A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2020  
Issue: October 2019  
Highlights  
Ross Miller, Chief Economist  
September GRF tax revenue was $37 million above the estimate published by  
the Office of Budget and Management (OBM) in August. September's tax receipts  
boosted the year-to-date (YTD) positive variance to $71 million for the first  
quarter of FY 2020. The commercial activity tax (CAT) provided the largest positive  
variance for the first quarter from any single tax, at nearly $34 million.  
Solid tax revenues have come despite some indications of slowing growth in the  
national economy. Inflation-adjusted U.S. gross domestic product (real GDP) grew by  
2
.0% at an annualized rate in the April through June quarter, slower than the 3.1%  
growth in the first quarter. The U.S. Bureau of Economic Analysis (BEA) attributed  
the slowdown to downturns in inventory investment, exports, and nonresidential  
fixed investment. Consumer spending grew by a solid 4.6% (annualized).  
Through September 2019, GRF sources totaled $8.56 billion:  
Revenue from the sales and use tax was $30.9 million above estimate;  
Personal income tax (PIT) receipts were $18.8 million above estimate.  
Through September 2019, GRF uses totaled $9.97 billion:  
Program expenditures were $68.2 million below estimate;  
Property tax reimbursements were $108.9 million above estimate  
primarily due to timing;  
Expenditures from all other program categories were below estimates,  
including Medicaid, which was below estimate by $62.5 million.  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 11),  
the National Economy (p. 23), and the Ohio Economy (p. 25).  
Also Issue Updates on:  
Vaping Prevention Initiatives (p. 17)  
Funding for Ohios Hemp Program (p. 17)  
9
11 Grant Program (p. 18)  
Rape Crisis Program Grants (p. 18)  
School Report Cards (p. 19)  
Direct Support Professional Rate Increase (p. 20)  
DYS Second Chance Grant Funding (p. 20)  
State Share of Instruction Reconciliation Payments (p. 21)  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of September 2019  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on October 1, 2019)  
State Sources  
Actual  
Estimate*  
Variance Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$128,063  
$728,967  
$857,030  
$125,600  
$735,900  
$861,500  
$2,463  
-$6,933  
-$4,470  
2.0%  
-0.9%  
-0.5%  
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  
Estate  
$930,915  
$11,975  
$80,025  
$32,832  
$8,182  
$0  
-$1,966  
$3  
$1  
$3,468  
$4,541  
$1,796  
$4  
$897,800  
$7,000  
$81,800  
$31,800  
$6,300  
$0  
-$7,000  
$100  
$0  
$5,800  
$4,400  
$2,000  
$0  
$33,115  
$4,975  
-$1,775  
$1,032  
$1,882  
$0  
3.7%  
71.1%  
-2.2%  
3.2%  
29.9%  
---  
$5,034  
71.9%  
-$97 -96.8%  
$1 ---  
-$2,332 -40.2%  
$141 3.2%  
-$204 -10.2%  
$4  
$0  
---  
---  
$0  
$0  
Total Tax Revenue  
$1,928,806 $1,891,500  
$37,306  
2.0%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$0  
$3,093  
$5,707  
$8,800  
$0  
$1,878  
$52,574 -$46,867 -89.1%  
$54,452 -$45,652 -83.8%  
$0  
$1,215  
---  
64.7%  
Total Nontax Revenue  
Transfers In  
$6,000  
$0  
$6,000  
-$2,346  
-$5,617  
-$7,963  
---  
-0.1%  
-0.8%  
-0.3%  
Total State Sources  
Federal Grants  
$1,943,606 $1,945,952  
$677,819 $683,436  
$2,621,425 $2,629,388  
Total GRF Sources  
*Estimates of the Office of Budget and Management as of August 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 2  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2020 as of September 30, 2019  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on October 1, 2019)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate* Variance Percent FY 2019** Percent  
$418,613  
$2,325,404 $2,313,300 $12,104  
$2,744,017 $2,713,100 $30,917  
$399,800 $18,813  
4.7%  
$387,375  
8.1%  
3.7%  
4.4%  
0.5% $2,241,989  
1.1% $2,629,364  
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  
Estate  
$2,282,127 $2,263,300 $18,827  
0.8% $2,212,629  
3.1%  
15.1%  
-2.0%  
-5.9%  
6.7%  
$399,431  
$179,389  
$89,913  
$8,919  
$1  
$365,800 $33,631  
9.2%  
-1.8%  
-1.0%  
17.3%  
---  
$347,006  
$183,009  
$95,596  
$8,357  
$182,700  
$90,800  
$7,600  
$0  
-$3,311  
-$887  
$1,319  
$1  
$0 1566.7%  
-$9,506  
$32,092  
$12,770  
$12,484  
$13,249  
$1,796  
-$26  
-$5,500  
$31,900  
$14,000  
$16,600  
$13,000  
$2,000  
$0  
-$4,006 -72.8%  
$192  
-$1,230  
-$4,116 -24.8%  
$249 1.9%  
-$204 -10.2%  
-$26  
$38  
-$6,160  
-54.3%  
-1.0%  
-13.9%  
-22.1%  
2.7%  
0.6%  
-8.8%  
$32,411  
$14,839  
$16,033  
$12,900  
$2,019  
-11.0%  
---  
---  
$162 -116.3%  
$37  
$38  
$0  
0.2%  
Total Tax Revenue  
$5,766,691 $5,695,300 $71,391  
1.3% $5,548,202  
3.9%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$0  
$8,605  
$69,730  
$78,335  
$0  
$7,001  
$55,040 $14,690  
$62,041 $16,293  
$0  
$1,604  
---  
22.9%  
26.7%  
26.3%  
$88 -100.0%  
$8,256  
4.2%  
$16,035 334.9%  
$24,378 221.3%  
Total Nontax Revenue  
Transfers In  
$75,480  
$68,570  
$6,911  
10.1%  
$75,995  
-0.7%  
4.8%  
-1.2%  
2.9%  
Total State Sources  
Federal Grants  
$5,920,507 $5,825,911 $94,596  
$2,640,938 $2,689,714 -$48,776  
$8,561,445 $8,515,625 $45,819  
1.6% $5,648,575  
-1.8% $2,671,679  
0.5% $8,320,254  
Total GRF SOURCES  
*
*
Estimates of the Office of Budget and Management as of August 2019.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 3  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean Botomogno, Principal Economist  
Overview  
FY 2020 GRF sources of $8.56 billion through September were $45.8 million (0.5%)  
above OBM estimates of August 2019. GRF sources consist of state-source receipts, which  
include tax revenue, nontax revenue, and transfers in, and federal grants (which are typically  
federal reimbursements for Medicaid and other human services programs). In the first  
quarter, GRF tax sources totaled $5.77 billion. This amount was $71.4 million (1.3%) above  
projections due to positive variances of $30.9 million (1.1%) for the sales and use tax,  
$
33.6 million (9.2%) for the CAT, and $18.8 million (0.8%) for the PIT. In addition, nontax  
revenue and transfers in were above projections by $16.3 million (26.3%) and $6.9 million  
10.1%), respectively. Those positive variances were partially offset by a shortfall of  
48.8 million (1.8%) for federal grants, which totaled $2.64 billion in the first fiscal quarter.  
(
$
Tables 1 and 2 show GRF sources for the month of September and for FY 2020 through  
September, respectively.  
