A monthly newsletter by LSC economists and budget analysts  
Volume: Fiscal Year 2019  
Issue: October 2018  
Highlights  
Ross Miller, Chief Economist  
September GRF tax revenue was very close to expectations, so that the first  
quarter of FY 2019 ended with a positive variance of $31.9 million compared to  
the estimate for tax revenue published by the Office of Budget and Management  
(
OBM) in August 2018. Revenue shortfalls from the personal income tax and the  
commercial activity tax were offset by healthy sales tax revenue. On the spending  
side of the ledger, Medicaid spending and most other spending categories were  
below estimate through the first three months.  
Ohio's unemployment rate remained unchanged at 4.6% in August, and Ohio's  
nonfarm payroll employment increased by 13,900 for the month. During the year  
ending in August, nonfarm payroll employment increased by 90,200.  
Through September 2018, GRF sources totaled $8.32 billion:  
Revenue from the sales and use tax was $60.3 million above estimate;  
Personal income tax receipts were $13.5 million below estimate.  
Through September 2018, GRF uses totaled $10.00 billion:  
Program expenditures were $232.9 million below estimate;  
Expenditures for Property Tax Reimbursements were above estimate by  
$
149.7 million due to timing, and Other Education had a very small  
positive variance. All other spending categories were below estimate.  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 11),  
the National Economy (p. 27), and the Ohio Economy (p. 29).  
Also Issue Updates on:  
School Report Cards (p. 18)  
High School Financial Literacy Education Grade (p. 19)  
Community Connectors School Mentorship Grants (p. 19)  
National Archery in the Schools Program (p. 20)  
Medicaid Group VIII Assessment (p. 20)  
WIOA Grant Increase (p. 21)  
Housing Assistance Grants for Ohioans with Disabilities (p. 22)  
Manufacturing Extension Partnership Grants (p. 24)  
Drug Use Prevention Grants (p. 25)  
Parole Supervision Software System Upgrade (p. 25)  
Available online at: www.lsc.ohio.gov/Budget Central  
Ohio Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of September 2018  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on October 1, 2018)  
State Sources  
Tax Revenue  
Actual  
Estimate*  
Variance Percent  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$115,259  
$709,612  
$824,871  
$117,500  
$694,700  
$812,200  
-$2,241  
$14,912  
$12,671  
-1.9%  
2.1%  
1.6%  
Personal Income  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Business and Property  
Estate  
$855,437  
$3,005  
$75,087  
$32,461  
$5,796  
$0  
-$6,626  
$106  
$0  
$5,594  
$4,495  
$2,019  
$21  
$0  
$0  
$850,600  
$10,200  
$75,100  
$35,500  
$7,500  
$0  
-$2,600  
$0  
$0  
$4,300  
$4,100  
$1,300  
$0  
$0  
$0  
$4,837  
-$7,195  
-$13  
-$3,039  
-$1,704  
$0  
-$4,026 -154.9%  
$106  
$0  
$1,294  
$395  
$719  
$21  
$0  
$0  
0.6%  
-70.5%  
0.0%  
-8.6%  
-22.7%  
---  
---  
---  
30.1%  
9.6%  
55.3%  
---  
---  
---  
Total Tax Revenue  
$1,802,266 $1,798,200  
$4,066  
0.2%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$32  
$2,078  
$10,861  
$0  
$1,937  
$53,708  
$32  
$141  
-$42,848  
---  
7.3%  
-79.8%  
Total Nontax Revenue  
$12,970  
$55,645  
-$42,675  
-76.7%  
Transfers In  
$0  
$0  
$0  
---  
-2.1%  
Total State Sources  
$1,815,236 $1,853,845  
$799,631  
$2,614,867 $2,768,556 -$153,689  
-$38,610  
Federal Grants  
$914,710 -$115,079  
-12.6%  
-5.6%  
Total GRF Sources  
*Estimates of the Office of Budget and Management as of August 2018.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 2  
October 2018  
Ohio Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate  
FY 2019 as of September 30, 2018  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on October 1, 2018)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance  
Percent FY 2018**  
2.6% $369,201  
2.3% $2,183,889  
2.3% $2,553,090  
Percent  
4.9%  
2.7%  
3.0%  
$387,375  
$2,241,989 $2,191,600  
$2,629,364 $2,569,100  
$377,500  
$9,875  
$50,389  
$60,264  
Personal Income  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Business and Property  
Estate  
$2,212,629 $2,226,100  
-$13,471  
-$20,094  
$3,009  
-$1,204  
-$143  
$0  
-$4,760 -340.0%  
$3,311  
$2,539  
$1,133  
$400  
-0.6% $2,069,123  
6.9%  
-2.4%  
-3.0%  
5.3%  
28.1%  
-100.0%  
-26.4%  
18.6%  
31.0%  
3.8%  
$347,006  
$183,009  
$95,596  
$8,357  
$0  
$367,100  
$180,000  
$96,800  
$8,500  
$0  
-5.5%  
1.7%  
-1.2%  
-1.7%  
---  
$355,377  
$188,751  
$90,762  
$6,522  
$62  
-$6,160  
$32,411  
$14,839  
$16,033  
$12,900  
$2,019  
$162  
-$1,400  
$29,100  
$12,300  
$14,900  
$12,500  
$1,300  
$0  
-$4,875  
$27,337  
$11,326  
$15,449  
$12,225  
$1,570  
$2,377  
-$374  
11.4%  
20.6%  
7.6%  
3.2%  
55.3%  
---  
5.5%  
$719  
$162  
$0  
$37  
28.6%  
-93.2%  
100.0%  
28.7%  
4.1%  
$0  
$0  
---  
$37  
$0  
---  
$29  
Total Tax Revenue  
$5,548,202 $5,516,300  
$31,902  
0.6% $5,328,752  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$88  
$8,256  
$16,035  
$0  
$7,781  
$56,363  
$88  
$475  
-$40,328  
---  
6.1%  
-71.6%  
$0 157218.3%  
$7,713  
7.0%  
-39.8%  
-29.1%  
$26,651  
Total Nontax Revenue  
$24,378  
$64,144  
-$39,765  
-62.0%  
$34,364  
Transfers In  
$75,995  
$80,190  
-$4,195  
-5.2%  
$111,347  
-31.7%  
3.2%  
Total State Sources  
$5,648,575 $5,660,634  
-$12,059  
-0.2% $5,474,463  
-7.8% $2,708,707  
-2.8% $8,183,171  
Federal Grants  
$2,671,679 $2,896,557 -$224,878  
$8,320,254 $8,557,190 -$236,937  
-1.4%  
1.7%  
Total GRF SOURCES  
*
*
Estimates of the Office of Budget and Management as of August 2018.  
*Cumulative totals through the same month in FY 2018.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 3  
October 2018  
Ohio Legislative Service Commission  
1
Jean J. Botomogno, Principal Economist  
Revenues  
Overview  
Tables 1 and 2 show GRF sources for the month of September and for the year to date  
(YTD) for FY 2019, respectively. GRF sources consist of state-source receipts, which include tax  
revenue, nontax revenue, and transfers in, and federal grants, which are primarily federal  
reimbursements for Medicaid.  
First-quarter revenue to the GRF in FY 2019 totaled $8.32 billion, which was below the  
OBM estimate by $236.9 million (2.8%) due to shortfalls of $224.9 million (7.8%) for federal  
grants, $39.8 million (62.0%) for nontax revenue, and $4.2 million (5.2%) for transfers in. These  
negative variances were partially offset by a positive variance of $31.9 million (0.6%) for tax  
receipts. The YTD negative variance for federal grants results from GRF Medicaid spending  
being substantially below expectations so far this year due partly to timing. The YTD negative  
variance in nontax revenue was mainly due to the timing of the $42.0 million JobsOhio deferred  
compensation payment from liq2 uor profits; the payment did not occur in September as  
anticipated in the OBM estimate.  
