A monthly newsletter by LSC economists and budget analysts  
Volume: Fiscal Year 2019  
Issue: November 2018  
Highlights  
Ross Miller, Chief Economist  
GRF tax revenues were $68.8 million above estimate in October, due mostly to  
the foreign insurance tax ($29.0 million), the commercial activity tax (CAT,  
26.2 million), and the personal income tax (PIT, $16.7 million). Revenues from  
$
other taxes were fairly close to estimates. Through the first four months of  
FY 2019, GRF tax revenues were above estimate by $100.7 million. GRF program  
expenditures were $63.6 million below estimate in October.  
Ohio's unemployment rate held steady at 4.6% in September, the same as in  
August, while payroll employment increased by 4,300 for the month. Total Ohio  
payroll employment reached 5.64 million, a record high surpassing the previous  
high set in May of 2000. However, one should note that the state's population has  
grown since 2000 and that private sector employment is still slightly below its  
March 2000 peak.  
Through October 2018, GRF sources totaled $11.23 billion:  
Revenue from the sales and use tax was $63.1 million above estimate;  
PIT receipts were $3.2 million above estimate.  
Through October 2018, GRF uses totaled $13.08 billion:  
Program expenditures were $296.5 million below estimates, including  
expenditures for Medicaid, which were below estimate by $262.6 million;  
Expenditures for all other program categories were below estimates  
except for Property Tax Reimbursements, which was above estimate by  
$
40.4 million primarily due to timing.  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 16),  
the National Economy (p. 26), and the Ohio Economy (p. 28).  
Also Issue Updates on:  
Diesel Mitigation Trust Fund Grants (p. 19)  
Uber Settlement (p. 20)  
Federal and State Funding for Ohio Airports (p. 20)  
2
017 Ohio Drug Overdose Report (p. 21)  
State Opioid Response Grant (p. 22)  
to Get Ready for College Campaign (p. 22)  
3
College Affordability Committee Recommendations (p. 23)  
School District Performance Audit Summary Report (p. 24)  
Conservation Project Grants (p. 24)  
Available online at: www.lsc.ohio.gov/Budget Central  
Ohio Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of October 2018  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on November 1, 2018)  
State Sources  
Actual  
Estimate*  
Variance Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$132,492  
$720,347  
$852,839  
$124,900  
$725,100  
$850,000  
$7,592  
-$4,753  
$2,839  
6.1%  
-0.7%  
0.3%  
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  
$713,378  
$81,373  
$85,452  
$33,789  
$169,222  
$1  
-$12,706  
$3,347  
$524  
$2,840  
$3,913  
$0  
$19  
$0  
$696,700  
$55,200  
$85,300  
$32,100  
$140,200  
$0  
-$7,000  
$2,800  
$500  
$5,400  
$4,000  
$0  
$0  
$0  
$16,678  
$26,173  
$152  
$1,689  
$29,022  
$1  
-$5,706  
$547  
$24  
-$2,560  
-$87  
$0  
$19  
$0  
2.4%  
47.4%  
0.2%  
5.3%  
20.7%  
---  
-81.5%  
19.5%  
4.9%  
-47.4%  
-2.2%  
---  
---  
---  
---  
-$5  
$0  
-$5  
Total Tax Revenue  
$1,933,985 $1,865,200  
$68,785  
3.7%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$25,272  
$1,109  
$37,681  
$19,634  
$899  
$1,765  
$5,638  
$210  
$35,916 2034.4%  
28.7%  
23.4%  
Total Nontax Revenue  
$64,063  
$22,298  
$41,764  
187.3%  
Transfers In  
$114  
$0  
$114  
---  
Total State Sources  
Federal Grants  
$1,998,161 $1,887,498 $110,663  
$911,285 $873,805 $37,480  
$2,909,446 $2,761,303 $148,143  
5.9%  
4.3%  
5.4%  
Total GRF Sources  
*Estimates of the Office of Budget and Management as of August 2018.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 2  
November 2018  
Ohio Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2019 as of October 31, 2018  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on November 1, 2018)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance Percent  
FY 2018** Percent  
$519,867  
$2,962,337 $2,916,700  
$3,482,204 $3,419,100  
$502,400  
$17,467  
$45,637  
$63,104  
3.5%  
1.6% $2,884,715  
1.8% $3,375,933  
$491,217  
5.8%  
2.7%  
3.1%  
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  
$2,926,007 $2,922,800  
$3,207  
$6,078  
$3,161  
$485  
$28,879  
$1  
0.1% $2,707,782  
8.1%  
2.8%  
0.4%  
8.7%  
17.5%  
$428,378  
$268,461  
$129,385  
$177,579  
$1  
$422,300  
$265,300  
$128,900  
$148,700  
$0  
1.4%  
1.2%  
0.4%  
19.4%  
---  
$416,811  
$267,492  
$119,025  
$151,120  
$63 -98.6%  
-$18,867  
$35,758  
$15,363  
$18,873  
$16,813  
$2,019  
$181  
-$8,400  
$31,900  
$12,800  
$20,300  
$16,500  
$1,300  
$0  
-$10,467 -124.6%  
-$10,334 -82.6%  
$3,858  
$2,563  
-$1,427  
$313  
$719  
$181  
$0  
12.1%  
20.0%  
-7.0%  
1.9%  
55.3%  
---  
$30,342  
$11,890  
$19,559  
$16,208  
$1,570  
$2,840 -93.6%  
-$374 100.0%  
$84 -61.9%  
17.9%  
29.2%  
-3.5%  
3.7%  
28.6%  
$0  
$0  
---  
---  
$32  
$0  
$32  
Total Tax Revenue  
$7,482,187 $7,381,500 $100,687  
1.4% $7,110,010  
5.2%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$25,360  
$9,365  
$53,716  
$88,441  
$19,634  
$8,680  
$58,128  
$86,442  
$5,726  
$685  
-$4,412  
$1,999  
29.2%  
7.9%  
-7.6%  
2.3%  
$15,747  
$8,155  
$27,874  
$51,775  
61.1%  
14.8%  
92.7%  
70.8%  
Total Nontax Revenue  
Transfers In  
$76,109  
$80,190  
-$4,081  
$98,604  
-5.1%  
$111,347 -31.6%  
Total State Sources  
Federal Grants  
$7,646,736 $7,548,132  
1.3% $7,273,133  
-5.0% $3,560,454  
-0.8% $10,833,586  
5.1%  
0.6%  
3.7%  
$3,582,964 $3,770,361 -$187,398  
$11,229,700 $11,318,493 -$88,793  
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  
November 2018  
Ohio Legislative Service Commission  
1
Revenues  
Jean J. Botomogno, Principal Economist  
Overview  
Four months into FY 2019, GRF sources totaling $11.23 billion were $88.8 million (0.8%)  
below the Office of Budget and Management (OBM) estimate, an improvement from a negative  
variance of $236.9 million at the end of the first fiscal quarter. Federal grants and transfers in  
were short of estimates by $187.4 million (5.0%) and $4.1 million (5.1%), respectively. Those  
negative variances were partially offset by positive variances of $100.7 million (1.4%) for GRF tax  
revenues and $2.0 million (2.3%) for nontax revenue. The year-to-date (YTD) negative variance  
for federal grants results from GRF Medicaid spending being substantially below expectations so  
far this year due partly to timing. Tables 1 and 2 show GRF sources for the month of October and  
for FY 2019 through October, respectively. GRF sources consist of state2-source receipts, which  
include tax revenue, nontax revenue, and transfers in, and federal grants.  
