Budget Footnotes  
A NEWSLETTER OF THE OHIO LEGISLATIVE SERVICE COMMISSION  
FEBRUARY 2018  
VOLUME 41, NUMBER 6  
STATUS OF THE GRF  
STATUS OF THE GRF  
Highlights...................................1  
Revenues ..................................2  
Expenditures............................13  
HIGHLIGHTS  
Ross A. Miller, Chief Economist, 614-644-7768  
ISSUE UPDATES  
January GRF tax revenue was $204 million, almost 10%,  
above the estimate published by the Office of Budget and Medicaid Electronic Visit  
Verification............................21  
Behavioral Health  
Redesign ..............................21  
0 Days to Family Foster  
Management (OBM) in September 2017. A very strong  
month from the income tax more than offset a weak result  
from the nonauto sales and use tax. GRF program  
expenditures were $27 million above estimate for the  
month, but remained below estimate for the fiscal year to  
date, by almost 1%.  
3
Care Pilot Program...............22  
OHFA Grant for Reducing  
Infant Mortality......................23  
Lead Plumbing Fixture  
Replacement Grants for  
Schools.................................24  
Ohio's unemployment rate decreased to 4.7% in  
Early Learning Portal ...............24  
December, from 4.8% in November, and 5.4% in August. OhioMeansJobs-Readiness  
Seal......................................25  
From December 2016 to December 2017, payroll  
employment rose by 38,500.  
Through January 2018, GRF sources totaled $19.23 billion:  
ARCO Recycling Site  
Cleanup................................26  
Boating Safety Education  
Grants...................................26  
Revenue from the personal income tax was  
249.9 million above estimate;  
Sales and use tax receipts were $22.7 million below  
estimate.  
TRACKING THE ECONOMY  
$
The National Economy ............29  
The Ohio Economy..................30  
Through January 2018, GRF uses totaled $19.26 billion:  
Program expenditures were $178.5 million below  
estimate during the first seven months of FY 2018;  
Spending on Medicaid was below estimate by  
Legislative Service Commission  
7
7 South High Street, 9th Floor  
Columbus, Ohio 43215  
$
Secondary Education was $62.5 million above  
estimate, due partly to timing;  
191.7 million, but spending on Primary and  
Telephone: 614-466-3615  
Most other program expenditure categories were  
below estimate.  
AVAILABLE ON OUR WEBSITE: WWW.LSC.OHIO.GOV  
CLICK ON 'BUDGET CENTRAL/BUDGET FOOTNOTES'  
Ohio Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of January 2018  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on February 1, 2018)  
STATE SOURCES  
TAX REVENUE  
Actual  
Estimate*  
Variance  
Percent  
Auto Sales  
$119,045  
$793,249  
$912,294  
$99,000  
$20,045  
20.2%  
-6.9%  
-4.1%  
Nonauto Sales and Use  
Total Sales and Use Taxes  
$852,300  
-$59,051  
$951,300  
-$39,006  
Personal Income  
$1,115,391  
$72,448  
$81,044  
$28,713  
$513  
$892,800  
$59,400  
$74,100  
$29,600  
$1,700  
-$100  
$222,591  
$13,048  
$6,944  
-$887  
-$1,187  
$100  
24.9%  
22.0%  
9.4%  
-3.0%  
-69.8%  
100.0%  
2.9%  
326.8%  
17.3%  
16.4%  
3.7%  
---  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
$0  
$53,809  
$227  
$52,300  
-$100  
$1,509  
$327  
Natural Gas Consumption (MCF)  
Alcoholic Beverage  
Liquor Gallonage  
$1,995  
$4,654  
$4,978  
$0  
$1,700  
$4,000  
$4,800  
$0  
$295  
$654  
$178  
Petroleum Activity Tax  
Corporate Franchise  
Business and Property  
Estate  
$0  
-$540  
$0  
-$540  
$0  
---  
$0  
$0  
---  
$5  
$0  
$5  
---  
Total Tax Revenue  
$2,275,531  
$2,071,500  
$204,031  
9.8%  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$14,464  
$4,626  
$13,000  
$2,900  
$1,780  
$17,680  
$1,464  
$1,726  
11.3%  
59.5%  
$204,127  
$223,217  
$202,347 11367.8%  
Total Nontax Revenue  
$205,537  
1162.5%  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$3,902  
$3,902  
$0  
$25,500  
$25,500  
$0  
-$21,598  
-$21,598  
---  
-84.7%  
-84.7%  
TOTAL STATE SOURCES  
Federal Grants  
$2,502,650  
$716,712  
$2,114,680  
$739,647  
$387,970  
-$22,934  
$365,035  
18.3%  
-3.1%  
12.8%  
TOTAL GRF SOURCES  
$3,219,362  
$2,854,327  
*Estimates of the Office of Budget and Management as of September 2017.  
Detail may not sum to total due to rounding.  
February 2018  
2
Budget Footnotes  
Ohio Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2018 as of January 31, 2018  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on February 1, 2018)  
Percent  
Change  
STATE SOURCES  
TAX REVENUE  
Actual  
Estimate*  
Variance  
Percent  
FY 2017**  
Auto Sales  
$818,381  
$774,500  
$43,881  
5.7%  
$791,728  
3.4%  
-6.0%  
-4.8%  
Nonauto Sales and Use  
$5,198,500 $5,265,100  
-$66,600  
-1.3% $5,530,536  
Total Sales and Use Taxes  
$6,016,881 $6,039,600  
-$22,719  
-0.4% $6,322,264  
Personal Income  
$5,264,194 $5,014,300  
$249,894  
$21,993  
$2,391  
-$12,105  
-$11,843  
-$2,837  
-$8,830  
$1,991  
-$545  
5.0% $4,833,745  
8.9%  
19.5%  
-2.8%  
-6.8%  
-10.7%  
17.5%  
-25.5%  
17.2%  
1.4%  
Commercial Activity Tax  
Cigarette  
$801,493  
$501,891  
$196,995  
$145,357  
$63  
$779,500  
$499,500  
$209,100  
$157,200  
$2,900  
$37,600  
$53,800  
$19,300  
$34,000  
$27,800  
$2,800  
$0  
2.8%  
0.5%  
-5.8%  
-7.5%  
-97.8%  
-23.5%  
3.7%  
-2.8%  
0.8%  
4.4%  
17.1%  
---  
$670,716  
$516,369  
$211,385  
$162,740  
$53  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
$28,770  
$55,791  
$18,755  
$34,280  
$29,012  
$3,280  
$38,599  
$47,621  
$18,505  
$35,026  
$28,093  
$2,860  
Natural Gas Consumption (MCF)  
Alcoholic Beverage  
Liquor Gallonage  
$280  
-2.1%  
3.3%  
$1,212  
$480  
Petroleum Activity Tax  
Corporate Franchise  
Business and Property  
Estate  
14.7%  
$2,397  
$2,397  
-$374  
-$123 2052.7%  
-$374  
$0  
---  
-$678  
$490  
44.8%  
-75.8%  
1.6%  
$118  
$0  
$118  
---  
Total Tax Revenue  
$13,098,903 $12,877,400  
$221,503  
1.7% $12,887,667  
NONTAX REVENUE  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$30,304  
$13,596  
$28,000  
$13,695  
$2,304  
-$99  
8.2%  
-0.7%  
$24,067  
$14,951  
$53,488  
$92,506  
25.9%  
-9.1%  
$235,409  
$279,309  
$262,760  
$304,455  
-$27,351  
-$25,146  
-10.4%  
-8.3%  
340.1%  
201.9%  
Total Nontax Revenue  
TRANSFERS  
Budget Stabilization  
Other Transfers In  
Total Transfers In  
$0  
$133,171  
$133,171  
$0  
$128,929  
$128,929  
$0  
$4,242  
$4,242  
---  
3.3%  
3.3%  
$0  
$92,187  
$92,187  
---  
44.5%  
44.5%  
TOTAL STATE SOURCES  
Federal Grants  
$13,511,383 $13,310,784  
$5,721,340 $5,812,118  
$19,232,723 $19,122,902  
$200,599  
-$90,779  
$109,819  
1.5% $13,072,360  
-1.6% $6,928,319  
0.6% $20,000,679  
3.4%  
-17.4%  
-3.8%  
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.  