Regarding YTD GRF tax sources, the sales and use tax posted a positive variance of  
$
60.3 million. The cigarette tax was also above estimate, by $3.0 million. The personal income  
tax (PIT), however, fell $13.5 million below anticipated revenue and the commercial activity tax  
CAT) experienced a shortfall of $20.1 million. In addition, combined receipts from three utility-  
(
related taxes (the kilowatt-hour excise tax, the public utility tax, and the natural gas  
consumption tax) were $4.6 million above projections. Most other taxes had3smaller variances,  
except for a YTD shortfall of $4.8 million for the financial institutions tax (FIT).  
For the month of September, GRF sources of $2.61 billion were $153.7 million below  
estimates, driven down by negative variances of $115.1 million for federal grants and  
$
$
42.7 million for nontax revenue. On the other hand, GRF tax sources were above projections by  
4.1 million: the CAT was $7.2 million short of projections, but the sales and use tax and the PIT  
were above anticipated revenues by $12.7 million and $4.8 million, respectively. In addition, the  
alcoholic beverage tax had a positive variance of $1.3 million. Most of the remaining tax sources  
had negative variances, including the FIT ($4.0 million), the kilowatt-hour excise tax ($3.0 million),  
and the foreign insurance tax ($1.7 million).  
1
This report compares actual monthly and year-to-date (YTD) GRF revenue sources to OBM's  
estimates. If actual receipts are 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 are lower  
than estimate.  
2
The timing of this payment may differ somewhat from estimate. For example, in FY 2018, this  
payment was received in September when it was expected in October 2017.  
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.  
Budget Footnotes  
P a g e | 4  
October 2018  
Ohio Legislative Service Commission  
Chart 1, below, shows cumulative variances of GRF sources through September 2018.  
Chart 1: Cumulative Variances of GRF Sources in FY 2019  
(
Variances from Estimates, $ in millions)  
$
50  
$0  
-
$50  
-
-
-
-
-
$100  
$150  
$200  
$250  
$300  
Jul-18  
Federal Grants  
Aug-18  
Sep-18  
Tax Revenue  
Total GRF Sources  
Compared to GRF sources in the first quarter of FY 2018, FY 2019 GRF sources increased  
137.1 million. GRF tax sources increased $219.5 million (4.1%), while federal grants,  
$
transfers in, and nontax revenue fell by $37.0 million, $35.4 million, and $10.0 million,  
respectively. Among the largest tax sources, revenue from the PIT and the sales and use tax  
increased, $143.5 million (6.9%) and $76.3 million (3.0%), respectively; on the other hand,  
receipts for the cigarette tax declined $5.7 million (3.0%) and revenue from the CAT was  
$
8.4 million (2.4%) lower than in FY 2018.  
Sales and Use Tax  
FY 2019 first-quarter GRF receipts from the sales and use tax of $2.63 billion were  
60.3 million (2.3%) above estimate, with both the nonauto and the auto portions of the tax  
$
above projections. Total revenue was also $76.3 million (3.0%) above receipts in FY 2018  
through September. For the month of September, GRF receipts were $824.9 million,  
$
12.7 million (1.6%) above estimate. Compared to the same month last year, September  
receipts from this tax increased $44.6 million (5.7%).  
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.  
Nonauto Sales and Use Tax  
In September 2018, GRF revenue from the nonauto sales and use tax totaled  
709.6 million, $14.9 million (2.1%) above estimate. This performance follows positive  
$
variances of 1.0% in July and 3.8% in August. Compared to revenue in the same month in 2017,  
September nonauto sales and use tax revenue increased $49.3 million (7.5%), which is another  
strong performance after a year-over-year increase of 9.5% in August 2018.  
Budget Footnotes  
P a g e | 5  
October 2018  
Ohio Legislative Service Commission  
For the fiscal year, GRF receipts were $2.24 billion, which was $50.4 million (2.3%)  
above estimate and also $58.1 million (2.7%) above revenue in the corresponding period in  
4
FY 2018. Chart 2, below, shows year-over-year growth in nonauto sales tax collections. The  
nonauto sales and use tax has improved substantially in the last few months relative to the  
performance at the start of calendar year (CY) 2018.  
Chart 2: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year (With Tax Base Adjustment,  
Three-month Moving Average)  
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Jan-18  
Feb-18 Mar-18 Apr-18 May-18 Jun-18  
Jul-18  
Aug-18 Sep-18  
Auto Sales and Use Tax  
September GRF revenue from the auto portion of the sales and use tax of $115.3 million  
was below estimate by $2.2 million (1.9%) and $4.8 million (4.0%) below revenue in  
September 2017. The monthly performance reduced this tax source's cumulative positive  
variance to $9.9 million (2.6%), down from $12.1 million through August. Through September,  
FY 2019 auto sales tax receipts of $387.4 million were $18.2 million (4.9%) above receipts in the  
first quarter of FY 2018. The auto sales and use tax has generally experienced strong but  
uneven growth since March 2018. However, the rate of growth has clearly slowed in the latest  
months, as shown in Chart 3.  
4
Beginning July 1, 2017, the sales tax on Medicaid health insuring corporations (MHICs) was  
eliminated. Thus the last payment deposited in the GRF was made in July 2017 (reflecting taxable  
activity in June 2017). So, to adjust for changes to the existing tax base, this chart excludes monthly  
revenue from MHICs from January to July in CY 2017 so that changes in nonauto sales and use tax  
revenue are on a comparable basis.  
Budget Footnotes  
P a g e | 6  
October 2018  
Ohio Legislative Service Commission  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
9
8
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Jan-18  
Feb-18 Mar-18 Apr-18 May-18 Jun-18  
Jul-18  
Aug-18 Sep-18  
Monthly nationwide new light vehicle (auto and light truck) sales were 17.4 million units  
in September at seasonally adjusted annual rates, higher than August unit sales of 16.6 million,  
but about 4% below sales in September 2017 (which were outsized due to hurricanes Harvey  
and Irma). Overall, total unit sales are slowing as sales in the July-September period averaged  
1
6.9 million units, below their average pace of 17.1 million units in the first six months of 2018.  
Truck sales continue to be healthy, but a sustained drop in those sales, if it occurs, would  
negatively impact Ohio auto sales tax revenue because they buoy the average price per unit  
and taxable base.  
Personal Income Tax  
First-quarter PIT receipts to the GRF of $2.21 billion were $13.5 million (0.6%) below  
projections. For the month of September, however, PIT revenue of $855.4 million was  
$
$
4.8 million (0.6%) above estimate, partially offsetting a cumulative negative variance of  
18.3 million through August. Compared to year-ago receipts, FY 2019 PIT revenue grew 6.9%  
or $143.5 million.  
PIT revenue is comprised of gross collections, minus refunds and distributions to the  
Local Government Fund (LGF). Gross collections consist of employer withholdings, quarterly  
5
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 (about 82% of gross  
collections in FY 2018). Larger than expected refunds could also greatly affect the monthly  
performance of the tax.  
5
Quarterly estimated payments are made by taxpayers who expect to be underwithheld by  
more than $500. Payments are due in April, June, and September of an individual's tax year and January  
of the following year. Most estimated payments are made by high-income taxpayers.  
Budget Footnotes  
P a g e | 7  
October 2018  
Ohio Legislative Service Commission  
For the month of September 2018, gross collections were $4.5 million above estimates.  
A positive variance of $32.7 million for employer withholdings was partially offset by shortfalls  
of $24.6 million for quarterly estimated payments and $3.4 million for miscellaneous payments.  
Refunds were $0.5 million below estimate and distributions to the LGF were $0.2 million above  
the anticipated level.  
For the YTD, revenues from each component of the PIT relative to estimates and to  
revenue received in FY 2018 are detailed in the table below. It shows withholding and annual  
return payments were above estimates, while quarterly estimated payments and miscellaneous  
payments were below estimates. YTD gross collections were $5.2 million below projections, and  
refunds were $7.8 million higher than expected. FY 2019 refunds also increased compared to  
their amount in the July-September period last year.  
