A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2019  
Issue: March 2019  
Highlights  
Ross Miller, Chief Economist  
February GRF tax revenue was $6.9 million below the Office of Budget and  
Management (OBM) estimate. The August OBM income tax revenue estimate was  
revised recently, as explained in this month's Revenues article. Despite the  
negative variance for the month, GRF tax revenue ended February $71.3 million  
above estimate for the first eight months of FY 2019.  
Ohio payroll employment had been reported to have grown by 116,500 during  
018, but recently revised data reduced that growth to 44,700. Employment  
2
started 2019 on the right foot though, growing 20,300 in January.  
Through February 2019, GRF sources totaled $21.89 billion:  
Revenue from the sales and use tax was $131.2 million above estimate;  
Personal income tax receipts were $115.2 million below estimate.  
Through February 2019, GRF uses totaled $22.89 billion:  
Program expenditures were $606.6 million below estimate, due primarily  
to Medicaid spending, which was $555.5 million below estimate;  
Expenditures in the Health and Human Services program category were  
below estimates by $53.2 million;  
Expenditures for Primary and Secondary Education were above estimate  
by $33.8 million, due partially to timing.  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 11),  
the National Economy (p. 25), and the Ohio Economy (p. 27).  
Also Issue Updates on:  
2
019 Federal Poverty Levels (p. 19)  
FHWA Emergency Relief Funding Awards (p. 20)  
School Safety and Security Grants (p. 20)  
College Credit Plus Program (p. 21)  
Report on Postsecondary Degree Attainment (p. 22)  
EPA Marsh Restoration Fund (p. 23)  
Wastewater and Drinking Water Improvement Loans (p. 23)  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of February 2019  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on March 1, 2019)  
State Sources  
Tax Revenue  
Actual  
Estimate*  
Variance Percent  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$88,906  
$621,135  
$710,041  
$97,000  
$624,400  
$721,400 -$11,359  
-$8,094  
-$3,265  
-8.3%  
-0.5%  
-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  
$222,520  
$348,796  
$63,656  
$29,579  
$102,669  
$3  
$40,354  
$30,866  
$17,937  
$4,742  
$3,654  
$0  
$216,200  
$329,900  
$64,400  
$32,800  
$6,320  
$18,896  
-$744  
2.9%  
5.7%  
-1.2%  
-9.8%  
-18.1%  
---  
-10.1%  
20.6%  
25.4%  
43.7%  
4.4%  
---  
-$3,221  
$125,400 -$22,731  
$0  
$44,900  
$25,600  
$14,300  
$3,300  
$3,500  
$0  
$0  
$0  
$0  
$3  
-$4,546  
$5,266  
$3,637  
$1,442  
$154  
$0  
$16  
$0  
$0  
$16  
$0  
$0  
---  
---  
---  
Total Tax Revenue  
$1,574,836  
$1,581,700  
-$6,864  
-0.4%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$40  
$8,235  
$370  
$0  
$8,308  
$1,463  
$9,770  
$40  
-$73  
-$1,092  
---  
-0.9%  
-74.7%  
Total Nontax Revenue  
$8,645  
-$1,125  
-11.5%  
Transfers In  
$0  
$1,583,481  
$679,938  
$0  
$0  
---  
-0.5%  
Total State Sources  
$1,591,470  
-$7,990  
Federal Grants  
$757,691 -$77,753  
$2,349,161 -$85,742  
-10.3%  
-3.6%  
Total GRF Sources  
$2,263,419  
*
personal income tax; the latter was revised in February 2019.  
Estimates of the Office of Budget and Management as of August 2018, except for the  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 2  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2019 as of February 28, 2019  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on March 1, 2019)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance Percent FY 2018** Percent  
$956,760  
$6,047,586  
$7,004,346  
$929,500  
$5,943,600  
$6,873,100  
$27,260  
$103,986  
$131,246  
2.9%  
1.7%  
1.9%  
$910,373  
$5,800,266  
$6,710,639  
5.1%  
4.3%  
4.4%  
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  
$5,607,407  
$1,183,885  
$557,415  
$238,692  
$256,044  
$5  
$87,673  
$103,953  
$40,432  
$37,271  
$33,990  
$4,750  
$5,722,600 -$115,193  
-2.0%  
2.4%  
0.6%  
-0.3%  
-6.1%  
---  
11.1%  
26.0%  
20.0%  
1.8%  
2.7%  
75.9%  
---  
$5,478,634  
$1,120,219  
$565,831  
$232,123  
$274,816  
2.4%  
5.7%  
-1.5%  
2.8%  
-6.8%  
$1,156,500  
$554,000  
$239,500  
$272,600  
$0  
$27,385  
$3,415  
-$808  
-$16,556  
$5  
$381 -98.6%  
$80,587  
$78,900  
$82,500  
$33,700  
$36,600  
$33,100  
$2,700  
$0  
$8,773  
$21,453  
$6,732  
$671  
8.8%  
28.4%  
17.9%  
-1.3%  
4.7%  
$80,939  
$34,302  
$37,746  
$32,455  
$3,280  
$1,908 -34.9%  
-$374 100.0%  
$118 -72.9%  
$890  
$2,050  
$1,243  
$0  
44.8%  
$1,243  
$0  
$32  
$0  
---  
---  
$0  
$32  
Total Tax Revenue  
$15,157,138 $15,085,800  
$71,338  
0.5% $14,653,605  
3.4%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$55,110  
$21,895  
$55,814  
$132,819  
$38,211  
$21,445  
$66,440  
$126,096  
$16,899  
$450  
-$10,626 -16.0%  
$6,723  
-$5,665  
$72,396  
44.2%  
2.1%  
$30,327  
$22,745  
$237,078 -76.5%  
81.7%  
-3.7%  
Total Nontax Revenue  
5.3%  
$290,150 -54.2%  
Transfers In  
$82,025  
$87,690  
-6.5%  
$133,327 -38.5%  
Total State Sources  
$15,371,982 $15,299,586  
$6,517,763  
$21,889,745 $22,241,404 -$351,659  
0.5% $15,077,082  
-6.1% $6,418,871  
-1.6% $21,495,953  
2.0%  
1.5%  
1.8%  
Federal Grants  
$6,941,818 -$424,055  
Total GRF SOURCES  
*
Estimates of the Office of Budget and Management as of August 2018, except for the personal income tax; the  
latter was revised in February 2019.  
*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  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean Botomogno, Principal Economist  
Overview  
The year-to-date (YTD) GRF revenue shortfall grew in February. Through the latest  
month in FY 2019, GRF sources totaling $21.89 billion were $351.7 million (1.6%) below revised  
OBM estimates, up from a cumulative negative variance of $287.4 million through  
January 2019. As noted in the February issue of Budget Footnotes, the Tax Commissioner  
reduced Ohio employer withholding tax rates effective January 1, 2019; the reduced rates were  
estimated to decrease withholding revenue by $152.6 million for FY 2019, with the GRF bearing  
$
150.6 million of the revenue loss. OBM revised its monthly estimates of personal income tax  
2
(PIT) revenue due to this change. Tables 1 and 2 show GRF sources for the month of February  
and for FY 2019 through February, respectively, with revised estimates of PIT revenue that  
reflect the new withholding rates. In the February issue, Tables 1 and 2 still showed the original  
August OBM estimates.  
