end of October. GRF  
dollars provided under this program category are used to make  
semiannual payments to school districts and other local governments.  
Spending patterns reflect the timing of county auditors' reimbursement  
requests.  
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 expenditure. In recent years, the federal government  
has reimbursed about two-thirds of Ohio's total Medicaid expenditures.  
Although  
Medicaid  
expenditures  
Table 5 shows GRF and non-GRF Medicaid expenditures for the from the GRF  
Ohio Department of Medicaid (ODM), the Ohio Department of  
were only  
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  
$
8.3 million  
below  
agencies Job and Family Services, Health, Aging, Mental Health and estimate for  
6
Addiction Services, State Board of Pharmacy, and Education account for  
the remaining 1%. Unlike ODM and ODODD, the six "sister" agencies  
incur only administrative spending.  
the first four  
months of the  
fiscal year,  
non-GRF  
As shown in Table 5, for the first four months of FY 2018, GRF  
Medicaid expenditures were $8.3 million (0.2%) below estimate while  
non-GRF Medicaid expenditures were $105.4 million (2.7%) below expenditures  
estimate. Across all funds, Medicaid expenditures were $113.8 million  
were below  
1.2%) below estimate. All-funds expenditures from ODM and ODODD  
estimate by  
(
were $46.7 million (0.6%) and $67.7 million (7.0%), respectively, below  
their year-to-date estimates. On the other hand, ODJFS had a positive  
year-to-date variance of $2.9 million (3.7%).  
$
105.4 million.  
Table 6 shows all-funds Medicaid expenditures by payment  
category. Expenditures from Managed Care and ACA-Managed Care, the  
two largest payment categories, were largely on par with the estimates.  
For the first four months of FY 2018, those expenditures were  
$
606,000 (0.0%) below and $2.1 million (0.2%) above estimates,  
6 The Medicaid appropriations made in the State Board of Pharmacy and  
ODE are new in FY 2018. See the September issue of this report for more details  
on the Medicaid appropriations in these two agencies.  
November 2017  
19  
Budget Footnotes  
Ohio Legislative Service Commission  
respectively. 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. The  
ACA-Managed Care category tracks managed care expenditures for  
individuals who became eligible for Medicaid through the federal  
Affordable Care Act.  
Services provided by ODODD (labeled "DDD Services" in the table)  
had the largest negative year-to-date variance at $57.6 million (6.2%).  
Approximately $40.0 million of the negative variance is the result of a  
county board cost settlement payment that has not yet been processed.  
Cost settlement involves reconciling the amount that county boards  
received to administer services versus how much the boards actually  
spent. The settlement payment, which will be disbursed across all  
counties, will likely be processed in November. Of the remaining variance,  
approximately $10.0 million is due to underspending on case management  
services and $7.6 million is related to timing issues.  
Administration had the second largest year-to-date negative  
variance at $41.5 million (11.6%). Of this amount, about $32.0 million is  
attributed to ODM and the remaining $9.5 million is attributed to the  
other Medicaid agencies. Of the ODM variance, about $25.0 million is due  
to prior fiscal year contracts that have not yet been paid.  
Lastly, Nursing Facilities had the largest positive year-to-date  
variance at $27.6 million (5.6%). Some of this variance is likely due to  
enrollments for the aged, blind, and disabled (ABD) category being above  
estimate.  
November 2017  
20  
Budget Footnotes  
Ohio Legislative Service Commission  
ISSUE UPDATES  
Ohio Department of Education Receives $35 Million Federal  
Competitive Grant to Improve Literacy  
Anthony Kremer, Budget Analyst, 614-466-5654  
On October 3, 2017, the Ohio Department of Education (ODE) received a  
35 million competitive grant under the federal Striving Readers Comprehensive  
$
Literacy Program. The grant will be used to advance literacy skills for students from  
birth through twelfth grade. The funds must support services and activities shown to be  
effective in improving literacy instruction, including screening and assessment, targeted  
interventions for students reading below grade level, and other research-based methods  
of improving classroom instruction and practice. On October 30, 2017, the Controlling  
Board approved appropriations of $4 million in FY 2018 and $10 million in FY 2019 in  
Fund 3FE0 line item 200669, Striving Readers, for ODE to spend the grant proceeds. The  
remaining $21 million of the grant is anticipated to be spent in the next biennium.  