The most important tax sources were ahead of estimates YTD: the sales and use tax posted  
a positive variance of $63.1 million; the CAT was $6.1 million above estimate; and the cigarette tax  
and the PIT were each $3.2 million above their respective anticipated levels. In addition, the  
3
foreign insurance tax was $28.9 million above estimate and combined receipts from three  
utility-related taxes (the kilowatt-hour excise tax, the public utility tax, and the natural gas  
consumption tax) were $6.9 million above projections. On the other hand, the financial institutions  
4
tax (FIT) and the alcoholic beverage tax were short of expectations by $10.5 million and  
$1.4 million, respectively. Most of the other taxes had smaller variances at the end of October.  
For the month of October 2018, GRF sources of $2.91 billion were $148.1 million above  
estimates, with all GRF categories surpassing projections. The overall performance of tax  
sources was excellent. A surplus of $68.8 million included positive variances of $29.0 million for  
the foreign insurance tax, $26.2 million for the CAT, $16.7 million for the PIT, $2.8 million for  
the sales and use tax, and $1.7 million for the kilowatt-hour excise tax. However, those positive  
variances were partially offset by shortfalls of $5.7 million for the FIT and $2.6 million for the  
alcoholic beverage tax. Nontax revenue reversed a timing-related deficit that occurred in  
September and was above estimate by $41.8 million. Also, for the first time this fiscal year,  
federal grants recorded a monthly positive variance, which was $37.5 million in October.  
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
As might be expected from the above comment, federal grants are primarily federal  
reimbursements for Medicaid.  
3
YTD, this source is 19.4% above estimate and 17.5% above revenue in FY 2018 through  
October. This result is likely due to fewer credit claims than estimated against the tax so far.  
4 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  
November 2018  
Ohio Legislative Service Commission  
Chart 1, below, shows cumulative variances of GRF sources through October 2018.  
Chart 1: Cumulative Variances of GRF Sources in FY 2019  
(
Variances from Estimates, $ in millions)  
$
$
150  
100  
$
50  
$0  
-
$50  
-
-
-
-
-
$100  
$150  
$200  
$250  
$300  
Jul-18  
Aug-18  
Tax Revenue  
Sep-18  
Oct-18  
Federal Grants  
Total GRF Sources  
Compared to GRF sources in the first four months of FY 2018, FY 2019 GRF sources  
increased $396.1 million. GRF tax sources, federal grants, and nontax revenue increased  
372.2 million, $22.5 million, and $36.7 million, respectively. On the other hand, transfers in fell  
$
by $35.2 million. Revenue was higher for most tax sources. Receipts from the PIT and the sales  
and use tax increased $218.2 million and $106.3 million, while revenue from the CAT and the  
cigarette tax grew $11.6 million and $1.0 million. However, combined revenue from taxes on  
financial institutions (the FIT and the corporate franchise tax) fell $11.2 million relative to the  
corresponding period in FY 2018.  
Sales and Use Tax  
The sales and use tax has been healthy so far this fiscal year. Through October, YTD GRF  
receipts from the sales and use tax of $3.48 billion were $63.1 million (1.8%) above estimate,  
with both the nonauto and the auto portions of the tax above projections. Total sales tax  
revenue was also $106.3 million (3.1%) above receipts in FY 2018 through October. For the  
latest month, GRF receipts were $852.8 million, $2.8 million (0.3%) above estimate, with a  
shortfall from the nonauto sales tax partially offsetting a positive variance from the auto sales  
tax. Compared to the same month last year, October receipts from this tax increased  
$
30.0 million (3.6%).  
For analysis and forecasting, revenue from 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.  
Budget Footnotes  
P a g e | 5  
November 2018  
Ohio Legislative Service Commission  
Nonauto Sales and Use Tax  
Although this GRF source performed well during the summer months, for the first time  
in FY 2019, monthly receipts from the nonauto sales and use tax fell below estimates. In  
October, GRF revenue from the nonauto sales and use tax totaling $720.3 million was  
$
4.8 million (0.7%) below projections. This performance reduced the cumulative positive  
variance of this source to $45.6 million (1.6%), down from a first-quarter positive variance of  
50.4 million. Compared to revenue in the same month in 2017, October nonauto sales and use  
$
tax revenue increased $19.5 million (2.8%). For the fiscal year, GRF receipts of $2.96 billion  
through October were $77.6 million (2.7%) above revenue in the corresponding period in  
FY 2018. As payrolls and income have steadily risen in calendar year (CY) 2018, the nonauto  
sales and use tax ha5s also improved. Chart 2, below, shows year-over-year growth in nonauto  
sales tax collections.  
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 Oct-18  
5
Beginning July 1, 2017, the sales tax on Medicaid health insuring corporations (MHICs) was  
eliminated. Thus, the last payment of $71.7 million 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  
November 2018  
Ohio Legislative Service Commission  
Auto Sales and Use Tax  
After a shortfall of $4.7 million in September, the auto sales and use tax bounced back in  
October with a positive variance of $7.6 million (6.1%). GRF revenue of $132.5 million from this  
source was also $10.5 million (8.6%) above revenue in October 2017. This performance  
increased this source's cumulative positive variance to $17.5 million (3.5%), up from  
$
$
9.9 million through September. Through October, FY 2019 auto sales tax receipts of  
519.9 million were $28.6 million (5.8%) above receipts in the corresponding period in FY 2018.  
Though auto sales tax revenue during recent months is still growing compared with the prior  
year, the rate of growth has slowed since the summer months (see Chart 3, below).  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
9
8
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18  
Monthly nationwide new light vehicle (auto and light truck) sales came in at 17.5 million  
units in October at seasonally adjusted annual rates, slightly higher than unit sales of  
7.4 million in September. Nationwide sales through October have generally held up compared  
1
to sales during the corresponding period in 2017. However, unit sales in the July-October period  
declined about 2% due to a strong decline in auto sales, though truck sales have continued to  
be healthy. The shift to higher-priced trucks from lower-priced cars has helped boost the  
average price per vehicle and auto sales tax revenue. Recent information shown below from  
the Ohio Bureau of Motor Vehicles (BMV) suggests that revenue is also supported by price  
increases for used vehicles. The taxable base for used vehicles (about 59% of the total base) in  
Ohio increased 4.9% in 2018 and was buoyed by solid growth for the average price per used  
vehicle, relative to the first three quarters of 2017.  
Budget Footnotes  
P a g e | 7  
November 2018  
Ohio Legislative Service Commission  
Ohio BMV Statistics on Vehicles Titled  
CY 2018  
Through September)  
Total Taxable Amount  
($ in millions)  
Average Taxable  
Amount Per Unit  
Unit  
(
New vehicles  
Used vehicles  
Total  
297,100  
1,367,582  
1,664,682  
$8,385  
$12,014  
$20,398  
$28,221  
$8,785  
$12,254  
Growth from CY 2017  
New vehicles  
Used vehicles  
Total  
2.5%  
-0.9%  
-0.3%  
5.3%  
4.9%  
5.0%  
2.7%  
5.8%  
5.4%  
Personal Income Tax  
Through October, FY 2019 PIT receipts to the GRF of $2.93 billion were $3.2 million  
(0.1%) above projections, as a result of a positive variance of $16.7 million (2.4%) in October  
2
018. This tax source recorded a deficit of $13.4 million in the first fiscal quarter. For the month  
of October, PIT revenue of $713.4 million was $74.7 million (11.7%) above revenue in October  
017. Revenue growth has generally been strong and compared to year-ago receipts, FY 2019  
2
PIT revenue grew $218.2 million (8.1%).  
PIT revenue is comprised of gross collections, minus refunds and distributions to the Local  
Government Fund (LGF). Gross collections consist of employer withholdings, quarterly estimated  
6
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. For the month of  
October 2018, positive variances of $15.7 million for quarterly estimated payments, $6.2 million  
for annual return payments, and $3.3 million for trust payments were partially offset by shortfalls  
of $4.7 million for withholding and $3.0 million for miscellaneous payments. Refunds were  
$0.8 million below estimate for the month.  