GRF sources consist of state-source receipts, which include tax revenue, nontax  
revenue, and transfers in, and federal grants. The $351.7 million YTD negative variance was due  
3
to a large shortfall of $424.1 million (6.1%) for federal grants, and a negative variance of  
$
$
negative variance for federal grants results from GRF Medicaid spending being $555.5 million  
below expectations through February. In contrast, monthly GRF tax sources have surpassed  
anticipations so far in FY 2019 though they have faltered in the last three months.  
5.7 million (6.5%) for transfers in. Those shortfalls were partially offset by positive variances of  
71.3 million (0.5%) for GRF tax revenues and $6.7 million (5.3%) for nontax revenue. The YTD  
Regarding specific GRF taxes, the PIT posted a cumulative YTD negative variance of  
$
115.2 million, attributable largely to shortfalls from quarterly estimated payments. Most tax  
sources were above estimates, including the sales and use tax ($131.2 million), the public utility  
tax ($21.5 million), the commercial activity tax (CAT, $27.4 million), the natural gas  
consumption tax ($6.7 million), and the cigarette and other tobacco products tax ($3.4 million).  
The financial institutions tax (FIT), which had a cumulative positive variance of $13.3 million  
through January saw that reduced to $8.8 million, due to a shortfall of $4.5 million in February  
4
receipts from the first payment of the fiscal year. With a deficit of $16.6 million, the foreign  
insurance tax was the only tax other than the PIT substantially below estimate.  
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
The remaining $2.0 million would reduce distributions to the Local Government Fund (LGF).  
For accounting purposes, GRF tax revenue distributions to the LGF are debited against income tax  
receipts. FY 2019 estimates for sales and kilowatt-hour taxes were unchanged, though half of GRF tax  
revenue distributions to the Public Library Fund are debited against each of these taxes.  
3
Federal grants are primarily federal reimbursements for Medicaid.  
4
Receipts of the FIT are typically expected at the end of January, March, and May.  
Budget Footnotes  
P a g e | 4  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
February GRF sources of $2.26 billion were $85.7 million (3.6%) below projections. All  
categories underperformed, except for transfers in for which no revenue was anticipated.  
Continuing a year-long trend, the largest negative variance belonged to federal grants at  
$
$
by negative variances of $11.4 million for the sales and use tax, $22.7 million for the foreign  
insurance tax, and $3.2 million for the kilowatt-hour tax. Those negative variances were  
partially offset by positive variances of $18.9 million for the CAT and $6.3 million for the PIT.  
Also, the public utility tax and the natural gas consumption tax were above projections by  
77.8 million. GRF tax sources and nontax revenue fell short of estimates by $6.9 million and  
1.1 million, respectively. In addition to the FIT shortfall, tax sources were also brought down  
$
sources through February.  
5.3 million and $3.6 million, respectively. Chart 1, below, shows cumulative variances of GRF  
Chart 1: Cumulative Variances of GRF Sources in FY 2019  
(Variances from August Estimates, $ in millions)  
$
$
200  
100  
$0  
-
-
-
-
-
$100  
$200  
$300  
$400  
$500  
Jul-18  
Aug-18  
Sep-18  
Oct-18  
Nov-18  
Dec-18  
Jan-19  
Feb-19  
Federal Grants  
Tax Revenue  
Total GRF Sources  
FY 2019 GRF sources increased $393.8 million relative to sources through February in  
FY 2018. GRF tax sources and federal grants were higher by $503.5 million and $98.9 million,  
respectively. The increases were partially offset by decreases of $157.3 million for nontax  
5
revenue and $51.3 million for transfers in. For the largest tax sources, receipts increased for  
the sales and use tax ($293.7 million), the PIT ($128.8 million), and the CAT ($63.7 million). Also,  
revenue from the public utility tax, the FIT, and the kilowatt-hour tax increased by  
$
23.0 million, $7.1 million, and $6.6 million, respectively. On the other hand, the foreign  
insurance tax and the cigarette tax experienced revenue declines of $18.8 million and  
$
8.4 million, respectively.  
5
An outsize payment of unclaimed funds of over $200 million was made to the GRF in  
February 2018, which explains this large decline in receipts from this category in FY 2019.  
Budget Footnotes  
P a g e | 5  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Sales and Use Tax  
Through February, FY 2019 receipts to the GRF from the sales and use tax totaled  
7.00 billion. This amount was $131.2 million (1.9%) above estimate, with both the nonauto  
$
and the auto portions of the tax ahead of projections. YTD GRF receipts from the sales and use  
tax were also 4.4% above revenue through February in FY 2018. For the month, GRF receipts of  
$
variances from both the auto tax and the nonauto tax; February was the first month this year  
that this tax yielded a negative variance. Monthly sales and use tax receipts were, however,  
710.0 million were $11.4 million (1.6%) below anticipated revenue, brought down by negative  
$
16.3 million (2.3%) above revenue in February 2018.  
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.  
Nonauto Sales and Use Tax  
The nonauto sales and use tax has had weak results in calendar year (CY) 2019. GRF  
revenue from the tax of $621.1 million in February was short of estimate by $3.3 million (0.5%),  
following a negative variance of $4.5 million in January. The latest performance decreased the  
cumulative positive variance of this tax to $104.0 million (1.7%), down from $107.3 million  
through January. For the YTD, GRF receipts of $6.05 billion were $247.3 million (4.3%) above  
revenue in the corresponding period in FY 2018. Chart 2, below, shows year-over-year growth  
6
in nonauto sales tax collections. Revenue growth for this tax has been solid, supported by  
employment and wage gains throughout FY 2019, but the rate of growth has slowed in the  
latest months.  
Chart 2: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year (With Tax Base Adjustment,  
Three-month Moving Average)  
8
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Jul-18  
Aug-18  
Sep-18  
Oct-18  
Nov-18  
Dec-18  
Jan-19  
Feb-19  
6
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 in July 2017 so that changes in nonauto sales and use tax  
revenue are on a comparable basis.  
Budget Footnotes  
P a g e | 6  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Auto Sales and Use Tax  
For only the second time this fiscal year, revenue from the auto sales and use tax for the  
month was below estimates and prior-year receipts. In February, GRF receipts of $88.9 million  
were short of estimate by $8.1 million (8.3%), and below February 2018 revenue by $3.1 million  
(
3.4%). This latest result partially offset a strong January when this source was 9.4% above  
estimate and 4.4% above revenue in January 2018. Through February, auto sales tax receipts of  
956.8 million were $27.3 million (2.9%) above estimate, down from $35.4 million at the end of  
$
January. YTD auto sales tax receipts were also $46.4 million (5.1%) above receipts in the  
corresponding period in FY 2018. Chart 3, below, shows year-over-year growth in auto sales tax  
collections. Revenue growth is positive, but the rate of growth has declined in recent months.  
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%  
Jul-18  
Aug-18  
Sep-18  
Oct-18  
Nov-18  
Dec-18  
Jan-19  
Feb-19  
At 16.6 million units (at a seasonally adjusted annual average rate), nationwide new  
light vehicle (auto and light truck) sales in February remained roughly at January's pace, but  
down about 3% from a year earlier. Though temporary factors such as the winter weather and  
the partial shutdown of the federal government may explain the downshift in sales, the lower  
pace may also reflect headwind factors such as spent-up vehicle demand and lower vehicles  
affordability. Unit sales exceeded 17 million units in each of the last four calendar years, and  
average auto prices and interest rates are rising.  