Under the requirements of the federal grant, at least 95% of the award must be  
distributed as competitive grants. Furthermore, ODE must allocate at least 15% of the  
grant funds to support children from birth through age five, at least 40% to support  
children in grades kindergarten through five, and at least 40% to support children in  
grades six through 12. ODE expects 30 to 40 local education agencies (LEAs) and  
nonprofit early childhood education service providers to receive three-year grants.  
Priority will be given to LEAs and providers serving large numbers of economically  
disadvantaged students, students with disabilities, limited English proficient students,  
and students identified as having difficulty reading. ODE may retain up to 5% of the  
grant award for administrative costs, which it intends to use to hire one new staff  
member to manage the grant program with the assistance of the 16 regional state  
support teams.  
Ohio Infant Mortality Rate Increases in 2016  
Jacquelyn Schroeder, Budget Analyst, 614-466-3279  
On October 6, 2017, the Ohio Department of Health (ODH) released its 2016 Ohio  
Infant Mortality Report, which found that Ohio's infant mortality rate for all races  
increased from a rate of 7.2 (number of infant deaths in the first year of life per  
1
,000 live births) in 2015 to 7.4 in 2016. Ohio's goal is to attain a rate of 6.0 or lower for  
every race or ethnic group. While the white infant mortality rate increased from 5.5 in  
015 to 5.8 in 2016, it still met this goal. However, the infant mortality rates for blacks  
and Hispanics did not meet the goal. During this same time period, the rate for blacks  
2
November 2017  
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Ohio Legislative Service Commission  
increased from 15.1 to 15.2, while the rate for Hispanics increased from 6.0 to 7.3. The  
total number of infants that died before their first birthday increased from 1,005 in 2015  
to 1,024 in 2016.  
According to the report, the leading cause of infant mortality is prematurity/pre-  
term births, which accounts for 30% of all infant deaths. Other leading causes include  
birth defects and sleep-related deaths (such as Sudden Infant Death Syndrome or  
asphyxia). Of these, sleep-related deaths are among the most preventable. State and  
local initiatives have sought to increase awareness about the ABCs of safe sleep Alone,  
on their Backs, and in a Crib. As a result of these and other efforts, the number of sleep-  
related deaths has been decreasing for the past several years. In 2016, there were  
1
17 sleep-related deaths, 33 fewer than 2015.  
The state has targeted funding to combat infant mortality in recent years and in  
the current biennium. For instance, the budget provides about $14 million over the  
biennium to address infant mortality through a multipronged approach that includes  
increasing awareness, supporting data collection, and implementing quality  
improvement programs. Additionally, $1 million over the biennium will be dedicated  
to reducing smoking during pregnancy through the Moms Quit for Two Grant Program  
and the Baby and Me Tobacco Free Grant Program. Other initiatives to reduce infant  
mortality include increasing access to long-acting reversible contraceptives and the use  
of progesterone treatment, as well as expanding access to home visiting services. In  
addition, ODH will relaunch the ABCs of safe sleep campaign. This version of the  
campaign will focus on nine metropolitan areas that have the highest number of infant  
deaths.  
More information regarding Ohio's efforts to reduce infant mortality and the  
report itself can be accessed on ODH's website: odh.ohio.gov.  
Attorney General Awarded $499,555 Federal Vision 21 Grant  
Jessica Murphy, Budget Analyst, 614-466-9108  
On October 17, 2017, the Office of the Attorney General announced that it had  
been awarded a $499,555 federal Vision 21: Linking Systems of Care for Children and  
Youth State Demonstration Project grant by the U.S. Department of Justice's Office for  
7
Victims of Crime. The grant will be used by the Attorney General's Crime Victim  
Services Section to initiate a two-phase project designed to assist state and local  
agencies in improving identification of child victims, increasing access to existing  
7 The Ohio Attorney General and the Illinois Criminal Justice Authority were the two  
winning applicants of a competitive bid solicitation issued to add two additional state sites into  
the federal Linking Systems of Care for Children and Youth program.  
November 2017  
22  
Budget Footnotes  
Ohio Legislative Service Commission  
services, and improving links to resources. This project is part of an ongoing federal  
initiative to address the issue of child and youth victimization through state-level  
demonstration projects.  
The award will fund Phase 1, a 15-month planning process to conduct a needs  
assessment with stakeholders, review existing policies and protocols, determine which  
agencies should be better linked, and then develop a plan to provide screening and  
services for child and youth victims. Portions of the award will be allocated to: (1) Case  
Western Reserve University to conduct a needs assessment that identifies gaps in  
services and resources and (2) to the Ohio Domestic Violence Network to provide  
technical and subject matter expertise to assist in developing a statewide training plan  
based on that assessment. It is anticipated that a second award of up to $500,000 will be  
available for Phase 2, a five-year implementation process for the statewide training plan  
developed in Phase 1.  