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 a YTD positive variance of  
$
12.3 million for gross collections. Positive variances from withholding, annual return  
payments, and trust payments were partially negated by shortfalls for quarterly estimated  
payments and miscellaneous revenue. Gross collections were reduced by refunds, which were  
$
the corresponding period last year.  
8.6 million higher than expected. FY 2019 refunds also increased compared to their amount in  
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.  
Budget Footnotes  
P a g e | 8  
November 2018  
Ohio Legislative Service Commission  
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  
$18.1  
-$18.6  
$3.2  
0.6%  
$154.8  
$49.2  
$5.5  
5.6%  
Quarterly Estimated Payments  
Trust Payments  
-6.8%  
22.3%  
22.9%  
-24.0%  
0.4%  
24.0%  
45.9%  
50.2%  
-24.8%  
7.6%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$16.4  
-$6.8  
$12.3  
$8.6  
$29.5  
-$7.1  
$231.8  
$9.7  
Less Refunds  
3.7%  
4.2%  
Less LGF Distribution  
GRF PIT Revenue  
$0.5  
0.4%  
$3.8  
3.0%  
$3.2  
0.1%  
$218.2  
8.1%  
Compared to revenue in the corresponding period in FY 2018, gross collections were  
.6% higher from increased employer withholding, quarterly estimated payments, and annual  
7
return payments. Payrolls have been growing, so revenue growth for the monthly employer  
withholding component of the PIT has followed, averaging about 5.9% for the fiscal year  
7
through October. The chart below illustrates the growth of monthly employer withholdings on  
a three-month moving average relative to one year ago.  
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 Oct-18  
7
The 5.6% growth shown in the table includes some withholding revenue other than monthly  
withholding.  
Budget Footnotes  
P a g e | 9  
November 2018  
Ohio Legislative Service Commission  
Commercial Activity Tax  
In each of the first three months of the fiscal year, the CAT experienced revenue  
shortfalls, including a monthly deficit of $11.8 million in August for the first payment for  
quarterly calendar return taxpayers. However, in October 2018, revenue from the CAT to the  
GRF of $81.4 million was $26.2 million (47.4%) above estimate. This performance returned  
this tax source to positive territory relative to estimate from a first-quarter negative variance  
of $20.1 million. For the fiscal year through October, total GRF receipts of $428.4 million were  
$
6.1 million (1.4%) above estimate and $11.6 million (2.8%) above revenue in the first four  
months of FY 2018. Gross collections from the tax increased 6.6% relative to collections  
through October last fiscal year but increased credit claims and refunds restrained net  
collections to the GRF.  
Chart 5 illustrates cumulative growth (compared with the prior year) for gross  
collections and refunds.  
Chart 5: Cumulative Growth in CAT Refunds and Gross Collections in FY 2019  
(
$ in millions)  
$
$
$
$
$
$
$
40.0  
35.0  
30.0  
25.0  
20.0  
15.0  
10.0  
$
35.8  
$
22.1  
$
14.5  
$
5.8  
$5.9  
$
4.5  
$4.5  
$
$
5.0  
0.0  
$
2.3  
July  
August  
September  
Gross Collections  
October  
Refunds  
OBM, in its October financial report, expected growth in CAT revenue to be stronger in  
the October-December quarter as credits may fall back in line with estimate. October revenue  
was strong, but the second payment for calendar quarter taxpayers, due in November, will  
likely determine the first-half results for this tax. 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.  
Budget Footnotes  
P a g e | 10  
November 2018  
Ohio Legislative Service Commission  
Cigarette and Other Tobacco Products Tax  
In October, GRF revenue from the cigarette and other tobacco products tax was  
$
(
85.5 million, $0.2 million (0.2%) above estimate. Receipts for the month were $6.7 million  
8.5%) above revenue from the tax in the corresponding month of the previous fiscal year.  
Through October, FY 2019 revenue from the cigarette and other tobacco products tax totaled  
268.5 million, $3.2 million (1.2%) above estimate and $1.0 million (0.4%) above cumulative  
$
receipts through October in FY 2018. YTD revenue included $243.6 million from the sale of  
cigarettes and $24.9 million from the sale of other tobacco products. Compared to FY 2018,  
receipts from cigarette sales grew $0.6 million while those from the sale of other tobacco  
products increased $0.4 million. So far in FY 2019, cigarette tax revenues have exhibited an  
unusually volatile pattern. However, on a yearly basis, revenue from the cigarette and other  
tobacco products tax usually trends downward generally at a slow pace due to a decline of  
cigarette revenue.  
Budget Footnotes  
P a g e | 11  
November 2018  
Ohio Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of October 2018  
($ in thousands)  
(Actual based on OAKS reports run November 2, 2018)  
Program Category  
Actual  
Estimate*  
Variance  
Percent  
1.6%  
Primary and Secondary Education  
Higher Education  
$686,614  
$196,020  
$7,442  
$676,004  
$194,594  
$7,753  
$10,609  
$1,426  
-$311  
0.7%  
-4.0%  
1.3%  
Other Education  
Total Education  
$890,076  
$878,352  
$11,725  
Medicaid  
$1,415,370 $1,364,928  
$177,850 $187,041  
$1,593,220 $1,551,969  
$50,441  
-$9,190  
$41,251  
3.7%  
-4.9%  
2.7%  
Health and Human Services  
Total Health and Human Services  
Justice and Public Protection  
General Government  
$202,441  
$35,329  
$206,959  
$37,948  
-$4,518  
-$2,619  
-$7,137  
-2.2%  
-6.9%  
-2.9%  
Total Government Operations  
$237,770  
$244,906  
Property Tax Reimbursements  
Debt Service  
$251,784  
$92,704  
$361,152  
$92,758  
-$109,369  
-$54  
-30.3%  
-0.1%  
Total Other Expenditures  
$344,487  
$453,910  
-$109,423  
-24.1%  
Total Program Expenditures  
Transfers Out  
$3,065,553 $3,129,137  
$10,456 $10,360  
$3,076,009 $3,139,497  
-$63,584  
$96  
-2.0%  
0.9%  
Total GRF Uses  
-$63,488  
-2.0%  
*August 2018 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 12  
November 2018  
Ohio Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2019 as of October 31, 2018  
($ in thousands)  
(Actual based on OAKS reports run November 2, 2018)  
Program Category  
Actual  
Estimate*  
Variance  
Percent  
FY 2018**  
Percent  
Primary and Secondary Education  
Higher Education  
$2,852,509 $2,855,277  
-$2,767  
-$11,609  
-$275  
-0.1% $2,849,618  
0.1%  
5.3%  
0.4%  
1.1%  
$758,409  
$33,872  
$770,018  
$34,147  
-1.5%  
-0.8%  
$720,103  
$33,726  
Other Education  
Total Education  
$3,644,791 $3,659,442  
-$14,651  
-0.4% $3,603,446  
Medicaid  
$5,547,550 $5,810,138 -$262,588  
$465,336 $507,594 -$42,258  
$6,012,886 $6,317,732 -$304,846  
-4.5% $5,501,779  
0.8%  
2.6%  
1.0%  
Health and Human Services  
Total Health and Human Services  
-8.3% $453,358  
-4.8% $5,955,137  
Justice and Public Protection  