February 2018  
3
Budget Footnotes  
Ohio Legislative Service Commission  
1
REVENUES  
Jean J. Botomogno, Principal Economist, 614-644-7758  
Overview  
For FY 2018 through January, GRF sources were $109.8 million  
0.6%) above OBM's estimates published in September 2017. Positive Through  
(
variances of $221.5 million for GRF tax sources and $4.2 million for  
transfers into the GRF were partially offset by shortfalls of $90.8 million  
and $25.1 million, respectively, for federal grants and for nontax revenue.  
GRF taxes and federal grants are expected to make up about 68% and  
January in  
FY 2018, GRF  
sources were  
3
0%, respectively, of anticipated GRF sources for FY 2018. The latter $109.8 million  
mainly consists of federal reimbursements for Medicaid expenditures  
made from state GRF moneys. Tables 1 and 2 show GRF sources for  
January and for FY 2018 through January, respectively.  
above  
estimate.  
GRF sources in January were $365.0 million (12.8%) above  
projected receipts. A positive variance of $222.6 million from the personal  
income tax (PIT) in January 2018 and a delayed transfer of $200.0 million  
from state unclaimed funds helped reverse the first-half cumulative  
2
negative variance of GRF sources. GRF tax sources were above  
anticipated revenue by $204.0 million and nontax revenue, including the  
payment from unclaimed funds to the GRF scheduled for December but  
booked this month, was above estimate by $205.5 million. Those positive  
variances were partially offset by negative variances of $22.9 million for  
FY 2018 GRF  
tax sources  
federal grants and $21.6 million for transfers in. Though GRF tax sources continue to be  
as a whole were above projected receipts, the nonauto sales and use tax  
came in $59.1 million below estimate. On the other hand, the auto sales  
and use tax outperformed its estimate by $20.0 million. Also, the  
commercial activity tax (CAT) and the cigarette tax were $13.0 million and  
above  
estimate.  
$
6.9 million, respectively, above projected revenues. The first actual tax  
filing for the financial institution tax (FIT) in January provided  
53.8 million, an amount that was $1.5 million above estimate. However,  
$
this tax source had accumulated a deficit of $10.3 million over the first six  
months of the fiscal year, so the year-to-date (YTD) negative variance  
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 For the first six months of the fiscal year, GRF sources' cumulative  
negative variance totaled $255.2 million (1.6%).  
February 2018  
4
Budget Footnotes  
Ohio Legislative Service Commission  
stood at $8.8 million at the end of January.3 For FY 2018 through January,  
the following taxes were substantially above estimates: the PIT  
(
(
$249.9 million), the auto sales and use tax ($43.9 million), and the CAT  
$22.0 million); and taxes with large negative variances included the  
nonauto sales and use tax ($66.6 million), the kilowatt-hour tax  
($12.1 million), and the foreign insurance tax ($11.8 million).  
Chart 1: Cumulative Variances of GRF Sources in FY 2018  
(
Variance from Estimates, $ in millions)  
$300  
$200  
$100  
Through  
$0  
January,  
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18  
federal grants  
to the GRF  
were  
-
-
-
$100  
$200  
$300  
$90.8 million  
Federal Grants  
Tax Revenue  
Total GRF Sources  
less than  
estimates.  
FY 2018 YTD GRF sources were $768.0 million (3.8%) below  
FY 2017 GRF sources through January. Excluding federal grants which fell  
1.21 billion (17.4%), receipts from the major categories increased: GRF tax  
sources increased $211.2 million (1.6%), nontax revenue jumped  
$
$
186.8 million (201.9%), and transfers in were up $41.0 million (44.5%).  
As explained in previous editions of this publication, federal grants  
to the GRF will decline from FY 2017 as an important source of Medicaid  
funding has shifted from the GRF to a dedicated purpose fund. More  
spending for the Medicaid program would be made from non-GRF funds  
this fiscal year, and the GRF will thus experience lower federal  
reimbursements in FY 2018. For tax sources, revenue grew for the PIT  
(
$430.4 million, 8.9%), the CAT ($130.8 million, 19.5%), the public utility  
tax ($8.2 million, 17.2%), and the corporate franchise tax ($2.5 million,  
052.7%). On the other hand, revenue declined for the sales and use tax  
2
($305.4 million, 4.8%), the foreign insurance tax ($17.4 million, 10.7%), the  
3 The GRF typically pays out refunds under the FIT during the first half of  
a fiscal year as taxpayers make adjustments to previous tax filings. Receipts of  
the FIT are typically expected at the end of January, March, and May.  
February 2018  
5
Budget Footnotes  
Ohio Legislative Service Commission  
cigarette tax ($14.5 million, 2.8%), the kilowatt-hour tax ($14.4 million,  
.8%), and the FIT ($9.8 million, 25.5%). The revenue increase for the PIT is  
6
due, in large part, to continued growth in 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. The decrease in FIT receipts is due to  
increased refunds this fiscal year relative to FY 2017.  
Sales and Use Tax  
The sales and use tax had its worst monthly performance of the  
fiscal year in January, despite strong auto sales and use tax revenue. Total  
receipts to the GRF of $912.3 million for the month lagged estimates by  
$
revenue. Monthly sales and use tax revenue was also $78.3 million (7.9%)  
below receipts in January 2017. The monthly results eliminated a first-half  
39.0 million (4.1%), dragged down by poor nonauto sales and use tax  
Through  
January in  
positive variance of $16.3 million (0.3%). Through January 2018, total GRF FY 2018, the  
sales and use tax receipts of $6.02 billion were $22.7 million (0.4%) below  
sales and use  
estimate, and $305.4 million (4.8%) below receipts in the corresponding  
period last year. Revenue from the auto sales and use tax generally has  
been more than expected throughout the fiscal year, but the nonauto  
tax fell below  
estimate by  
portion of the tax continues to be weak.  
$22.7 million.  
For analysis and forecasting, the sales and use tax is separated into  
two parts: auto and nonauto. Auto sales and use tax collections generally  
arise from the sale of motor vehicles, but auto taxes arising from leases are  
paid at the lease signing and are mostly recorded under the nonauto tax  
instead of the auto tax.4  
Nonauto Sales and Use Tax  
The monthly performance of the nonauto sales and use tax has  
been uneven this fiscal year, with an equal number of monthly positive  
and negative variances, through December. However, in January 2018, the  
nonauto sales and use tax revenue produced its worst performance of the  
fiscal year to date. Receipts to the GRF of $793.2 million were $59.1 million  
4 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.  
February 2018  
6
Budget Footnotes  
Ohio Legislative Service Commission  
(6.9%) below estimate, increasing the cumulative negative variance of this  
tax source to $66.6 million (1.3%), up from $7.6 million (0.2%) at the end of  
December 2017. January 2018 revenue was also $94.8 million (10.7%)  
below receipts in the same month last year.  
For the fiscal year through January, GRF receipts from this tax  
totaled $5.20 billion, $332.0 million (6.0%) 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  
Medicaid health insuring corporations (MHICs) with a provider  
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 nonauto sales and use tax revenue overall by FY 2017, that  
YTD nonauto  
declines in revenue from this tax source are generally expected this year sales and use  
when compared to the corresponding months in FY 2017. Monthly  
revenue growth on a year-ago basis, after adjusting for the decrease in  
the tax base described above, declined in the latest months as shown in  
Chart 2 below.5  
tax receipts  
were  
$
66.6 million  
below  
Chart 2: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year (with tax base adjustment)  
estimate.  
(
Three-month Moving Average)  
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Underscoring the lack of performance of this tax source, nonauto  
sales and use tax adjusted receipts growth fell 2.5% when compared to  
revenue in the same month last year.  
5 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.  
February 2018  
7
Budget Footnotes  
Ohio Legislative Service Commission  
Auto Sales and Use Tax  
The auto portion of the sales and use tax surpassed expectations in  
January 2018. Receipts of $119.0 million were $20.0 million (20.2%) ahead  
of projections and $16.6 million (16.2%) above January 2017 revenue. Total  
revenue of $818.4 million for the fiscal year to date was $43.9 million  
(5.7%) above estimate and $26.7 million (3.4%) above revenue in the first  
seven months of FY 2017. Chart 3 provides year-over-year growth in auto  
sales and use tax collections in 2017.  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
Through  
8
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
January in  
FY 2018, the  
auto sales and  
use tax was  
$43.9 million  
above  
estimate.  