OHFA Expands Eligibility Under Save the Dream Ohio Program  
Shannon Pleiman, Budget Analyst, 614-466-1154  
On September 26, 2017, the Ohio Housing Finance Agency (OHFA) announced  
the expansion of the Save the Dream Ohio (SDO) Program to assist homeowners with  
disabilities. Specifically, SDO will now provide financial assistance to applicants who  
have been determined eligible for workers' compensation, Social Security disability, VA  
disability, or disability income assistance though an employer or insurance company.  
Previously, SDO provided assistance only to applicants who were determined to be  
eligible for unemployment benefits. Eligible homeowners may qualify for up to $35,000  
in assistance to pay delinquent property taxes, reinstate mortgages, or make monthly  
mortgage payments.  
SDO is funded under the U.S. Treasury Department's Hardest-Hit Fund (HHF), a  
program started in 2010 to help struggling homeowners avoid foreclosure and  
communities tackle blight in areas particularly affected by the housing crisis. OHFA  
reopened SDO to accept more applications in September 2016, the result of receiving an  
additional $191.9 million in funding for the HHF initiative. Since the inception of the  
SDO program, OHFA has disbursed $434 million in assistance on behalf of 25,000  
homeowners.  
Controlling Board Approves Grant Awards for Regional Workforce Training  
Adam Wefler, Budget Analyst, 614-466-0632  
On October 16, 2017, the Controlling Board approved the allocation of  
2.9 million in capital funds under the Ohio Department of Higher Education's (DHE)  
$
November 2017  
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Ohio Legislative Service Commission  
Regionally Aligned Priorities in Delivering Skills (RAPIDS) Program. RAPIDS grants  
provide funding for capital equipment and facilities used to train students and current  
workers for the specific workforce requirements of varying regions throughout the  
state. This round of grants was awarded to institutions in the West, Central, and  
Northern Appalachia regions. Each region was allocated a total of about $974,000. A  
brief description of each region's grant recipients and activities is provided below.  
Central region. Central Ohio Technical College, Columbus State Community  
College, and Marion Technical College will focus on supporting regional healthcare,  
information technology, and manufacturing.  
Northern Appalachia region. Belmont College, Eastern Gateway Community  
College, Washington State Community College, and Zane State College will focus on  
the oil and gas and healthcare industries by providing equipment, developing  
curriculum and career pathways for students, improving credit articulation, and  
strengthening business partnerships with local employers.  
West region. Central State University, Clark State Community College, Edison  
Community College, Sinclair Community College, and Wright State University will  
focus on improving education and training in the health care and cybersecurity fields  
through two consortiums. Under both arrangements, participating institutions will  
share equipment and technology.  
Overall, S.B. 310 of the 131st General Assembly appropriated $8.0 million in  
capital funding for the program to DHE. Additional regions will receive awards as  
strategic plans are submitted and approved.  
BWC Awards $406,000 to Fire Departments Under  
New Gear and Equipment Grant Program  
Terry Steele, Senior Budget Analyst, 614-387-3319  
On October 13, 2017, the Bureau of Workers' Compensation (BWC) issued  
406,270 in grants to 38 fire departments under a new initiative aimed at reducing  
$
firefighters' exposure to toxic environmental elements. The newly created Firefighter  
Exposure to Environmental Elements Grant Program provides $2.0 million in each fiscal  
year of the FY 2018-FY 2019 biennium to help fire departments purchase safety gear and  
equipment designed to protect firefighters from contact with carcinogens and other  
dangers encountered during the course of duty. Eligible gear and equipment includes  
diesel exhaust systems, washing machines for turn-out gear, hoods with barrier  
protection, and washable gloves.  
The Firefighter Exposure to Environmental Elements Grant Program is a  
component of BWC's ongoing Safety Intervention Grant Program that is overseen by  
the Division of Safety and Hygiene. Eligible firefighting agencies (public, private, and  
November 2017  
24  
Budget Footnotes  
Ohio Legislative Service Commission  
volunteer services that obtain workers' compensation coverage through BWC) may  
receive up to $15,000 for the purchase of qualified items. Grant applications must  
include information about the number of active career and volunteer firefighters on  
staff and the number of fire, EMS, and HazMat runs made each year. Overall, H.B. 27,  
the workers' compensation budget act for the FY 2018-FY 2019 biennium, provided  
$
15.0 million in each fiscal year for the Safety Intervention Grant Program.  
