A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2020  
Issue: February 2020  
Highlights  
Ross Miller, Chief Economist  
January GRF program expenditures were $110.4 million above the estimate  
published by the Office of Budget and Management (OBM) in September 2019. GRF  
expenditures for Medicaid were $161.9 million above estimate, while the  
combined spending on all other program categories partially offset the positive  
variance for Medicaid. Year-to-date (YTD) program expenditures remain below  
estimate despite Januarys results.  
GRF tax revenue had another good month, with receipts for January exceeding  
estimate by $44.7 million. Sales and use tax revenue was $31.2 million above  
estimate, and the commercial activity tax (CAT) and financial institutions tax (FIT)  
were above estimate by over $10 million each. There was a $16.4 million negative  
variance for the personal income tax (PIT), though, due to refunds for the month  
having been almost $31 million greater than expected.  
Through January 2020, GRF sources totaled $20.54 billion:  
Revenue from the sales and use tax was $110.6 million above estimate;  
PIT receipts were $19.2 million below estimate.  
Through January 2020, GRF uses totaled $21.45 billion:  
Program expenditures were $146.9 million below estimate;  
Expenditures from all program categories were below estimates except for  
Medicaid, which was above estimate by $108.2 million.  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 10),  
the National Economy (p. 26), and the Ohio Economy (p. 28).  
Also Issue Updates on:  
Clean Ohio Trail Fund Grants (p. 18)  
Study on Storm Shelters for Schools (p. 18)  
National Motor Vehicle Title Information Systems Study Committee (p. 19)  
Integrated Care for Kids Grant (p. 20)  
Reducing Falls with Artificial Intelligence Project (p. 20)  
Law Enforcement Body Armor Program (p. 21)  
MARCS Grants (p. 22)  
ODOT Performance Audit (p. 22)  
Rural Industrial Park Loan Program (p. 23)  
Use of School Economically Disadvantaged Funding (p. 24)  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of January 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on February 3, 2020)  
State Sources  
Actual  
Estimate* Variance Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$125,490  
$916,866  
$1,042,356 $1,011,200  
$128,700  
$882,500  
-$3,210  
$34,366  
$31,156  
-2.5%  
3.9%  
3.1%  
Personal Income  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Estate  
$980,483  
$83,823  
$74,328  
$27,906  
$82  
$996,900 -$16,417  
-1.6%  
15.1%  
1.7%  
-2.1%  
103.3%  
---  
$72,800  
$73,100  
$28,500  
-$2,500  
$0  
$11,023  
$1,228  
-$594  
$2,582  
$145  
$145  
$74,577  
$1,387  
$2,159  
$4,077  
$5,263  
$0  
$60,100  
$100  
$14,477  
$1,287 1286.9%  
24.1%  
$2,300  
$4,400  
$5,000  
$0  
-$141  
-$323  
$263  
$0  
-6.1%  
-7.3%  
5.3%  
---  
---  
---  
$32  
$0  
$0  
$32  
$0  
$0  
Total Tax Revenue  
$2,296,618 $2,251,900  
$44,718  
2.0%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$35,458  
$4,194  
$2,485  
$42,137  
$27,500  
$3,716  
$776  
$7,958  
$478  
$1,709  
$10,146  
28.9%  
12.9%  
220.2%  
31.7%  
Total Nontax Revenue  
$31,991  
Transfers In  
Total State Sources  
Federal Grants  
$50  
$0  
$50  
$54,914  
$84,005  
---  
2.4%  
9.9%  
4.4%  
$2,338,805 $2,283,891  
$930,121 $846,116  
Total GRF Sources  
$3,268,926 $3,130,008 $138,919  
*Estimates of the Office of Budget and Management as of August 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 2  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2020 as of January 31, 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on February 3, 2020)  
State Sources  
Tax Revenue  
Auto Sales  
Actual  
Estimate*  
Variance Percent FY 2019**  
4.0% $867,854  
Percent  
6.7%  
$926,354  
$890,600 $35,754  
Nonauto Sales and Use  