General Government  
$820,265  
$134,273  
$954,537  
$832,300  
$139,048  
$971,348  
-$12,035  
-$4,776  
-1.4%  
-3.4%  
-1.7%  
$764,822  
$128,640  
$893,462  
7.2%  
4.4%  
6.8%  
Total Government Operations  
-$16,811  
Property Tax Reimbursements  
Debt Service  
$829,019  
$887,115  
$788,662  
$887,627  
$40,357  
-$512  
5.1%  
$770,881  
$859,165  
7.5%  
3.3%  
5.3%  
-0.1%  
Total Other Expenditures  
$1,716,134 $1,676,289  
$39,845  
2.4% $1,630,046  
Total Program Expenditures  
Transfers Out  
$12,328,348 $12,624,811 -$296,463  
$752,327 $751,933 $393  
$13,080,675 $13,376,745 -$296,070  
-2.3% $12,082,091  
2.0%  
0.1%  
$58,408 1188.1%  
Total GRF Uses  
-2.2% $12,140,499  
7.7%  
*
*
August 2018 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2018.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
November 2018  
Ohio Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on November 5, 2018)  
Month of October 2018  
Year to Date through October 2018  
Department  
Medicaid  
GRF  
Actual  
Estimate*  
Variance  
Percent  
Actual  
Estimate*  
Variance  
Percent  
$1,357,921 $1,304,510  
$600,774  
1,958,694 $2,302,908 -$344,214  
$53,411  
4.1% $5,309,740 $5,566,157  
-39.8% $2,275,887 $3,051,676  
-$256,418  
-$775,789  
-4.6%  
-25.4%  
-12.0%  
Non-GRF  
$998,399 -$397,625  
$
-14.9% $7,585,627 $8,617,834 -$1,032,207  
All Funds  
Developmental Disabilities  
GRF  
$52,073  
248,385  
300,458  
$52,284  
$198,338  
$250,622  
-$210  
$50,047  
$49,837  
-0.4%  
25.2%  
19.9%  
$205,209  
$758,736  
$963,945  
$205,434  
$776,658  
$982,092  
-$225  
-$17,922  
-$18,147  
-0.1%  
-2.3%  
-1.8%  
$
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$4,626  
$6,935  
$7,897  
-$2,308  
-$1,214  
-$3,522  
-33.3%  
-15.4%  
-23.7%  
$29,477  
$52,094  
$81,571  
$34,919  
$43,105  
$78,024  
-$5,443  
$8,990  
$3,547  
-15.6%  
20.9%  
4.5%  
Non-GRF  
$6,683  
11,309  
$
$14,831  
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$749  
$1,200  
$2,772  
$3,972  
-$451  
$410  
-$42  
-37.6%  
14.8%  
-1.1%  
$3,124  
$10,611  
$13,735  
$3,627  
$14,359  
$17,986  
-$503  
-$3,748  
-$4,251  
-13.9%  
-26.1%  
-23.6%  
Non-GRF  
$3,182  
$
3,931  
All Funds  
All Departments:  
GRF  
$1,415,370 $1,364,928  
$50,441  
3.7% $5,547,550 $5,810,138  
-28.9% $3,097,329 $3,885,798  
-$262,588  
-$788,469  
-4.5%  
-20.3%  
-10.8%  
Non-GRF  
All Funds  
$859,023 $1,207,406 -$348,383  
2,274,393 $2,572,334 -$297,941  
$
-11.6% $8,644,879 $9,695,936 -$1,051,057  
*September 2018 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 14  
November 2018  
Ohio Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on November 5, 2018)  
Month of October 2018  
Estimate* Variance Percent  
Year to Date through October 2018  
Payment Category  
Actual  
Actual  
Estimate*  
Variance  
Percent  
Managed Care  
CFC†  
$1,427,267 $1,395,791  
$31,476  
-$12,368  
-$33,854  
$715  
2.3% $5,515,333 $5,671,279  
-2.5% $1,954,888 $1,994,400  
-8.9% $1,412,084 $1,512,830  
-$155,946  
-$39,512  
-$100,745  
-$6,287  
-2.7%  
-2.0%  
-6.7%  
-0.7%  
-1.3%  
3.7%  
$485,236  
$344,974  
$237,301  
$77,143  
$497,604  
$378,828  
$236,586  
$78,622  
$204,151  
$0  
Group VIII  
ABD†  
0.3%  
-1.9%  
6.1%  
-
$933,193  
$309,169  
$840,022  
$65,976  
$939,480  
$313,339  
$810,295  
$100,935  
ABD Kids  
-$1,480  
$12,486  
$65,976  
-$4,170  
My Care  
PayFor Performance  
$216,637  
$65,976  
$29,727  
-$34,959 -34.6%  
Fee-For-Service  
ODM Services  
DDD Services  
Hospital - HCAP†  
Hospital - Other  
$691,061  
$396,331  
$294,718  
$12  
$990,711 -$299,650 -30.2% $2,456,183 $3,279,287  
-$823,104 -25.1%  
$421,595  
$245,571  
-$25,264  
$49,147  
-6.0% $1,503,043 $1,654,268  
-$151,225  
-$16,019  
-9.1%  
-1.7%  
20.0%  
$935,510  
$12  
$951,529  
$635,291  
$38,200  
$317,645 -$317,633 -100.0%  
-$635,279 -100.0%  
-$20,582 -53.9%  
$0  
$5,900  
-$5,900 -100.0%  
$17,618  
Premium Assistance  
Medicare Buy-In  
Medicare Part D  
$87,953  
$50,646  
$37,307  
$91,699  
$52,816  
$38,882  
-$3,746  
-$2,170  
-$1,576  
-4.1%  
-4.1%  
-4.1%  
$352,781  
$202,015  
$150,766  
$371,635  
$216,915  
$154,721  
-$18,854  
-$14,899  
-$3,955  
-5.1%  
-6.9%  
-2.6%  
Administration  
Total  
$68,112  
$94,133  
-$26,021 -27.6%  
$320,582  
$373,734  
-$53,152 -14.2%  
$2,274,393 $2,572,334 -$297,941 -11.6% $8,644,879 $9,695,936 -$1,051,057 -10.8%  
*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 | 15  
November 2018  
Ohio Legislative Service Commission  
EWexndpy Zheann, DedputyiDtiruectorr es8  
Ivy Chen, Principal Economist  
Overview  
For the month of October, GRF program expenditures totaled $3.07 billion. These  
expenditures were below the estimate released by OBM in August 2018 by $63.6 million (2.0%),  
which increased the total negative YTD variance in GRF program expenditures to $296.5 million  
(
2.3%). GRF transfers out were largely in line with estimate, being $0.4 million above the YTD  
estimate. Including both program expenditures and transfers out, GRF uses totaled  
13.08 billion through October, which was $296.1 million (2.2%) below estimate. Tables 3 and 4  
$
detail GRF uses for the month of October and for FY 2019 through October, respectively.  
YTD expenditures were below estimates for all but one program category. Medicaid  
continued to dominate the negative variances. YTD GRF Medicaid expenditures of $5.55 billion  
were $262.6 million (4.5%) below estimate. Medicaid is mainly funded by the GRF, but it is also  
supported by several non-GRF funds. More details on both the GRF and non-GRF variances in  
Medicaid expenditures are discussed in the section that follows this overview.  
The negative YTD variance in the Health and Human Services program category  
increased $9.2 million in October to $42.3 million (8.3%). The Ohio Department of Job and  
Family Services (ODJFS) contributed $29.4 million to the program category's negative YTD  
variance 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 $10.3 million,  
followed by item 600523, Family and Children Services ($3.9 million) and item 600521, Family  
Assistance Local ($3.2 million).  
The Ohio Department of Health (ODH) accounted for another $6.8 million of the total  
negative variance in Health and Human Services. Several payments did not get disbursed as  
quickly as anticipated by the estimate. YTD expenditures were below estimates for 16 out of  
2
0 GRF appropriation items in the ODH budget. Overall GRF expenditures from the Ohio  
Department of Mental Health and Addiction Services (OhioMHAS) were below the YTD estimate  
by $5.1 million, of which $4.3 million occurred in item 336510, Residential State Supplement.  
This item is used to provide cash assistance and case management to aged, blind, or disabled  
adults who reside in approved living arrangements, such as group homes or adult care facilities.  