In addition to good performances from the largest GRF tax sources, the foreign  
insurance tax was the only other GRF tax source with a noticeable surplus of $1.3 million YTD.  
The fourth largest GRF tax source, the cigarette and other tobacco products tax, posted a  
cumulative shortfall of $3.3 million. YTD negative variances were also recorded for the alcoholic  
2
beverage tax ($4.1 million), the financial institutions tax (FIT, $4.0 million), the natural gas  
consumption tax ($1.2 million), and the kilowatt-hour tax ($0.9 million).  
Total GRF sources for the month of September of $2.62 billion were $8.0 million (0.3%)  
below projections but with positive variances of $37.3 million for GRF tax sources and  
$
6.0 million for transfers in. Those positive variances were offset by shortfalls of $5.6 million for  
federal grants and a timing-related negative variance of $45.7 million for nontax revenue. The  
monthly negative variance for nontax 3revenue reflects a payment made by JobsOhio in August  
that had been expected in September.  
Regarding GRF taxes in September 2019, the PIT exceeded projections by $33.1 million,  
while the CAT and the FIT each had a positive variance of $5.0 million. In addition, revenues  
from the foreign insurance tax and the kilowatt-hour tax were $1.9 million and $1.0 million,  
respectively, more than expected. On the other hand, the sales and use tax had a negative  
1
This report compares actual monthly and year-to-date GRF revenue sources to OBMs  
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 GRF typically pays out refunds under the FIT during the first half of a fiscal year as  
taxpayers make adjustments to previous tax filings. FIT receipts are generally expected at the end of  
January, March, and May. As shown in Table 2, first-quarter FIT refunds were $4.0 million larger than  
expected.  
3
In August, nontax revenue was above estimate by $62.3 million due to the early payment.  
Budget Footnotes  
P a g e | 4  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
variance of $4.5 million, and the alcoholic beverage tax and the cigarette tax were short of  
estimates by $2.3 million and $1.8 million, respectively. Chart 1, below, shows cumulative  
variances of GRF sources in FY 2020.  
Chart 1: Cumulative Variances of GRF Sources in FY 2020  
(
Variances from Estimates, $ in millions)  
$
$
$
$
80  
60  
40  
20  
$0  
-
-
-
$20  
$40  
$60  
Jul-19  
Aug-19  
Sep-19  
Federal Grants  
Tax Revenue  
Total GRF Sources  
As shown in Table 2, FY 2020 GRF sources through September were $241.2 million  
(2.9%) above sources in the corresponding period in FY 2019, with GRF tax sources accounting  
for $218.5 million of the total growth. Receipts from nontax revenue were $54.0 million above  
revenue from this source in FY 2019. Federal grants and transfers in decreased $30.7 million  
and $0.5 million, respectively. As a result of continuing economic growth, FY 2020 first-quarter  
receipts increased for the largest GRF tax sources: the sales and use tax ($114.7 million), the PIT  
(
$69.5 million), and the CAT ($52.4 million). Growth in PIT revenue, at 3.1%, was slower than  
growth in the other two tax sources largely due to a reduction in withholding rates that went  
into effect in January of this year. Revenue from the cigarette and other tobacco products tax,  
continuing its usual yearly downward trend, fell $3.6 million. Revenue also fell for the  
kilowatt-hour tax ($5.7 million), the alcoholic beverage tax ($3.5 million), the FIT ($3.3 million),  
and the natural gas consumption tax ($2.1 million).  
Sales and Use Tax  
The sales and use tax had a strong FY 2019 and was again in positive territory in the first  
quarter of FY 2020. Through September, receipts to the GRF from the sales and use tax totaled  
$
first-quarter revenue in FY 2019. Both the nonauto and the auto portions of the tax were ahead  
of projections.  
2.74 billion. This amount was $30.9 million (1.1%) above estimate and 4.4% above  
For the month of September, however, GRF receipts of $857.0 million were $4.5 million  
(0.5%) below estimated revenue, though they were $32.2 million (3.9%) above receipts in the  
same month in 2018. The nonauto sales and use tax posted a negative variance of $6.9 million  
that was partially offset by a gain of $2.5 million from the auto sales and use tax. For analysis  
Budget Footnotes  
P a g e | 5  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
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  
YTD FY 2020 nonauto sales and use tax receipts to the GRF totaled $2.33 billion, an  
amount $12.1 million (0.5%) above estimate and $83.4 million (3.7%) above revenue in the  
corresponding period in FY 2019. However, GRF revenue of $729.0 million in September was  
below estimate by $6.9 million (0.9%). Monthly receipts were $19.4 million (2.7%) above  
revenue in September 2018. Chart 2, below, shows year-over-year growth in nonauto sales and  
use tax collections in the last 12 months. Revenue growth for this tax has been solid, supported  
by employment and wage gains throughout the period, though the growth rate has declined.  
Nonauto sales and use tax growth has been supported by increased sales tax remittances by  
out-of-state sellers. Though the total amount of additional tax revenue is uncertain, Ohio has  
benefitted from an increase in voluntary collections by certain remote sellers in the wake of the  
4
U.S. Supreme Court decision in South Dakota v. Wayfair in June 2018. Following this Supreme  
Court decision, H.B. 166, the main operating budget act for the biennium, made several  
changes to sales tax law and substantially modified Ohios nexus assumptions which will boost  
revenue from the nonauto sales and use tax. The changes are expected to increase revenue by  
$
or lower depending on the behavioral response of remote sellers and market facilitators.  
121 million in FY 2020 and $210 million in FY 2021. However, the revenue gains may be higher  
Chart 2: Nonauto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
8
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
4
Though the Court’s decision applied only to South Dakota, it reversed long-standing federal law  
that prevented states from requiring out-of-state sellers to collect sales tax on purchases by residents of  
the state. Certain sellers have decided to impose and remit sales taxes even though they may not yet be  
required to do so by state law.  
Budget Footnotes  
P a g e | 6  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Auto Sales and Use Tax  
Similarly to the nonauto sales and use tax, the auto sales and use tax performed above  
expectations in the first three months of FY 2020. GRF revenue from this source totaling  
$
$
418.6 million through September was $18.8 million (4.7%) above estimates and also  
31.2 million (8.1%) above receipts in the corresponding period in FY 2019. For the month of  
September 2019, revenue from this tax was $128.1 million, $2.5 million (2.0%) above estimate  
and $12.8 million (11.1%) above the amount received in the same month in 2018. Chart 3,  
below, shows year-over-year growth in auto sales and use tax collections. Revenue growth has  
been uneven but remained positive. The rise in Ohio auto sales and use tax revenue had been  
mostly due to price increases for both new and used vehicles. The price increases represent the  
combined effects of inflation and a shift in consumer tastes toward more expensive models,  
especially light trucks and sport utility vehicles (SUVs). Compared to the corresponding quarter  
in FY 2019, first-quarter data from the Ohio Bureau of Motor Vehicles show a 2.9% increase in  
the number of titles issued and an increase of 5.1% in average prices.  