FY 2019 Personal Income Tax Revenue Variance and Annual Change by Component  
YTD Variance from Estimate  
Changes from FY 2018  
Amount  
$ in millions)  
Percent  
(%)  
Amount  
($ in millions)  
Percent  
(%)  
Category  
(
Withholding  
$22.7  
-$34.2  
-$0.1  
$10.2  
-$3.8  
-$5.2  
$7.8  
1.1%  
-13.4%  
-1.1%  
35.0%  
-18.6%  
-0.2%  
5.9%  
$113.1  
$29.3  
$2.2  
5.5%  
Quarterly Estimated Payments  
Trust Payments  
15.3%  
22.0%  
51.5%  
-19.4%  
6.7%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$13.4  
-$4.0  
$154.0  
$8.5  
Less Refunds  
6.5%  
Less LGF Distribution  
GRF PIT Revenue  
$0.4  
0.4%  
$2.0  
2.0%  
-$13.5  
-0.6%  
$143.5  
6.9%  
Compared to revenue in the corresponding period in FY 2018, gross collections were  
.7% higher, from increased receipts from withholding, which accounted for the majority of the  
6
growth in collections. Also, quarterly estimated payments and annual return payments  
experienced strong increases of 15.3% and 51.5%, respectively.  
Through September, employer withholding was 1.1% above estimate in FY 2019.  
Revenue growth for this PIT component has been generally respectable in 2018 and accelerated  
in the most recent months, despite a slowdown in the summer months. The chart below  
illustrates the growth of monthly employer withholdings on a three-month moving average  
relative to one year ago.  
Budget Footnotes  
P a g e | 8  
October 2018  
Ohio Legislative Service Commission  
Chart 4: Monthly Witholding Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Jan-18  
Feb-18 Mar-18 Apr-18 May-18 Jun-18  
Jul-18  
Aug-18 Sep-18  
Commercial Activity Tax  
Revenue from the CAT to the GRF was $3.0 million in September, which was $7.2 million  
(70.5%) below estimate and $7.1 million (70.4%) below receipts in September 2017. For the  
quarter, the CAT posted a cumulative negative variance of $20.1 million (5.5%), with shortfalls  
in each of the three months, including a monthly deficit of $11.8 million in August for the first  
payment for quarterly calendar return taxpayers. This performance is a reversal from the last  
fiscal quarter in FY 2018 when the tax was 9.6% above projections. Compared to FY 2018,  
FY 2019 CAT receipts to the GRF were also lower, by $8.4 million (2.4%). The FY 2019 negative  
variance and the decline in receipts relative to FY 2018 were due to a slowdown in collections  
and an increase in credit claims and refunds. Gross collections (i.e., all funds revenue) from this  
tax source increased only 1% compared to the corresponding quarter in FY 2018, but refunds  
increased about 37%.  
Under continuing law, CAT receipts are deposited into the GRF (85%), the School District  
Tangible Property Tax Replacement Fund (Fund 7047, 13%), and the Local Government Tangible  
Property Tax Replacement Fund (Fund 7081, 2%). Distributions to 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.  
Cigarette and Other Tobacco Products Tax  
In September, GRF revenue from the cigarette and other tobacco products tax was  
$
(
75.1 million, nearly matching estimate. The monthly receipt was, however, $11.8 million  
13.6%) below revenue from the tax in the corresponding month of the previous fiscal year. For  
the first fiscal quarter, the cigarette and other tobacco products tax totaled $183.0 million,  
Budget Footnotes  
P a g e | 9  
October 2018  
Ohio Legislative Service Commission  
$
3.0 million (1.7%) above estimate but $5.7 million (3.0%) below cumulative receipts through  
September in FY 2018.  
YTD revenue included $163.3 million from the sale of cigarettes and $19.7 million from  
the sale of other tobacco products. Compared to FY 2018, receipts from cigarette sales  
declined $7.9 million while those from the sale of other tobacco products increased  
$
downward generally at a slow pace due to a decline of cigarette revenue. OBM estimates a  
yearly revenue decline of about 2.4% compared to FY 2018.  
2.2 million. Revenue from the cigarette and other tobacco products tax usually trends  
Budget Footnotes  
P a g e | 10  
October 2018  
Ohio Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of September 2018  
(
$ in thousands)  
(Actual based on OAKS reports run October 2, 2018)  
Program Category  
Actual  
Estimate*  
Variance  
Percent  
Primary and Secondary Education  
Higher Education  
$722,623  
$187,392  
$7,868  
$690,563  
$197,163  
$10,506  
$32,061  
-$9,771  
-$2,639  
$19,651  
4.6%  
-5.0%  
-25.1%  
2.2%  
Other Education  
Total Education  
$917,883  
$898,232  
Medicaid  
$1,255,730 $1,400,047 -$144,317  
$64,357 $81,713 -$17,356  
$1,320,087 $1,481,760 -$161,673  
-10.3%  
-21.2%  
-10.9%  
Health and Human Services  
Total Health and Human Services  
Justice and Public Protection  
General Government  
$163,581  
$23,980  
$160,973  
$28,107  
$2,609  
-$4,126  
-$1,518  
1.6%  
-14.7%  
-0.8%  
Total Government Operations  
$187,561  
$189,079  
Property Tax Reimbursements  
Debt Service  
$297,899  
$409,534  
$707,433  
$260,819  
$409,929  
$670,748  
$37,080  
-$395  
14.2%  
-0.1%  
5.5%  
Total Other Expenditures  
$36,685  
Total Program Expenditures  
Transfers Out  
$3,132,964 $3,239,819 -$106,855  
$13 $2,500 -$2,487  
$3,132,977 $3,242,319 -$109,343  
-3.3%  
-99.5%  
-3.4%  
Total GRF Uses  
*August 2018 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 11  
October 2018  
Ohio Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2019 as of September 30, 2018  
($ in thousands)  
(Actual based on OAKS reports run October 2, 2018)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2018** Percent  
Primary and Secondary Education  
Higher Education  
$2,165,896  
$562,389  
$26,430  
$2,179,273  
$575,424  
$26,394  
-$13,377  
-$13,035  
$36  
-0.6% $2,066,824  
4.8%  
4.1%  
-2.3%  
0.1%  
$540,361  
$23,602  
Other Education  
12.0%  
4.7%  
Total Education  
$2,754,715 $2,781,090  
-$26,376  
-0.9% $2,630,787  
Medicaid  
$4,132,180  
$287,486  
$4,445,210 -$313,030  
-7.0% $4,135,948  
-$33,068 -10.3% $283,927  
-0.1%  
1.3%  
0.0%  
Health and Human Services  
Total Health and Human Services  
$320,554  
$4,419,666 $4,765,763 -$346,097  
-7.3% $4,419,875  
Justice and Public Protection  
General Government  
$617,824  
$98,944  
$625,341  
$101,101  
$726,442  
-$7,517  
-$2,157  
-$9,674  
-1.2%  
-2.1%  
-1.3%  
$574,067  
$95,254  
7.6%  
3.9%  
7.1%  
Total Government Operations  
$716,768  
$669,322  
Property Tax Reimbursements  
Debt Service  
$577,235  
$794,412  
$427,510 $149,726  
$794,869 -$458  
35.0%  
-0.1%  
$413,777  
$773,964  
39.5%  
2.6%  
Total Other Expenditures  
$1,371,647 $1,222,379 $149,268  
12.2% $1,187,741  
15.5%  
Total Program Expenditures  
Transfers Out  
$9,262,795 $9,495,674 -$232,879  
-2.5% $8,907,724  
4.0%  
$741,871  
$741,573  
$297  
0.0%  
$58,368 1171.0%  
11.6%  
Total GRF Uses  
$10,004,666 $10,237,248 -$232,582  
-2.3% $8,966,092  
*
*
August 2018 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2018.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 12  
October 2018  
Ohio Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on October 2, 2018)  
Month of September 2018  
Year to Date through September 2018  
Actual Estimate* Variance Percent  
Department  
Medicaid  
GRF  
Actual  
Estimate* Variance Percent  
$1,195,562 $1,340,782 -$145,221 -10.8% $3,951,819 $4,261,648 -$309,829  
$652,473 $989,796 -$337,324 -34.1% $1,675,114 $2,053,278 -$378,164 -18.4%  
$1,848,034 $2,330,579 -$482,544 -20.7% $5,626,932 $6,314,925 -$687,993 -10.9%  
-7.3%  
Non-GRF  
All Funds  
Developmental Disabilities  
GRF  
$50,385  
155,159  