$5,707,281 $5,632,400 $74,881  
1.3% $5,426,451  
5.2%  
Total Sales and Use  
$6,633,635 $6,523,000 $110,635  
1.7% $6,294,305  
5.4%  
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  
Estate  
$5,411,725 $5,430,900 -$19,175  
-0.4% $5,384,887  
0.5%  
6.8%  
-3.4%  
-7.5%  
12.2%  
$891,845  
$476,830  
$193,340  
$172,046  
$3,971  
$35,618  
$65,832  
$20,453  
$31,490  
$31,316  
$4,041  
$858,100 $33,745  
3.9%  
-0.2%  
-2.2%  
12.1%  
---  
$835,088  
$493,759  
$209,112  
$153,375  
$477,600  
$197,700  
-$770  
-$4,360  
$153,500 $18,546  
$0  
$33,600  
$68,500  
$22,100  
$34,400  
$30,400  
$4,500  
$0  
$3,971  
$2,018  
-$2,668  
-$1,647  
-$2,910  
$916  
-$459 -10.2%  
$85  
$38  
$2 204940.2%  
6.0%  
-3.9%  
-7.5%  
-8.5%  
3.0%  
$47,319  
-24.7%  
-9.9%  
-9.1%  
-3.2%  
3.2%  
-14.9%  
-93.1%  
16.9%  
2.9%  
$73,087  
$22,495  
$32,529  
$30,336  
$4,750  
$1,227  
$32  
$85  
$38  
---  
---  
$0  
Total Tax Revenue  
$13,972,264 $13,834,300 $137,964  
1.0% $13,582,303  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$76,957  
$15,498  
$79,879  
$172,334  
$55,000 $21,957  
$11,968 $3,530  
$60,646 $19,233  
39.9%  
29.5%  
31.7%  
35.0%  
$55,070  
$13,660  
$55,444  
$124,174  
39.7%  
13.5%  
44.1%  
38.8%  
Total Nontax Revenue  
$127,615 $44,719  
Transfers In  
$75,598  
$68,570  
$7,028  
10.2%  
$82,025  
-7.8%  
3.1%  
8.2%  
4.6%  
Total State Sources  
Federal Grants  
$14,220,196 $14,030,484 $189,712  
$6,318,467 $6,224,137 $94,329  
$20,538,663 $20,254,622 $284,041  
1.4% $13,788,501  
1.5% $5,837,824  
1.4% $19,626,326  
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  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean Botomogno, Principal Economist  
Overview  
GRF sources started calendar year (CY) 2020 with a monthly positive variance of  
138.9 million (4.4%) when compared to the OBM estimate released in August 2019. This  
$
performance increased GRF sources cumulative positive variance to $284.0 million (1.4%), up  
from $145.1 million in the first half of FY 2020. All GRF categories were above estimate for the  
2
YTD, including tax revenue ($138.0 million, 1.0%), federal grants ($94.3 million, 1.5%), nontax  
revenues ($44.7 million, 35.0%), and transfers in ($7.0 million, 10.2%). GRF sources in January  
2
020 were $3.27 billion, raising the YTD total to $20.54 billion. Tables 1 and 2 show GRF sources  
for the month of January and for FY 2020 through January, respectively. GRF sources consist of  
both federal grants and state-source receipts, such as tax revenue, nontax revenue, and  
transfers in.  
Chart 1, below, shows cumulative YTD variances of GRF sources each month through  
January 2020.  
Chart 1: Cumulative Variances of GRF Sources in FY 2020  
(
Variances from Estimates, $ in millions)  
$
$
$
$
400  
300  
200  
100  
$0  
-
-
-
-
$100  
$200  
$300  
$400  
Jul-19  
Aug-19  
Sep-19  
Oct-19  
Nov-19  
Dec-19  
Jan-20  
Federal Grants  
Tax Revenue  
Total GRF Sources  
1 This report compares actual monthly and YTD 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 Federal grants are typically federal reimbursements for Medicaid and other human services  
programs.  
Budget Footnotes  
P a g e | 4  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
With a shortfall of $19.2 million through the first seven months of the fiscal year, the PIT  
was the only underperforming major tax source, pulled down by higher than expected refunds;  
the section below analyzing the PIT provides some additional details on refunds this year. On the  
other hand, the sales and use tax and the CAT posted positive YTD variances of $110.6 million  
and $33.7 million, respectively. Also, the foreign insurance tax, the domestic insurance tax, and  
the FIT were above their respective YTD estimates by $18.5 million, $4.0 million, and $2.0 million.  