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%  
Budget Footnotes  
P a g e | 7  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Personal Income Tax  
YTD FY 2020 PIT GRF revenue of $2.28 billion was $18.8 million (0.8%) above OBM  
projections. First-quarter PIT receipts were also $69.5 million (3.1%) above receipts in the first  
three months of FY 2019. Comparisons with year-ago receipts are affected by a 3.3%  
5
withholding rate reduction earlier this calendar year. PIT revenue is comprised of gross  
collections minus refunds and distributions to the LGF. Gross collections consist of employer  
6
withholdings, quarterly estimated payments, trust payments, payments associated with  
annual returns, and other miscellaneous payments. The performance of the tax is typically  
driven by employer withholdings, which is the largest component of gross collections (about  
8
the monthly performance of the tax.  
1% of gross collections in FY 2019). Larger than expected refunds could also greatly affect  
September GRF receipts of $930.9 million were $33.1 million (3.7%) above estimate  
and $75.5 million (8.8%) above receipts in September 2018. Gross collections were above  
projections by $34.1 million, with all components exceeding projected revenue: withholding,  
quarterly estimated payments, and annual return payments were above estimates by  
$
was reduced by a distribution to the LGF that was $1.1 million larger than expected, whereas  
refunds were slightly below target.  
13.7 million, $11.7 million, and $6.6 million, respectively. Gross collectionspositive variance  
FY 2020 revenues from each component of the PIT relative to estimates and to  
revenue received in FY 2019 are detailed in the table below. FY 2020 gross collections were  
above estimate by $28.0 million. First-quarter revenue from all components was ahead of  
estimates. Higher than projected refunds ($8.1 million) and distributions to the LGF  
(
FY 2020 refunds and LGF distributions also increased compared to their amounts in the  
prior year, while gross collections grew from FY 2019 by $100.0 million.  
$1.1 million) reduced the positive variance for GRF revenue to the $18.8 million total.  
7
5
Effective January 1, 2019, Ohio employer withholding tax rates were reduced by 3.3% in order  
to be fully consistent with the income tax rate reductions enacted in 2015 (H.B. 64 of the  
st  
1
31 General Assembly).  
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 individuals tax year and January  
of the following year. Most estimated payments are made by high-income taxpayers.  
7
In part, the increase in LGF distributions is due to an increase in the allocation of GRF tax  
revenue to the LGF. H.B. 166 included a provision in uncodified law increasing the allocation from 1.66%  
of GRF tax revenue to 1.68% during the current biennium. The allocation thus accounts for  
1
.2 percentage points of the 3.3% increase in LGF distributions.  
Budget Footnotes  
P a g e | 8  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
FY 2020 PIT Revenue Variance and Annual Change by Component  
YTD Variance from Estimate  
Changes from FY 2019  
Amount  
$ in millions)  
Percent  
(%)  
Amount  
($ in millions)  
Percent  
(%)  
Category  
(
Withholding  
$11.9  
$8.1  
$1.3  
$5.5  
$1.1  
$28.0  
$8.1  
$1.1  
$18.8  
0.5%  
$54.7  
$30.2  
$1.5  
2.5%  
Quarterly Estimated Payments  
Trust Payments  
3.3%  
10.7%  
12.0%  
6.6%  
1.1%  
5.1%  
1.0%  
0.8%  
13.7%  
12.0%  
30.7%  
9.3%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$12.1  
$1.5  
$100.0  
$27.2  
$3.3  
4.1%  
Less Refunds  
19.5%  
3.3%  
Less LGF Distribution  
GRF PIT Revenue  
$69.5  
3.1%  
8
Through September, FY 2020 employer withholding receipts grew 2.5%. The chart below  
illustrates the growth of monthly employer withholdings on a three-month moving average  
relative to one year ago. It shows both the actual change in withholding receipts in FY 2020 and  
estimated withholding receipts adjusted for the decrease in withholding tax rates in January.  
Chart 4: Monthly Witholding Receipts Trend  
Actual and Adjusted 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%  
Actual  
Adjusted  
8
Withholding receipts consist of monthly employer withholding (about 99% of the total) and  
annual employer withholding. For FY 2020, monthly employer withholding was 2.2% above such receipts  
in FY 2019. On the other hand, annual employer withholding grew 152.1%.  
Budget Footnotes  
P a g e | 9  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Commercial Activity Tax  
Receipts from the CAT have come in above projection every month this fiscal year.  
FY 2020 GRF receipts in the first quarter totaled $399.4 million, $33.6 million (9.2%) above  
estimate and $52.4 million (15.1%) above revenue through September in FY 2019. September  
revenue of $12.0 million was $5.0 million (71.1%) above estimate and $9.0 million (298.5%)  
above revenue in September 2018. This monthly performance follows positive variances of  
$
18.2 million in August and $10.4 million in July.  
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 September, Fund 7047 and  
Fund 7081 received $61.1 million and $9.4 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.  
FY 2020 first-quarter gross collections (i.e., all funds revenue) increased $88.3 million  
(
the first quarter this fiscal year, resulting in a lower growth rate for GRF receipts.  
21.2%) relative to collections in FY 2019. Refunds also increased by $26.7 million (451.6%) in  
Cigarette and Other Tobacco Products Tax  
FY 2020 first-quarter revenue from the cigarette and other tobacco products (OTP) tax  
totaling $179.4 million was below estimate by $3.3 million (1.8%). This total included  
$
2
158.8 million from the sale of cigarettes and $20.6 million from the sale of OTP. September  
019 receipts of $80.0 million were $1.8 million (2.2%) below estimate but $4.9 million (6.6%)  
above revenue in September 2018.  
FY 2020 receipts from this tax source fell $3.6 million (2.0%) relative to revenues in the  
corresponding period in FY 2019. Receipts from cigarette sales fell $4.5 million (2.8%) while  
those from the sale of OTP increased $0.9 million (4.5%). On a yearly basis, revenue from the  
cigarette and OTP tax usually trends downward, generally at a slow pace; this is due to a decline  
of cigarette revenue, while receipts from the tax on OTP generally increase. The OTP tax is an  
ad valorem tax, generally 17% of the wholesale price paid by wholesalers for the product; thus,  
revenue from that portion of the tax base (about 8% of the total tax base) grows with OTP price  
increases.  
Starting October 1, 2019, H.B. 166 levied a tax of 10¢ per milliliter of vapor product, or if  
the vapor product is sold in nonliquid form, a tax per gram. Vapor product is defined as any  
liquid solution or other substance that contains nicotine and is depleted as it is used in an  
electronic smoking product. However, the increase in revenue from this new tax is unlikely to  
offset the yearly decline in cigarette and OTP tax receipts.  