205,545  
$48,918  
$209,422  
$258,340  
$1,467  
3.0%  
$153,136  
$510,351  
$663,487  
$153,151  
$578,320  
$731,471  
-$15  
-$67,969 -11.8%  
-$67,984 -9.3%  
0.0%  
$
-$54,263 -25.9%  
-$52,795 -20.4%  
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$8,938  
$12,001  
20,939  
$9,673  
$13,458  
$23,131  
-$735  
-$1,456 -10.8%  
-$2,192 -9.5%  
-7.6%  
$24,850  
$45,412  
$70,262  
$27,985  
$35,208  
$63,193  
-$3,134 -11.2%  
Non-GRF  
$10,204  
$7,069  
29.0%  
11.2%  
$
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$845  
$674  
$3,696  
$4,370  
$171  
25.5%  
$2,375  
$7,430  
$9,805  
$2,427  
$11,587  
$14,014  
-$51  
-2.1%  
Non-GRF  
$1,800  
-$1,896 -51.3%  
-$1,724 -39.5%  
-$4,157 -35.9%  
-$4,209 -30.0%  
$
2,645  
All Funds  
All Departments:  
GRF  
$1,255,730 $1,400,047 -$144,317 -10.3% $4,132,180 $4,445,210 -$313,030  
-7.0%  
Non-GRF  
All Funds  
$821,434 $1,216,373 -$394,939 -32.5% $2,238,306 $2,678,392 -$440,086 -16.4%  
2,077,164 $2,616,419 -$539,256 -20.6% $6,370,486 $7,123,602 -$753,116 -10.6%  
$
*September 2018 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
October 2018  
Ohio Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on October 2, 2018)  
Month of September 2018  
Actual Estimate* Variance Percent  
Year to Date through September 2018  
Actual Estimate* Variance Percent  
Payment Category  
Managed Care  
CFC†  
$1,370,505 $1,493,132 -$122,627  
-8.2% $4,088,065 $4,275,488 -$187,422  
-4.4%  
-1.8%  
-5.9%  
-1.0%  
-1.1%  
2.8%  
$490,385  
$355,794  
$236,122  
$77,593  
$210,611  
$0  
$498,238  
$378,540  
$234,991  
$78,444  
-$7,853  
-$22,746  
$1,131  
-$850  
-1.6% $1,469,652 $1,496,796  
-6.0% $1,067,110 $1,134,002  
-$27,144  
-$66,892  
-$7,003  
-$2,690  
$17,241  
Group VIII  
ABD†  
0.5%  
-1.1%  
4.3%  
$695,892  
$232,027  
$623,385  
$0  
$702,894  
$234,717  
$606,144  
ABD Kids  
My Care  
Pay For Performance  
$201,985  
$100,935 -$100,935 -100.0%  
$8,626  
$100,935 -$100,935 -100.0%  
Fee-For-Service  
ODM Services  
DDD Services  
Hospital - HCAP†  
Hospital - Other  
$542,447  
$331,346  
$200,993  
$0  
$944,525 -$402,079 -42.6% $1,765,123 $2,288,577 -$523,454  
-22.9%  
-10.2%  
-9.2%  
$367,878  
$253,102  
$317,645 -$317,645 -100.0%  
-$36,532 -9.9% $1,106,713 $1,232,673 -$125,961  
-$52,109 -20.6%  
$317,645 -$317,645 -100.0%  
$640,791  
$0  
$705,958  
-$65,166  
$10,108  
$5,900  
$4,208  
71.3%  
$17,618  
$32,300  
-$14,682  
-45.5%  
Premium Assistance  
Medicare Buy-In  
Medicare Part D  
$89,094  
$51,230  
$37,864  
$91,962  
$53,291  
$38,671  
-$2,868  
-$2,061  
-$807  
-3.1%  
-3.9%  
-2.1%  
$264,828  
$151,369  
$113,459  
$279,937  
$164,098  
$115,838  
-$15,109  
-$12,730  
-$2,379  
-5.4%  
-7.8%  
-2.1%  
Administration  
Total  
$75,118  
$86,800  
-$11,682 -13.5%  
$252,470  
$279,601  
-$27,131  
-9.7%  
$2,077,164 $2,616,419 -$539,256 -20.6% $6,370,486 $7,123,602 -$753,116  
-10.6%  
*September 2018 estimates from the Department of Medicaid.  
†CFC - Covered Families and Children; ABD - Aged, Blind, and Disabled; HCAP - Hospital Care Assurance Program.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 14  
October 2018  
Ohio Legislative Service Commission  
EWexndpy Zheann, DedputyiDtiruectorr es6  
Ivy Chen, Principal Economist  
Overview  
For the first quarter of FY 2019, GRF program expenditures totaled $9.26 billion. These  
expenditures were $232.9 million (2.5%) below the estimate released by OBM in August 2018.  
GRF transfers out were essentially on target, posting a small positive YTD variance of  
$
$
0.3 million. Including both program expenditures and transfers out, GRF uses totaled  
10.00 billion through the first quarter, which was $232.6 million (2.3%) below estimate.  
Tables 3 and 4 detail GRF uses for the month of September and for FY 2019 through September.  
GRF Medicaid had the largest negative YTD variance at $313.0 million (7.0%), of which  
$
144.3 million occurred in the month of September. The latter was mainly due to timing of the  
pay for performance payments for managed care plans. More details on both the GRF and  
non-GRF variances in Medicaid expenditures are provided in the section that follows this  
overview.  
Health and Human Services had the second largest negative YTD variance at  
33.1 million (10.3%). The Ohio Department of Job and Family Services (ODJFS) accounted for  
21.6 million of this total. YTD expenditures from all but two GRF appropriation items in the  
$
$
ODJFS budget were below their estimates due mainly to the timing of various payments.  
Item 600416, Information Technology Projects, had the largest negative YTD variance at  
$
Family and Children Services ($3.0 million).  
7.6 million, followed by item 600521, Family Assistance Local ($3.5 million) and item 600523,  
Two other major contributing agencies to the Health and Human Services program  
category's negative YTD variance were the Ohio Department of Health (ODH) and the Ohio  
Department of Mental Health and Addiction Services (ODMHAS). Timing was also a major  
contributing factor behind these two agencies' negative YTD variances. Several payments did  
not get disbursed as quickly as anticipated in the estimate. Although posting a positive variance  
of $2.6 million in September, ODH expenditures were $5.6 million below estimate at the end of  
September. YTD expenditures from ODMHAS were $5.1 million below estimate. Item 336421,  
Continuum of Care Services, accounted for $4.1 million of ODMHAS's total negative YTD  
variance.  
Partially offsetting the negative variances in Medicaid, Health and Human Services, and  
several other program categories was Property Tax Reimbursements. The positive YTD variance  
in this program category increased $37.1 million during the month to $149.7 million (35.0%) at  
the end of September. Funds provided under this program category are used to make  
semiannual payments to school districts and other local governments. The first payment, which  
is based on a property tax settlement conducted in August, will be made through the end of  
6
This report compares actual monthly and YTD expenditures from the GRF to OBM's estimates.  
If a program category's actual expenditures were higher than estimate, that program category is  
deemed to have a positive variance. The program category is deemed to have a negative variance when  
its actual expenditures were lower than estimate.  
Budget Footnotes  
P a g e | 15  
October 2018  
Ohio Legislative Service Commission  
December. Funds are disbursed as county auditors request reimbursement. It is common to see  
monthly variances as the payment timelines assumed in the OBM estimate often differ from  
the actual reimbursement request timelines. The program category's YTD variance generally  
decreases by the end of a payment cycle.  
Medicaid  
As indicated earlier, GRF Medicaid expenditures were $144.3 million (10.3%) and  
313.0 million (7.0%), respectively, below their monthly and YTD estimates. While it is mainly  
$
funded by the GRF, Medicaid is also supported by several non-GRF funds. As a joint federal-  
state program, both GRF and non-GRF Medicaid expenditures contain federal and state  
7
dollars. In September, non-GRF Medicaid expenditures were $394.9 million (32.5%) below  
estimate. Through September, non-GRF Medicaid expenditures were $440.1 million (16.4%)  
below estimate. Including both the GRF and non-GRF, all funds Medicaid expenditures were  
$
539.3 million (20.6%) below estimate in September and $753.1 million (10.6%) below estimate  
YTD at the end of September.  