The YTD negative variances in Medicaid, Health and Human Services, and six other  
program categories were partially offset by the positive YTD variance in Property Tax  
Reimbursements. Although this program category posted a large negative variance of  
$
above estimate at the end of October. Funds provided under this program category are used to  
109.4 million (30.3%) in October, the category's YTD expenditures were $40.4 million (5.1%)  
8
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 | 16  
November 2018  
Ohio Legislative Service Commission  
make semiannual payments to school districts and other local governments. The first payments,  
which are based on a property tax settlement conducted in August, will be made through the  
end of 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 toward the end of a payment cycle.  
Medicaid  
For the month of October, GRF Medicaid expenditures were $50.4 million (3.7%) above  
estimate while non-GRF Medicaid expenditures were $348.4 million (28.9%) below estimate.  
Through October, FY 2019 GRF and non-GRF Medicaid expenditures were both below  
estimates, by $262.6 million (4.5%) and $788.5 million (20.3%), respectively. Including both the  
GRF and non-GRF, all funds Medicaid expenditures of $8.64 billion were $1.05 billion (10.8%)  
below the YTD estimate. Timing accounted for the majority of the monthly and YTD variances in  
GRF and non-GRF Medicaid expenditures. As a joint federal-st9ate program, both GRF and  
non-GRF Medicaid expenditures contain federal and state dollars.  
As indicated in the prior issue of Budget Footnotes, the $100.9 million in GRF funded pay  
for performance payments for managed care plans did not occur in September as assumed in  
the estimate. In October, $66.0 million of such payments were disbursed, which accounted for  
the positive variance in that month's overall GRF Medicaid expenditures. The estimate also  
assumed $317.6 million each in non-GRF funded Health Care Assurance Program (HCAP)  
payments for hospitals in September and October. However, both payments have been  
delayed. Delay in HCAP payments accounted for 91.1% and 80.6%, respectively, of the October  
and YTD negative variances in non-GRF Medicaid expenditures. Delay in these two HCAP  
payments also accounted for 60.4% of the total negative YTD variance in all funds Medicaid  
expenditures. Pay for performance and HCAP payments are supported by 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.  
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  
expenditure. In recent years, the federal government has reimbursed about two-thirds of Ohio's total  
Medicaid expenditures.  
Budget Footnotes  
P a g e | 17  
November 2018  
Ohio Legislative Service Commission  
1
0
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 $823.1 million (25.1%), followed by Managed Care  
(
(
$155.9 million, 2.7%), Administration ($53.2 million, 14.2%), and Premium Assistance  
$18.9 million, 5.1%).  
The negative variance in FFS was primarily due to the delay in HCAP payments  
($635.3 million) as indicated earlier. Under HCAP, the state makes subsidy payments to  
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 expected also  
contributed to the negative variance in this category. Beginning January 1, 2018, newly eligible  
individuals are enrolled onto managed care shortly after receiving Medicaid benefits.  
Previously, when ODM was determining the estimates, newly eligible individuals could remain  
in the FFS system for several weeks while they decided which managed care plan in which to  
enroll.  
Expenditures from all Managed Care categories were below their YTD estimates except  
for MyCare, which had a positive YTD variance of $29.7 million (3.7%). MyCare is a managed  
care program for Ohioans who are eligible for both Medicaid and Medicare. Group VIII  
(
individuals who became eligible for Medicaid through the federal Affordable Care Act) had the  
largest negative YTD variance of $100.7 million (6.7%) within the Managed Care category,  
followed by CFC (Covered Families and Children) at $39.5 million (2.0%). These negative  
variances were mainly due to lower than expected caseloads. For the first four months of  
FY 2019, on average the monthly managed care caseloads for Group VIII and CFC were 6.7%  
(
negative YTD variance in the Pay for Performance category was due to the delay in making the  
remaining part of the payment that was originally scheduled for September.  
40,300) and 1.3% (20,600), respectively, below estimates. Finally, the $35.0 million (34.6%)  
1
0
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 | 18  
November 2018  
Ohio Legislative Service Commission  
Issue Updates  
Controlling Board Approves $15.4 Million in Funding for  
Diesel Mitigation Trust Fund Grants  
Robert Meeker, Budget Analyst  
On October 15, 2018, the Controlling Board approved a request from the Ohio  
Environmental Protection Agency (Ohio EPA) to allocate $15.4 million in FY 2019 from the  
Volkswagen Clean Air Act Settlement Fund (Fund 3HE0) to finance the Diesel Mitigation Trust  
Fund (DMTF) Grant Program. Of this total, $15.0 million will be used to provide competitive  
grants to remove diesel engines from use  
and replace or repower them with clean  
diesel, alternative fuel, or electric engines.  
The remaining $0.4 million will be used for  
Ohio EPA's administrative costs.  
The grant funding will be allocated  
for specific project categories as follows:  
$
5 million for school buses, $5 million for  
public transit buses, and $5 million for local  
freight trucks and airport ground support  
equipment. Ohio EPA expects to award  
individual grants in amounts between  
$
50,000 and $2 million. A local match of at  
least 25% is required for all projects. This is  
a reimbursement program in which grant  
recipients must provide their own funding  
to cover expenses as they are incurred. To  
be grant eligible, an applicant's vehicles and  
equipment must be operating within  
2
6 designated priority counties as shown in  
the map (source: Ohio EPA).  
The money supporting the grant program is the result of an agreement between the  
U.S. EPA, the state of California, and Volkswagen (VW) and its subsidiaries settling allegations  
that the latter violated the federal Clean Air Act by selling approximately 590,000 model year  
2
009 to 2016 diesel motor vehicles in the U.S. that were equipped with "defeat devices." The  
devices were in the form of computer software designed to make vehicles appear compliant  
during emissions testing, while during normal operation and use, the vehicles actually emitted  
nine to 40 times the legally allowable amount of nitrogen oxides. The settlement requires VW  
to contribute $2.7 billion to the Environmental Mitigation Trust for State Beneficiaries to pay  
for projects that reduce emissions of nitrogen oxides. All 50 states, Puerto Rico, and the District  
of Columbia are eligible beneficiaries, with the amount allocated primarily based on the  
number of VW diesel vehicles equipped with defeat devices registered within the boundaries of  
the beneficiary. Ohio expects to receive a total of $75.3 million from the trust over the next  
ten years, an amount based on more than 16,000 such vehicles registered within the state.  
Budget Footnotes  
P a g e | 19  
November 2018  
Ohio Legislative Service Commission  
Ohio Receives Nearly $5.6 Million from the  
Multistate Settlement with Uber  
Maggie Wolniewicz, Senior Budget Analyst  
On September 26, 2018, the Ohio Attorney General announced that Ohio will receive  
nearly $5.6 million of a $148 million multistate settlement with Uber after the company  
violated security breach notification laws by waiting a year before notifying affected individuals  
of a data breach that compromised their personal information. Approximately $1.2 million of  
Ohio's share of the settlement will be used to provide $100 payments to eligible drivers whose  
information was accessed during the data breach, including those who applied to drive for Uber  
and those who are no longer driving for the company. These payments will be distributed by an  
appointed outside settlement administrator. The remaining $4.4 million will be used by the  
Attorney General's Office to fund services and activities that protect consumers from predatory  
and illegal business practices.  
The data breach, which occurred in November 2016 and was not reported until  
November 2017, exposed the names and driver's license numbers of more than 600,000 Uber  
drivers nationwide, including more than 12,000 in Ohio. The names, emails, and cellular  
telephone numbers of 57 million Uber users around the world were also exposed, subjecting  
them to potential financial fraud and identity theft. The attorneys general of all 50 states and  
the District of Columbia participated in the settlement, resulting in the largest multistate data  
breach settlement to date. As part of the settlement, Uber has agreed to comply with state  
data breach and consumer protection laws, as well as develop and implement an overall data  
security policy for all user data collected and maintained by the company, including initiating a  
corporate integrity program where employees are able to report issues of concern.  