Budget Footnotes  
P a g e | 10  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of September 2019  
($ in thousands)  
(Actual based on OAKS reports run October 2, 2019)  
Program Category  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$719,596  
$188,268  
$13,995  
$756,457 -$36,861  
$200,147 -$11,879  
-4.9%  
-5.9%  
-9.5%  
-5.2%  
Other Education  
$15,456  
-$1,461  
Total Education  
$921,859  
$972,060 -$50,200  
Medicaid  
$1,109,783 $1,124,376 -$14,593  
$74,073  
$1,183,856 $1,212,700 -$28,844  
-1.3%  
Health and Human Services  
Total Health and Human Services  
$88,324 -$14,251 -16.1%  
-2.4%  
Justice and Public Protection  
General Government  
$167,404  
$29,381  
$175,474  
-$8,070  
-4.6%  
$47,495 -$18,115 -38.1%  
Total Government Operations  
$196,785  
$222,970 -$26,185 -11.7%  
Property Tax Reimbursements  
Debt Service  
$399,650  
$375,135  
$774,785  
$270,325 $129,325  
$375,382 -$246  
$645,707 $129,079  
47.8%  
-0.1%  
20.0%  
Total Other Expenditures  
Total Program Expenditures  
Transfers Out  
$3,077,286 $3,053,436 $23,849  
$8,198 $0 $8,198  
$3,085,484 $3,053,436 $32,048  
0.8%  
---  
Total GRF Uses  
1.0%  
*September 2019 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 11  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2020 as of September 30, 2019  
($ in thousands)  
(Actual based on OAKS reports run October 2, 2019)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2019** Percent  
Primary and Secondary Education  
Higher Education  
$2,176,112 $2,217,554 -$41,443  
-1.9% $2,165,896  
0.5%  
-3.7%  
19.8%  
-0.2%  
$541,734  
$31,651  
$555,418 -$13,684  
$33,164 -$1,513  
-2.5%  
-4.6%  
$562,389  
$26,430  
Other Education  
Total Education  
$2,749,497 $2,806,137 -$56,640  
-2.0% $2,754,715  
Medicaid  
$4,158,325 $4,220,789 -$62,464  
-1.5% $4,132,180  
0.6%  
3.5%  
0.8%  
Health and Human Services  
Total Health and Human Services  
$297,636  
$322,870 -$25,233  
-7.8%  
$287,486  
$4,455,961 $4,543,659 -$87,698  
-1.9% $4,419,666  
Justice and Public Protection  
General Government  
$630,320  
$111,008  
$741,328  
$649,602 -$19,283  
-3.0%  
$617,824  
$98,944  
2.0%  
12.2%  
3.4%  
$124,209 -$13,201 -10.6%  
Total Government Operations  
$773,811 -$32,483  
-4.2%  
$716,768  
Property Tax Reimbursements  
Debt Service  
$601,005  
$761,147  
$492,120 $108,885  
22.1%  
0.0%  
$577,235  
$794,412  
4.1%  
-4.2%  
-0.7%  
$761,393  
-$246  
Total Other Expenditures  
$1,362,152 $1,253,513 $108,639  
8.7% $1,371,647  
Total Program Expenditures  
Transfers Out  
$9,308,938 $9,377,120 -$68,182  
-0.7% $9,262,795  
0.5%  
$656,601  
$642,775 $13,826  
2.2%  
$741,871 -11.5%  
-0.4%  
Total GRF Uses  
$9,965,540 $10,019,895 -$54,355  
-0.5% $10,004,666  
*
*
September 2019 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 12  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on October 2, 2019)  
Month of September 2019  
Year to Date through September 2019  
Actual Estimate* Variance Percent  
Department  
Medicaid  
GRF  
Actual  
Estimate* Variance Percent  
$1,036,923 $1,054,004 -$17,081  
$1,176,106 $1,211,082 -$34,976  
-1.6% $3,952,386 $4,016,364  
-2.9% $2,340,198 $2,383,376  
-$63,977  
-$43,178  
-1.6%  
-1.8%  
-1.7%  
Non-GRF  
$
2,213,029 $2,265,086 -$52,057  
-2.3% $6,292,584 $6,399,740 -$107,155  
All Funds  
Developmental Disabilities  
GRF  
$60,807  
$58,506  
$206,288  
$264,795  
$2,301  
-$1,862  
$439  
3.9%  
-0.9%  
0.2%  
$176,554  
$654,759  
$831,314  
$176,616  
$657,997  
$834,614  
-$62  
-$3,238  
-$3,300  
0.0%  
-0.5%  
-0.4%  
Non-GRF  
All Funds  
$204,426  
$
265,233  
Job and Family Services  
GRF  
$11,218  
$12,673  
23,891  
$11,003  
$9,582  
$215  
$3,091  
$3,306  
2.0%  
32.3%  
16.1%  
$26,977  
$45,628  
$72,605  
$25,127  
$37,130  
$62,257  
$1,850  
$8,498  
7.4%  
22.9%  
16.6%  
Non-GRF  
$
$20,585  
$10,348  
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$834  
$862  
$3,407  
$4,269  
-$28  
$2,105  
$2,077  
-3.2%  
61.8%  
48.6%  
$2,407  
$11,767  
$14,174  
$2,683  
$10,878  
$13,561  
-$276 -10.3%  
Non-GRF  
$5,512  
$889  
$613  
8.2%  
4.5%  
$
6,346  
All Funds  
All Departments:  
GRF  
$1,109,783 $1,124,376 -$14,593  
$1,398,717 $1,430,359 -$31,642  
$2,508,500 $2,554,735 -$46,235  
-1.3% $4,158,325 $4,220,789  
-2.2% $3,052,352 $3,089,382  
-1.8% $7,210,677 $7,310,171  
-$62,464  
-$37,030  
-$99,494  
-1.5%  
-1.2%  
-1.4%  
Non-GRF  
All Funds  
*September 2019 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on October 2, 2019)  
Month of September 2019  
Year to Date through September 2019  
Actual Estimate* Variance Percent  
Payment Category  
Actual  
Estimate* Variance Percent  
Managed Care  
CFC†  
$1,391,515 $1,389,282  
$2,232  
0.2% $4,148,712 $4,164,437 -$15,724  
-0.4%  
-1.5%  
-0.8%  
-0.9%  
-1.1%  
3.7%  
$482,247  
$360,130  
$234,176  
$75,650  
$493,109 -$10,863  
-2.2% $1,459,339 $1,482,095 -$22,755  
Group VIII  
ABD†  
$362,266  
$236,306  
$76,836  
-$2,135  
-$2,130  
-$1,187  
-0.6% $1,078,138 $1,087,132  
-$8,994  
-$6,079  
-$2,583  
-0.9%  
-1.5%  
8.4%  
$700,723  
$226,529  
$683,984  
$706,802  
$229,111  
ABD Kids  
My Care  
$239,312  
$220,765 $18,547  
$659,296 $24,687  
Fee-For-Service  
ODM Services  
DDD Services  
Hospital - HCAP†  
Hospital - Other  
$960,855  
$359,648  
$261,241  
$339,965  
$0  
$959,504 $1,350  
0.1% $2,567,317 $2,597,745 -$30,427  
-1.2%  
-3.7%  
-0.1%  
1.7%  
0.7%  
$373,898 -$14,250  
$250,884 $10,357  
-3.8% $1,059,959 $1,100,591 -$40,632  
4.1%  
1.6%  
$808,030  
$680,646  
$18,681  
$809,153  
$669,444 $11,202  
$18,557  
-$1,122  
$334,722  
$0  
$5,243  
$0  
$125  
Premium Assistance  
Medicare Buy-In  
Medicare Part D  
$91,875  
$52,995  
$38,880  
$93,082  
$53,519  
$39,563  
-$1,207  
-$524  
-$683  
-1.3%  
-1.0%  
-1.7%  
$271,550  
$155,142  
$116,408  
$276,130  
$158,728  
$117,402  
-$4,580  
-$3,585  
-$995  
-1.7%  
-2.3%  
-0.9%  
Administration  
Total  
$64,256  
$112,867 -$48,611 -43.1%  
$223,097  
$271,860 -$48,762 -17.9%  
$2,508,500 $2,554,735 -$46,235  
-1.8% $7,210,677 $7,310,171 -$99,494 -1.4%  
*September 2019 estimates from the Department of Medicaid.  