Personal Income Tax  
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  
7
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  
7
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  
February of the following year. Most estimated payments are made by high-income taxpayers.  
Budget Footnotes  
P a g e | 7  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
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.  
February PIT receipts of $222.5 million were $6.3 million (2.9%) above estimate. Employer  
withholding, quarterly estimated payments and annual returns payments were above estimates by  
$
offset by a shortfall of $1.2 million in miscellaneous payments, resulting in a combined positive  
variance of $17.4 million for gross collections. However, refunds were higher than anticipated by  
14.7 million, $2.6 million, and $1.4 million, respectively. Those positive variances were partially  
$11.9 million and distributions to the LGF were $0.9 million lower than projected.  
February revenue from the PIT decreased the cumulative GRF negative variance of this tax  
to $115.2 million (2.0%), compared to updated estimates, from a shortfall of $121.5 million through  
January. For the first half of FY 2019, the PIT year-over-year growth was 5.4%, but the  
withholding rate reduction will tend to pull the growth rate down during the remainder of the  
fiscal year, and that revenue growth stood at 2.4% through February. (The withholding rate  
reduction of January 1, 2019 was estimated to decrease receipts from this component by  
$
PIT growth would have been about 3.2%.)  
47.4 million in the January-February period. So, excluding the withholding rate reduction,  
Revenues from each component of the PIT relative to revised estimates and to revenue  
received in FY 2018 are detailed in the table below. Trends of recent months continued through  
the end of February. YTD gross collections were below estimate by $69.5 million; and shortfalls  
for quarterly estimated payments and miscellaneous revenue were partially offset by positive  
variances from withholding and annual return payments. The negative variance for gross  
collections was increased by higher than projected refunds and distributions to the LGF.  
FY 2019 refunds and LGF distributions also increased compared to their amounts in the  
corresponding period last year, while gross collections grew from FY 2018.  
FY 2019 Personal Income Tax Revenue Variance and Annual Change by Component  
YTD Variance from Revised  
Changes from FY 2018  
Estimate  
Amount  
$ in millions)  
Percent  
(%)  
Amount  
($ in millions)  
Percent  
(%)  
Category  
(
Withholding  
$75.3  
1.3%  
$313.6  
-$152.4  
$1.4  
5.4%  
Quarterly Estimated Payments  
Trust Payments  
-$157.4  
$2.1  
-22.6%  
7.1%  
-22.1%  
4.5%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$22.5  
-$12.0  
-$69.5  
$44.2  
$1.5  
21.3%  
-19.4%  
-1.0%  
4.8%  
$37.2  
-$12.4  
$187.4  
$50.0  
$8.6  
40.9%  
-19.9%  
2.8%  
Less Refunds  
5.5%  
Less LGF Distribution  
GRF PIT Revenue  
0.5%  
3.3%  
-$115.2  
-2.0%  
$128.8  
2.4%  
Budget Footnotes  
P a g e | 8  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Regarding the two most important components of the PIT, employer withholding  
8
receipts grew 5.4%, while quarterly estimated payments fell 22.1%. The chart below illustrates  
the growth of monthly employer withholdings on a three-month moving average relative to  
one year ago. It shows growth generally between 5% and 6% in FY 2019.  
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%  
Jul-18  
Aug-18  
Sep-18  
Oct-18  
Nov-18  
Dec-18  
Jan-19  
Feb-19  
Commercial Activity Tax  
The third CAT payment by quarterly calendar taxpayers in February provided GRF  
receipts of $348.8 million, an amount $18.9 million (5.7%) above estimate and $30.1 million  
(
9.4%) above such revenue in the same month last year. As a result, the cumulative positive  
variance of this tax increased to $27.4 million (2.4%), up from $8.5 million through January. YTD  
GRF receipts totaled $1.18 billion, which was $63.7 million (5.7%) above revenue through  
February in FY 2018.  
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%). Through February, Fund 7047 and Fund 7081  
received $181.1 million and $27.9 million, respectively. The distributions 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.  
8
Withholding receipts consist of monthly employer withholding (about 99% of the total) and  
annual employer withholding (about 1% of the total). YTD through February, monthly employer  
withholding was 5.5% above such receipts in the corresponding period in FY 2018. On the other hand,  
annual employer withholding fell 17.4%.  
Budget Footnotes  
P a g e | 9  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Cigarette and Other Tobacco Products Tax  
YTD revenue from the cigarette and other tobacco products tax totaling $557.4 million  
remained above estimate in February. In February, the tax provided $63.7 million to the GRF,  
an amount $0.7 million (1.2%) below estimate, and $0.3 million (0.4%) below revenue in  
February 2018. Through January, this GRF source was $4.2 million above anticipated receipts.  
So the latest monthly performance reduced the tax's cumulative variance to $3.4 million (0.6%).  
YTD collections in FY 2019, $506.9 million from the sale of cigarettes and $50.5 million from the  
sale of other tobacco products (OTP), were $8.4 million (1.5%) below revenues in the  
corresponding period in FY 2018. Compared to FY 2018, receipts from cigarette sales fell  
$
13.4 million (2.6%) while those from the sale of OTP increased $5.0 million (11.0%). On a  
yearly basis, revenue from the cigarette and OTP tax usually trends downward generally at a  
slow pace due to a decline of cigarette revenue, though receipts from OTP tax generally  
increase. The OTP tax is an ad valorem tax, generally 17% of the wholesale price paid by  
wholesalers for the product; thus, revenue from that portion of the tax base (about 7% of the  
total tax base) grows with OTP price increases.  