Ohio Airports Awarded Over $50 Million in  
Federal and State Aviation Grants  
Tom Middleton, Senior Budget Analyst  
On September 27, 2018, the Federal Aviation Administration (FAA) reported that a total  
of $48.7 million in grant funding had been awarded to 50 commercial and general aviation  
airports in Ohio under the Airport Improvement Program (AIP) during federal fiscal year 2018.  
The bulk of the federal funding, approximately $28.0 million (57.5%), was awarded to the  
following five Ohio airports: (1) $11.1 million to the Akron-Canton Regional Airport,  
(
2) $5.9 million to the Cleveland-Hopkins International Airport, (3) $4.5 million to the  
Rickenbacker International Airport, (4) $4.2 million to the Mansfield Lahm Airport, and  
5) $2.4 million to the Newark-Heath Airport. Qualifying airports must meet specific operating  
(
criteria and be included in the National Plan of Integrated Airport Systems. Eligible projects  
include those that improve airport safety, capacity, security, and environmental conditions. The  
money may also be used to cover professional services, such as planning, survey, and design.  
The federal shares of AIP projects range from 75% to 95%. FAA AIP funding consists of three  
components: entitlement grants (largely based on the volume of passengers or cargo), a  
set-aside for certain specific projects, and discretionary grants.  
Budget Footnotes  
P a g e | 20  
November 2018  
Ohio Legislative Service Commission  
Ohio airports that do not qualify for FAA AIP entitlement grants may qualify for state  
assistance under the Ohio Airport Grant Program overseen by the Ohio Department of  
Transportation (ODOT). On August 9, 2018, ODOT announced the award of approximately  
$
5.1 million to 16 of these airports for capital improvements under the program. Grant funds  
cover up to 90% of the construction costs associated with airport pavement resurfacing,  
obstruction removal, and marking projects. The Ohio Airport Grant Program is mostly funded by  
the GRF under line item 777471, Airport Improvements State; however, the program also  
receives a portion of funding from aircraft license tax revenues deposited into the Airport  
Assistance Fund (Fund 5W90) under line item 777615, County Airport Maintenance.  
Department of Health Releases Drug Overdose Report  
Jacquelyn Schroeder, Budget Analyst  
On September 27, 2018, ODH released its 2017 Ohio Drug Overdose Report, which  
found that prescription opioid-related unintentional overdose deaths continued to decrease,  
while overdose deaths related to illegally produced fentanyl mixed and used with other drugs,  
such as cocaine and methamphetamine, continued to increase. In 2017, there were  
5
23 overdose deaths related to prescription opioids, a decrease of 7.3% from 564 such deaths  
in 2016. According to the report, the continuing decrease in prescription opioid overdose  
deaths corresponds with a number of state initiatives in recent years that reduce the  
prescription opioid supply available, including shuttering pill mills, establishing new prescribing  
guidelines, strengthening prescription drug monitoring and enforcement, creating new  
regulations for wholesalers, and enhancing the functionality of the Ohio Automated Rx  
Reporting System (OARRS). As a result of these efforts, the number of unintentional overdose  
deaths related to prescription drugs has decreased steadily in the past four years. The  
5
6
23 prescription opioid-related overdose deaths in 2017 represent a 22.2% decrease from  
72 deaths in 2014.  
In 2017, there were 3,431 unintentional overdose deaths associated with fentanyl and  
related drugs, an increase of 45.6% from 2,357 such deaths in 2016. The fentanyl and related  
drug overdose deaths have increased significantly in recent years. The 2017 figure represents a  
5
82.1% increase from 503 such deaths in 2014. Due to these increases, the total unintentional  
drug overdose deaths have also increased steadily in recent years from 2,531 in 2014 to  
,854 in 2017, an increase of 91.8%. The state has provided funding in recent years to combat  
4
all drug abuse and addiction problems. Funding has been provided to enable community rapid  
response teams to follow up with survivors of a drug overdose to help connect these individuals  
with treatment, expand the availability of the opioid overdose reversal drug naloxone, and to  
support toxicology screenings for county coroner drug overdose investigations, among other  
initiatives. More information regarding the state's efforts to reduce all drug overdose deaths  
and the 2017 Ohio Drug Overdose Report can be accessed on ODH's website  
(https://www.odh.ohio.gov/) by clicking on Drug Overdose under the D group of the A-Z Index.  
Budget Footnotes  
P a g e | 21  
November 2018  
Ohio Legislative Service Commission  
Ohio Awarded $55.8 Million State Opioid Response Grant  
Ryan Sherrock, Economist  
On September 19, 2018, OhioMHAS was awarded $55.8 million in federal State Opioid  
Response (SOR) grant funds. These funds will be used to increase access to medication-assisted  
treatment (MAT) and recovery housing, expand naloxone distribution, provide professional  
training to improve opioid epidemic responses, and develop employment opportunities for  
persons in recovery from opioid addiction. Specific grant activities will include the following:  
launching public awareness programs for both general and targeted populations, operating  
drug takeback programs, educating local law enforcement personnel on naloxone supply  
management, training more physicians in the use of MAT, and creating continuing educational  
opportunities to expand practitioners' expertise in substance use disorder and opioid use  
disorder treatment. A complete list of planned activities can be accessed on OhioMHAS'  
website (mha.ohio.gov) by clicking on Funding State Opioid Response Program Summary  
of the Ohio State Opioid Response (SOR) Grant. OhioMHAS anticipates the Ohio SOR project to  
annually provide treatment and recovery support services to 9,000 individuals with an opioid  
use disorder.  
The SOR grant funds are provided through the federal Substance Abuse and Mental Health  
Services Administration. The majority (85%) of the grant funds is distributed in accordance with a  
formula that considered the following for each state or territory: the proportion of people with  
abuse or dependence on opioids who need treatment, but are not receiving it, and the proportion  
of overdose deaths. The remaining 15% is set aside for the ten states with the highest overdose  
mortality rates. Ohio is one of the states that are currently eligible for the set-aside funds.  
DHE Launches "3 to Get Ready" Campaign to Help  
High School Students Prepare for College  
Edward M. Millane, Senior Budget Analyst  
In late September, the Department of Higher Education (DHE) announced a "3 to Get  
Ready" campaign to help high school students prepare for college. The campaign consists of  
three separate components that are important to a successful college application process. First,  
the Ohio Free Application for Federal Student Aid (FAFSA) Completion initiative encourages  
high schools and higher education institutions to host students and their families who need  
support during the FAFSA completion process, which began October 1. Second, the Ohio  
College Application Month (OCAM), which began October 1 and will run through November 15,  
provides assistance to high school seniors as they apply for their preferred postsecondary  
education option and ensures that each senior submit at least one college application. OCAM is  
a part of the American College Application Campaign, a multistate initiative designed to help all  
seniors apply to college. Third, the College Signing Day, which will occur sometime between  
April 1 and May 31, celebrates the students' plans to continue their education or training after  
high school. On that day, eligible high school seniors will "sign" with their university or college  
of choice and be celebrated by their families, peers, and school staff. For more information on  
the "3 to Get Ready" campaign and related resources, go to DHE's website:  
https://www.ohiohighered.org/3ToGetReady.  
Budget Footnotes  
P a g e | 22  
November 2018  
Ohio Legislative Service Commission  
College Affordability Committee Issues Recommendations to  
Increase Student Success and Make College More Affordable  
Edward M. Millane, Senior Budget Analyst  
In late September, the Joint Committee on Ohio College Affordability released a report of  
its findings and recommendations from the five hearings it held from May through September of  
this year. Created by H.B. 49 of the 132nd General Assembly, the ten-member Committee was  
established to study and develop strategies to reduce the cost of attending the state's colleges  
and universities. The report references various existing state and institution initiatives that can be  
expanded or replicated statewide or at more colleges and universities to increase student success  
and make college more affordable. The Committee's recommendations and examples of the  
strategies are summarized below:  
1
) Increasing student success and completion. The Committee recommends the use of  
credit completion incentives and summer tuition discount programs to assist  
students in graduating early or on time.  