$
6 million Awarded to Support Behavioral Healthcare Workforce  
Robert Moore, Budget Analyst, 614-466-4280  
On September 27, the Ohio Department of Mental Health and Addiction Services  
(OhioMHAS) awarded $6 million in grants to strengthen Ohio's behavioral healthcare  
workforce. Grants were given to 61 community-based providers across the state for  
recruitment, retention, and retraining of behavioral health workers. Providers may use  
grant funds to help defray costs associated with professional licensure and  
credentialing and to support tuition payment or loan repayment programs. Funds also  
may be used to support workforce development for chemical dependency counselors,  
social workers, marriage and family therapists, and professional counselors. The  
maximum amount that a provider could receive was $100,000. For a list of all programs  
receiving funds, please refer to OhioMHAS' website: mha.ohio.gov.  
Ohio, along with other states, is experiencing a shortage of behavioral health  
professionals. This is due in part to an aging behavioral health workforce, a high  
turnover rate, and a lack of students specializing in behavioral health. The current  
opioid addiction crisis and a rapidly growing population of older adults have also led  
to higher demand for these services. In addition to this grant, OhioMHAS plans to  
address this issue by supporting residency programs in psychiatry, expanding the  
number of medical professionals who are able to prescribe medication assisted  
treatment to those addicted to opioids, and sponsoring continuing education courses  
that focus on drug addiction and its impacts.  
Attorney General Awards $89.1 million in Crime Victim Service Grants  
Joseph Rogers, Senior Budget Analyst, 614-644-9099  
On October 13, 2017, the Office of the Attorney General awarded a total of  
89.1 million to crime victim assistance programs as part of the 2018 grant cycle,  
$
including $85.6 million that was awarded to 367 programs pursuant to the federal  
Victims of Crime Act (VOCA) and $3.5 million that was awarded to 187 programs as  
November 2017  
25  
Budget Footnotes  
Ohio Legislative Service Commission  
part of Ohio's State Victims Assistance Act (SVAA).8 The grants were awarded to crime  
victim assistance programs operated by public agencies or private nonprofit  
organizations. Recipients include rape crisis centers, domestic violence shelters, child  
advocacy centers, hospitals and emergency medical facilities, prosecutor-based  
victim/witness programs, community-based victim service organizations, court  
appointed special advocates, and certain other legal service providers.  
The table below shows the five counties that were awarded the most funding  
during this grant period. These five counties account for 51.0% ($45.4 million) of the  
award total. Franklin and Cuyahoga counties were awarded the largest amounts of  
funding as many statewide organizations are headquartered in Columbus and  
Cleveland. Madison and Putnam are the only two counties that were not awarded any  
direct funding. However, crime victims in those counties can receive services from  
agencies in neighboring counties.  
Top 5 Counties Receiving Victim Assistance Grant Awards, 2018 Grant Cycle  
Total Amount of  
Percentage of  
Total Funding  
County  
Number of Awards  
Funding Awarded  
Franklin  
63  
44  
$15,991,954  
$15,405,089  
$5,228,931  
$4,694,610  
$4,089,887  
$45,410,471  
$89,054,364  
18.0%  
17.3%  
5.9%  
5.3%  
4.6%  
51.0%  
N/A  
Cuyahoga  
Summit  
16  
Hamilton  
26  
Lucas  
16  
Top 5 Total  
Statewide Total  
165  
554  
Ohio Turnpike and Infrastructure Commission Awards Contract to Exploit  
Connected and Autonomous Vehicles Technologies on the Ohio Turnpike  
Tom Middleton, Senior Budget Analyst, 614-728-4813  
On October 16, 2017, the Ohio Turnpike and Infrastructure Commission entered  
into a contract to support a project aimed at developing and studying connected and  
autonomous vehicle technology. The Commission will pay Logicalis, Inc. almost  
$
1.5 million for equipment, software, and technical services for establishing a "proof of  
concept" project along the Ohio Turnpike. Specifically, this project involves a 52-mile  
stretch in Northeast Ohio between the Amherst and Streetsboro toll plazas, running  
through Lorain, Cuyahoga, and Summit counties.  
8
A complete grant award list can be found at: http://www.ohioattorneygeneral.gov/Media/  
News-Releases.  