Budget Footnotes  
P a g e | 10  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of February 2019  
($ in thousands)  
(Actual based on OAKS reports run March 5, 2019)  
Program Category  
Actual  
Estimate*  
Variance Percent  
Primary and Secondary Education  
Higher Education  
$871,304  
$210,796  
$4,870  
$846,239  
$216,162  
$3,236  
$25,065  
-$5,367  
$1,634  
3.0%  
-2.5%  
50.5%  
2.0%  
Other Education  
Total Education  
$1,086,970 $1,065,637  
$21,333  
Medicaid  
$1,054,469 $1,150,838  
-$96,369  
-$6,023  
-8.4%  
-7.0%  
-8.3%  
Health and Human Services  
Total Health and Human Services  
$80,215  
$86,238  
$1,134,685 $1,237,077 -$102,392  
Justice and Public Protection  
General Government  
$153,514  
$27,495  
$155,764  
$26,710  
-$2,250  
$785  
-1.4%  
2.9%  
Total Government Operations  
$181,009  
$182,474  
-$1,465  
-0.8%  
Property Tax Reimbursements  
Debt Service  
$22  
$64,895  
$64,917  
$192  
$57,233  
$57,425  
-$170 -88.6%  
$7,662  
13.4%  
Total Other Expenditures  
$7,492  
13.0%  
Total Program Expenditures  
Transfers Out  
$2,467,580 $2,542,612  
$0 $0  
$2,467,580 $2,542,612  
-$75,032  
$0  
-3.0%  
---  
Total GRF Uses  
-$75,032  
-3.0%  
*August 2018 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 11  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2019 as of February 28, 2019  
($ in thousands)  
(Actual based on OAKS reports run March 5, 2019)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2018** Percent  
Primary and Secondary Education  
Higher Education  
$5,711,349  
$1,541,708  
$54,426  
$5,677,575  
$1,554,372  
$54,833  
$33,774  
-$12,664  
-$407  
0.6%  
-0.8%  
-0.7%  
$5,592,805  
$1,549,503  
$53,747  
2.1%  
-0.5%  
1.3%  
1.5%  
Other Education  
Total Education  
$7,307,483 $7,286,781  
$20,703  
0.3% $7,196,055  
Medicaid  
$10,077,264 $10,632,783 -$555,519  
$904,564 $957,769 -$53,205  
$10,981,828 $11,590,553 -$608,724  
-5.2%  
-5.6%  
$9,946,821  
$893,864  
1.3%  
1.2%  
1.3%  
Health and Human Services  
Total Health and Human Services  
-5.3% $10,840,685  
Justice and Public Protection  
General Government  
$1,556,186  
$253,956  
$1,551,051  
$267,799  
$5,134  
-$13,844  
-$8,709  
0.3%  
$1,483,104  
$249,485  
4.9%  
1.8%  
4.5%  
-5.2%  
Total Government Operations  
$1,810,141 $1,818,851  
-0.5% $1,732,589  
Property Tax Reimbursements  
Debt Service  
$905,542  
$914,131  
-$8,590  
-$1,270  
-$9,860  
-0.9%  
-0.1%  
$906,528  
-0.1%  
6.5%  
3.4%  
$1,127,660  
$1,128,930  
$1,058,955  
Total Other Expenditures  
$2,033,201 $2,043,061  
-0.5% $1,965,483  
Total Program Expenditures  
Transfers Out  
$22,132,654 $22,739,245 -$606,591  
$752,927 $751,933 $994  
$22,885,581 $23,491,178 -$605,597  
-2.7% $21,734,811  
1.8%  
0.1%  
$69,445 984.2%  
5.0%  
Total GRF Uses  
-2.6% $21,804,256  
*
*
August 2018 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2018.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 12  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on March 4, 2019)  
Month of February 2019  
Year to Date through February 2019  
Department  
Medicaid  
GRF  
Actual  
Estimate* Variance Percent  
Actual  
Estimate*  
Variance Percent  
$1,000,157 $1,097,686  
$807,388 $865,018  
-$97,529  
-$57,630  
-8.9%  
-6.7%  
$9,612,274 $10,164,194 -$551,919  
$6,292,912 $6,686,924 -$394,012  
-5.4%  
-5.9%  
-5.6%  
Non-GRF  
$
1,807,545 $1,962,704 -$155,159  
-7.9% $15,905,186 $16,851,118 -$945,931  
All Funds  
Developmental Disabilities  
GRF  
$47,544  
163,520  
211,065  
$48,466  
$173,843  
$222,310  
-$922  
-$10,323  
-$11,245  
-1.9%  
-5.9%  
-5.1%  
$403,076  
$406,259  
-$3,183  
-$52,255  
-$55,438  
-0.8%  
-3.5%  
-2.9%  
$
$1,437,407 $1,489,662  
$1,840,483 $1,895,921  
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$5,986  
$15,879  
21,865  
$4,131  
$15,053  
$19,184  
$1,855  
$826  
44.9%  
5.5%  
$55,562  
$122,340  
$177,902  
$55,972  
$105,995  
$161,968  
-$411  
$16,345  
$15,934  
-0.7%  
15.4%  
9.8%  
Non-GRF  
$
$2,681  
14.0%  
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$781  
$554  
$2,531  
$3,085  
$227  
40.9%  
$6,352  
$21,123  
$27,475  
$6,359  
$25,066  
$31,425  
-$6  
-0.1%  
Non-GRF  
$1,673  
-$858 -33.9%  
-$631 -20.4%  
-$3,943 -15.7%  
-$3,950 -12.6%  
$
2,455  
All Funds  
All Departments:  
GRF  
$1,054,469 $1,150,838  
$988,460 $1,056,445  
-$96,369  
-$67,985  
-8.4% $10,077,264 $10,632,783 -$555,519  
-6.4% $7,873,782 $8,307,647 -$433,866  
-7.4% $17,951,046 $18,940,431 -$989,385  
-5.2%  
-5.2%  
-5.2%  
Non-GRF  
All Funds  
$
2,042,930 $2,207,284 -$164,354  
*September 2018 estimates from the Department of Medicaid  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on March 4, 2019)  
Month of February 2019  
Year to Date through February 2019  
Actual Estimate* Variance Percent  
Payment Category  
Actual  
Estimate* Variance Percent  
Managed Care  
CFC†  
$1,319,684 $1,449,546 -$129,862  
-9.0% $11,001,220 $11,554,061 -$552,841  
-4.8%  
-3.0%  
-9.7%  
-2.9%  
-4.7%  
2.9%  
$478,908  
$325,070  
$231,786  
$74,968  
$510,180  
$393,659  
$251,101  
$84,858  
-$31,271  
-$68,589 -17.4%  
-$19,315 -7.7%  
-$9,889 -11.7%  
-6.1%  
$3,889,866 $4,009,998 -$120,131  
$2,760,320 $3,058,090 -$297,769  
Group VIII  
ABD†  
$1,858,867 $1,915,130  
$610,643 $640,526  
$1,686,580 $1,639,384  
$194,944 $290,935  
-$56,264  
-$29,883  
$47,196  
ABD Kids  
My Care  
P4P & Insurer Fee†  
$208,951  
$0  
$209,749  
$0  
-$798  
$0  
-0.4%  
-
-$95,990 -33.0%  
Fee-For-Service  
ODM Services  
DDD Services  
Hospital - HCAP†  
Hospital - Other  
$548,086  
$342,401  
$205,506  
$179  
$577,422  
$368,560  
$208,862  
$0  
-$29,335  
-$26,159  
-$3,355  
$179  
-5.1% $5,546,363 $5,920,308 -$373,945  
-6.3%  
-9.4%  
-2.5%  
-0.1%  
-7.1%  
$2,880,936 $3,178,098 -$297,163  
-1.6%  
-
-
$1,782,208 $1,827,050  
-$44,843  
-$680  
-$31,260 -11.2%  
$634,610  
$248,609  
$635,291  
$279,869  
$0  
$0  
$0  
Premium Assistance  
Medicare Buy-In  
Medicare Part D  
$89,962  
$51,749  
$38,213  
$101,261  
$59,757  
$41,504  
-$11,299 -11.2%  
-$8,008 -13.4%  
$709,947  
$408,101  
$301,846  
$764,984  
$450,650  
$314,334  
-$55,037  
-$42,550  
-$12,487  
-7.2%  
-9.4%  
-4.0%  
-$3,292  
-7.9%  
Administration  
Total  
$85,198  
$79,055  
$6,143  
7.8%  
$693,516  
$701,077  
-$7,561  
-1.1%  
-5.2%  
$2,042,930 $2,207,284 -$164,354  
-7.4% $17,951,046 $18,940,431 -$989,385  
*September 2018 estimates from the Department of Medicaid  
P4P - Pay For Performance, Insurer Fee - Health Insurer Fee  
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  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Expenditures9  
Melaney Carter, Assistant Director  
Ivy Chen, Principle Economist  
Overview  
In the month of February, GRF program expenditures were $75.0 million (3.0%) below  
estimate, increasing the negative year-to-date (YTD) variance to $606.6 million (2.7%). As  
expected, there were no transfers out in February, so the YTD positive variance remained at  
$
$
1.0 million (0.1%). Including both program expenditures and transfers out, GRF uses totaled  
22.89 billion through February, which was $605.6 million (2.6%) below estimate. Tables 3  
and 4 detail GRF uses for the month of February and for FY 2019 through February,  
respectively.  