The estimate assumed $100.9 million in pay for performance payments for managed  
care plans and $317.6 million in Health Care Assurance Program (HCAP) payments for hospitals  
in September. Neither payment actually occurred in that month, however. Delay in these two  
payments accounted for 77.6% and 55.6%, respectively, of the September and YTD negative  
variances in all funds Medicaid expenditures. Pay for performance and HCAP payments are  
supported by GRF and non-GRF, respectively, appropriations in the Ohio Department of  
Medicaid (ODM) budget.  
Table 5 shows GRF and non-GRF Medicaid expenditures for ODM, the Ohio Department  
of Developmental Disabilities (ODODD), and six other "sister" agencies that also take part in  
administering Ohio Medicaid. ODM and ODODD account for about 99% of the total Medicaid  
budget. Therefore, they also account for the vast majority of variances in Medicaid  
expenditures. The other six agencies Job and Family Services, Health, Aging, Mental Health  
and Addiction Services, State Board of Pharmacy, and Education account for the remaining  
one percent of the total Medicaid budget. Unlike ODM and ODODD, the six "sister" agencies  
incur only administrative spending.  
8
Table 6 shows all funds Medicaid expenditures by payment category. Overall  
expenditures from all four major payment categories, Managed Care, Fee-For-Service (FFS),  
Premium Assistance, and Administration, were below their YTD estimates. The FFS category had  
the largest overall negative variance of $523.5 million (22.9%). This was mainly due to the delay  
in HCAP payments as indicated earlier. Under HCAP, the state makes subsidy payments to  
7
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.  
8
For FY 2019, several FFS categories, such as nursing facilities and physician services, have been  
grouped into "ODM Services." In previous fiscal years, these expenditures were broken out into their  
own separate categories.  
Budget Footnotes  
P a g e | 16  
October 2018  
Ohio Legislative Service Commission  
hospitals that provide uncompensated care to low-income and uninsured individuals at or  
below 100% of the federal poverty level. FFS caseloads being lower than projected also  
contributed to the negative variance in this category. Beginning January 1, 2018, newly eligible  
individuals were enrolled onto managed care shortly after receiving Medicaid benefits.  
Previously, when ODM was determining the projections, newly eligible individuals could remain  
in the FFS system for several weeks while they decided which managed care plan in which to  
enroll.  
Managed Care had the second largest overall negative variance of $187.4 million (4.4%)  
at the end of September. All managed care categories were below their YTD estimates except  
for MyCare, which had a positive YTD variance of $17.2 million (2.8%). MyCare is a managed  
care program for Ohioans who are eligible for both Medicaid and Medicare. As noted earlier,  
the scheduled $100.9 million payment for managed care pay for performance was delayed.  
Other notable negative YTD variances under Managed Care were in Group VIII (individuals who  
became eligible for Medicaid through the federal Affordable Care Act) and CFC (Covered  
Families and Children) categories. Group VIII was below the YTD estimate by $66.9 million  
(
were mainly due to decreases in caseloads. The majority of Ohioans eligible for Medicaid  
receive their services through managed care.  
5.9%) while CFC was below the YTD estimate by $27.1 million (1.8%). These negative variances  
Finally, the Administration category had a negative YTD variance of $27.1 million (9.7%)  
due mainly to timing, and the Premium Assistance category had a negative YTD variance of  
$
15.1 million (5.4%).  
Budget Footnotes  
P a g e | 17  
October 2018  
Ohio Legislative Service Commission  
Issue Updates  
ODE Releases First Report Cards with Overall A-F Letter Grades  
Daniel P. Redmond, Budget Analyst  
On September 13, 2018, the Ohio Department of Education (ODE) released report cards  
for public districts and schools for the 2017-2018 school year, the first year overall A-F letter  
grades have been issued. The overall grades are derived from performance on six individually  
graded components: Achievement, Progress, Gap Closing, Graduation Rate, Improving at Risk  
K-3 Readers, and Prepared for Success, each of which is comprised of various graded and  
ungraded performance measures. The Achievement and Progress components contribute 20%  
each toward a district's overall grade while the other four components contribute 15% each.  
Most districts are clustered toward the middle of the grading scale. As shown in the chart  
below, 42% (253) of districts received a "C," the most common grade. Another 31% (191) of  
districts received a "B" while 20% (122) received a "D." Five percent (28) of districts received an  
"
A" while 2% (14) received an "F."  
The 2017-2018 school year report cards are also the first to count toward consequences  
related to state test results since the 2013-2014 school year. Due to changes to state tests, the  
General Assembly suspended many consequences for the 2014-2015, 2015-2016, and  
2
016-2017 school years. These "safe harbor" provisions exempted districts and schools from  
school restructuring, designation as a building whose students are eligible for the EdChoice  
scholarship program, designation as a "challenged school district" in which a new start-up  
community school may be located, and automatic community school closure, among others.  
Distribution of School District Overall Report Card Letter Grades,  
2017-2018 School Year  
4
4
3
3
2
2
1
1
5%  
0%  
5%  
0%  
5%  
0%  
5%  
0%  
42%  
31%  
20%  
5%  
5%  
%
2%  
F
0
A
B
C
Letter Grade  
D
Budget Footnotes  
P a g e | 18  
October 2018  
Ohio Legislative Service Commission  
Ohio Receives a "B" in High School Financial Literacy Study  
Allison Schoeppner, LSC Fellow  
Ohio received a "B" grade for its efforts to improve the financial literacy of high school  
graduates in a recent study from the Center for Financial Literacy at Champlain College  
(
Vermont). The college graded states on the importance placed on teaching personal finance  
education to high school students, ranging from an "A" for requiring personal finance  
instruction equal to a one-semester, half-year course as a graduation requirement to an "F" for  
no requirement for personal finance instruction in high school. Ohio was one of 19 states to  
qualify for a "B" because it "mandates personal finance education as part of a required course."  
Ohio high school students must receive instruction in economics and financial literacy in order  
to graduate. However, Ohio law allows school districts to integrate the financial literacy  
education requirement into the required social studies curriculum or another course (e.g.,  
economics, civics, family and consumer sciences, business, life skills, career readiness, or  
mathematics courses) or offer a stand-alone course, with no specific requirement for the length  
of instruction. Overall, five states received an "A" while 27 states received a "C" or below. Ohio  
fared as well as or better than its neighboring states in the study. While Michigan and West  
Virginia also received a "B," Indiana and Kentucky received a "C" and Pennsylvania received an  
"
F." Champlain College based its findings on each state's graduation requirements, academic  
standards, personal finance education delivery models, and data from the National Conference  
of State Legislatures (NCSL). To read Champlain College's full report, visit www.champlain.edu  
and search for "National High School Financial Literacy Report."  
ODE Awards $8 Million in Grants for  
Community Connectors Program  
Jason Glover, Budget Analyst  
On July 1, 2018, the Ohio Department of Education (ODE) awarded $8 million in  
matching grants to 71 community partnerships as part of the fourth round of funding for the  
Community Connectors school mentorship program. Created by H.B. 483 of the 130th General  
Assembly, Community Connectors supports programming in career advising and mentoring for  
students in low-performing, high-poverty schools. Eligible districts must partner with members  
of the business community, civic organizations, or the faith-based community to provide  
sustainable career services to students in grades 5-12. Under this round of funding, the state is  
providing $3 for every $1 in local funding with a maximum award of $150,000. Most of the  
awards ranged from $100,000 to $150,000, including 19 of the 71 partnerships receiving the  
maximum award. Geographically, 16 (23%) of the partnerships are located in Hamilton County,  
1
2 (17%) are located in Cuyahoga County, ten (14%) are located in Franklin County, and three  
(4%) each are located in Lake, Montgomery, and Summit Counties. The full list of recipients is  
available online at communityconnectors.ohio.gov. H.B. 49 provides $4 million for the program  
in both FY 2018 and FY 2019 using lottery profits appropriated in Fund 7017 appropriation item  
2
appropriations for FY 2018 and FY 2019.  