Nationwide, light vehicle sales fell about 2% in 2017 when  
compared to 2016. However, the nationwide decline in unit sales may not  
have occurred in Ohio, based on recent information from the Ohio Bureau  
of Motor Vehicles (BMV). The BMV reported titles for both new and used  
vehicles grew in calendar year (CY) 2017 and both portions of the auto tax  
taxable base increased, as show in the table below. New vehicles and used  
vehicles provided about 41% and 59%, respectively, of the total taxable  
base in 2017. However, growth was generally higher in the first half of  
2
017 (compared to the corresponding period in 2016), than in the last six  
months of 2017 (compared to the second half of 2016). In the July to  
December period in 2017 (which corresponds to the first six months of  
FY 2018), titles grew 2.7%, the increase in taxable amount was 2.8%, and  
the average taxable amount grew just 0.1%.  
February 2018  
8
Budget Footnotes  
Ohio Legislative Service Commission  
Total Taxable Amount  
Average Taxable  
Amount  
CY 2017  
Titles  
(
$ in millions)  
New vehicles  
Used vehicles  
382,305  
1,770,774  
2,153,079  
$10,584  
$27,685  
$8,370  
$14,821  
Total  
Total  
$25,405  
$11,800  
Growth from CY 2016  
4.5%  
New vehicles  
Used vehicles  
2.8%  
4.3%  
4.0%  
2.6%  
-0.4%  
0.5%  
3.8%  
4.1%  
For FY 2018 as a whole, OBM expects a decline of 2.5% in revenue  
from the Ohio auto sales and use tax when compared to FY 2017; but so  
far it appears the auto tax base has not declined.  
Personal Income Tax  
For the year to date, total PIT GRF revenue of $5.26 billion was  
PIT GRF  
249.9 million (5.0%) above estimate and $430.4 million (8.9%) above  
revenue was  
$
corresponding receipts through January in FY 2017. PIT revenue is  
comprised of gross collections, minus refunds and distributions to the  
$249.9 million  
Local Government Fund (LGF). Gross collections consist of employer above  
6
withholdings, quarterly estimated payments, trust payments, payments  
associated with annual returns, and other miscellaneous payments. The  
performance of the tax is typically driven by employer withholdings,  
which is the largest component of gross collections, and to a lesser extent,  
the amount of refunds to taxpayers.  
estimate in  
FY 2018  
through  
January.  
Results from the PIT in January 2018 were strong, and GRF  
revenue of $1.12 billion was $222.6 million (24.9%) above estimate and  
$
269.5 million (31.9%) above receipts in January 2017. Quarterly  
estimated payments led the way with a positive variance of  
7
$
142.1 million (65.1%). In addition, employer withholding and trust  
payments were $25.7 million (3.2%) and $6.2 million, respectively, above  
estimates. Those positive variances were partially offset by shortfalls of  
6 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.  
7
Estimated payments were also $147.5 million (69.2%) higher than  
corresponding receipts in January 2017. Oversized revenue from the January  
quarterly estimated payments may be due to taxpayers reacting to higher than  
expected nonwage income and capital gains in CY 2017.  
February 2018  
9
Budget Footnotes  
Ohio Legislative Service Commission  
$
6.5 million (43.0%) for taxes due with annual returns and $3.5 million  
(
28.9%) for miscellaneous payments. The filing of tax returns was  
delayed by a week this year and that probably affected refunds which  
were $58.6 million (41.5%) below estimate and $66.3 million (44.5%)  
below refunds in January 2017. In the previous three months, refunds  
were higher than estimated by a combined $65.4 million.  
FY 2018 revenues through January from each component of the  
PIT relative to estimates and to revenue received in FY 2017 are detailed  
in the table below. PIT trends in the earlier months of FY 2018 continued.  
Except annual return payments, components of gross collections  
exceeded estimates through January 2018, with refunds and LGF  
distributions deviating from estimates by relatively small amounts.  
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 Revenue  
(%)  
(
growth from  
Withholding  
$72.8  
$174.8  
$8.7  
1.5%  
34.2%  
41.2%  
-19.3%  
30.6%  
4.4%  
$220.4  
$187.9  
$8.3  
4.5%  
37.7%  
38.4%  
-17.4%  
34.5%  
7.5%  
monthly  
Quarterly Estimated Payments  
Trust Payments  
employer  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
-$19.9  
$12.4  
$248.9  
-$2.5  
-$17.5  
$13.5  
$412.7  
-$19.2  
$1.4  
withholding is  
improving.  
Less Refunds  
-0.6%  
0.7%  
-4.3%  
0.6%  
Less LGF Distribution  
GRF PIT Revenue  
$1.5  
$249.9  
5.0%  
$430.4  
8.9%  
Compared to corresponding receipts in FY 2017 through January,  
receipts from employer withholding, quarterly estimated payments, and  
miscellaneous payments were all higher in FY 2018, but payments with  
annual returns were below such payments last year. Refunds were also  
lower than in the corresponding period in FY 2017. The chart below  
illustrates the growth of monthly employer withholdings on a  
three-month moving average relative to one year ago. It shows revenue  
growth from employer withholding rising in recent months.  
February 2018  
10  
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
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Commercial Activity Tax  
After underperforming in the previous two months, January CAT  
receipts to the GRF of $72.4 million were $13.0 million (22.0%) above  
estimate, and $20.4 million (39.3%) above revenue in January 2017. And  
for the fiscal year, total receipts of $801.5 million to the GRF were  
FY 2018 CAT  
GRF tax  
receipts  
$
22.0 million (2.8%) above projections and $130.8 million (19.5%) above through  
receipts in the corresponding period in FY 2017 through January. This  
strong growth was due in part to the change in allocation of revenue  
enacted in H.B. 49. Yearly gross collections increased by $67.8 million  
(
CAT refunds also increased by $19.8 million (31.1%).  
January were  
$22.0 million  
above  
7.0%) relative to collections in FY 2017 through January 2017. However,  
estimate.  
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 tax revenues. 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 7047 and Fund 7081 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.  
February 2018  
11  
Budget Footnotes  
Ohio Legislative Service Commission  
Cigarette and Other Tobacco Products Tax  
January 2018 revenue from the cigarette and other tobacco products  
tax of $81.0 million was $6.9 million (9.4%) above estimate. The FY 2018  
performance of this tax source has been uneven, probably due to the  
timing of remittances, with monthly positive variances alternating with  
shortfalls. Through January 2018, GRF cigarette and other tobacco  
products tax revenue of $501.9 million was $2.4 million (0.5%) above  
cigarette tax  
receipts were  
$2.4 million  
estimate. This revenue included $463.1 million and $38.8 million, above  
respectively, from sales of cigarettes and sales of other tobacco products.  
FY 2018 revenue was also $14.5 million (2.8%) below collections in the  
corresponding period in FY 2017. Receipts from cigarette sales fell  
estimate  
through  
January.  
$
16.9 million (3.5%) while those from other tobacco products grew  
$
2.5 million (6.8%). Revenue from the cigarette and other tobacco products  
tax usually trends downward, generally at a slow pace.  