GRF Medicaid expenditures had the largest negative variances for both the month of  
February and YTD. GRF Medicaid expenditures in February were $96.4 million below estimate,  
increasing this category's negative YTD variance to $555.5 million (5.2%). 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.  
In addition to Medicaid, the Health and Human Services, Higher Education, and Property  
Tax Reimbursements categories increased their negative YTD variances in February. At the end  
of February, Health and Human Services had the second highest negative YTD variance of  
$
53.2 million (5.6%); Higher Education had a negative variance of $12.7 million (0.8%); and  
Property Tax Reimbursements had a negative YTD variance of $8.6 million (0.9%). Three other  
categories maintained negative YTD variances despite positive variances for the month of  
February. General Government had a negative YTD variance of $13.8 million (5.2%), Debt  
Service had a negative YTD variance of $1.3 million (0.1%), and Other Education had a negative  
YTD variance of $0.4 million (0.7%). On the other hand, the Primary and Secondary Education  
category had a positive YTD variance of $33.8 million (0.6%), which increased by $25.1 million in  
February. Justice and Public Protection also had a positive YTD variance at the end of February  
(
significant of these variances follows the discussion of Medicaid.  
$5.1 million), although this category's monthly variance was negative. A discussion of the more  
Medicaid  
GRF Medicaid expenditures were $96.4 million (8.4%) and $555.5 million (5.2%),  
respectively, below their monthly and YTD estimates. In addition to 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 dollars. In February, non-GRF Medicaid  
expenditures were $68.0 million (6.4%) below estimate. For FY 2019 through February,  
non-GRF Medicaid expenditures were $433.9 million (5.2%) below estimate. Including both the  
9
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  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
GRF and non-GRF, all funds Medicaid expenditures were $164.4 million (7.4%) below estimate  
in February and $989.4 million (5.2%) below estimate YTD at the end of February.  
Table 5 shows GRF and non-GRF Medicaid expenditures for the Ohio Department of  
Medicaid (ODM), the Ohio Department of Developmental Disabilities (ODODD), and six other  
"
sister" agencies that also take part in administering Ohio Medicaid. ODM and ODODD account  
for about 99% of the total Medicaid budget. 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.  
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. Managed Care had  
the largest overall negative variance of $552.8 million (4.8%), followed by FFS ($373.9 million,  
6
.3%), Premium Assistance ($55.0 million, 7.2%), and Administration ($7.6 million, 1.1%).  
Expenditures from all Managed Care categories were below their YTD estimates except  
for MyCare, which had a positive YTD variance of $47.2 million (2.9%). MyCare is a managed  
care program for Ohioans who are eligible for both Medicaid and Medicare. Group VIII had the  
largest negative YTD variance within the Managed Care category at $297.8 million (9.7%),  
followed by CFC (Covered Families and Children) at $120.1 million (3.0%), and P4P & Insurer  
Fee (Pay for Performance and Health Insurer Fee) at $96.0 million (33.0%). The negative  
variances for Group VIII and CFC were mainly due to lower than expected caseloads. For the  
first eight months of FY 2019, the average monthly managed care caseloads for Group VIII and  
CFC were 8.1% (51,400) and 2.1% (33,000), respectively, below estimates. Finally, $61.0 million  
of the $96.0 million negative YTD variance in the P4P & Insurer Fee category was due to lower  
than expected Health Insurer Fee payments. The Health Insurer Fee a source of funding for  
the Marketplaces under ACAis a tax by the federal government on certain entities that  
provide health insurance. The tax applies to Medicaid mana1g0ed care companies and is  
incorporated into Ohio's Medicaid managed care capitation rates.  
The negative YTD variance in FFS was primarily due to lower than expected FFS  
caseloads. Beginning January 1, 2018, newly eligible individuals are removed from FFS and  
enrolled onto managed care shortly after receiving Medicaid benefits. Previously, when ODM  
prepared 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.  
Health and Human Services  
The negative YTD variance in the Health and Human Services program category  
increased $6.0 million in February to $53.2 million (5.6%). The most significant negative YTD  
variance was $36.5 million for the Ohio Department of Job and Family Services (ODJFS),  
10  
The Health Insurer Fee was in effect from 2014 through 2016. The U.S. Congress approved a  
one-year moratorium for 2017 but the tax went back into effect (and remains in effect) for 2018.  
Congress suspended the tax once again in 2019; if not further delayed, it will be collected again  
beginning in 2020.  
Budget Footnotes  
P a g e | 16  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
followed by $10.2 million for the Ohio Department of Mental Health and Addiction Services  
(ODMHAS).  
The negative YTD variance for ODJFS is spread over all but one of the GRF appropriation  
items included in this category. The two items with the largest negative YTD variances, both  
around $6.0 million, were items 600410, TANF State Maintenance of Effort, and 600416,  
Information Technology Projects. Item 600410 is used in conjunction with Ohio's federal  
Temporary Assistance for Needy Families (TANF) block grant to provide cash assistance and  
noncash services, such as child care, to low-income families in Ohio. This item has had negative  
variances in most months of the fiscal year so far. Item 600416 provides funding for the  
development, implementation, and maintenance of computer systems used by ODJFS and the  
county departments of job and family services (CDJFSs). The negative YTD variance for this item  
comes primarily from negative monthly variances in the beginning of the fiscal year. This item's  
negative variance decreased in February due to a positive monthly variance of $2.6 million.  
The negative YTD variance for ODMHAS came primarily from three line items.  
Item 336510, Residential State Supplement, had a negative YTD variance of $4.0 million,  
item 336412, Hospital Services, had a negative YTD variance of $3.7 million, and item 336423,  
Addiction Services Partnership with Corrections, had a negative YTD variance of $3.2 million.  
Item 336510 is used to provide cash assistance and case management to aged, blind, or  
disabled adults who reside in approved alternate living facilities such as group homes and  
residential care facilities. This item's negative YTD variance comes primarily from the first four  
months of the fiscal year. Item 336412 funds inpatient operations at the state's six regional  
psychiatric hospitals. About half of this item's YTD variance is due to a negative variance of  
$
correctional facilities used by the Department of Rehabilitation and Correction (DRC).  
1.6 million in February. Item 336423 funds services provided by ODMHAS inside of  
General Government  
Despite a small positive February variance of $0.8 million, the General Government  
category had a negative YTD variance of $13.8 million. Close to half of this YTD variance (46.0%)  
was caused by the Secretary of State's single GRF appropriation item 050508, Statewide Voting  
and Tabulation Equipment. This item was created by S.B. 135 of the 132nd General Assembly to  
reimburse counties for expenditures related to voting systems acquired between January 2014  
and August 2018. The appropriation for FY 2019 is $10.0 million and the estimates reflect  
roughly equal payments each month. However, H.B. 41 of the 132nd General Assembly,  
effective March 20, 2019, amended the program to allow reimbursements also for  
expenditures incurred after August 2018. Changes in the program have caused a delay in the  
reimbursements.  
Higher Education  
The negative YTD variance in the Higher Education category increased by $5.4 million in  
February to $12.7 million (0.8%). About half of this YTD variance (52.8%) occurred in  
item 235563, Ohio College Opportunity Grant, which was below estimates YTD by $6.7 million.  