00629, Community Connectors. This round of funding is supported by the combined  
Budget Footnotes  
P a g e | 19  
October 2018  
Ohio Legislative Service Commission  
Ohio's National Archery in the Schools Program  
Continues to Grow  
Tom Wert, Budget Analyst  
In FY 2019, four additional schools will participate in Ohio's National Archery in the  
Schools Program (NASP), bringing the statewide total of participating schools to nearly 680  
since the program's inception in FY 2005. NASP is a school curriculum taught during physical  
education classes and designed to teach archery skills including archery safety, equipment,  
technique, mental concentration, and self-improvement to students in grades 1-12.  
Participating schools are eligible for grant funding of up to $2,500 from the Ohio Department of  
Natural Resources (DNR) Division of Wildlife. Schools may use the grants to purchase necessary  
start-up equipment such as bows, arrows, and targets. For FY 2019, individual NASP grants  
average $2,375 each. From FY 2013 to FY 2018, the average award was $2,500 for the  
1
5
75 recipients. Prior to FY 2012, the average NASP award was approximately $1,000 for the  
00 recipients. In total, nearly $950,000 has been provided to schools under the program.  
Funding for NASP grants is supported by wildlife restoration grants from the U.S. Fish  
and Wildlife Service (USFWS) under the Aid in Wildlife Restoration Act of 1937 (commonly  
referred to as the Pittman-Robertson Act). Wildlife restoration grant awards are determined by  
a formula that provides 50% of the funding based on the land area of the state, and 50% by the  
number of paid hunting licenses issued. For shooting and hunter education activities, including  
NASP, wildlife restoration grants provide up to 75% of the funding, with the remaining 25%  
provided through state matching dollars.  
Medicaid Releases 2018 Group VIII Assessment  
Alexander B. Moon, Economist  
On August 21, 2018, the Ohio Department of Medicaid (ODM) released its second  
9
assessment of the "Group VIII" population. This group of individuals became eligible for Ohio  
Medicaid in January 2014 through the federal Affordable Care Act (ACA), which extends  
Medicaid coverage to previously uninsured adults aged 19 to 64 with incomes up to 138% of  
the federal poverty level. The assessment found that Group VIII enrollees benefited from the  
expansion through improved physical and mental health and financial stability. The assessment  
also found that the expansion resulted in an increase in primary care utilization and a  
subsequent decrease in emergency room usage, thereby shifting costs to preventative and  
more cost-effective care. Since implementation in 2014, 17.5% of Ohioans aged 19 to 64 have  
received Medicaid coverage through the expansion. While coverage is widespread, enrollment  
9
The full assessment report is available on ODM's website at the following link:  
http://www.medicaid.ohio.gov/Portals/0/Resources/Reports/Annual/Group-VIII-Final-Report.pdf.  
Budget Footnotes  
P a g e | 20  
October 2018  
Ohio Legislative Service Commission  
in the program tends to be higher in rural Appalachian and metropolitan counties. Coverage  
also tends to be transitional for most enrollees. For instance, as of November 2017, only about  
one-third of Group VIII enrollees maintained continuous coverage since their initial enrollment.  
The most common reasons cited for disenrollment were increased household income, as well  
as obtaining non-Medicaid coverage.  
This assessment was completed as a follow-up to the 2016 Ohio Medicaid Group VIII  
Assessment. While the 2016 assessment was completed in response to a requirement in  
H.B. 64, the biennium budget act of the 131st General Assembly, this most recent assessment  
was commissioned by ODM. During FY 2018, Group VIII caseloads averaged 692,000 per month,  
of which 633,000 were served under managed care. In the same year, ODM spent a total of  
$
4.90 billion for this population, of which $4.07 billion was on managed care plans. The federal  
government reimbursed 95% of costs for Group VIII coverage during calendar year 2017 and  
4% of costs for calendar year 2018. For calendar year 2019, the federal share will drop to 93%,  
and then 90% from 2020 onward.  
9
Controlling Board Approves Spending Increase for  
the Federally Funded WIOA Program  
Nicholas J. Blaine, Budget Analyst  
On August 20, 2018, the Ohio Department of Job and Family Services (ODJFS) received  
Controlling Board approval to spend an additional $34.5 million in federal Workforce Innovation  
and Opportunity Act (WIOA) Program funds in FY 2019. The revenue to support this increase  
comes from an additional $25.0 million in WIOA state formula grant funds, as well as  
$
9.5 million in federal National Dislocated Worker Grant (NDWG) funds. WIOA funds are  
primarily distributed as formula grants to states to help job seekers access employment,  
education, training, and support services and to match employers with workers. WIOA funds  
are also used to support NDWG grants to help dislocated workers and communities recover  
from mass layoffs and natural disasters. In this case, the $9.5 million in additional NDWG funds  
will be used to assist those impacted by flooding in Appalachian counties along the Ohio River.  
WIOA state formula funds are provided through three funding streams for adults, youth,  
and dislocated workers. The table below shows Ohio's WIOA formula grant allocation provided  
by the U.S. Department of Labor for the last three fiscal years for each category. The  
$
109.8 million figure for FY 2019 includes the $25.0 million increase in WIOA formula grants.  
Budget Footnotes  
P a g e | 21  
October 2018  
Ohio Legislative Service Commission  
Ohio's WIOA State Formula Grant Allocation  
Category  
Adult  
FY 2017  
FY 2018  
FY 2019  
$26,068,489  
$28,162,375  
$30,539,787  
$84,770,651  
$27,953,259  
$30,130,209  
$29,804,480  
$87,887,948  
$33,780,803  
$36,354,942  
$39,677,597  
$109,813,342  
Youth  
Dislocated Worker  
Total  
Source: U.S. Department of Labor  
WIOA is administered at the state level by ODJFS and locally by 20 regional workforce  
investment boards. Service delivery is provided by 88 local OhioMeansJobs (One-Stop) centers,  
with one center in each county. ODJFS is required to distribute 85% of the state's total annual  
WIOA grants to Ohio's workforce investment boards for service delivery. Boards have two years  
to expend WIOA grants. The remaining WIOA dollars are used by ODJFS to help areas in the  
state that experience mass layoffs (10%) and for administration and other statewide workforce  
programs (5%). ODJFS may expend WIOA funds over three years for these purposes.  
HUD Awards $2.1 Million to Provide Affordable Housing to  
People with Disabilities in Ohio  
Shannon Pleiman, Budget Analyst  
On September 4, 2018, the U.S. Department of Housing and Urban Development (HUD)  
awarded approximately $2.1 million to 12 public housing agencies in Ohio to provide affordable  
housing to 424 people with disabilities. The funding is provided through HUD's Section 811  
Mainstream Housing Choice Voucher Program. This program provides funding to housing  
agencies to assist nonelderly persons (18-62 years of age) with disabilities who are  
(
1) transitioning out of institutional or other separated settings, (2) at serious risk of  
institutionalization, (3) homeless, or (4) at risk of becoming homeless. Funds are used to  
subsidize rental housing opportunities which provide access to appropriate supportive services  
to eligible individuals. The table below shows the total amount of the award and the number of  
vouchers awarded to each public housing agency.  
Budget Footnotes  
P a g e | 22  
October 2018  
Ohio Legislative Service Commission  
Section 811 Mainstream Housing Choice Voucher Program Awards in Ohio  
Total  
Award  
Number of  
Vouchers  
Award per  
Voucher  
Recipient  
Columbus Metropolitan Housing Agency  
Greater Dayton Premier Management  
Portage Metropolitan Housing Agency  
Erie Metropolitan Housing Agency  
Licking Metropolitan Housing Agency  
Lucas Metropolitan Housing Agency  
Mansfield Metropolitan Housing Agency  
Warren Metropolitan Housing Agency  
Fayette Metropolitan Housing Agency  
City of Marietta  
$397,611  
$286,476  
$222,081  
$195,620  
$178,320  
$165,819  
$156,337  
$110,713  
$108,397  
$86,629  
79  
50  
45  
35  
35  
41  
35  
19  
28  
19  
19  
19  
424  
$5,033  
$5,730  
$4,935  
$5,589  
$5,095  
$4,044  
$4,467  
$5,827  
$3,871  
$4,559  
$3,823  
$3,686  
$4,837  
Marion Metropolitan Housing Agency  
Jackson County Metropolitan Housing Agency  
$72,639  
$70,040  
Overall $2,050,682  
The Section 811 Mainstream Housing Choice Voucher Program encourages partnerships  
with local health and human service agencies to coordinate services that help nonelderly  
people with disabilities live independently in the community. HUD bases the amount it awards  
to public housing agencies on their (1) capacity and experience in providing housing for persons  
with disabilities and partnering with health and human services agencies, (2) ability to  
collaborate with other local groups to provide certain outreach services and program  
implementation, and (3) commitment to tracking achievement through a program evaluation  
plan. Overall, HUD awarded $98.5 million to 285 local public housing authorities across the  
country to provide affordable housing to nearly 12,000 nonelderly persons with disabilities.  