February 2018  
12  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of January 2018  
($ in thousands)  
(Actual based on OAKS reports run February 2, 2018)  
PROGRAM  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$706,062  
$184,568  
$7,096  
$661,786 $44,276  
6.7%  
1.6%  
$181,641  
$8,176  
$2,928  
Other Education  
-$1,080 -13.2%  
Total Education  
$897,726  
$851,602 $46,124  
5.4%  
Medicaid  
$1,017,438 $1,072,970 -$55,532  
$161,556 $157,925 $3,631  
-5.2%  
2.3%  
-4.2%  
Health and Human Services  
Total Welfare and Human Services $1,178,993 $1,230,895 -$51,902  
Justice and Public Protection  
General Government  
$216,814  
$36,359  
$191,139 $25,675  
$35,247 $1,113  
$226,386 $26,788  
13.4%  
3.2%  
Total Government Operations  
$253,173  
11.8%  
Property Tax Reimbursements  
Debt Service  
-$6  
$123,987  
$123,981  
$526  
$117,150  
$117,676  
-$532 -101.2%  
$6,837  
5.8%  
Total Other Expenditures  
$6,304  
5.4%  
Total Program Expenditures  
TRANSFERS  
$2,453,874 $2,426,559 $27,315  
1.1%  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$444  
$444  
$0  
$0  
$0  
$0  
$444  
$444  
---  
---  
---  
TOTAL GRF USES  
$2,454,317 $2,426,559 $27,759  
1.1%  
*September 2017 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
February 2018  
13  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2018 as of January 31, 2018  
($ in thousands)  
(Actual based on OAKS reports run February 2, 2018)  
Percent  
PROGRAM  
Actual  
Estimate* Variance Percent FY 2017** Change  
Primary and Secondary Education  
Higher Education  
$4,849,888 $4,787,344 $62,543  
1.3%  
-0.4%  
-2.9%  
0.9%  
$4,744,916  
$1,327,411  
$51,142  
2.2%  
0.5%  
-4.2%  
1.8%  
$1,333,837 $1,339,269  
$49,003 $50,486  
-$5,431  
-$1,482  
Other Education  
Total Education  
$6,232,728 $6,177,099 $55,630  
$6,123,470  
Medicaid  
$8,642,401 $8,834,080 -$191,679  
-2.2% $10,272,922 -15.9%  
-3.2% $836,447 -2.4%  
-2.3% $11,109,370 -14.9%  
Health and Human Services  
$816,361  
$843,724 -$27,363  
Total Welfare and Human Services $9,458,761 $9,677,804 -$219,042  
Justice and Public Protection  
General Government  
$1,340,393 $1,344,292  
$225,838 $238,855 -$13,016  
$1,566,231 $1,583,147 -$16,916  
-$3,900  
-0.3%  
-5.4%  
-1.1%  
$1,292,946  
$235,914  
3.7%  
-4.3%  
2.4%  
Total Government Operations  
$1,528,860  
Property Tax Reimbursements  
Debt Service  
$906,414  
$907,918  
-$1,504  
$3,308  
$1,804  
-0.2%  
0.3%  
0.1%  
$901,983  
$1,013,333  
$1,915,316  
0.5%  
0.8%  
0.7%  
$1,021,866 $1,018,558  
Total Other Expenditures  
$1,928,280 $1,926,476  
Total Program Expenditures  
TRANSFERS  
$19,186,001 $19,364,525 -$178,524  
-0.9% $20,677,015  
-7.2%  
Budget Stabilization  
Other Transfers Out  
Total Transfers Out  
$0  
$69,445  
$69,445  
$0  
$65,514  
$65,514  
$0  
$3,931  
$3,931  
---  
6.0%  
6.0%  
$29,483 -100.0%  
$238,605 -70.9%  
$268,087 -74.1%  
TOTAL GRF USES  
$19,255,446 $19,430,039 -$174,594  
-0.9% $20,945,102  
-8.1%  
*September 2017 estimates of the Office of Budget and Management.  
**Cumulative totals through the same month in FY 2017.  
Detail may not sum to total due to rounding.  
February 2018  
14  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on February 6, 2018)  
Month of January 2018  
Year to Date Through January 2018  
Department  
Actual  
Estimate*  
Variance  
-$71,269  
-$56,339  
-$14,930  
$9,727  
$1,731  
$7,997  
-$1,316  
-$946  
-$370  
-$440  
$35  
Percent  
-3.7%  
Actual  
Estimate*  
Variance  
-$142,287  
-$192,458  
$50,172  
-$23,665  
$1,394  
-$25,059  
-$5,517  
-$897  
Percent  
-1.0%  
-2.3%  
0.9%  
Medicaid  
$1,856,062 $1,927,331  
$13,971,207 $14,113,493  
GRF  
$959,320 $1,015,659  
-5.5%  
-1.6%  
4.5%  
$8,232,309  
$5,738,897  
$1,585,593  
$352,352  
$1,233,241  
$149,215  
$51,897  
$97,319  
$15,145  
$2,363  
$12,782  
$2,396  
$1,250  
$1,146  
$3,463  
$2,028  
$1,435  
$1,515  
$0  
$8,424,768  
$5,688,726  
$1,609,258  
$350,958  
$1,258,300  
$154,733  
$52,793  
$101,939  
$15,966  
$2,165  
Non-GRF  
$896,743  
$227,319  
$51,355  
$175,964  
$19,221  
$6,175  
$13,046  
$1,533  
$336  
$911,672  
$217,592  
$49,624  
$167,967  
$20,537  
$7,121  
$13,416  
$1,973  
$302  
Developmental Disabilities  
-1.5%  
0.4%  
GRF  
3.5%  
Non-GRF  
4.8%  
-2.0%  
-3.6%  
-1.7%  
-4.5%  
-5.1%  
9.1%  
Job and Family Services  
-6.4%  
-13.3%  
-2.8%  
-22.3%  
11.5%  
-28.4%  
3.1%  
GRF  
Non-GRF  
-$4,620  
-$822  
Health  
GRF  
$197  
Non-GRF  
$1,196  
$174  
$1,671  
$168  
-$475  
$5  
$13,801  
$2,769  
-$1,019  
-$373  
-7.4%  
-13.5%  
0.0%  
Mental Health and Addiction  
GRF  
$0  
$0  
$0  
--  
$1,250  
$0  
Non-GRF  
Aging  
$174  
$168  
$5  
3.1%  
$1,519  
-$373  
-24.6%  
-20.9%  
-0.8%  
-38.5%  
-5.1%  
--  
$572  
$554  
$18  
3.3%  
$4,377  
-$914  
GRF  
$242  
$254  
-$12  
-4.8%  
10.2%  
-2.1%  
--  
$2,044  
-$16  
Non-GRF  
Pharmacy Board  
GRF  
$331  
$300  
$31  
$2,333  
-$898  
$35  
$36  
-$1  
$1,597  
-$82  
$0  
$0  
$0  
$0  
$0  
Non-GRF  
Education  
GRF  
$35  
$36  
-$1  
-2.1%  
-53.9%  
-10.4%  
-97.4%  
$1,515  
$210  
$1,597  
-$82  
-5.1%  
6.1%  
$10  
$21  
-$11  
$198  
$12  
$10  
$11  
-$1  
$202  
$102  
$101  
99.0%  
-91.7%  
Non-GRF  
$0  
$11  
-$10  
$8  
$97  
-$89  
Total GRF  
$1,017,438 $1,072,970  
$1,087,489 $1,095,242  
$2,104,926 $2,168,212  
-$55,532  
-$7,753  
-5.2%  
-0.7%  
-2.9%  
$8,642,401  
$7,086,343  
$8,834,080  
$7,068,311  
-$191,679  
$18,032  
-2.2%  
0.3%  
-1.1%  
Total Non-GRF  
Total All Funds  
-$63,286  
$15,728,744 $15,902,391  
-$173,647  
*Estimates are from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
February 2018  
15  
Budget Footnotes  
Ohio Legislative Service Commission  
Table 6: All-Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
$ in thousands)  
Actuals based on OAKS report run on February 6, 2018)  
(
(
Month of January 2018  
Year to Date Through January 2018  
Payment Category  
Managed Care  
Actual  
Estimate* Variance Percent  
Actual  
Estimate*  
$6,494,786  
$2,408,389  
$1,557,159  
$1,385,359  
$856,516  
$701,593  
$702,923  
$616,437  
$358,071  
$284,397  
$215,301  
$239,991  
$81,468  
Variance  
-$26,346  
-$21,678  
-$21,428  
-$6,639  
Percent  
-0.4%  
-0.9%  
-1.4%  
-0.5%  
4.7%  
$914,674  
$337,095  
$221,454  
$72,312  
$130,815  
$103,328  
$98,227  
$66,614  
$49,776  
$38,058  
$28,648  
$32,435  
$11,490  
$942,082  
$352,311  
$212,508  
$61,704  
$123,865  
$104,458  
$112,178  
$88,883  
$54,632  
$39,802  
$27,916  
$34,798  
$13,075  
-$27,408  
-$15,216  
$8,946  
-2.9%  
-4.3%  
4.2%  
$6,468,440  
$2,386,711  
$1,535,731  
$1,378,720  
$897,181  
$669,337  
$718,706  
$543,783  
$354,771  
$275,399  
$193,505  
$231,570  
$74,890  
ACA - Managed Care  
DDD Services  
Hospitals  
$10,607  
$6,951  
17.2%  
5.6%  
Nursing Facilities  
Physicians/All Other  
Behavioral Health  
Administration  
$40,665  
-$32,256  
$15,784  
-$72,654  
-$3,301  
-$1,130  
-$13,951  
-$22,269  
-$4,856  
-$1,744  
$732  
-1.1%  
-12.4%  
-25.1%  
-8.9%  
-4.4%  
2.6%  
-4.6%  
2.2%  
-11.8%  
-0.9%  
-3.2%  
-10.1%  
-3.5%  
-8.1%  
-1.1%  
Medicare Buy-In  
Medicare Part D  
Prescription Drugs  
Aging Waivers  
-$8,999  
-$21,796  
-$8,421  
-$2,363  
-$1,585  
-$63,286  
-6.8%  
-12.1%  
-2.9%  
Home Care Waivers  
Total All Funds  
-$6,578  
$2,104,926 $2,168,212  
$15,728,744 $15,902,391  
-$173,647  
*
Estimates are fromthe Department of Medicaid.  