2
) Predictability and transparency in pricing. The Committee recommends that every  
public university implement an undergraduate tuition guarantee model as the  
default option for students seeking a four-year degree. These models may also  
include fee guarantees for at least the first two years of room and board.  
3
4
5
) Providing accessible and affordable course materials. The Committee recommends  
that institutions implement the inclusive access programs, which allow institutions  
more negotiating power on the costs of textbooks, and open educational resources,  
which are free, digital resources.  
) Incentivizing pursuit of in-demand programs. The Committee recommends an  
additional funding weight to the state's State Share of Instruction (SSI) funding  
formula to incentivize public universities to offer degrees in rising, in-demand,  
competitive fields.  
) Completing a FAFSA and preparing for college attendance. The Committee  
recommends the state prioritize FAFSA completion for all graduating high school  
seniors and each university and college adopt a policy encouraging FAFSA filing as  
part of the application process.  
To view the full report and all of the Committee's recommendations, go to the Ohio  
Senate's website at: http://www.ohiosenate.gov/committees/joint-committee-on-ohio-college-  
affordability.  
Budget Footnotes  
P a g e | 23  
November 2018  
Ohio Legislative Service Commission  
Auditor of State Releases School District  
Performance Audit Summary Report  
Terry Steele, Senior Budget Analyst  
1
1
On September 19, 2018, the Auditor of State released a special report that provides a  
summary of performance audits of school districts since the Auditor of State began these audits  
in FY 2011. Over that span of time, the Auditor of State's Office has conducted 86 performance  
audits of school districts. Of this number, 78 (90.7%) were conducted in order to help the  
school district recover from fiscal distress and the other eight were conducted at the request of  
school districts. Performance audits for districts in distress are not automatic. The Auditor of  
State in consultation with the Department of Education determines cases where a school  
district in distress would benefit from a performance audit, focusing primarily on areas of the  
highest spending. Performance audits conducted at the request of school districts that are not  
in fiscal distress typically cover topics such as student transportation, food service staffing,  
benefits, facilities, and fleet management operations. According to the Auditor of S1t2ate, the  
potential savings identified in those performance audits total a little over $138 million.  
Performance audits of school districts in fiscal distress are paid for by the Auditor of  
State's Office, through GRF appropriation item 070409, School District Performance Audits. The  
Auditor of State spent approximately $850,000 for nine school district performance audits in  
FY 2018. The FY 2019 appropriation for these purposes is approximately $975,000. Performance  
audits requested by school districts not in fiscal distress are paid for by the requesting school  
district. Any such payments are deposited into the Public Audit Expense Local Government  
Fund (Fund 4220). As of July 9, 2018, there is one school district in fiscal emergency (Coventry  
Local School District in Summit County), one district in fiscal watch (Niles City School District in  
Trumbull County), and one district in fiscal caution (Parma City School District in  
Cuyahoga County).  
Ohio Awarded $1.5 Million in Federal State Wildlife Grants  
Tom Wert, Budget Analyst  
On September 28, 2018, the U.S. Department of the Interior (USDOI) announced that the  
Ohio Department of Natural Resources (ODNR) Division of Wildlife would receive nearly  
1.5 million under the USDOI State Wildlife Grant (SWG) Program. The Division will direct funds  
$
received under the grant toward projects that will help identify and protect species with the  
greatest conservation need across the state in accordance with the state's 2015 State Wildlife  
Action Plan. As shown in the table below, 14 projects will receive funding under the grant, with a  
small portion set aside for ODNR to administer the grants. Nine of the projects will be carried out in  
1
1
The full report is available on the Auditor of State's website at the following link:  
https://ohioauditor.gov/publications/opt%20schools%20FINAL2018.pdf.  
1
2
However, the report did not list the actual amounts of savings from implementing the  
performance audit recommendations.  
Budget Footnotes  
P a g e | 24  
November 2018  
Ohio Legislative Service Commission  
partnership with the Ohio State University (OSU), which will contribute nearly $572,000 to support  
those projects. Six projects also receive state funding totaling just over $233,000. State funding is  
supported by the Wildlife Fund (Fund 7015) which receives revenue primarily from the sale of  
hunting and fishing licenses and permits and federal sportfish and wildlife restoration grants.  
Projects Funded Under the State Wildlife Grant Program  
Funding  
Project Title  
Federal  
State  
OSU  
Total  
Aquatic Mollusk Conservation, Research &  
Surveys*  
$
214,446  
$115,471  
$329,917  
Statewide Stream Conservation  
$181,577  
$173,968  
$97,772  
$279,349  
$267,643  
Amphibian and Reptile Conservation*  
$93,675  
$76,598  
Native Fish, Native Streams: Rare Fish  
Reintroduction*  
$
$
$
$
142,254  
139,225  
122,225  
104,667  
$218,852  
$214,192  
$188,038  
$161,026  
$152,373  
Conservation Genetic Approaches to  
Conserving State-listed Wildlife Species*  
$74,967  
Survey and Monitoring of Terrestrial Species  
of Greatest Conservation Need  
$65,813  
$1,373  
Forest Management Effects on the  
Population Ecology of Timber Rattlesnakes*  
$56,359  
$51,958  
Ohio Biodiversity Conservation Partnership  
Project*  
$
99,042  
Statewide Odonate Survey*  
Statewide Bat Conservation*  
Freshwater Mollusk Health Assessment*  
Wildlife Diversity Conservation  
Ohio Natural Heritage Database  
Wildlife Diversity Database  
SWG Grant Administration  
Total  
$66,092  
$62,703  
$62,234  
$60,970  
$46,777  
$16,250  
$3,011  
$35,588  
$33,763  
$33,510  
$101,680  
$96,466  
$95,744  
$93,800  
$71,965  
$25,000  
$4,632  
$32,830  
$25,188  
$8,750  
$1,621  
$1,495,441  
$233,347  
$571,889  
$2,300,677  
*Projects in partnership with OSU.  
Budget Footnotes  
P a g e | 25  
November 2018  
Ohio Legislative Service Commission  
TRurhaaizacRidkzwiann, SegniortEchonoemistEconomy  
Philip A. Cummins, Senior Economist  
Overview  
Economic activity continues to grow in the tenth year of the current expansion.  
Inflation-adjusted gross domestic product (real GDP), a broad measure of the national  
economy, rose at a 3.5% annual rate in this year's third quarter. However, various measures of  
residential construction and sales have slowed. Employment nationwide increased again in  
October, with gains in numerous industries. Industrial production strengthened in September,  
reaching the highest level ever. Inflation at the consumer level remains well contained, but  
upward pressures on wages and other business costs are evident in statistics and reports from  
industry. Concerns regarding impacts of higher international tariffs and shortages of workers  
with needed skills continue to be noted by business people. At a meeting of the Federal  
Reserve's main monetary policy-setting group this month, the central bank held its target  
short-term interest rate unchanged.  
Ohio's nonfarm payroll employment rose by 1.9% in the year to September, the largest  
year-over-year increase since 2012. Job gains were widespread among industries. The state  
unemployment rate was 4.6% in September, unchanged since July. The region's economic  
activity expanded at a modest pace, as reported by the Federal Reserve's survey of business  
contacts. Existing home sales in the state were down from a year earlier in September and for  
this year's first nine months.  
The National Economy  
In the July-September quarter, the nation's real GDP grew at a 3.5% annual rate (initial  
estimate). This follows growth at a 4.2% rate in the previous quarter, and 2.2% in the year's first  
quarter. Growth in the most recent two quarters was the strongest in four years. The upturn in  
growth this year reflects continued expansion of consumer spending, stronger growth of  
business fixed investment in the first half of the year, and an upturn in government spending,  
along with inventory accumulation in the third quarter. Residential fixed investment, however,  
has slowed since 2017.  