Budget Footnotes  
P a g e | 23  
October 2018  
Ohio Legislative Service Commission  
Development Services Agency Awards $7.8 Million in Grants  
Under the Manufacturing Extension Partnership Program  
Tom Middleton, Senior Budget Analyst  
On September 10, 2018, the Controlling Board approved six grants totaling  
approximately $7.8 million in GRF funding to be distributed by the Development Services  
Agency (DSA) under the Ohio Manufacturing Extension Partnership (MEP) Program. These  
grants constitute the state's share of funding under this federal public-private partnership  
overseen by the National Institute of Standards and Technology (NIST). The goal of the program  
is to leverage federal, state, and private dollars to support the manufacturing industry. Under  
the program, funding is awarded to regional MEP service partners to provide technical and  
business assistance in support of small- and medium-sized manufacturers. The six Ohio award  
recipients are shown in the table below, along with the FY 2019 funding allocations.  
Ohio MEP Grant Awards, FY 2019  
Regional Partner  
Region(s)  
Northeast  
State Funding  
$2,750,000  
$1,500,000  
$1,300,000  
Total Funding  
$5,423,888  
$3,305,546  
$2,509,576  
Manufacturing Advocacy and Growth  
Network (MAGNET)  
Techsolve  
Southwest  
West  
University of Dayton Research Institute  
(FASTLANE)  
Ohio State University Center for Design Central and  
$
1,011,481  
$2,611,148  
$2,029,546  
and Manufacturing Excellence (CDME)  
Southeast  
Northwest  
Central  
Center for Innovative Food Technology  
$740,000  
$450,000  
(CIFT)  
PolymerOhio  
$1,049,697  
Total  
$7,751,481  
$16,929,401  
The state funding is provided under GRF line item 195453, Technology Programs and  
Grants. Federal funding for the MEP Program is not subject to Controlling Board approval, and  
flows through Fund 3080 appropriation item 195672, Manufacturing Extension Partnership. In  
addition, each entity is required to provide local matching funds.  
Budget Footnotes  
P a g e | 24  
October 2018  
Ohio Legislative Service Commission  
Attorney General Awards $3.7 Million in Drug Use Prevention  
Grants to Local Law Enforcement Agencies  
Jessica Murphy, Budget Analyst  
In August 2018, the Ohio Attorney General awarded $3.7 million in drug use prevention  
grants to 157 local law enforcement agencies. Awards will pay for up to 50% of the base salary  
of Drug Abuse Resistance Education (DARE) officers, school resource officers, and others who  
conduct drug abuse prevention education and awareness programs in various local jurisdictions  
across the state. Recipients include 45 county sheriff's offices, 95 city and village police  
departments, 16 township police departments, and one police district. The awards range from  
$
addition to the City of Westlake, four other law enforcement agencies will receive over  
583 (Sugarcreek Township) to $170,870 (City of Westlake) with an average of $23,295. In  
$
enforcement agencies represent nearly 20% of the total award amount.  
100,000 Stark, Shelby, Franklin, and Butler County Sheriff's offices. T10ogether, these five law  
The Attorney General awards drug use prevention grant funds for a one-year period and  
distributes them to recipients in two separate payments, one in September at the beginning of  
the grant cycle and the second in March of the following year. Recipients are required to submit  
mid-year and final reports detailing program activity, and for the 2018-2019 grant cycle, are  
required to provide over-the-counter and prescription drug abuse prevention education. The  
money to support these grants comes from the Drug Abuse Resistance Education Fund  
(
motor vehicle while intoxicated to have their license reinstated. This $75 has generated, on  
average over the last six fiscal years, $2.96 million per year for crediting to Fund 4L60.  
Fund 4L60), which receives $75 of the $475 fee that is paid by a driver convicted of operating a  
DRC Contracts for Replacement Software Application to  
Supervise Offenders in Local Communities  
Joseph Rogers, Senior Budget Analyst  
On September 24, 2018, the Controlling Board approved a Department of Rehabilitation  
and Correction (DRC) request to enter into a $1.5 million contract with COBRA Systems, Inc., to  
replace the software application used to supervise offenders residing in local communities  
around Ohio. The work will be performed by Mansfield, Ohio-based StepMobile, an affiliate of  
COBRA Systems, for the benefit of DRC's Adult Parole Authority (APA). The APA employs over  
4
80 parole officers to supervise over 37,000 offenders under some type of release (primarily  
post release, community or transitional control, probation, parole, judicial release, or treatment  
in lieu), which includes probation services to 41 of Ohio's 88 counties. The APA currently uses  
an outdated legacy system to document, track, and manage these offenders that cannot easily  
be upgraded to connect or share information with other data systems.  
10  
For a complete list of grant recipients, visit www.ohioattorneygeneral.gov.  
Budget Footnotes  
P a g e | 25  
October 2018  
Ohio Legislative Service Commission  
The contract requires COBRA Systems to undertake the tasks necessary to integrate the  
APA's offender data and related information into what is known as the Ohio Community  
Supervision System (OCSS). In addition, COBRA Systems will install and activate 83 kiosks to be  
located in APA offices and used by offenders to report in. The OCSS is an online offender case  
management software application currently being used by the adult probation departments of  
1
6 common pleas and municipal courts to manage a total of 24,787 offenders. COBRA Systems  
is the sole owner of the source code and intellectual property. The OCSS was the result of a DRC  
Probation Improvement and Incentive technology grant awarded to a multicounty collaborative  
led by the Adult Probation Department of the Franklin County Court of Common Pleas.  
Budget Footnotes  
P a g e | 26  
October 2018  
Ohio Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
Overview  
The U.S. economy continues its expansion. Real gross domestic product (GDP), or GDP  
adjusted for inflation, unrevised from its previous release, grew at a 4.2% annualized rate in the  
second quarter. Nonfarm employers added 134,000 jobs at the national level, and the  
unemployment rate dropped to 3.7% in September, the lowest monthly rate since 1969. The  
largest monthly increase in employment occurred in professional and business services  
occupations, which added 54,000 jobs.  
Production of goods and services, as well as employment, continues to rise, although  
national housing data suggest the market is becoming increasingly tepid. Growth in personal  
consumption expenditures slowed slightly in August. However, the labor market remains  
upbeat and demand for workers in many occupations maintains its strength. The Federal Open  
Market Committee (FOMC) noted that economic activity and job gains had been sufficiently  
strong since their last meeting and are expected to continue their rise, and raised the federal  
funds rate by 0.25 percentage points effective on September 27. The FOMC indicated another  
rise in the rate was likely before the end of the calendar year.  
The Ohio economy added 13,900 nonfarm workers in August, while the unemployment  
rate remained constant at a seasonally adjusted rate of 4.6%. In the private sector, educational  
and health services (+7,800) and leisure and hospitality (+3,500) were the industries which saw  
the most substantial job gains during the month. State government employment rose by 7,100  
employees between August 2017 and August 2018. Ohio existing real estate sales numbers  
year to date were about equal to 2017, while the average price of existing homes rose 5.7%  
over that time. Demand in the housing market remains strong in Ohio despite rising interest  
rates nationally.  