In addition to the PIT, the following tax sources had noticeable YTD negative variances: the three  
utility-related taxes (the kilowatt-hour excise tax, the public utility tax, and the natural gas  
3
consumption tax, for a total of $8.7 million) and the alcoholic beverage tax ($2.9 million). The  
remaining GRF tax sources had a net YTD negative variance of $0.2 million.  
For the month of January 2020, all GRF categories contributed to the overall positive  
variance. Federal grants exceeded anticipated revenue by $84.0 million (9.9%); tax sources were  
$
44.7 million (2.0%) above estimate; and nontax revenue was $10.1 million (31.7%) above  
projections primarily due to better than expected earnings on investments. Among the largest  
tax sources, the sales and use tax had a good month with a positive variance of $31.2 million,  
while larger than expected refund activity again this month led to a deficit of $16.4 million for  
the PIT. The CAT and the cigarette tax were above estimates by $11.0 million and $1.2 million,  
respectively. Financial institutions made their first FIT estimated payments totaling $74.6 million  
in January, an amount $14.5 million above estimates; this erased a cumulative negative variance  
4
of $12.5 million at the end of December. The foreign insurance tax and the public utility tax  
experienced positive variances of $2.6 million and $1.3 million, respectively. All the other tax  
sources posted smaller revenue variances.  
Compared to receipts in the first seven months of FY 2019, YTD FY 2020 GRF sources  
were higher by $912.3 million (4.6%). Except for transfers in which was $6.4 million below its  
FY 2019 level, revenue from the other GRF categories grew relative to receipts in the previous  
year. Federal grants, tax sources, and nontax revenue increased $480.6 million, $390.0 million,  
and $48.2 million, respectively. Growth in GRF tax revenue was mostly due to the sales and use  
tax ($339.3 million), the CAT ($56.8 million), the foreign insurance tax ($18.7 million), and the  
PIT ($26.8 million). On the other hand, receipts fell for the utility-related taxes ($25.1 million),  
due to lower energy prices this year, and the cigarette tax ($16.9 million), which is the normal  
trend.  
Sales and Use Tax  
In January 2020, sales and use taxes totaling $1.04 billion were $31.2 million (3.1%) above  
estimate, partially reversing a negative variance of $34.7 million in December 2019. Revenue in  
January and in December were strongly affected by the performance of the nonauto sales and  
use tax. Through January 2020, YTD GRF revenue of $6.63 billion was $110.6 million (1.7%) above  
anticipated receipts, and $339.3 million (5.4%) above collections in the first seven months of  
FY 2019. For analysis and forecasting, revenue from the sales and use tax is separated into two  
3 Remittances for sales of both beer/malt beverages and wine/mixed beverages were below  
estimates and also below last year revenues.  
4 Annual FIT tax returns are due in October, but estimated payments are made in January, March,  
and May. The reconciliation between estimated payments and final tax liability generally results in net  
refunds between July and December.  
Budget Footnotes  
P a g e | 5  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
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 this month bounced back from a shortfall in December.  
January GRF receipts totaling $916.9 million were $34.4 million (3.9%) above estimate,  
effectively cancelling out the prior months negative variance of $34.3 million. So, for the  
two-month period, revenue from the tax source was on target relative to the combined  
estimates. Monthly receipts were also $85.0 million (10.2%) above revenue in January 2019. The  
most recent months collections increased the cumulative positive variance of this GRF source to  
$
74.9 million (1.3%), up from $40.5 million in the first half of FY 2020. For the fiscal year to date,  
GRF receipts of $5.71 billion were $280.8 million (5.2%) above revenue in the corresponding  
period in FY 2019. Chart 2, below, shows year-over-year growth in nonauto sales and use tax  
collections. On a three-month moving average basis, revenue growth has fallen from 6.5% in  
October to 4.7% in January but is still fairly robust.  
Chart 2: Nonauto Sales and Use Tax 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%  
The nonauto sales and use tax is benefiting from payments made bymarketplace  
facilitators(MPFs) that were imposed in H.B. 166, the main operating budget act for the  
biennium. The act substantially modified Ohios sales and use tax nexus and required businesses  
to remit sales and use taxes for sales through those retail channels to Ohio residents. Generally,  
an MPF is an entity, or an affiliate of an entity, that owns, operates, or controls a marketplace  
(either physical or electronic) and facilitates sales on that marketplace. A seller who makes sales  
of goods or services to a consumer in Ohio facilitated by an MPF (regardless of whether the seller  
has substantial nexus of its own or is a retailer with a physical presence in Ohio) must charge  
sales and use taxes to be remitted by the MPF. State and permissive local nonauto sales and use  
tax remittances by MPFs may have totaled about $76 million in the second fiscal quarter,  
according to data from the Tax Department.  