†CFC - Covered Families and Children; ABD - Aged, Blind, and Disabled; HCAP - Hospital Care Assurance Program.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 14  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
EMexlanpey Cearnter,dDiriecttorures9  
Ivy Chen, Principal Economist  
Overview  
Through September, FY 2020 GRF program expenditures totaled $9.31 billion. These  
expenditures were $68.2 million (0.7%) below the estimate released by OBM in September 2019.  
All program categories were below estimate except for Property Tax Reimbursements, which  
were above estimate by $108.9 million (22.1%) due to timing. Transfers out were also above  
estimate by $13.8 million (2.2%) YTD. Combining both program expenditures and transfers out,  
total YTD GRF uses were below estimate by $54.4 million (0.5%). YTD GRF expenditures compared  
to estimates and the corresponding period in FY 2019 are shown in the preceding Table 4. Table 3  
shows GRF expenditures for the month of September compared to estimates. From Table 3, you  
can see that the positive YTD variance in Property Tax Reimbursements was caused by a positive  
variance of $129.3 million (47.8%) in September, which also pushed the monthly variance in total  
program expenditures into positive territory ($23.8 million, 0.8%) despite all other categories  
having negative variances. The addition of a positive variance of $8.2 million in transfers out for  
the month resulted in a positive monthly variance in total GRF uses of $32.0 million (1.0%).  
The remainder of this article will give more details about the variance in the Property Tax  
Reimbursements category, as well as the two largest negative YTD variances. The largest negative  
variance was in the Medicaid category. YTD GRF Medicaid expenditures were below estimate by  
$
expenditures to give a complete view of Medicaid spending. The second largest negative GRF  
YTD variance was $41.4 million (1.9%) in the Primary and Secondary Education category.  
62.5 million (1.5%) at the end of September. The Medicaid section will also discuss non-GRF  
Property Tax Reimbursements  
This category of GRF expenditures reimburses school districts and other local  
governments for their property tax losses due to property tax rollbacks and the homestead  
exemption. Reimbursements are made twice a year. The current payment is based on a  
property tax settlement conducted in August. Reimbursements will be made as counties  
request them through December. Since payments are made at the request of the counties, this  
category often has variances at the beginning of a cycle that are offset as the cycle draws to a  
close. In August, this category was under estimate by $20.4 million and in September, it was  
over estimate by $129.3 million, resulting in a positive YTD variance of $108.9 million. This  
YTD variance should decrease by the end of the calendar year.  
Medicaid  
GRF Medicaid expenditures were below both their monthly and YTD estimates, by  
14.6 million (1.3%) and $62.5 million (1.5%), respectively. Non-GRF Medicaid expenditures  
$
9
This report compares actual monthly and YTD expenditures from the GRF to OBMs estimates.  
If a program categorys actual expenditures were higher than estimate, that program category is  
deemed to have a positive variance. The program category is deemed to have a negative variance when  
its actual expenditures were lower than estimate.  
Budget Footnotes  
P a g e | 15  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
were also below both their monthly and YTD estimates, by $31.6 million (2.2%) and  
$
37.0 million (1.2%), respectively. Including both the GRF and non-GRF, all funds Medicaid  
expenditures were $46.2 million (1.8%) below estimate in September and $99.5 million (1.4%)  
below the YTD estimate at the end of September. As a joint federal-state program, both GRF  
and non-GRF Medicaid expenditures contain federal and state dollars.  
Table 5 shows GRF and non-GRF Medicaid expenditures for the Ohio Department of  
Medicaid (ODM), the Ohio Department of Developmental Disabilities (ODODD), and six other  
sisteragencies that also take part in administering Ohio Medicaid. ODM and ODODD account  
for about 99% of the total Medicaid budget. Therefore, they generally also account for the  
majority of the 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 sisteragencies incur only administrative spending.  
Table 6 shows all funds Medicaid expenditures by payment category. Expenditures were  
below their YTD estimates for all four payment categories. Administration ($48.8 million, 17.9%)  
had the largest overall negative variance, followed by Fee-For-Service (FFS, $30.4 million, 1.2%),  
Managed Care ($15.7 million, 0.4%), and Premium Assistance ($4.6 million, 1.7%).  
The variance in the Administration category is mostly due to timing and is expected to  
smooth out throughout the fiscal year. The FFS variance is largely due to lower than expected  
spending in the Ohio Medicaid Schools Program (MSP). MSP allows school entities to be  
reimbursed for Medicaid covered services, certain administrative activities, and specialized  
transportation provided to eligible children aged 3 to 21 years. Services are delivered through  
an individualized education program designed to enable a child to participate in school. Any  
qualified local education agency may participate in MSP voluntarily.  
Primary and Secondary Education  
This category of GRF expenditures includes all GRF spending by the Ohio Department of  
Education (ODE). YTD spending in this category was under estimate by $41.4 million (1.9%) at  
the end of September. This variance was driven by negative variances in two line items:  
2
00550, Foundation Funding, and 200573, EdChoice Expansion.  
Item 200550 supplies the bulk of the state’s subsidy payments for public school students  
to school districts, joint vocational school districts, community and STEM schools, and  
nonpublic schools through the state’s voucher programs. This item is the usual culprit when  
there are significant variances in the Primary and Secondary Education category. This is partly  
because of the size of the appropriation ($6.94 billion for FY 2020) but mainly because  
payments are based on data that are updated throughout the year. For FY 2020, however,  
foundation payments are based on FY 2019 amounts, so there might be more stability in this  
item than has been typical in prior years. The YTD variance for item 200550 was a negative  
$
19.9 million at the end of September.  
Item 200573 provides payments for students who obtain state-paid Educational Choice  
(EdChoice) scholarships through the income-based expansion of the program. The estimates  
spread the appropriation out into two payments of $28.6 million each. Actual payments will be  
more evenly spread out. The YTD variance for item 200573 was a negative $16.6 million at the  
end of September.  
Budget Footnotes  
P a g e | 16  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
ODH Announces Funding for Vaping Prevention Initiatives  
Jacquelyn Schroeder, Budget Analyst  
On September 10, 2019, the Ohio Department of Health (ODH) announced that it would  
invest $4.1 million in new programming to prevent and reduce e-cigarette usage (vaping)  
among Ohios youth. Of this amount, $3.3 million will be used to develop new tools and  
resources for local organizations to help them educate communities about the dangers of  
vaping. Tools may include a web-based module on vaping prevention, awareness education for  
parents and caregivers, as well as community outreach and public awareness activities.  
Additionally, $800,000 will be allocated for public education campaigns that target parents and  
youth regarding vaping dangers and inform the public about the new age restriction law on the  
sale of tobacco products. This law prohibits the sale of tobacco and vaping products to  
individuals under the age of 21 and takes effect on October 17, 2019. ODH also plans to send a  
letter to Ohio school districts that encourages them to prohibit vaping products in their schools.  
The letter will also address vaping dangers and educate officials about free resources that help  
individuals quit vaping.  
In August, ODH issued a health alert to all healthcare providers asking them to report  
suspected cases of severe pulmonary illness in which vaping is involved to local or state health  
officials. Symptoms of the illness include coughing, shortness of breath, chest pain, nausea,  
vomiting, abdominal pain, and fever. As of August, no deaths have been reported in Ohio.  