The second largest negative YTD variance was in item 235438, Choose Ohio First Scholarship,  
which had a negative YTD variance of $3.4 million. The Ohio College Opportunity Grant (OCOG)  
is Ohio's need-based financial aid program. The Choose Ohio First Scholarship provides  
scholarships to students pursuing Science, Technology, Engineering, Mathematics, and  
Medicine (STEMM) degrees or STEMM education degrees. Both of these programs are funded  
Budget Footnotes  
P a g e | 17  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
through reimbursements to institutions of higher education, so actual expenditures may differ  
from estimates due to the timing of reimbursement requests.  
Primary and Secondary Education  
The Ohio Department of Education's (ODE) positive YTD variance of $33.8 million was  
dominated by item 200550, Foundation Funding, which had a positive YTD variance of  
$
43.1 million at the end of February. Item 200550 is primarily used to provide operating  
subsidies to public schools through the state's school funding formula. This item often has  
variances as ODE collects and updates various data that are used in the formula. A positive  
monthly variance for this item in February of $16.3 million partially offset a negative monthly  
variance in January of $22.3 million. Except for January, however, this item has had positive  
monthly variances since September.  
Item 200502, Pupil Transportation, had the second largest positive YTD variance of  
$
formula, as well as transportation funding for students with disabilities that is provided outside  
of the formula.  
6.0 million. Item 200502 is used to fund the transportation portion of the school funding  
Budget Footnotes  
P a g e | 18  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
2019 Federal Poverty Level Standards  
Ryan Sherrock, Economist  
The U.S. Department of Health and Human Services recently published the updated  
Federal Poverty Level (FPL) standards for 2019. These levels are used to set eligibility criteria for  
many assistance programs, such as Medicaid and the Children's Health Insurance Program  
(CHIP). Assistance programs often use a percentage of the FPL to determine eligibility  
(
4
e.g., 138% or 200% FPL). The FPL is adjusted for household size and geographic region. The  
8 contiguous states and the District of Columbia (DC) all use the same FPL while Alaska and  
Hawaii each have their own to account for higher costs of living in those regions. The table  
below shows the updated FPLs for the 48 contiguous states and DC.  
2
019 FPL for the 48 Contiguous States and DC  
Persons in Household  
Poverty Level  
$12,490  
$16,910  
$21,330  
$25,750  
$30,170  
$34,590  
1
2
3
4
5
6
Note: Add $4,420 for each additional household member.  
FPLs are published annually and become effective each January. The 2019 levels are  
calculated by taking the 2017 Census Bureau's poverty thresholds and adjusting them, using the  
Consumer Price Index, for price changes between 2017 and 2018. The FPL represents the  
minimum amount of income required to provide basic necessities such as food, clothing, and  
shelter.  
Budget Footnotes  
P a g e | 19  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Ohio is Awarded $83.3 Million in Federal Emergency Relief  
Funding for Roads and Bridges  
Tom Middleton, Senior Budget Analyst  
On February 5, 2019, the Federal Highway Administration (FHWA) announced that Ohio  
was awarded nearly $83.3 million to make repairs to roads and bridges damaged by storms,  
floods, and other emergency events. The FHWA Emergency Relief Program reimburses states  
for the reconstruction or replacement of damaged highways and bridges, as well as the  
arrangement of detours and replacement of guardrails and other damaged safety devices.  
Ohio's share of funding under this announcement flows to the Ohio Department of  
Transportation (ODOT) and includes reimbursements for emergencies dating from as far back  
as March 2011 and as recent as March 2018. The table below lists the Emergency Relief funding  
awarded to ODOT by emergency event.  
FHWA Emergency Relief Funding Awards to Ohio, February 2019  
Emergency Event  
Heavy rainfall and flooding  
Heavy rainfall and flooding  
Storms and landslides  
Time Period of Event  
February-March 2018  
March-April 2017  
March 2015  
Award Amount  
$63,029,374  
$2,089,375  
$11,927,927  
$900,000  
State Route 7 rock falls  
January 2012  
Jefferson County landslides  
March 2011  
$5,360,000  
$83,306,676  
Total  
BWC Awards $243,000 in School Safety Grants  
Dan Redmond, Budget Analyst  
On January 17, 2019, the Bureau of Workers' Compensation (BWC) announced ten  
recipients of school safety grants totaling $243,000. The grants, part of the School Safety and  
Security Grants Program (SSSG), are the first of $4 million that BWC will distribute for  
Prekindergarten-12 safety upgrades for fiscal years 2019 and 2020. SSSG is an expansion of  
BWC's Safety Intervention Grants Program and pays for approved equipment through a 3-to-1  
match (up to a maximum of $40,000). Eight public school districts and two private schools  
received grants in amounts ranging from $11,000 to $40,000. The table below lists the recipient  
school or district, the grant amount, and the intended use of the funds.  
Budget Footnotes  
P a g e | 20  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
BWC School Safety Grants  
School or District  
Fort Laramie Local  
Adena Local  
County  
Shelby  
Amount  
Use of Funds  
$40,000 Security cameras and software licenses  
$39,974 Security cameras and a panic alarm system  
Ross  
Temple Emanu El  
Cuyahoga  
$28,951 Security film for panels/doors, concrete crash  
barriers, a security camera system, and a key  
card system  
Yeshiva Derech Hatorah  
Cuyahoga  
$28,620 Building entrance modifications to restrict  
access  
Jennings Local  
Highland Local  
Putnam  
Morrow  
$24,699 Security camera and secure keycard systems  
$22,025 Secured door hardware throughout the district's  
four schools  
Chippewa Local  
Wayne  
$21,467 Security camera and software licenses to install  
on district buses  
Hopewell Loudon Schools Seneca  
$13,915 Installation of a motorized bleacher system  
$12,218 Installation of indoor/outdoor security cameras  
Plymouth-Shiloh Local  
Indian Creek Local  
Richland  
Jefferson  
$10,838 Purchase of trauma response kits to be  
distributed to the district's four schools  
Total  
$242,705  
71,000 Students Participated in CCP Program in FY 2018  
Alexandra Vitale, Budget Analyst  
In November 2018, the Department of Higher Education (DHE) announced that more  
than 71,000 students participated in the College Credit Plus (CCP) program in the 2017-2018  
school year, a 4.6% increase from the approximately 68,000 students who took CCP classes the  
year before. More than 93% of those students passed their CCP courses and, thus, received  
college credit. According to DHE, 46.8% of participating students were seniors, 28.9% were  
juniors, and 14.2% were freshmen or sophomores. The remaining participants were home-  
school or private school students for which a grade level was not reported (9.6%) or were in 7th  
or 8th grade (0.5%). Most students took one or two college courses through the program.  
The CCP program, which replaced the former Post-Secondary Enrollment Options  
Program (PSEO) starting in FY 2016, allows qualified public, nonpublic, and home-instructed  
students in grades 7-12 to take college courses at public expense for both college and high  
school credit. Under CCP, funding for public students is deducted from the state aid allocated to  
the educating district or school. Funding for nonpublic and home-instructed students is paid  
Budget Footnotes  
P a g e | 21  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
directly by the state through certain GRF and non-GRF appropriations. Overall, the amount paid  
to colleges under the program increased from $45.0 million for FY 2017 to $48.6 million for  
FY 2018, based on the latest available figures from the Ohio Department of Education.  
Additional details on the CCP program are available on DHE's website at  
http://www.ohiohighered.org/ccp.  