November 2017  
26  
Budget Footnotes  
Ohio Legislative Service Commission  
As part of this project, Turnpike crews have installed roadside sensors that can  
link to fiber-optic cables already in place along the toll road. The contract will enable  
3
8 Commission vehicles to receive high-speed radios to test vehicle-to-infrastructure  
and vehicle-to-vehicle communications. For example, the devices can help exchange  
data about weather advisories or indicate to snow plow drivers the optimal plow angles  
to remove snow and ice. The project is paid for using a combination of capital and  
operating funding. Ohio Turnpike toll revenues and proceeds of toll revenue bonds are  
the two major sources of funding for the Ohio Turnpike and Infrastructure  
Commission.  
This project along the Ohio Turnpike is part of Ohio's contribution to the  
multistate "Smart Belt Coalition," a partnership between state transportation agencies  
and research entities in Michigan, Pennsylvania, and Ohio. The purpose of the coalition  
is to leverage resources in developing and employing next-generation vehicle  
technologies. Another Smart Belt Coalition project currently under construction is the  
Ohio Department of Transportation's U.S. Route 33 Smart Corridor Project between  
Dublin and East Liberty.  
November 2017  
27  
Budget Footnotes  
Ohio Legislative Service Commission  
TRACKING THE  
ECONOMY  
Philip A. Cummins, Senior Economist, 614-387-1687  
Ruhaiza Ridzwan, Senior Economist, 614-387-0476  
Overview  
Economic activity is continuing to rise, bouncing back from  
temporary hurricane effects. U.S. inflation-adjusted gross domestic  
product (real GDP) rose at or above a 3% annual rate in this year's second  
and third quarters. Industrial production rose in September and would  
have grown in the third quarter except for the hurricanes, according to  
estimates. The number of nonfarm payroll jobs increased 261,000 in  
October, and 169,000 on average so far this year after gains averaging  
1
4
87,000 in all of 2016. The nation's unemployment rate last month fell to  
.1%, lowest in nearly 17 years. Inflation turned higher in September as  
hurricane-related gasoline shortages pushed up prices. Interest rates  
remain low, and monetary policy was held unchanged by the Federal  
Reserve's Open Market Committee at its meeting ended November 1.  
In Ohio, total employment trended higher through September. The  
statewide average unemployment rate edged down in the latest month  
but increased over the past two years reflecting more people entering or  
re-entering the job market than found jobs. Reports from businesses in  
this region through early October indicated that economic activity  
continued to expand.  
The National Economy  
Unemployment nationwide fell to 4.1% of the labor force in  
October, and total nonfarm payroll employment rose 261,000. Trends in  
employment and the unemployment rate are shown in Chart 5.  
Unemployment  
nationwide  
The rise in total payroll jobs in October was the largest monthly  
addition to the number employed since July 2016. Upward revisions to  
the nonfarm payroll employment figures for August and September  
added 90,000 jobs and replaced the decline in total employment  
previously reported for September with a small (18,000) increase.  
October's rebound was in part a recovery from effects of hurricanes.  
Workers in food services and drinking places returned to their jobs in  
October after being off work in the survey period in September due to  
hurricanes, adding 89,000 to payrolls after a decline of 98,000. Other  
fell to 4.1% of  
the labor force  
in October.  
November 2017  
28  
Budget Footnotes  
Ohio Legislative Service Commission  
industries that added to payrolls in October included professional and  
business services (+50,000), manufacturing (+24,000), and health care  
+22,000).  
(
Chart 5: U.S. Employment and Unemployment  
1
1
1
1
1
1
1
1
48  
45  
42  
39  
36  
33  
30  
27  
11%  
10%  
9%  
8%  
7%  
6%  
5%  
4%  
2
007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  
Nonfarm Payroll Employment  
Unemployment Rate (right scale)  
The U.S. unemployment rate of 4.1% was lowest since  
December 2000. People counted as unemployed those without jobs who  
actively sought work in the most recent four weeks totaled 6.5 million in  
October, 1.2 million fewer than a year earlier and 8.8 million fewer than in  
2
1
009 when unemployment peaked. The unemployed in October included  
.6 million who had been seeking work for more than six months. An  
additional 1.6 million people had jobs but could only find part-time work.  
Real GDP grew at a 3.0% annual rate in the 2017 third quarter, in  
the U.S. Bureau of Economic Analysis' initial estimate, following growth  
Real GDP grew  
at a 3.1% rate in the second quarter. Earlier, this broad measure of at a 3.0%  
U.S. economic activity grew at only a 1.2% rate in this year's first quarter,  
annual rate in  
and 1.5% for all of last year. The upturn in the pace of economic growth  
reflects a pickup in business spending, particularly for equipment.  