However, 20 Ohioans between 16 and 59 years of age have been hospitalized in 12 counties.  
There are also 21 additional illness reports that are under investigation. Nationwide, 530 cases  
of lung illness have been reported in 38 states and one U.S. territory and seven deaths have  
occurred. While investigations are currently ongoing, the Centers for Disease Control and  
Prevention (CDC) states that no single product or substance has been directly linked in these  
cases yet.  
According to the CDC, e-cigarettes are the most commonly used tobacco product among  
youth. In 2018, more than 3.6 million middle and high schoolers in the U.S. used e-cigarettes,  
which equates to about 20.8% of all high schoolers and 4.9% of all middle schoolers.  
Controlling Board Approves $3.3 Million for Hemp Program  
Shannon Pleiman, Senior Budget Analyst  
On September 9, 2019, the Controlling Board approved a request from the Department  
of Agriculture to transfer approximately $3.3 million in FY 2020 from the Controlling Board  
Emergency Purposes/Contingencies Fund (Fund 5KM0) to the Hemp Program Fund (Fund 5WJ0)  
to supporrdt the newly created Hemp Program. The Hemp Program was established by S.B. 57 of  
the 133 General Assembly and requires the Department to establish, with the U.S.  
Department of Agricultures approval, a Hemp Cultivation and Processing Program to monitor  
and regulate hemp cultivation and processing in Ohio. The majority of the approved funding,  
approximately $1.8 million, will be used to buy lab equipment to test cannabidiol (CBD) and  
Budget Footnotes  
P a g e | 17  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
hemp products and purchase hemp field mapping software. Just under $735,000 will be used to  
hire ten new employees to oversee the program. This includes a program director, an office  
support employee, an attorney, an agricultural inspection manager, a lab supervisor, two plant  
health inspectors, two food safety specialists, and an IT support staffer. Of the remainder,  
$
personal services, including lab contracts and staff augmentation to ensure the new hemp  
software and equipment connects to existing lab databases at the Department.  
595,000 will go towards supplies and maintenance and $215,000 will be used for purchased  
Controlling Board Approves $4.3 Million for New 911 Grant  
Program  
Shannon Pleiman, Senior Budget Analyst  
On September 23, 2019, the Controlling Board approved a Department of Commerce  
request for an appropriation of $1.0 million in FY 2020 and $3.3 million in FY 2021 to operate  
the 911 Grant Program created by the federal Next Generation 911 Advancement Act of 2012.  
Of the $4.3 million total over the biennium, approximately $3.8 million (90%) is for issuing  
grants and approximately $430,000 (10%) is for administrative expenses. Local 911 emergency  
call centers may use these grants to cover 60% of their costs for migrating to a digital,  
IP-enabled network and adopting Next Generation 911 technology. The technology enables the  
exchange of digital information, supports more efficient management of emergencies and call  
overload, and more accurately identifies the location of callers. Grants may also be used to train  
9
11 call center personnel and others who are part of the 911 service response chain. While the  
grants are disbursed by the Department of Commerce, the Ohio 911 Program Office under the  
Department of Administrative Services is responsible for overseeing grant applications and  
approvals, as well as ensuring that grant recipients comply with the grant guidelines.  
Attorney General Awards $4.2 Million in Rape Crisis Program  
Grants  
Jessica Murphy, Budget Analyst  
On August 20, 2019, the Attorney Generals Office announced the award of $4.2 million  
in GRF-funded Rape Crisis Center grants for FY 2020. Rape crisis centers are eligible for the  
grants if they provide specified core services, including hotlines, victim advocacy, and ongoing  
support from the onset of the need for services through the healing proce0ss. A total of  
1
3
1 centers operating throughout the state each received a grant of $120,774. In addition, a  
grant of $416,000 was made to the Alliance to End Sexual Violence, a nonprofit state sexual  
assault coalition, to provide statewide training on sexual assault issues.  
The grant program is funded through GRF line item 055501, Rape Crisis Centers. This  
item was established by the FY 2014-FY 2015 biennial operating budget, which appropriated  
$
to 25 rape crisis programs, generally in the amount of $36,789. Funding for the program in the  
1.0 million in each of those fiscal years to the program. This funding resulted in annual grants  
10  
Awards by county and agency can be found in the August 20 news release on the Attorney  
Generals website at: https://www.ohioattorneygeneral.gov/Media.  
Budget Footnotes  
P a g e | 18  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
next two biennia increased to about $1.4 million per year. H.B. 166 triples this annual funding  
to $4.2 million. This increase in funding resulted in the Attorney General awarding larger grants  
to programs in more counties.  
ODE Releases 2018-2019 School Report Cards  
Dan Redmond, Budget Analyst  
On September 12, 2019, ODE released report cards for public districts and schools for the  
2018-2019 school year. The report cards provide an overall A-F letter grade derived from  
performance on six individually graded components: Achievement, Progress, Gap Closing,  
Graduation Rate, Improving At-Risk K-3 Readers, and Prepared for Success, each of which is  
comprised of various graded and ungraded performance measures. The Achievement and  
Progress components contribute 20% each toward a districts overall grade while the other four  
components contribute 15% each. The report cards also publish financial data on classroom  
instruction, revenue sources, and spending per pupil. New to this years report cards are data  
comparing federal spending per pupil to state and local spending per pupil.  
The 2018-2019 school year report cards are the second to incorporate overall letter  
grades. Compared to the 2017-2018 school year, 17.4% of districts (106) received a higher overall  
grade, 16.6% (101) received a lower grade, and 66.0% (401) received the same grade. Like the  
2
shown in the chart below, 46.4% (282) of districts received aC,the most common grade.  
Another 27.8% (169) of districts received aB, 20.1% (122) received a D,5.1% (31) received an  
017-2018 school year, most districts are clustered toward the middle of the grading scale. As  
A,and 0.7% (4) received anF.Compared to the prior school year, the total percentage of  
districts receiving an A orBdecreased from 36.0% to 32.9% while the percentage of districts  
receiving a Dor Fdecreased from 22.4% to 20.7%. This latter decrease is attributable to the  
number of districts receiving an F,which decreased from 14 districts to four districts.  
Distribution of School District Overall Report Card Letter Grades,  
2017-2018 and 2018-2019 School Years  
5
4
4
3
3
2
2
1
1
0.0%  
5.0%  
0.0%  
5.0%  
0.0%  
5.0%  
0.0%  
5.0%  
0.0%  
4
6.4%  
4
1.6%  
31.4% 27.8%  
2
0.1% 20.1%  
4.6% 5.1%  
5
0
.0%  
.0%  
2.3% 0.7%  
F
A
B
017-2018 School Year  
C
D
2018-2019 School Year  
2
Budget Footnotes  
P a g e | 19  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
ODODD to Raise Rates for Direct Support Providers  
Alexander Moon, Economist  
On August 20, 2019, ODODD announced a compensation increase for direct support  
professionals (DSPs) who provide services under a Medicaid waiver. Two separate  
DSP compensation rates will be implemented. First, the DSP homemaker/personal care hourly  
rate will increase from an average of $11.12 to $12.82 by January 1, 2020, and then again to  
$
$
13.23 by January 1, 2021. Second, the on-site/on-call DSP hourly rate will increase from $6.09 to  
8.55 by January 1, 2020. These two increases are anticipated to cost $308.3 million over the  
FY 2020-FY 2021 biennium and will be paid for with a mixture of state and federal funds, as well  
as local funds from county boards of developmental disabilities. H.B. 166 included a provision  
that increased the homemaker/personal care rates by these exact amounts. However, the  
provision was vetoed by the Governor with the explanation that reimbursement rates in statute  
imposed on the ability of state departments to manage costs and policies. The veto message  
stated that the increases would instead be implemented administratively. These increased  
reimbursement rates are expected to reduce DSP turnover rates, which can be as high as 55% per  
year, and lead to more consistent care for individuals who receive care.  