Detail may not sum to total due to rounding.  
February 2018  
16  
Budget Footnotes  
Ohio Legislative Service Commission  
8
EXPENDITURES  
Russ Keller, Senior Economist, 614-644-1751  
Charles Dobson, Economist, 614-466-1523  
Overview  
Through January, GRF program expenditures were $19.19 billion,  
which was $178.5 million (0.9%) below the estimate released by OBM in  
September 2017. GRF transfers out were $69.4 million, which was  
Through  
$3.9 million (6.0%) above the YTD estimate. Including both program  
January,  
expenditures and transfers out, GRF uses totaled $19.26 billion through  
January, which was $174.6 million (0.9%) below the YTD estimate.  
FY 2018 GRF  
uses were  
Due mainly to timing issues, GRF program expenditures in January  
were $27.3 million (1.1%) above estimate. Expenditures from the Primary  
and Secondary Education program category were $44.3 million (6.7%)  
above estimate in January, due largely to sooner than expected payments  
for EdChoice and several other school choice programs funded under GRF  
appropriation item 200550, Foundation Funding, the main funding source  
of school foundation payments. A large portion of anticipated February  
payments for such programs was disbursed in January, resulting in a  
large monthly variance and increasing the category's positive  
YTD variance to $62.5 million (1.3%).  
$
174.6 million  
below  
estimate.  
Expenditures from the Justice and Public Protection program  
category were $25.7 million (13.4%) above estimate in January. The main  
culprit was also timing issues. As reported in last month's Budget  
Footnotes, the majority of the negative YTD variance in Justice and Public  
Protection occurred in months prior to December. January's positive  
variance reduced the category's negative YTD variance from $29.6 million  
(2.6%) at the end of December to $3.9 million (0.3%) at the end of January.  
The negative variance in GRF Medicaid expenditures, on the other  
hand, grew by $55.5 million in January. The category's negative YTD  
variance increased to $191.7 million. More details on Medicaid's variances  
will be provided in the section that follows this overview.  
8
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.  
February 2018  
17  
Budget Footnotes  
Ohio Legislative Service Commission  
Another program category with a relatively large negative  
YTD variance is Health and Human Services. Also reported in the last  
month's Budget Footnotes, the entire negative YTD variance in this program  
category occurred in months prior to December; the category's  
expenditures were $7.6 million (7.9%) and $3.6 million (2.3%) above  
estimates in December and January, respectively. The category's negative  
YTD variance fell from $38.6 million (6.6%) at the end of November to  
$
27.4 million (3.2%) at the end of January. YTD expenditures from the  
departments of Job and Family Services and Health were $29.9 million  
and $8.2 million, respectively, below estimates. These negative variances  
were partially offset by a positive YTD variance of $10.6 million from the  
Department of Mental Health and Addiction Services.  
Through  
January,  
Medicaid  
FY 2018 GRF  
Medicaid  
expenditures  
were  
Medicaid is a joint federal-state program. It is mainly funded by the  
GRF but is also supported by several non-GRF funds. Both GRF and  
non-GRF Medicaid expenditures contain federal and state dollars. Table 5  
shows GRF and non-GRF Medicaid expenditures for the Ohio Department  
9
of Medicaid (ODM), the Ohio Department of Developmental Disabilities $191.7 million  
(ODODD), and six other "sister" agencies that also take part in  
below  
administering Ohio Medicaid. ODM and ODODD account for about 99%  
of the total Medicaid budget. The other six agenciesJob and Family  
Services, Health, Aging, Mental Health and 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.  
estimate while  
non-GRF  
Medicaid  
expenditures  
were  
As indicated earlier, GRF Medicaid expenditures were  
$
191.7 million (2.2%) below the estimate for the first seven months of  
above  
18.0 million  
$
FY 2018. This negative variance was partially offset by a positive  
YTD variance of $18.0 million (0.3%) in non-GRF Medicaid expenditures.  
Including both the GRF and non-GRF, all-funds Medicaid expenditures  
were $173.6 million (1.1%) below the YTD estimate.  
estimate.  
9 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.  
February 2018  
18  
Budget Footnotes  
Ohio Legislative Service Commission  
As can be seen from Table 5, almost the entire amount of the  
negative YTD variance in all-funds Medicaid expenditures can be  
attributable to ODM ($142.3 million, 1.0%) and ODODD ($23.7 million,  
Expenditures  
.5%). ODM's GRF Medicaid expenditures were $192.5 million (2.3%)  
from Managed  
1
below the YTD estimate while its non-GRF Medicaid expenditures were  
$
50.2 million (0.9%) above the YTD estimate. ODODD's GRF Medicaid Care and  
expenditures were above the YTD estimate by $1.4 million (0.4%) but its  
non-GRF Medicaid expenditures were below the YTD estimate by  
ACA-Managed  
Care, the two  
largest  
$
25.1 million (2.0%).  
Table 6 shows all-funds Medicaid expenditures by payment  
category. Expenditures from Managed Care and ACA-Managed Care, the  
payment  
two largest payment categories, were largely in line with estimates with categories,  
expenditures being $26.3 million (0.4%) and $21.7 million (0.9%),  
respectively, below the YTD estimates. Overall, more than 80% of Ohioans  
enrolled in Medicaid receive services through managed care. The  
ACA-Managed Care category tracks managed care expenditures for  
individuals who became eligible for Medicaid through the federal  
Affordable Care Act.  
were below  
estimates by  
$
26.3 million  
and  
$
21.7 million,  
The Administration category had the largest negative YTD variance  
at $72.7 million (11.8%). Of this amount, approximately $62.0 million is  
attributed to ODM and the remaining $10.7 million is attributed to the  
other Medicaid agencies. ODM's negative variance was primarily due to  
the following: timing-related issues ($25.0 million), prior fiscal year  
contracts that have not yet been paid, and caseload-driven contracts  
requiring lower payments to vendors than anticipated.  
respectively.  
The Physicians/All Other category had the second largest negative  
YTD variance at $32.3 million (4.6%), due partially to a lower than  
estimated caseload for home health services.  
Two other payment categories with significant negative  
YTD variances are Prescription Drugs and services provided by ODODD  
(labeled "DDD Services" in the table). YTD expenditures for Prescription  
Drugs were $21.8 million (10.1%) below estimate, due largely to lower  
than estimated per-member per-month prescription drug costs for the  
Aged, Blind, and Disabled (ABD) population. YTD expenditures from  
ODODD were below estimate by $21.4 million (1.4%). Of this variance,  
$
16.0 million was due to lower than expected expenditures for targeted  
case management services.  
On the other hand, both caseload and per-member per-month costs  
for Nursing Facilities have been higher than projected. As a result, this  
payment category's expenditures had the largest positive YTD variance at  
$
40.7 million (4.7%).  
February 2018  
19  
Budget Footnotes  
Ohio Legislative Service Commission  
The Behavioral Health payment category had the second largest  
positive YTD variance at $15.8 million (2.2%) due largely to higher than  
anticipated per-member permonth behavioral health service costs for the  
ABD population.  