Budget Footnotes  
P a g e | 6  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Auto Sales and Use Tax  
Despite two consecutive monthly setbacks, the auto sales and use tax continues to be  
above estimate so far in FY 2020. This tax source posted a negative variance of $3.2 million  
(
2.5%) in January 2020, which followed a shortfall of $0.4 million in December. Monthly  
collections were $1.2 million (1.0%) above revenue in January 2019. YTD GRF revenue from this  
source totaled $926.4 million through January, an amount $35.8 million (4.0%) above  
estimates. YTD collections were also $58.5 million (6.7%) above receipts during the  
corresponding period in FY 2019.  
Chart 3 shows year-over-year growth in auto sales and use tax collections. After a sharp  
increase from September through November, the growth rate has declined in the most recent  
months. Nationwide, U.S. vehicle sales started 2020 on a strong note, reaching about 17 million  
seasonally adjusted annualized units. January vehicle sales were 1.9% above those in January  
2
019, and CY 2019 trends continued. Car sales were 14.6% lower and light truck and SUV sales  
were 9.5% higher than in the same month last year.  
Chart 3: Auto Sales and Use Tax Receipts Trend  
Actual vs. Prior Year  
(
Three-month Moving Average)  
1
0.0%  
9
8
7
6
5
4
3
2
1
0
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
.0%  
Personal Income Tax  
Through January, YTD GRF receipts of $5.41 billion were $19.2 million (0.4%) below  
projections, with the bulk of the shortfall coming in the latest month. January revenue from  
the PIT to the GRF totaling $980.5 million was $16.4 million (1.6%) below projections, and this  
result increased the first-half cumulative deficit which was $2.8 million. YTD FY 2020 revenue  
increased $26.8 million (0.5%) compared to PIT GRF receipts in the first seven months of  
FY 2019.  
January PIT revenue was also $31.2 million (3.1%) below January 2019 receipts, the first  
month of a truecomparison relative to year-ago receipts in FY 2020. Effective January 1, 2019,  
Ohio employer withholding tax rates were reduced by 3.3% in order to be fully consistent with  
st  
the income tax rate reductions enacted in 2015 (H.B. 64 of the 131 General Assembly). Thus,  
Budget Footnotes  
P a g e | 7  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
starting in January 2020, monthly revenue comparisons with year-ago receipts are no longer  
affected by the previous withholding rate reduction, though YTD comparisons would still be  
affected. However, the impact on those YTD comparisons would lessen in subsequent months.  
PIT revenue to the GRF is comprised of gross collections, minus refunds and distributions  
to the Local Government Fund (LGF). Gross collections consist of employer withholdings,  
5
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 81% of gross collections  
in FY 2019). Larger than expected refunds could also greatly affect the monthly performance of  
the tax, and refund activity has directly led to the shortfall in PIT receipts this fiscal year.  
Four of the seven months this fiscal year experienced significantly higher refunds than  
estimated: in the first and second fiscal quarters, taxpayer refunds were $8.1 million and  
$
28.5 million above estimates, respectively. In January, refunds were $30.9 million greater than  
anticipated, more than twice the size of the positive variance of $14.6 million for gross collections  
for the month. Refunds for the fiscal year through January thus total $67.5 million more than  
expected (as shown in the table below). Also, taxpayers have received $124.9 million more in  
refunds YTD than in the corresponding period in FY 2019. A potential explanation for increased  
refunds may lie, in part, on changes in the behavior of taxpayers and tax preparers still adjusting  
to a major federal tax reform bill (the Tax Cuts and Jobs Act of 2017) and recent changes to Ohio  
income tax law.  
For the YTD, revenues from each component of the PIT relative to estimates and revenue  
received in FY 2019 are detailed in the table below. Gross collections were $53.5 million above  
estimate, with all components above their YTD estimates. However, refunds and distributions to  
the LGF as a whole were $72.7 million higher than expected. FY 2020 refunds and LGF  
distributions also increased compared to their respective amounts in the corresponding period  
last fiscal year. 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. Compared to  
6
receipts in the first seven months of FY 2019, YTD FY 2020 employer withholding receipts grew  
1
.9%, despite the reduction in withholding rates described above.  