The DSP field consists of a variety of individuals with various backgrounds. A high school  
education is typically required, and some community colleges, vocational schools, and private  
organizations offer nondegree programs as well. DSPs provide a variety of services to  
individuals with developmental disabilities. These services help an individual remain within his  
or her home or community and also help the individual meet daily living needs.  
Controlling Board Approves $219,000 for Services to Incarcerated  
Juvenile Parents with Minor Children  
Robert Meeker, Budget Analyst  
On September 9, 2019, the Controlling Board approved waivers of competitive selection  
totaling $218,604 for four service providers working with the Department of Youth Services  
DYS) to implement positive family engagement strategies and activities that address the needs  
(
of incarcerated parents with minor children as part of the Every Child Matters program. The  
program is a collaboration between DYS and seven youth services organizations (service  
providers) annually serving 60 youth committed to DYS who have minor children.  
The contracts are funded through a $749,997 U.S. Office of Juvenile Justice and  
Delinquency Prevention (OJJDP) Second Chance grant awarded in FY 2018. A total of $664,500  
will be used for services provided by program partners during the grant period ending in  
FY 2022, with the remaining $85,497 budgeted for use by DYS for program materials and  
incentives and rewards for incarcerated juveniles and their children for completing program  
milestones. Services provided under the grant include mentoring for children of incarcerated  
parents, enhancing communication between children and parents, and transportation  
assistance for in-person visits.  
The table below lists the seven service providers and the amount budgeted to each  
provider over the grant period, FY 2019 through FY 2022. The four providers whose FY 2020  
contracts were subject to the Controlling Boards waiver of competitive selection are Passages, the  
RIDGE Project, Family and Youth Advocacy Center at Capital University, and Action for Children.  
Budget Footnotes  
P a g e | 20  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
2
018 Second Chance Grant Contract Funding, FY 2019-FY 2022  
Service Provider/Agency Name  
Budgeted Amount  
Passages  
The RIDGE Project  
$132,000  
$127,500  
$120,000  
$114,000  
$75,000  
$75,000  
$21,000  
$664,500  
$85,497  
$749,997  
Family and Youth Advocacy Center at Capital University  
Action for Children  
Unlocking Futures  
Youth Law Center  
Global Partners for Fathers and Families  
Partner Total  
Overall Total  
Department of Youth Services  
DHE Distributes $1.5 Million in State Share of Instruction  
Reconciliation Payments to 12 Community Colleges  
Edward Millane, Senior Budget Analyst  
In August 2019, the Department of Higher Education (DHE) distributed $1.5 million to  
2 community colleges as part of a reconciliation of FY 2019 obligations under the State Share  
1
of Instruction (SSI) formula, the main source of state operating support for public higher  
education (see the table below for the payments to individual colleges). According to a DHE  
spokesperson, the reconciliation payments were made necessary due to an inadvertent  
miscalculation in the number of students DHE classified asat-risk in the FY 2019 SSI formula  
for community colleges. Certain outcomes achieved by at-risk students, such as course and  
degree completions, are weighted more heavily in the formula. Since the SSI formula allocates  
funding to an institution in proportion to its share of the statewide total for a particular  
outcome factor, the miscalculation shifted some SSI funding toward 11 community colleges and  
away from 12 others. The SSI reconciliation payments compensate those 12 community  
colleges for their FY 2019 underpayment. The reconciliation payments, required by H.B. 166,  
were supported by the transfer of $1.5 million in unused FY 2019 GRF appropriations within  
DHEs budget to line item 235505, State Share of Instruction Reconciliation.  
Budget Footnotes  
P a g e | 21  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Community Colleges Receiving H.B. 166 SSI Reconciliation Payments  
College  
Cuyahoga Community College  
Amount  
$562,402  
Lakeland Community College  
$301,339  
$283,495  
$90,576  
$84,825  
$44,461  
$40,419  
$37,176  
$27,313  
$20,362  
$5,800  
Lorain County Community College  
Southern State Community College  
Eastern Gateway Community College  
Rio Grande Community College  
Cincinnati State Technical and Community College  
Washington State Community College  
North Central State College  
Terra State Community College  
James A. Rhodes State College  
Hocking Technical College  
$1,832  
Total  
$1,500,000  
Budget Footnotes  
P a g e | 22  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
Phil Cummins, Senior Economist  
Overview  
The U.S. economy continues to expand on the strength of the service sector. Industrial  
production remains below a peak at the end of 2018. In September, 136,000 workers were  
added to nonagricultural payrolls and the national unemployment rate decreased to 3.5%,  
lowest since 1969. Real GDP grew at an annualized rate of 2.0% in the second quarter of 2019.  
Inflation remains low.  
In Ohio, total nonfarm payroll employment through August remained below a peak  
reached in January, seasonally adjusted. However, a broader measure of total Ohio  
employment, estimated separately in conjunction with unemployment, continued to grow each  
month this year. Payroll employment increased by 3,700 in August, but the states  
unemployment rate increased by 0.1 percentage point to 4.1%. Personal income in Ohio rose at  
an annual rate of 4.5% in the second quarter of 2019, trailing the national average.  
At its September meeting, the Federal Open Market Committee (FOMC), the monetary  
policy-setting group in the central bank, lowered its short-term interest rate target by  
0
.25 percentage point to a range of 1.75% to 2.0%. The reduction was the second cut this year  
following nine increases starting in 2015. In the press release following the September meeting,  
the FOMC said it acted[i]n light of the implications of global developments for the economic  
outlook as well as muted inflation pressures. The median forecast of meeting participants was  
for no further net change in the interest rate target through the end of calendar year 2020. As  
of October 7, however, federal funds futures pricing indicated a widespread11expectation of  
another 0.25 percentage point rate cut when the FOMC meets later this month.  
The National Economy  
The national unemployment rate declined by 0.2 percentage point in September, to  
.5%, the lowest since 1969, according to the Bureau of Labor Statistics. The number of  
3
unemployed persons nationally was approximately 5.8 million in September, and the labor force  
participation rate defined as the number of employed persons plus persons not employed and  
looking for work, divided by the noninstitutionalized populationremained level at 63.2%.  
A comparison of the national and state unemployment rates can be viewed in Chart 5. The rate  
of unemployment for Ohioans has been greater than the nationwide average since April 2016.  
The national economy gained 136,000 nonfarm payroll employees in September, below  
the average 2019 per-month job growth of 161,000. Employment rose in health care (+39,000),  
professional and business services (+34,000), government (+22,000), and transportation and  
warehousing (+16,000). In addition, employment data from July and August were revised upward  
by a total of 45,000, indicating stronger job growth than previously reported during those months.  