DHE Issues First Annual Report on State's Progress Toward Goal  
of 65% Degree or Certificate Attainment by 2025  
Edward M. Millane, Senior Budget Analyst  
As required by H.B. 49, the Department of Higher Education (DHE), in collaboration with  
the Department of Education (ODE), issued a report on the progress the state is making toward  
achieving its goal of 65% of Ohioans ages 25-64 having a de1gree, certificate, or other  
1
postsecondary credential of value in the marketplace by 2025. The report also discusses  
several initiatives and strategies that the state has implemented to accelerate progress towards  
achieving its 2025 goal.  
As seen in the chart below, Ohio's overall rate of degree or certificate attainment  
increased from 34.9% in 2008 to 44.1% in 2016, an increase of 9.2 percentage points. While  
Ohio's rate has steadily increased over this period of time, the 44.1% attainment rate in 2016  
was still nearly three percentage points below the national average of 46.9%. According to the  
report, the large percentage point increases in both Ohio's and the U.S.'s average attainment  
rates between 2013 and 2014 are likely due to the inclusion of workforce-relevant certificates  
in total postsecondary credentials beginning in 2014.  
Chart 5: Average Degree and Certificate Attainment Rates for Ohio and U.S.  
5
4
4
3
3
3
0.0%  
6.0%  
2.0%  
8.0%  
4.0%  
0.0%  
4
6.9%  
4
5.8%  
4
5.3%  
4
3
0.0%  
7.5%  
3
9.4%  
44.1%  
3
3
8.7%  
5.5%  
43.6%  
3
3
7.9%  
4.9%  
3
8.1%  
38.3%  
43.2%  
36.5%  
3
5.8%  
34.7%  
2009  
2
008  
2010  
2011  
2012  
Year  
2013  
2014  
2015  
2016  
Ohio  
U.S.  
Source: Lumina Foundation A Stronger Nation 2018  
11  
DHE's report cites data from the Lumina Foundation's A Stronger Nation 2018. DHE's full  
report can be viewed at: https://www.ohiohighered.org/attainment. Lumina's full report can be viewed  
at: https://www.luminafoundation.org/resources/a-stronger-nation-report.  
Budget Footnotes  
P a g e | 22  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Controlling Board Approves Ohio EPA Request to Establish  
Marsh Restoration Fund  
Jessica Murphy, Budget Analyst  
On February 11, 2019, the Controlling Board approved an Ohio Environmental  
Protection Agency (Ohio EPA) request to create the Marsh Restoration Fund (Fund 5VA0) with  
an appropriation of $250,000 in FY 2019 for a remediation and restoration project adjacent to  
the Mentor Marsh located within the City of Mentor (Lake County). The project includes the  
removal, disposal, and replacement of contaminated soil. The appropriated funds are to be  
used to initiate a contract for engineering design and planning services. While the project's  
total cost, as well as its timeline for completion, is uncertain, a related civil litigation settlement  
agreement has resu12lted in the defendants remitting $10.6 million to the Ohio EPA explicitly for  
use on this project.  
The project site is approximately nine acres on which between 200,000 and  
00,000 tons of waste salt was disposed of in 1966, and later covered with fly ash (a coal  
3
byproduct) and lime kiln dust. In the ensuing years, two events occurred: contaminated ground  
water leached from the site, and the ecology of the adjacent marsh changed from a freshwater  
swamp forest to an area dominated by salt-tolerant reed grass.  
Under the terms of the settlement agreement, a 62-acre property referred to as the  
Salt Fill Site" adjacent to the Mentor Marsh, which includes the project site, is to be donated to  
"
the Lake County Land Reutilization Corporation, an Ohio nonprofit corporation. Once the  
project is completed, the Salt Fill Site is expected to be offered to the Cleveland Museum of  
Natural History. The museum and the Ohio Department of Natural Resources Division of  
Natural Areas and Preserves jointly own and manage the 646-acre marsh as a state nature  
preserve.  
Ohio EPA Awards $187.8 Million in Wastewater and Drinking  
Water Infrastructure Improvement Loans  
Robert Meeker, Budget Analyst  
At the end of January 2019, the Ohio Environmental Protection Agency (Ohio EPA)  
announced that low-interest and principal forgiveness loans totaling $187.8 million had been  
awarded to 39 local governments for wastewater and drinking water infrastructure  
improvement projects. The loans were approved during the fourth quarter of calendar year  
2
018 (October to December). Ohio EPA estimates that loan recipients will save a total of more  
than $36.9 million statewide compared to market-rate loans.  
Individual loans range from $58.2 million (Northeast Ohio Regional Sewer District) to  
10,000 (Bellefontaine, Logan County) with a median award of $200,000. Of the loan total,  
10.3 million is in the form of principal forgiveness loans which do not need to be repaid. Of  
$
$
12  
The plaintiffs in the settlement are the state of Ohio and the city of Mentor. The defendants  
are the Osborne Concrete & Stone Co., and various related trusts, estates, and other individuals and  
entities.  
Budget Footnotes  
P a g e | 23  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
the 22 local governments receiving principal forgiveness loans, ten (45%) received a principal  
forgiveness amount that is more or less 100% of the loan award.  
The loans are backed with money drawn from the Ohio Water Pollution Control Loan  
Fund (WPCLF) and the Water Supply Revolving Loan Account (WSRLA). Both funds are managed  
by the Ohio EPA with assistance from the Ohio Water Development Authority. The WPCLF  
provides below-market rate, zero interest rate, and principal forgiveness loans for the planning,  
design, and construction of wastewater treatment facilities and sewer systems. The WSRLA  
provides below-market rate loans to public water systems for the planning, design, and  
construction of improvements to community water systems and nonprofit noncommunity  
public water systems. Both the WPCLF and WSRLA are funded with federal capitalization grants,  
loan repayments, and bond proceeds.  
Budget Footnotes  
P a g e | 24  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
State of the Economy  
Economic growth nationally was strong through much of the previous biennium. Ohio's  
economy continued to expand, though not as rapidly as that of the nation. Economic statistics  
have been mixed in early 2019. Annual growth of inflation-adjusted gross domestic product  
(
real GDP) was 2.6% nationally in the fourth quarter of 2018. National industrial production  
grew at a rate of 4.6% during that time, but fell in the month of January. Employment numbers  
have been good in recent months, although February employment gains in the nation were  
minimal. The Federal Reserve Bank's Open Market Committee (FOMC) has tempered plans for  
further increases in the federal3 funds rate, resorting to a more patient approach when assessing  
1
current economic conditions. On March 6, 2019, the final vehicle rolled off the assembly line  
1
4
at General Motors' assembly plant in Lordstown, Ohio. At least 1,700 positions were lost.  
The National Economy  
The national economy continued to grow in 2018, extending a recovery and expansion  
that began in 2009. Economic indicators have turned mixed in early 2019, with employment up  
strongly in January but stagnating in February. Real GDP grew by 2.9% in 2018, the highest rate  
of growth since 2015. Growth was supported by federal tax cuts and spending increases.  
Interest rates generally rose during the past two years but remain low in a longer-term  
historical context, and monetary policy tightening of the past few years appears now to be on  
hold. Chart 6 illustrates quarterly changes in real GDP and industrial production from 2008  
through last year. Industrial production is predominantly manufacturing, and also includes  
mining and utility output.  