Consumer spending continued to advance, but investment in residential  
structures slowed and government spending remained weak. The rate of  
additions to inventories turned higher in the latest two quarters.  
the 2017 third  
quarter.  
Industrial production rose 0.3% in September, following declines in  
July and August. Adverse effects of hurricanes Harvey and Irma  
continued to hold down industrial output in September. For the third  
quarter, the actual decline in the industrial production index at a  
1
.5% annual rate would have been at least a 0.5% increase excluding  
hurricane effects.  
November 2017  
29  
Budget Footnotes  
Ohio Legislative Service Commission  
The consumer price index (CPI) for all items rose 0.5% in  
September, its largest monthly increase since January. The rise mostly  
reflected higher gasoline prices. Compared with a year earlier, the CPI for  
all items was 2.2% higher, and the index of consumer prices other than  
food and energy was 1.7% higher than a year earlier for the fifth  
consecutive month. A related price measure, the personal consumption  
expenditures deflator excluding food and energy, was 1.3% higher in  
September than a year earlier.  
The Ohio Economy  
Ohio's unemployment rate dropped slightly in September to 5.3%  
from 5.4% in August. Ohio's unemployment rate was well above the  
U.S. unemployment rate of 4.2% for September. In September 2016, Ohio's  
unemployment rate was 5.0%, 0.1 percentage point higher than that of the  
U.S. The number of Ohioans counted as unemployed was 305,000 in  
September, a decrease of 6,000 from August. From a year earlier, the  
number of unemployed Ohioans increased by 21,000. Chart 6 below  
Ohio's  
unemployment  
rate dropped  
slightly in  
September to  
shows trends in the state's payroll employment and unemployment rate 5.3% from  
over the last ten years.  
5
.4% in  
August.  
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)  
The state's total nonfarm payroll employment, seasonally adjusted,  
increased by 10,500, or 0.2% in September from August's revised total,  
following a gain of 6,500 jobs in August. In September, the private service-  
providing sector added 7,400 jobs and goods-producing industries added  
3
,100 jobs. Government employment was unchanged as job gains in state  
November 2017  
30  
Budget Footnotes  
Ohio Legislative Service Commission  
and federal governments were offset by job losses in local government.  
September's job gains were recorded in trade, transportation, and utilities;  
educational and health services; manufacturing; leisure and hospitality;  
and construction. Job losses occurred in financial activities, other  
(
services. Employment in the mining and logging industry group was  
unchanged in September.  
miscellaneous) services, information, and professional and business  
Ohio's total  
nonfarm  
Compared to September 2016, Ohio's total nonfarm payroll payroll  
employment increased by 61,600, or 1.1%. The increase was largely in  
educational and health services (+24,800), leisure and hospitality (+19,300),  
construction (+9,100), and financial activities (+6,300). Decreases in  
employment occurred in trade, transportation, and utilities; government;  
and information.  
employment  
increased by  
6
1
1,600, or  
.1%, in  
The number of existing homes sold in Ohio dropped by 2.8% from September  
September 2016 to September 2017, according to the Ohio Association of  
Realtors. During the period of January through September 2017, existing  
home unit sales were 0.6% higher than in the corresponding months in  
compared  
with a year  
earlier.  
2
016. The statewide sales price of homes sold in the first nine months of  
2
017 averaged $172,946, or 5.3% higher than in the same period in 2016.  
Economic activity in the Federal Reserve Bank of Cleveland's  
9
district grew at a moderate pace, according to the latest Beige Book.  
Hiring in the region grew across industries for which reports were  
received. Employers in construction and nonfinancial services sectors  
reported wage pressures for both high-skilled and low-skilled workers.  
Input prices rose moderately. Retailers indicated little change in  
consumer spending. Sales of new motor vehicles increased about 3% in  
the first eight months of this year compared to the corresponding period a  
year earlier. Manufacturing activity continued to expand at a modest  
pace, but production at auto assembly plants trended lower. Residential  
and nonresidential building markets in the region remained strong.  
Business lending increased slightly on balance. Freight contacts noted  
increased volume due to more e-commerce shipments and oil and gas  
industry expansion.  
9 The Federal Reserve Bank of Cleveland's district consists of all of Ohio,  
western Pennsylvania, eastern Kentucky, and northern panhandle of  
West Virginia. The Beige Book summarizes comments from business and  
industry contacts outside of the Federal Reserve System collected on or before  
October 6, 2017.  
November 2017  
31  
Budget Footnotes