A comparison of national and state nonfarm payroll employment can be viewed in Chart 6.  
11  
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html.  
Budget Footnotes  
P a g e | 23  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Chart 5: U.S. and Ohio Unemployment Rates  
%
of Labor Force  
1
1
1
2.0%  
1.0%  
0.0%  
9
8
7
6
5
4
3
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019  
United States Ohio  
Real GDP rose at a 2.0% annual rate in the 2019 second quarter in the third estimate  
from the BEA. Consumer spending increased at a 4.6% rate and government spending  
increased, but other components of final demand fell including exports and both nonresidential  
and residential fixed investment. Businesses added to inventories at a slower rate in the second  
quarter than in the years first three months. Monthly data show real consumer spending  
continued to rise in July and August, though not as rapidly as in the second quarter.  
Light vehicle sales rose a seasonally adjusted 1.1% from August to September, with  
monthly increases of 1.0% or greater in both the auto and light truck categories. From  
September 2018 to September 2019, auto sales decreased 11.0%, while light truck sales  
increased 4.0%. The pace of light vehicle sales remained 2.0% to 3.0% below the recent peak in  
2
National Automobile Dealers Association.  
016. The market for new vehicles is likely to continue to favor light trucks according to the  
Industrial production rose 0.6% in August as manufacturing output (75% of the total  
index) rose 0.5%. The indexes remained lower than levels early this year, which were below  
peaks at the end of 2018. Mining output recovered in August from cuts in oil extraction in July  
because of Hurricane Barry.  
According to the Institute for Supply Management (ISM), activity in the  
manufacturing sector declined in September, the seco2 nd straight month of contraction  
1
measured by ISMs purchasing managers index (PMI). Reports of declines in production  
and employment in the manufacturing sector were more widespread in September among  
surveyed purchasing executives than in August. ISMs nonmanufacturing index registered  
12  
ISM’s PMI combines measures of production, new orders, inventories, employment, and  
timeliness of supplier deliveries.  
Budget Footnotes  
P a g e | 24  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
increases in new orders, employment, and overall activity in the 1m3 onth of September,  
although data indicated slower growth compared to the prior month.  
The consumer price index (CPI) rose 0.1% in August, held down by a 1.9% drop in energy  
prices. Gasoline prices fell 3.5% after rising 2.5% in July. Food prices were unchanged for the  
third consecutive month. Compared with prices a year earlier, the CPI for all items was 1.7%  
higher, and excluding volatile food and energy prices increased 2.4%, the largest 12-month rise  
since July 2018. A related measure, the personal consumption expenditures price index, was  
1
.4% higher in August than a year earlier and 1.8% higher excluding food and energy prices.  
The Ohio Economy  
Total nonfarm payroll employment in Ohio rose 3,700 (0.1%) from July to August, and  
was 24,800 (0.4%) higher than a year earlier. The statewide average unemployment rate rose to  
.1% in August, up from 4.0% in June and July, lowest since 2001. Trends in Ohio  
4
unemployment and employment are shown in charts 5 and 6.  
As Chart 6 indicates, Ohio employment measured by nonfarm payrolls was little  
changed through this years first eight months, seasonally adjusted. Nonfarm payroll  
1
4
employment in August was 0.2% lower than the recent peak in January. Employment was  
down in construction; manufacturing; transportation, warehousing, and utilities; and wholesale  
trade from peak levels in late 2018 and early 2019. The number of retail jobs continued a slide  
underway since 2016, with declines across most lines of business but largest at general  
merchandise stores, followed by clothing stores. Employment in health care and social  
assistance rose but more slowly than in recent years. Employment grew in professional and  
business services, and in leisure and hospitality.  
Chart 6: U.S. and Ohio Nonfarm Payroll Employment  
(
in millions)  
1
1
1
1
1
1
53.7  
48.4  
43.1  
37.8  
32.5  
27.2  
5.8  
5.6  
5.4  
5.2  
5.0  
4.8  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019  
U.S. Employment Ohio Employment (right scale)  
13  
The nonmanufacturing index is based on a survey of organizations in all private industries  
other than manufacturing, as well as in public administration.  
14  
The all-time peak for Ohio nonfarm payroll employment was in 2000.  
Budget Footnotes  
P a g e | 25  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
This years decline in unemploym5 ent appears to reflect greater success in finding jobs. Total  
1
employment in Ohio, more inclusive than the nonfarm payroll employment discussed in the  
previous paragraph, rose about 83,000 or 1.5% from January to August. The acceleration shown by  
total employment contrasts sharply with the deceleration indicated by the nonfarm payroll  
numbers. The two employment estimates, based on separate surveys, sometimes give differing  
indications regarding the state of labor markets. Unemployment fell 31,000 from January to August.  
Between August 2018 and August 2019, the unemployment rate remained the same or  
decreased in ten of the 12 defined metropolitan statistical areas (MSAs) which include Ohio  
subdivisions. The Cleveland-Elyria MSA had the largest decrease in its unemployment rate over  
the period, from 5.1% to 4.1%, followed by the Toledo MSA, from 4.9% to 4.4%. Unemployment  
rates increased in Dayton (to 4.3%) and in Youngstown-Warren-Boardman (to 6.0%) over the  
year. Year over year, the number of labor force participants increased in all MSAs which include  
Ohio subdivisions.  
Personal income in Ohio rose at a 4.5% annual rate in the 2019 second quarter. This  
compares with a 5.4% annual rate of increase in personal income in all 50 states plus the District  
of Columbia (D.C.). Most of the fastest growing states were in the West, followed by those on the  
East Coast. Personal income includes the income of all state residents from employment,  
ownership of business or financial assets, and transfers. The statistic excludes capital gains and  
losses. As shown in Chart 7, growth of personal income in Ohio has generally trailed that of the  
nation during the past six years, by about one percentage point on average, after more nearly  
matching that nationwide in the recovery years immediately after the 2007-200916recession. Ohio  
personal income was 3.2% of that for the 50 states and D.C. in the latest quarter.  
Chart 7: Personal Income  
Billions of Dollars, Seasonally Adjusted Annual Rates  
$
$
$
$
$
$
$
$
$
$
$
18,750  
18,000  
17,250  
16,500  
15,750  
15,000  
14,250  
13,500  
12,750  
12,000  
11,250  
$625  
$600  
$575  
$550  
$525  
$500  
$475  
$450  
$425  
$400  
$375  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019  
50 states + D.C. Ohio (right scale)  
15  
Employment totals released with the unemployment estimates include farm employment and  
self-employed persons.  
16  
Personal income in the 50 states plus D.C. differs from personal income in the national  
accounts due to differing treatment of incomes of U.S. residents working abroad and foreign residents  
working in the U.S.  
Budget Footnotes  
P a g e | 26  
October 2019  
Legislative Budget Office of the Legislative Service Commission  
Unit sales of residential real estate in Ohio during August were 2.0% lower than a year  
earlier, according to an Ohio Realtorsreport. For the first eight months of 2019, unit sales were  
0
2
6
.5% lower than a year earlier. In all of 2018, unit sales were 1.0% below those in peak year  
017. The average price for home purchases closed during January-August 2019 was $194,811,  
.3% higher than a year earlier, continuing an uptrend underway since 2012.  
Budget Footnotes  
P a g e | 27  
October 2019