Chart 6: United States Output Measures  
1
0
5
0
5
-
-
-
-
-
10  
15  
20  
25  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  
Real Gross Domestic Product Total Industrial Production  
1
3
4
https://www.federalreserve.gov/newsevents/pressreleases/monetary20190130a.htm.  
https://www.chicagotribune.com/business/ct-biz-gm-lordstown-ohio-plant-closing-20190306-  
1
story.html.  
Budget Footnotes  
P a g e | 25  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Total nonfarm payroll increased by 20,000 in February after rising 311,000 in January,  
according to the U.S. Bureau of Labor Statistics. The unemployment rate, measured as the  
number of unemployed persons divided by the number of persons in the labor force, declined  
to 3.8%, down 0.2 percentage points from a month earlier. The number of unemployed persons  
decreased by 300,000 to 6.2 million persons. Employment in professional and business services  
increased by 42,000 workers. Construction employment declined by 31,000 in February;  
year over year, the construction industry has added 223,000 jobs.  
Consumer spending was strong during much of 2018, supported by employment and  
wage gains and the tax cuts in late 2017. Consumer durable goods spending grew during the  
year. Retail sales slowed late in 2018. Overall sales of new cars and light trucks were  
1
7.2 million units in 2018, up 0.5% from 2017. The market share of light trucks and SUVs  
increased sharply over the last year. During 2018, automakers announced plans to reduce  
manufacturing in the U.S., coupled with plans to reduce the variety of models offered,  
particularly among the passenger car segment.  
The rate of real private residential fixed investment reached its highest level (seasonally  
adjusted) in ten years in the fourth quarter of 2017, then declined slowly during 2018.  
Nonresidential fixed investment accelerated during 2018 to 7% higher than a year earlier. The  
largest percent change among the major investment subcategories was in intellectual property  
products. Export demand rose, as did government spending at both the federal level and the  
state and local level.  
Inflation, measured by the consumer price index (CPI), remained slightly above the  
Federal Reserve's 2% target for much of CY 2018, and slowed in recent months. The measure  
which includes food and energy products has been volatile over recent history due to variable  
energy prices. Overall price inflation was minimal in 2015 and was slow to pick up for much of  
2
2
016 after a steep drop in energy prices at the end of 2014. The drop in energy prices in late  
018 resulted in no month-to-month increase in the all-items CPI since October 2018.  
Chart 7: Consumer Price Index  
6
5
4
3
2
1
0
-
-
-
1
2
3
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019  
All Items Excluding Food and Energy  
Budget Footnotes  
P a g e | 26  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
The Federal Reserve began raising short-term interest rates in December 2015, and in  
December 2016 determined economic conditions were strong enough for a second quarter-  
point increase in the target range. The Federal Reserve's interest rate range was raised  
consistently over 2017 and 2018 due to strength in the economy, financial markets, and labor  
market. Future interest rate increases may be more gradual than previously appeared likely.  
The statement released after the January meeting of the central bank's monetary policy  
decision-makers said the committee would be "patient" in considering future interest rate  
changes. Six weeks earlier, nearly all committee members expected to raise short-term interest  
rates in 2019, by 0.25 to 0.75 percentage point.  
Chart 8: Effective Federal Funds Rate  
4
4
3
3
2
2
1
1
0
0
.5%  
.0%  
.5%  
.0%  
.5%  
.0%  
.5%  
.0%  
.5%  
.0%  
-
0.5%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019  
The Ohio Economy  
The economy in Ohio has been growing along with the national economy since  
mid-2016, although the growth rate in real GDP has generally been slower in Ohio than  
nationally since 2015. In the third quarter of 2018, Ohio's economy grew at an annualized 2.8%  
rate, down from 3.7% during the second quarter and approximately the same as the  
third quarter of 2017. Over the same two quarters, national real GDP growth was 3.4% and  
4
by its contribution to total GDP growth, was wholesale trade, followed closely by finance and  
insurance.  
.2%, respectively. During the third quarter of 2018, Ohio's fastest growing sector, as measured  
Budget Footnotes  
P a g e | 27  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Chart 9: Real Gross Domestic Product  
Seasonally Adjusted  
1
0
5
0
5
-
-
-
-
10  
15  
20  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  
United States  
Ohio  
In the year to December 2018, Ohio nonfarm payroll employment grew5 by a revised  
1
4
4,700 jobs (0.8%), and increased a further 20,300 from December to January. The pace of  
growth picked up modestly in the past year, after slower growth in 2017. The healthcare and  
social assistance sector added the most jobs in Ohio in the past year, while retail trade lost the  
most jobs. In private industry, the goods-producing sector added 18,700 jobs in the past year,  
while the service-providing sector gained 38,600 workers.  
Chart 10: Total Nonfarm Payroll Employment  
Millions, Seasonally Adjusted  
1
1
1
1
1
1
1
1
54.7  
50.8  
46.9  
43.0  
39.1  
35.2  
31.3  
27.4  
5.95  
5.80  
5.65  
5.50  
5.35  
5.20  
5.05  
4.90  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019  
United States Ohio (right scale)  
15  
Prior to revision, Ohio nonfarm payroll employment was reported to have grown 116,500  
(2.1%) in the year to December. Nationwide, total nonfarm payroll employment rose 1.8% in that  
period.  
Budget Footnotes  
P a g e | 28  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
Ohio's unemployment rate in January was 4.7%, up from 4.6% a month prior. Ohio's  
unemployment rate has been higher than the national average since May 2016. The number of  
unemployed workers in Ohio was 269,000 in January, an increase of 2,000 from December. The  
Ohio civilian labor force did not gain a significant number of participants in December 2018, and  
declined by 0.3% year over year.  
Chart 11: Unemployment Rate  
Seasonally Adjusted  
1
1
1
2
1
0
9
8
7
6
5
4
3
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019  
United States Ohio  
Personal income, total earnings from wages, investments, transfers, and business  
income, has grown in Ohio and nationally in nearly every quarter since 2009, as seen in  
Chart 12. Figures in the chart reflect dollars of current purchasing power. Ohio's personal  
income grew 3.1% year over year, ending in the third quarter of 2018, while personal income in  
the U.S. rose 4.4%.  
Chart 12: Personal Income  
Billions of Dollars, Seasonally Adjusted Annualized Quarters  
1
1
1
1
1
1
1
1
1
1
8,000  
7,250  
6,500  
5,750  
5,000  
4,250  
3,500  
2,750  
2,000  
1,250  
600  
575  
550  
525  
500  
475  
450  
425  
400  
375  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  
United States Ohio (right scale)  
Budget Footnotes  
P a g e | 29  
March 2019  
Legislative Budget Office of the Legislative Service Commission  
The Ohio statewide housing market, following a series of moderately strong years,  
softened in 2018. Housing construction growth, as indicated by building permits for new  
privately owned units (Chart 13), slowed last year. On the national level, new housing  
construction activity grew but more slowly than in 2017. Ohio existing home sales, as measured  
in units, decreased by 0.7% in 2018 as compared to a year prior. According to Ohio Realtors, the  
average sale price of an existing Ohio home was $182,484 in 2018, an increase of $9,281 over  
the average sale price in 2017. The total dollar volume of existing home sales was increased by  
4
.6% in 2018.  
Chart 13: New Privately Owned Housing Units  
Authorized by Building Permits  
4
0%  
0%  
0%  
0%  
3
2
1
0%  
-
-
-
-
10%  
20%  
30%  
40%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  
United States  
Ohio  
Budget Footnotes  
P a g e | 30  
March 2019