5 Quarterly estimated payments are made by taxpayers who expect to be underwithheld by more  
than $500. Payments are due in April, June, and September of an individuals tax year and January of the  
following year. Most estimated payments are made by high-income taxpayers.  
6 Withholding receipts consist of monthly employer withholding (about 99% of the total) and  
annual employer withholding.  
Budget Footnotes  
P a g e | 8  
February 2020  
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  
Category  
Amount  
$ in millions)  
Percent  
(%)  
Amount  
($ in millions)  
Percent  
(%)  
(
Withholding  
$38.4  
$8.3  
0.7%  
$101.6  
$39.7  
$3.8  
1.9%  
7.5%  
Quarterly Estimated Payments  
Trust Payments  
1.5%  
19.2%  
0.2%  
$5.7  
12.2%  
16.3%  
4.4%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$0.3  
$19.4  
$1.8  
$0.9  
2.0%  
$53.5  
$67.5  
$5.2  
0.9%  
$166.4  
$124.9  
$14.7  
$26.8  
2.7%  
Less Refunds  
12.9%  
2.1%  
26.9%  
6.3%  
Less LGF Distribution  
GRF PIT Revenue  
-$19.2  
-0.4%  
0.5%  
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 2019.  
Chart 4: Monthly Witholding 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%  
Actual  
Adjusted  
Budget Footnotes  
P a g e | 9  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Commercial Activity Tax  
GRF CAT receipts in January 2020 were $83.8 million, an amount $11.0 million (15.1%)  
above estimate and $17.5 million (26.4%) above revenue in the same month in 2019. Through  
January 2020, GRF receipts of $891.8 million exceeded OBM estimates by $33.7 million (3.9%),  
up from $22.7 million at the end of December 2019, and were $56.8 million (6.8%) above revenue  
YTD through January in FY 2019. The increase in receipts compared to FY 2019 was driven, in  
7
part, by a decline in tax credits claimed against the CAT. Through January, FY 2020 gross  
collections (i.e., all funds revenue) grew only 4.6% while refunds and credits fell 17.3%, resulting  
in a higher growth rate for the GRF.  
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 January, Fund 7047 and Fund 7081  
received $136.4 million and $21.0 million, respectively. Those funds are used to make  
reimbursement payments to school districts and other local taxing units, respectively, for the  
phase out of property taxes on general business tangible personal property. Any receipts in  
excess of amounts needed for such payments are transferred back to the GRF. In FY 2020, OBM  
estimates a CAT excess of $141.5 million would be transferred to the GRF.  
Cigarette and Other Tobacco Products Tax  
Cigarette and other tobacco products tax provided $74.3 million to the GRF in January, an  
amount $1.2 million (1.7%) above estimate, and $0.9 million (1.2%) above revenue in January  
2
019. Through January in FY 2020, revenue to the GRF totaled $476.8 million, $0.8 million (0.2%)  
below estimate and $16.9 million (3.4%) below receipts through January in FY 2019. YTD revenue  
included $429.4 million from the sale of cigarettes and $47.4 million from the sale of other  
tobacco products. Compared to FY 2019, receipts from cigarette sales fell $19.5 million while  
those from the sale of other tobacco products increased $2.6 million. On a yearly basis, revenue  
from the cigarette and other tobacco products tax usually trends downward generally at a slow  
pace due to a decline of cigarette revenue, though receipts from the sales of other tobacco  
products increase yearly.  
H.B. 166 levied a tax of 10¢ per milliliter (or gram) of vapor product (depending on the  
form of the product). A 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. The tax is to  
be paid by distributors beginning October 1, 2019. The taxation of vapor products is estimated  
to increase GRF revenue by $3.2 million, with most of the revenue occurring in the January to  
June period.  
7 A number of Ohios business tax credits can be claimed against more than one type of tax, but  
many are claimed against the CAT, which is imposed on the privilege of doing business in Ohio. Through  
January, refunds and credits totaled $76.9 million, $16.1 million below those in the corresponding period  
in FY 2019.  