February 2018  
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Ohio Legislative Service Commission  
ISSUE UPDATES  
Ohio Department of Medicaid Begins Electronic Visit Verification  
Charles Dobson, Economist, 614-644-1523  
On January 8, 2018, the Ohio Department of Medicaid (ODM) began using an  
Electronic Visit Verification (EVV) system for monitoring many home and  
community-based services. The system verifies when provider visits occur and their  
duration, recording the visit start and end times and Global Positioning System (GPS)  
coordinates in near real-time. With the adoption of the EVV system, ODM hopes to  
promote quality of care, reduce billing errors, and improve payment accuracy. The use  
of EVV is being implemented in phases. During this first phase, providers that bill for  
certain services provided through the Ohio Home Care Waiver Program and Medicaid  
fee-for-service will be required to use EVV. In future phases, ODM will require  
Medicaid managed care plans to use the EVV system, as well as providers billing for  
Aging and Developmental Disabilities Waiver services.  
ODM contracted with the New York-based Sandata Technologies LLC to provide  
the EVV system and any training and technical assistance required. The EVV system is  
provided at no cost to home and community-based service providers. However, home  
and community-based providers are allowed to use their own EVV systems as long as  
the systems meet ODM interface requirements. A provider is responsible for any costs  
associated with using alternate systems.  
The federal 21st Century CURES Act required the implementation of EVV for  
certain home and community-based services. States are required to implement  
EVV systems in order to receive full federal reimbursement for those services.  
Behavioral Health Redesign Launched January 1, 2018  
Charles Dobson, Economist, 614-644-1523  
On January 1, 2018, a redesign of the behavioral health system was implemented,  
which resulted in an updated benefit package for community behavioral health  
services. The redesign is an ongoing effort between ODM and the Ohio Department of  
Mental Health and Addiction Services (ODMHAS) to enhance the quality and delivery  
of care for mental health and substance use disorder treatment. This phase of the  
redesign does the following: updates Medicaid behavioral health billing codes to align  
with national standards, develops a single fee schedule for mental health and substance  
use disorder services, ties rates to the qualifications of the provider, and expands  
February 2018  
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Ohio Legislative Service Commission  
services for individuals with the most intensive needs. At this point, the changes only  
impact fee-for-service claims and claims for individuals enrolled onto MyCare Ohio.  
The last phase of the redesign, which is anticipated to occur on July 1, 2018, will  
integrate behavioral health into Medicaid managed care.  
H.B. 49 required ODM and ODMHAS to beta test the billing system. Any  
Medicaid behavioral health provider was able to volunteer to participate in testing.  
Before implementation was allowed to occur, at least half of the participating providers  
were required to submit clean claims that were properly adjudicated. Many providers  
volunteered to take part in the testing, which began October 25, 2017, and ended  
December 15, 2017. The results were that claims were entered correctly in 99% of the  
cases and a majority of claims were paid on the first submission. As a result, the testing  
requirement was met and implementation was able to proceed.  
Eight Counties Selected to Participate in Foster Care Pilot Program  
Jessica Murphy, Budget Analyst, 614-466-9108  
On December 20, 2017, the Ohio Attorney General announced that eight  
counties Allen, Clark, Cuyahoga, Fairfield, Highland, Montgomery, Summit, and  
Stark had been chosen to participate in 30 Days to Family Ohio, a pilot program for  
foster care recruitment and support in counties significantly impacted by opioid use.  
The selection criteria for participating counties included the number of families/children  
in need of services, geographic location, and the readiness or ability of the county's  
public children services agency (PCSA) to implement the program. The process to select  
two additional participating counties is still underway. Each participating county's  
PCSA will receive at least $60,000 to fund a full-time staff member for family search and  
engagement and foster family recruitment.  
The pilot program is being administered by the Waiting Child Fund, a  
Cleveland-based nonprofit organization that focuses on foster care. Total funding for  
the program is $1.2 million, consisting of $960,000 federal Victims of Crime grant  
previously designated by the Attorney General for the Waiting Child Fund and  
$
240,000 that the Waiting Child Fund has committed to raising from private donations  
and foundations to provide the federally required 20% match. Up to one-half of the  
program's total funding will be retained for direct use by the Waiting Child Fund,  
primarily for the cost of hiring practice coaches, foster parent recruiters, and other  
personnel to support the work in each of the pilot PCSAs. The Waiting Child Fund will  
also be working with Virginia-based PolicyWorks to evaluate the program.  
3
0 Days to Family is an intense, short-term intervention that aims to place  
children with safe and appropriate relatives within 30 days of entering foster care. The  
model was developed by the St. Louis-based Foster & Adoptive Care Coalition and first  
implemented in St. Louis, Missouri in 2011. In 2017, PolicyWorks prepared an  
February 2018  
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Ohio Legislative Service Commission  
evaluation of the program, which found the program is successful in achieving its  
primary goal of increasing placements with relatives. The full evaluation report is  
available online at: comm.eval.org/theoriesofevaluation/viewdocument/30-days-to-  
family-theory-of-change. The report identified key areas of cost savings related to the  
greater likelihood of children in the program successfully exiting the foster care system  
to guardianship, which reduces the number of days in care. The report also found that  
the program led to reduced welfare placement and Medicaid expenditures in Missouri  
as a result of a lower percentage of children placed in medical, mental health, and  
residential treatment facilities.  
Ohio Housing Finance Agency Awards Close to $1.0 million to Pilot  
Program Aimed at Reducing Infant Mortality  
Shannon Pleiman, Budget Analyst, 614-466-1154  
On December 20, 2017, the Ohio Housing Finance Agency (OHFA) awarded  
close to $1.0 million to CelebrateOne, a Franklin County-based organization created to  
reduce infant mortality. The money will be used to implement a pilot program that  
provides rental assistance, health care, and social services to low-income households at  
risk for infant mortality. As shown in the table below, the award will fund: (1) rental  
assistance for ten units of public housing administered by the Columbus Metropolitan  
Housing Authority, (2) a grant manager and community health worker supervisor to  
assist families with rental, medical care, and social services, (3) housing stabilization  
services in partnership with the Homeless Families Foundation, and (4) evaluation of  
the pilot program by Children's HealthWatch and Nationwide Children's Hospital. The  
money for the grant comes from OHFA's General Fund, which receives payments for  
administering certain state and federal housing programs and a portion of interest  
payments and loan servicing fees under the agency's housing loan programs.  
CelebrateOne Pilot Program Grant by Function  
Function  
Amount  
$682,326  
$139,925  
$104,186  
$64,534  
Rental Assistance  
Grant Manager and Community Health Worker Supervisor  
Housing Stabilization Services  
Evaluation  
Total  
$990,971  
S.B. 332 of the 131st General Assembly, which consisted of recommendations by  
the Commission on Infant Mortality, required OHFA to include reducing infant  
mortality as a priority housing need in the agency's annual plan. In FY 2017, OHFA  
identified low-income households at risk for infant mortality as one of four particularly  
February 2018  
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Ohio Legislative Service Commission  
vulnerable populations in an Ohio Housing Needs Assessment. According to the Ohio  
Department of Health's (ODH's) latest Ohio Infant Mortality Report,1 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.  
0
Ohio Facilities Construction Commission Assists 721 Schools with  
Assessment and Replacement of Lead Plumbing Fixtures  
Adam Wefler, Budget Analyst, 614-466-0632  
In December 2017, the Ohio Facilities Construction Commission (OFCC)  
reported that it had approved grants for 721 public and chartered nonpublic school  
buildings under the Lead Plumbing Fixture Replacement Assistance Grants program.  
This program, created in H.B. 390 of the 131st General Assembly, allows any public or  
chartered nonpublic school building built prior to 1990 to apply for up to $15,000 in  
reimbursement for drinking water testing and, if necessary, fixture replacement. A  
school may claim reimbursement for the cost of replacing drinking fountains, water  
coolers, plumbing fixtures, and limited connected piping if a drinking water assessment  
meeting certain requirements finds that those fixtures are the cause of lead above the  
federal action level of 15 parts per billion in drinking water. The deadline for a school to  
apply for assistance expired on August 31, 2017.  
Under the program, over 14,600 tests have been performed on plumbing fixtures.  