The National Economy  
Nonfarm payroll employment increased by 134,000 in the United States, and the  
unemployment rate fell 0.2 percentage points in August to 3.7%. The number of unemployed  
persons, who include those that were available for work, wanted a full-time job, and had  
looked for work during the past four weeks, decreased by 270,000. The labor force participation  
rate was flat at 62.7% for the population as a whole, but increased markedly (+1.3%) for youths  
aged 16 to 19.  
Nonfarm payroll employment and the unemployment rate are shown in Chart 5.  
Employment in professional and business services saw a 54,000 increase in September.  
Construction (+23,000) and manufacturing (+18,000) employment increased in September;  
manufacturing has added 278,000 workers thus far in 2018, with about four-fifths of the  
increase accruing to durable goods production. Employment in transportation and warehousing  
Budget Footnotes  
P a g e | 27  
October 2018  
Ohio Legislative Service Commission  
was up 1214,000 last month, while employment in other major categories showed little to no  
change.  
Chart 5: U.S. Employment and Unemployment  
1
1
1
1
1
1
1
1
1
52  
49  
46  
43  
40  
37  
34  
31  
28  
11.0%  
10.0%  
9.0%  
8.0%  
7.0%  
6.0%  
5.0%  
4.0%  
3.0%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  
Nonfarm Payroll Employment Unemployment Rate (right scale)  
Gross domestic product rose at an annualized 7.6% rate, $370.9 billion in current dollars  
in the second quarter of 2018. Real GDP, adjusted for inflation, increased at an annualized,  
seasonally adjusted rate of 4.2% in the second quarter, mostly reflecting upticks in  
consumption expenditures, nonresidential fixed investment, and government spending. Net  
exports (exports minus imports) were higher, also contributing to GDP growth. Private  
inventory investment and residential fixed investment contributed negatively to the growth  
rate. The personal consumption expenditure price index increased at a 2.0% annual rate,  
compared with a 2.5% rise in the first quarter.  
Industrial production, as measured by the Federal Reserve Board's Industrial Production  
Index (IPI), increased 0.4% in the month of August. The IPI, designed to highlight structural  
development in industry, has increased 4.9% year over year. Among the major industry groups,  
manufacturing production has risen 3.1% from August 2017, while mining is up 14.1%, and  
utility production has increased 4.8% during the same time period.  
Overall production in the manufacturing sector expanded again in September, although  
at a slower rate than in August, according to the Institute for Supply Management (ISM). The  
growth rate of new orders fell in September, although there were noticeable increases in both  
the Production Index and Employment index. Inventories grew at a slower rate, and  
11  
Press releases from the Bureau of Labor Statistics note that Hurricane Florence may have  
affected survey results in the establishment survey, but it is unlikely it affected results in the household  
survey. Establishment survey data is used to estimate nonfarm payroll employment by industry,  
whereas household survey data is used to measure unemployment and labor force participation  
statistics. It is not possible to quantify the net effect on employment.  
Budget Footnotes  
P a g e | 28  
October 2018  
Ohio Legislative Service Commission  
manufacturing firms surveyed by ISM noted an increase in labor rates, as well as pressure on  
profit margins, as tariffs on both imports to and exports from China affect their bottom lines.  
1
2
The manager of ISM's supply chain study suggested "there are signs the manufacturing sector  
could be peaking."  
The consumer price index (CPI) increased at a seasonally adjusted rate of 0.2% in  
August, in large part due to rising prices for gasoline and other fuels, as well as increased costs  
for shelter. The cost of food consumed at home remained unchanged. Across all items, prices  
have risen 2.7% from August 2017 to August of this year, mostly driven by a 10.2% increase in  
the energy price index. The gasoline price index has risen 20.3% over those 12 months,  
1
3
although the cost of energy has fallen 0.4%.  
Nationally, seasonally adjusted existing home sales numbers did not rise or fall in the  
1
4
month of August, and are down 1.5% versus this month last year. The average price of  
existing homes sold in August was lower than July, but was up 4.6% compared to August 2017.  
Existing home inventories are 2.7% higher than at this time last year. According to the Federal  
Housing Finance Agency, the average price of all home purchases is up 6.4% year to year.  
The Ohio Economy  
Total nonfarm payroll employment in the state of Ohio was 5.63 million in August 2018,  
with employers adding approximately 13,900 during the month. Unemployment rose by 3,000  
workers in August, and the unemployment rate was steady at a seasonally adjusted rate of 4.6%,  
decreased from 5.0% in August 2017. Ohio's labor force lost approximately 12,800 members in  
the month of August, and it contained about 3,900 fewer persons than it did a year ago. Chart 6  
below documents both the unemployment rate and total nonfarm employment in Ohio over the  
last ten years. The labor market continues its steady performance observed recently.  
Chart 6: Ohio Employment and Unemployment  
5
5
5
5
5
5
5
5
5
4
.8  
.7  
.6  
.5  
.4  
.3  
.2  
.1  
.0  
.9  
12.0%  
1
1
9
8
7
6
5
1.0%  
0.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
4.0%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  
Nonfarm Payroll Employment Unemployment Rate (right scale)  
1
1
1
2
Nunn, Sharon, "Factory Activity Slowed Last Month," The Wall Street Journal, 10/2/2018, pg. A2.  
This category includes electricity and utility (piped) gas service.  
3
4
Data are from the National Association of Realtors.  
Budget Footnotes  
P a g e | 29  
October 2018  
Ohio Legislative Service Commission  
Private service-producing companies added a net of 10,800 jobs in August, led by strong  
gains in 5educational and health services (+7,800); leisure and hospitality (+3,500); other  
1
services (+2,400); trade, transportation, and utilities (+1,200); and information services  
(
5
+200). Between August 2017 and August 2018, the manufacturing industry has added  
,600 jobs in durable goods and 2,700 in nondurable goods. Leisure and hospitality (+18,900);  
educational and health services (+15,800); trade, transportation, and utilities (+15,300); and  
financial activities (+6,100) industries all expanded their employment year over year.  
Government employment added 4,500 jobs during August, with local governments (+3,900)  
seeing the bulk of the gains. Total government employment has increased 7,900 from  
August 2017; the state of Ohio was responsible for 7,100 of these jobs, whereas local (+600)  
and federal governments (+200) also saw gains over the year. Gains in state employment were  
primarily a result of hiring within educational services, with other categories increasing payrolls  
modestly.  
Existing home sales rose 0.3% year over year in August, while the price paid for existing  
homes was up approximately $10,000, or 5.7% during that time according to the Ohio  
Association of Realtors. Over the first eight months of 2018, the count of sales was almost  
unchanged from 2017, while prices rose 5.7%. Such movement of the aggregate price and  
quantity indicates both an increased demand for existing homes and a decreased supply for  
these homes.  
Personal consumption expenditure (PCE) increased in current dollars (i.e., with no  
adjustment for inflation) to $459.4 billion in 2017 in the state of Ohio, up 3.6% from  
$
443.3 billion in 2016. In comparison, PCE for Americans increased by 4.3% during 2017. By  
category, Ohio expenditure increases were widespread, with spending up in both goods and  
services. The largest percent increases were in the categories of gasoline and other energy  
goods (10.4%), financial services and insurance (7.7%), and furnishings and durable household  
equipment (6.1%). Per-capita expenditure increased in all categories except clothing and  
footwear, where spending decreased 0.2% per person.  
Business activity in the re6gion grew moderately over the past two months, according to  
1
a Federal Reserve Board report. Both the number of jobs and wage compensation rose, while  
firms boosted training efforts to combat a shortage of workers. Surveyed firms noted a strong  
rise in nonlabor costs during the survey period. Final prices for construction projects rose as  
rising input prices were passed along to consumers. Manufacturers reported strong conditions,  
attributing them to a strong overall economy and pro-growth fiscal policy. Overall demand was  
strong in many sectors, putting upward pressure on manufacturing capacity utilization and  
freight volumes.  
15  
This category contains repair and maintenance, personal services, religious or civic  
organizations, and private households.  
16  
The report is part of the latest Federal Reserve System Beige Book that summarizes  
information from outside contacts collected on or before September 12, 2018. The Federal Reserve  
Bank of Cleveland's district includes all of Ohio and parts of Kentucky, Pennsylvania, and West Virginia.  
Budget Footnotes  
P a g e | 30  
October 2018