Economic expansion is continuing in the current quarter, though the pace of growth  
may have slowed from that in the previous two quarters. Estimates from the Federal Reserve  
Banks of Atlanta and New York peg real GDP growth in the year's fourth quarter at annual rates  
of 2.9% and 2.6%, respectively, as of November 8.  
In October, total nonfarm payroll employment nationwide rose by 250,000 and  
unemployment as a share of the labor force remained unchanged at 3.7%. Trends in U.S. payroll  
employment and the unemployment rate are shown in Chart 6.  
Budget Footnotes  
P a g e | 26  
November 2018  
Ohio Legislative Service Commission  
Chart 6: 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)  
Payroll employment gains in this year's first ten months averaged 213,000 per month, or  
.7% at an annual rate, the strongest pace of increase since 2015. October's larger rise may  
1
have reflected, in part, bounceback from effects of Hurricane Florence on leisure and  
hospitality industry employment in September. The U.S. Bureau of Labor Statistics, which  
publishes these figures, saw no effect in October from Hurricane Michael on the estimates for  
national employment and unemployment.  
Employment increases in October were reported in numerous industries. Compared  
with year-earlier levels, employment rose 323,000 (2.0%) in health care, 296,000 (2.4%) in  
manufacturing, 330,000 (4.7%) in construction, 184,000 (3.5%) in transportation and  
warehousing, 254,000 (1.6%) in leisure and hospitality, 516,000 (2.5%) in professional and  
business services, and 65,000 (10.2%) in mining. Average hourly pay of all private-sector  
employees was 3.1% higher than a year earlier, the largest increase since 2009.  
Unemployment in October rose to 6.1 million persons. Total employment (including  
workers not on nonfarm payrolls) also rose, holding the nation's unemployment rate at 3.7%.  
The share of the working-age population (those age 16 and older) that was employed rose in  
October to 60.6%, highest since 2009.  
Industrial production in the U.S. in September rose 0.3% to an all-time peak, 5.1% higher  
than a year earlier. Effects of Hurricane Florence on total industrial production were small, less  
than 0.1 percentage point, according to the Federal Reserve, the source agency for this  
measure. Manufacturing production rose 0.2% in September to 3.5% above the year-earlier  
index level. Factory output, which accounts for more than three-fourths of the total industrial  
production index, remains below the 2007 all-time peak. Mining output rose 13.4% in the year  
to September and was up 24% from a 2016 low point, mainly on gains in oil and gas extraction.  
The index for mining production was at its highest level ever. Utility output in September was  
5
variable seasonally, has been trending higher for the past 12 months.  
.4% higher than in the year-earlier month. Output of electric and natural gas utilities, highly  
Budget Footnotes  
P a g e | 27  
November 2018  
Ohio Legislative Service Commission  
The consumer price index (CPI) rose 0.1% in September to 2.3% above its year-earlier  
level. Year-to-year changes were larger than this in each of the preceding six months, as much  
as 2.9% in June and July, because of energy price increases. The CPI excluding food and energy  
was 2.2% higher than a year earlier in September, the same as in August. Another measure of  
price inflation at the consumer level, the price index for personal consumption expenditures  
excluding food and energy, was 2.0% higher than a year earlier in September, the same  
increase as in the previous four months. Pay increases are gradually becoming larger; the  
employment cost index for wages and salaries of all private-industry workers rose 3.1% in the  
year to September, the largest increase in this broad measure since 2008. Higher pay tends to  
be incorporated in price changes, unless offset by higher productivity. Growth of labor  
productivity has generally been slow during the past eight years, though it appears to have  
picked up in this year's second and third quarters.  
The Ohio Economy  
In September, Ohio's economy continued to add more jobs while the state unemployment  
rate remained at 4.6%, unchanged since July. Ohio's unemployment rate in September was down  
compared to 5.0% in September of last year. The number of unemployed workers in Ohio was  
2
66,000 in September, 2,000 less than in August, and 21,000 less than in September of last year.  
The state's unemployment rate in September was higher than the U.S. unemployment rate. The  
U.S. unemployment rate was 3.7% in September and 4.2% in September of last year. Ohio  
employment and unemployment over the last ten years are shown in Chart 7.  
Chart 7: 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)  
Ohio's total nonfarm payroll employment, seasonally adjusted, increased by 4,300 or  
.1% in September from the revised total in August, to 5.64 million, a new record surpassing  
0
the previous peak set in May of 2000. Private service-providing industries added 3,900 jobs,  
with most gains occurring in other services (+3,400) and professional and business services  
(
(
+1,300). Goods-producing industries gained 2,600 jobs, with increases in manufacturing  
+3,400) and mining and logging (+100) being partly offset by construction (-900). Government  
lost 2,200 jobs, mainly in state and local governments.  
Budget Footnotes  
P a g e | 28  
November 2018  
Ohio Legislative Service Commission  
Compared to September of last year, the state's nonfarm payroll employment was  
04,600, or 1.9% higher. Employment in private service-providing industries, goods-producing  
1
industries, and government increased by 74,600, 22,700, and 7,300, respectively.  
Year-over-year employment gains were essentially across the board, with the largest gains  
occurring in trade, transportation, and utilities (+18,400), leisure and hospitality (+18,100),  
educational and health services (+16,500), and durable goods manufacturing (+14,000).  
Among the 12 metropolitan areas in Ohio, the Cleveland-Elyria metropolitan area had  
the strongest nonfarm payroll employment growth during the year ending in September at  
2
.7%, while the Youngstown-Warren-Boardman metropolitan area was the weakest with a 1.1%  
decline. The unemployment rate in the Cleveland-Elyria metropolitan area was 4.4% in  
September, down from 5.1% in September of last year. The Ohio metropolitan area with the  
lowest unemployment rate in September was the Columbus metropolitan area at 3.6%, down  
from 3.9% in September of last year. The Weirton-Steubenville metropolitan area had the  
highest unemployment rate in the state in September at 5.3%, followed by  
Youngstown-Warren-Boardman metropolitan area at 5.2%. Compared to September of last  
year, the Youngstown-Warren-Boardman metropolitan area had the largest decrease in  
unemployment rate in the state; the rate dropped from 7.2% in September 2017 to 5.2% in  
September 2018. Unlike the statewide nonfarm payroll employment and unemployment data  
above, metropolitan area data are not seasonally adjusted.  
The number of existing homes sold in Ohio in September was 12,667, a decrease by 6.9%  
compared to the 13,602 homes sold in September 2017, according to the Ohio Association of  
Realtors. The average statewide sales price of homes sold in September was $183,379. From  
January through September of this year, existing home sales were 0.7% lower than in the  
corresponding months in 2017. The average statewide sales price during the first nine months of  
this year was $183,306, higher than the $173,329 average for the corresponding months in 2017.  
Economic activity in the region continued to expand at a modest pace, according to a  
1
3
Federal Reserve Bank of Cleveland report. Hiring activity remained moderate with a continued  
tight labor market. On balance, wage increases were moderate across sectors though a few  
contacts cited stronger increases. Retail sales were flat during the reporting period of  
September through early October, bucking the nearly year-long upward trend. Manufacturing  
activity remained strong. Residential construction activity dropped modestly due in part to a  
decrease in homebuyers' ability to purchase a new home. Sales of low-priced homes were  
described as better than sales of higher-end homes. Nonresidential construction picked up  
relative to the low level of activity in the previous reporting period of early July through August.  
Bankers reported demand for commercial and industrial loans softened but demand for  
mortgages and core deposits were up, possibly just seasonally. Contacts in the transportation  
sector noted stable demand at a high level, but limited freight capacity continued to restrain  
growth.  
1
3
The report is from the latest Federal Reserve System Beige Book that summarizes information  
gathered on or before October 15, 2018, from outside contacts. 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 | 29  
November 2018