Budget Footnotes  
P a g e | 10  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of January 2020  
($ in thousands)  
(Actual based on OAKS reports run February 4, 2020)  
Program Category  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$810,985  
$198,849  
$4,276  
$819,217  
$190,582  
$3,980  
-$8,231  
$8,268  
$296  
-1.0%  
4.3%  
7.4%  
0.0%  
Other Education  
Total Education  
$1,014,110 $1,013,779  
$332  
Medicaid  
$1,441,110 $1,279,243 $161,867  
$116,664  
$1,557,773 $1,430,398 $127,375  
12.7%  
Health and Human Services  
Total Health and Human Services  
$151,155 -$34,492 -22.8%  
8.9%  
Justice and Public Protection  
General Government  
$235,789  
$41,434  
$246,358 -$10,569  
$47,978  
$294,337 -$17,113  
-4.3%  
-$6,544 -13.6%  
Total Government Operations  
$277,223  
-5.8%  
Property Tax Reimbursements  
Debt Service  
$0  
$121,322  
$121,322  
$0  
$121,500  
$121,500  
$0  
-$178  
-$178  
---  
-0.1%  
-0.1%  
Total Other Expenditures  
Total Program Expenditures  
Transfers Out  
$2,970,430 $2,860,014 $110,416  
$821 $0 $821  
$2,971,251 $2,860,014 $111,237  
3.9%  
---  
Total GRF Uses  
3.9%  
*September 2019 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 11  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2020 as of January 31, 2020  
($ in thousands)  
(Actual based on OAKS reports run February 4, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2019** Percent  
Primary and Secondary Education  
Higher Education  
$4,986,544 $5,016,386  
$1,331,136 $1,390,627  
-$29,843  
-$59,490  
-$668  
-0.6%  
-4.3%  
-1.2%  
$4,840,045  
$1,330,912  
$49,556  
3.0%  
0.0%  
Other Education  
$55,045  
$55,712  
11.1%  
2.4%  
Total Education  
$6,372,724 $6,462,725  
-$90,001  
-1.4% $6,220,514  
Medicaid  
$9,865,975 $9,757,801 $108,174  
1.1%  
$9,022,795  
$824,349  
9.3%  
4.2%  
8.9%  
Health and Human Services  
Total Health and Human Services  
$859,186  
$932,706  
-$73,520  
-7.9%  
$10,725,161 $10,690,508  
$34,654  
0.3% $9,847,143  
Justice and Public Protection  
General Government  
$1,500,226 $1,531,869  
-$31,643  
-2.1%  
$1,402,672  
$226,460  
7.0%  
16.2%  
8.2%  
$263,210  
$301,699  
-$38,488 -12.8%  
Total Government Operations  
$1,763,436 $1,833,567  
-$70,132  
-3.8% $1,629,132  
Property Tax Reimbursements  
Debt Service  
$905,289  
$926,004  
-$20,715  
-$691  
-2.2%  
-0.1%  
$905,520  
0.0%  
-3.6%  
-1.9%  
$1,024,647 $1,025,339  
$1,062,765  
Total Other Expenditures  
$1,929,937 $1,951,343  
-$21,406  
-1.1% $1,968,285  
Total Program Expenditures  
Transfers Out  
$20,791,258 $20,938,143 -$146,884  
$663,620 $669,975 -$6,356  
$21,454,878 $21,608,118 -$153,240  
-0.7% $19,665,074  
5.7%  
-0.9%  
$752,927 -11.9%  
5.1%  
Total GRF Uses  
-0.7% $20,418,001  
*
*
September 2019 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 12  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on February 7, 2020)  
Month of January 2020  
Year to Date through January 2020  
Department  
Medicaid  
GRF  
Actual  
Estimate* Variance Percent  
Actual  
Estimate*  
Variance Percent  
$1,374,779 $1,213,269 $161,510  
$845,219 $839,955 $5,263  
$2,219,998 $2,053,224 $166,774  
13.3% $9,392,869  
0.6% $5,067,556  
$9,287,236 $105,633  