Of the drinking water samples tested, about 1,400 (9.6%) were above the federal action  
level. As a result, 676 fixtures have been replaced. The remaining fixtures are no longer  
in use. However, about 160 schools have yet to complete their testing. To date, OFCC  
has reimbursed about $500,000 for eligible drinking water assessments and fixture  
replacements. Schools approved for the grants may submit requests for reimbursement  
until May 31, 2018.  
INFOhio Rolls Out Portal to Digital Resources for Preschool Children  
Jason Glover, Budget Analyst, 614-466-8742  
In December 2017, INFOhio, a state-supported organization providing digital  
library resources and other services for public schools, launched the Early Learning  
Portal to help parents and educators prepare children ages three through five for  
school. The portal contains links to more than 50 early learning websites and mobile  
1
0
The full report, which was released in October 2017, is available at:  
www.odh.ohio.gov.  
February 2018  
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Budget Footnotes  
Ohio Legislative Service Commission  
device applications selected by expert educators and librarians based on the resource's  
quality, educational value, message, safety and privacy, sales and marketing practices,  
usability, age-appropriateness, and support options. Each resource aligns with Ohio's  
Early Learning and Development Standards for children from birth to age five. Nearly  
all resources in the portal are available at no charge, with a few carrying a minimal fee.  
Development costs for the Early Learning Portal amounted to $56,000, shared equally  
between GRF funds appropriated in the budgets of the Ohio Department of Education  
(ODE) and the Ohio Department of Job and Family Services (ODJFS). ODE and ODJFS  
also partnered with the Governor's Office in developing the portal. The portal is  
accessible on INFOhio's website at: www.infohio.org/early-learning.  
ODE Launches OhioMeansJobs-Readiness Seal  
Allison Schoeppner, LSC Fellow, 614-644-3854  
In December 2017, ODE released the criteria and guidance materials for public  
and chartered nonpublic schools to begin implementing the OhioMeansJobs-Readiness  
Seal on high school transcripts and diplomas. Established in H.B. 49, the seal  
acknowledges high school students in the class of 2018 and onward who demonstrate  
various professional skills associated with success in the workforce or higher education.  
To earn the seal, a student must demonstrate proficiency in 15 essential  
professional skills, including reliability, punctuality, teamwork, critical thinking,  
problem solving, digital technology, and global/intercultural fluency. A student may  
demonstrate the skills at school, at work, or in the community, but they must be  
validated by at least three mentors overall. The list of skills was determined by ODE,  
the Governor's Office of Workforce Transformation, and the Department of Higher  
Education, as well as surveys of Ohio business leaders. In support of the new seal, ODE  
posted various resources on its website (www.education.ohio.gov) to assist students,  
parents, and educators in navigating the process of earning the seal. These resources  
include information about required criteria for students, guidance documents, and  
validation forms for mentors.  
Under H.B. 49, a student in the class of 2018 who earns the seal may also apply it  
toward a set of alternative graduation criteria if the student fails to meet one of the three  
existing testing pathways otherwise required to obtain a diploma.  
February 2018  
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Ohio Legislative Service Commission  
Controlling Board Approves Additional $3.25 million for  
ARCO Recycling Site Cleanup in Cuyahoga County  
Robert Meeker, Budget Analyst, 614-466-3839  
On January 22, 2018, the Controlling Board approved an Ohio Environmental  
Protection Agency (Ohio EPA) request for $3.25 million in additional funding in  
FY 2018 to complete remediation of the ARCO Recycling site in East Cleveland  
(Cuyahoga County). This funding increase, which is supported by fees on the disposal  
of construction and demolition debris that are deposited into the Recycling and Litter  
Prevention Fund (Fund 5320), is in addition to $3.65 million that was earmarked for the  
remediation effort in H.B. 49 and $1.58 million that will be supported by other existing  
funds appropriated to the Ohio EPA. In total, the ARCO site cleanup is expected to cost  
$
8.48 million.  
In January 2017, the Ohio EPA determined that the ARCO Recycling site was  
being used as an illegal dump for concrete, dirt, lumber, and demolished home  
materials rather than a recycling facility. After action by the Attorney General, the  
owner of the site agreed to allow the Ohio EPA, in partnership with the Cuyahoga  
County Board of Health, to begin cleanup of the site. As part of the consent agreement,  
the owner agreed to reimburse the Ohio EPA for the cost of the cleanup efforts,  
although the amount has yet to be determined. H.B. 49 earmarked $3.65 million in  
FY 2018 for the site cleanup.  
Due to a major fire at the site on October 28, 2017, total cleanup costs are  
expected to increase by $4.83 million. Costs added to the cleanup include those  
associated with fighting the fire, taking fire prevention measures, managing the  
1
3 million gallons of water used to fight the fire, and increasing the speed of the cleanup  
to forestall additional hotspots and fires. As indicated earlier, Fund 5320 will provide  
3.25 million to fund the cost increase and the remaining $1.58 million will be funded  
by EPA's existing appropriations.  
$
Department of Natural Resources Awards $240,000 in  
Boating Safety Education Grants  
Tom Wert, Budget Analyst, 614-466-0520  
On January 16, 2018, the Ohio Department of Natural Resources (ODNR)  
announced the recipients of Boating Safety Education Grants totaling $240,003. As  
shown in the table below, ten community boating safety programs in eight counties will  
receive grants of between $8,875 and $30,000. These grants are used by state and local  
government, nonprofit organizations, educational institutions, and other eligible  
entities to provide watercraft safety programs that benefit the general boating public.  
February 2018  
26  
Budget Footnotes  
Ohio Legislative Service Commission  
Boating Safety Education Grants may range from $1,000 to $30,000 and require a  
grantee cost share or in-kind contribution of 25%. Grants are made from the Waterways  
Safety Fund (Fund 7086), which receives 0.875% of Ohio's motor fuel tax revenues,  
boating registration and related fees, federal grants, and fines.  
FY 2018 Boating Safety Education Grant Recipients  
County  
Grant Recipient  
Great Miami Rowing Center  
Grant Amount  
$20,426  
$8,875  
Butler  
Berea Power Squadron  
Cuyahoga  
Delaware  
Franklin  
Mayfield Village Parks and Recreation  
The Adaptive Adventure Sports Coalition  
American Kayaking Association  
HERO USA  
$28,027  
$29,791  
$22,321  
$28,696  
$30,000  
$17,889  
$24,000  
$29,978  
$240,003  
Hocking  
Mercer  
Preble  
Hocking College  
U.S. Freshwater Boaters Alliance  
Miami Valley Boy Scout Council  
Barberton Parks and Recreation  
Summit  
Total  
February 2018  
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Ohio Legislative Service Commission  
TRACKING THE  
ECONOMY  
Philip A. Cummins, Senior Economist, 614-387-1687  
Ruhaiza Ridzwan, Senior Economist, 614-387-0476  
The nation's  
economy is  
Overview  
The nation's economy is expanding in most sectors. Another  
expanding in  
most sectors,  
and prospects  
increase in payroll employment was reported for January, when the  
unemployment rate remained at a 17-year low. U.S. inflation-adjusted  
gross domestic product (real GDP) rose again in last year's fourth quarter.  
Industrial production bounced back in the fourth quarter, recovering appear  
from hurricane disruptions. Inflation in the U.S. remains well contained,  
favorable for  
with several broad measures of prices showing increases short of the 2%  
target of the Federal Reserve, the nation's central bank.  
further  
economic  
growth.  
Prospects appear favorable for further economic growth.  
Purchasing power of households and corporations is being augmented by  
enhanced after-tax cash flows from the recently enacted federal tax cuts.  
Interest rates remain low, even with recent increases, supporting further  
growth. Economies in much of the rest of the world are firming also, and  
the synchronized expansion abroad supports demand for U.S. exports.1  
Recent stock market turmoil appears unlikely, at this juncture, to derail  
the economic expansion. Under new Federal Reserve Chair Jerome  
Powell, who replaced retiring Janet Yellen, the central bank is expected to  
continue raising short-term interest rates and reducing its exceptionally  
large holdings of securities.  
1
In Ohio, economic activity also is expanding. Employment in the  
state continues to trend upward. Unemployment fell to 4.7% of the state's  
labor force in December, matching lows reached in 2015, the lowest  
unemployment rates here since 2001. Ohio's real GDP grew briskly in last  
year's third quarter.  
11 The International Monetary Fund summarizes economic developments  
around the globe in its World Economic Outlook Update, January 22, 2018,  
http://www.imf.org/en/publications/weo/issues/2018/01/11/world-economic-outl  
ook-update-january-2018.  
February 2018  
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Budget Footnotes  
Ohio Legislative Service Commission  
The National Economy  
Total nationwide nonfarm payroll employment rose 200,000 in  
January, and unemployment as a percent of the labor force was  
unchanged at 4.1%. U.S. employment and the unemployment rate are  
shown in Chart 5.  
Total  
nationwide  
nonfarm  
payroll  
Chart 5: U.S. Employment and Unemployment  
1
1
1
1
1
1
1
1
49  
46  
43  
40  
37  
34  
31  
28  
11.0%  
10.0%  
9.0%  
8.0%  
7.0%  
6.0%  
5.0%  
4.0%  
employment  
rose 200,000  
in January,  
somewhat  
above the  
average  
monthly  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  
increase last  
year.  
Nonfarm Payroll Employment Unemployment Rate (right scale)  
The rise in payroll employment last month was in line with the  
average monthly increase over the past seven years, though somewhat  
above the average last year. Increases were reported for last month in  
construction, restaurants and bars, health care, and durable goods  
manufacturing. Compared with a year earlier, employment increased in  
numerous private goods-producing and service-providing industries. The  
annual revision by the U.S. Bureau of Labor Statistics (BLS) to historical  
payroll employment figures raised total employment slightly, about 0.1%  
for 2017.  
The country's unemployment rate held in January at 4.1%, a 17-year  
low, for the fourth consecutive month. With release of the January figures,  
BLS updated its estimate of the civilian noninstitutional population ages 16  
and older, an annual adjustment, increasing the number for December 2017  
by 488,000 (0.2%). The unemployment rate was unaffected. About  
6.7 million people were counted as unemployed in January.  
Real GDP grew at a 2.6% annual rate in the 2017 fourth quarter, in  
the first estimate from the U.S. Bureau of Economic Analysis. This follows  
growth at 3.1% and 3.2% rates in the second and third quarters,  
respectively, the strongest back-to-back quarters in three years. Consumer  
spending and nonresidential fixed investment continued to expand, and  
residential fixed investment growth resumed after two quarters of  
February 2018  
29  
Budget Footnotes  
Ohio Legislative Service Commission  
contraction. Growth of exports and government spending turned higher.  
Inventory building slowed. Import growth picked up.  
Industrial production rose in December, by 0.9%, after contracting  
0
.1% in November. The December increase mostly resulted from higher  
utility output and, to a lesser degree, from continued recovery in mining.  
Manufacturing output rose only 0.1% in December, the fourth consecutive  
monthly increase, to 2.4% higher than a year earlier. Fourth quarter  
mining output rose at a robust 12.7% annual rate after slow growth in the  
third quarter, attributed to hurricane disruptions.  
The consumer price index (CPI) rose 0.1% in December to 2.1%  
higher than a year earlier. Excluding food and energy, the CPI rose 0.3%  
in December to 1.8% above a year ago. The latter index has been above its  
year-earlier value by 1.7% or 1.8% in each of the latest eight months.  
Another measure of inflation, the personal consumption expenditures  
deflator, was up 1.7% from a year earlier in December, and 1.5% higher  
excluding food and energy.  
In December,  
Ohio's  
unemployment  
rate fell for the  
fourth  
The Ohio Economy  
In December, the state's unemployment rate fell for the fourth  
consecutive month to 4.7% from 4.8% in November. In December of 2016,  
the state's unemployment rate was 5.0%. The U.S. unemployment rate  
was 4.1% in December 2017. The number of unemployed Ohioans was  
consecutive  
month to 4.7%.  
2
70,000 in December, the fewest unemployed Ohians since October 2015.  
The number of unemployed Ohioans decreased by 9,000 in December  
from a month earlier, and by 14,000 from a year earlier. Chart 6 below  
shows trends in the state's payroll employment and unemployment rate  
over the last ten years.  
Chart 6: Ohio Employment and Unemployment Rates  
5
5
5
5
5
5
5
5
4
.7  
.6  
.5  
.4  
.3  
.2  
.1  
.0  
.9  
12.0%  
11.0%  
10.0%  
9.0%  
8.0%  
7.0%  
6.0%  
5.0%  
4.0%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017  
Nonfarm Payroll Employment Unemployment Rate (right scale)  
February 2018  
30  
Budget Footnotes  
Ohio Legislative Service Commission  
Ohio's total nonfarm payroll employment, seasonally adjusted,  
increased to 5,542,200 in December from November's revised total of  
5
1
,539,700, an increase of 2,500 jobs. Goods-producing industries added  
,200 jobs, government employment increased by 700, and employment in  
the private service-providing sector increased by 600 jobs. The largest job Compared to a  
gains occurred in manufacturing, leisure and hospitality, state  
government, and financial activities. Job losses were largely in  
professional and business services, construction, and local government.  
year ago,  
Ohio's total  
nonfarm  
payroll  
Compared to a year ago, Ohio's total nonfarm payroll employment  
increased by 38,500, mostly in the private service-providing sector, which  
accounted for 26,800 more jobs. The largest gains in 2017 occurred in employment  
leisure and hospitality (+14,900), followed by educational and health  
services (+12,600), manufacturing (+10,200), and financial activities  
increased by  
8,500, mostly  
in the private  
3
(
+9,800). Decreases in employment were primarily in trade,  
transportation, and utilities (-10,400), information (-2,600), and  
professional and business services (-1,000). Government employment service-  
dropped by 4,700 during this period, mostly in state government (-2,200)  
and local government (-1,500).  
providing  
sector.  
Ohio's real GDP grew 3.9% at a seasonally adjusted annual rate in  
the third quarter of 2017. Ohio's growth was slightly higher than real GDP  
growth for all 50 states plus the District of Columbia during the same  
period, which was 3.4%. Ohio's growth was largely in finance and  
insurance, durable goods manufacturing, and real estate, rental, and  
leasing. Ohio's GDP growth was higher than its neighboring states –  
Michigan (3.5%), Pennsylvania (3.2%), West Virginia (2.9%), Indiana  
(
5
2.7%), and Kentucky (2.2%). Ohio's growth ranked seventh among the  
0 states.  
The number of existing homes sold in Ohio dropped by 3.1% in  
December compared to a year earlier, according to the Ohio Association  
of Realtors. The statewide sales price of homes sold in December  
averaged $170,706, or 6.9% higher than a year earlier. In 2017, sales of  
existing homes were 0.9% higher than in 2016. The average sales price in  
2
017 was $172,870, or 5.7% higher than the average price in 2016.  
Economic activity in the region continued to expand at a moderate  
1
2
pace, according to a Federal Reserve Bank of Cleveland report. Labor  
12 The report is from the latest Federal Reserve System Beige Book that  
summarizes information gathered on or before January 8, 2018, from outside  
contacts. The Federal Reserve Bank of Cleveland's district includes all of Ohio  
and parts of Kentucky, Pennsylvania, and West Virginia.  
February 2018  
31  
Budget Footnotes  
Ohio Legislative Service Commission  
markets in the region tightened. Contacts in construction and  
nonfinancial services reported strong increases in input costs. Retail sales  
during the early part of the holiday shopping season were moderately  
higher than the same period a year ago. New motor vehicle sales were  
above year-ago levels. Manufacturing production grew at a slow pace, but  
some contacts expected manufacturing production to grow at a moderate  
pace in the near term. Production at auto assembly plants in the region Ohio's real  
from January through November of 2017 dropped by about 20%  
compared to the corresponding months a year ago. The drop was due to  
GDP grew  
3
.9% at a  
"retooling for a next-generation sport utility vehicle and cutbacks in small  
seasonally  
adjusted  
passenger car production." Sales of new and existing single family homes  
remained strong. Nonresidential construction remained elevated.  
Volumes of freight transportation grew at a moderate to strong pace.  
annual rate in  
the third  
quarter of  
2017.  
February 2018  
32  
Budget Footnotes