1.1%  
-1.9%  
0.0%  
Non-GRF  
$5,166,164  
-$98,608  
$7,025  
All Funds  
8.1% $14,460,425 $14,453,400  
Developmental Disabilities  
GRF  
$58,198  
150,468  
208,666  
$57,980  
$218  
0.4%  
$406,260  
$406,071  
$1,449,919  
$1,855,990  
$189  
-$33,917  
-$33,728  
0.0%  
-2.3%  
-1.8%  
$
$178,172 -$27,704 -15.5% $1,416,002  
$236,152 -$27,487 -11.6% $1,822,262  
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$7,392  
$12,933  
20,325  
$7,241  
$16,503  
$23,744  
$151  
2.1%  
$60,873  
$111,264  
$172,137  
$58,090  
$104,712  
$162,801  
$2,784  
$6,552  
$9,336  
4.8%  
6.3%  
5.7%  
Non-GRF  
-$3,570 -21.6%  
-$3,419 -14.4%  
$
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$741  
$753  
$4,321  
$5,074  
-$12  
-1.6%  
$5,974  
$24,495  
$30,468  
$6,405  
$24,608  
$31,013  
-$431  
-$113  
-$545  
-6.7%  
-0.5%  
-1.8%  
Non-GRF  
$2,340  
-$1,981 -45.9%  
-$1,993 -39.3%  
$
3,081  
All Funds  
All Departments:  
GRF  
$1,441,110 $1,279,243 $161,867  
$1,010,959 $1,038,952 -$27,992  
12.7% $9,865,975 $9,757,801 $108,174  
-2.7% $6,619,317 $6,745,404 -$126,086  
1.1%  
-1.9%  
-0.1%  
Non-GRF  
All Funds  
$
2,452,069 $2,318,195 $133,875  
5.8% $16,485,293 $16,503,205  
-$17,912  
*September 2019 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on February 7, 2020)  
Month of January 2020  
Year to Date through January 2020  
Actual Estimate* Variance Percent  
Payment Category  
Actual  
Estimate* Variance Percent  
Managed Care  
CFC†  
$1,701,663 $1,542,604 $159,059  
10.3% $10,257,698 $10,085,809 $171,888  
18.4% $3,585,842 $3,504,373 $81,470  
17.2% $2,683,212 $2,588,747 $94,465  
-1.5% $1,667,623 $1,686,830 -$19,207  
1.7%  
2.3%  
3.6%  
-1.1%  
1.9%  
0.3%  
-0.1%  
$647,243  
$484,492  
$263,717  
$93,668  
$212,543  
$0  
$546,639 $100,604  
$413,357 $71,135  
Group VIII  
ABD†  
$267,801  
$85,004  
-$4,084  
$8,665  
ABD Kids  
My Care  
P4P†  
10.2% $544,943 $10,341  
-7.5% $1,561,539 $1,556,434  
-- $204,197 $204,482  
$555,284  
$229,803 -$17,261  
$0 $0  
$5,105  
-$286  
Fee-For-Service  
ODM Services  
DDD Services  
$574,864  
$350,194  
$204,507  
$0  
$600,834 -$25,971  
$352,276 -$2,082  
$230,952 -$26,445 -11.5% $1,770,410 $1,798,984 -$28,574  
-4.3% $5,047,027 $5,126,901 -$79,875  
-0.6% $2,456,018 $2,513,818 -$57,800  
-1.6%  
-2.3%  
-1.6%  
1.7%  
Hospital - HCAP†  
Hospital - Other  
$0  
$0  
--  
$680,646  
$139,953  
$669,444 $11,202  
$144,655 -$4,703  
$20,163  
$17,606  
$2,556 14.5%  
-3.3%  
Premium Assistance  
Medicare Buy-In  
Medicare Part D  
$94,947  
$56,229  
$38,718  
$97,644  
$56,970  
$40,675  
-$2,697  
-$740  
-2.8%  
-1.3%  
-4.8%  
$644,594  
$372,853  
$271,741  
$660,492 -$15,898  
$382,910 -$10,056  
-2.4%  
-2.6%  
-2.1%  
-$1,957  
$277,582  
-$5,841  
Administration  
Total  
$80,595  
$77,110  
$3,485  
4.5%  
$535,974  
$630,000 -$94,026 -14.9%  
$2,452,069 $2,318,193 $133,877  
5.8% $16,485,292 $16,503,203 -$17,910 -0.1%  
*September 2019 estimates from the Department of Medicaid.  
P4P - Pay For Performance.  
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  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
8
Expenditures  
Melaney Carter, Director, Legislative Budget Office  
Overview  
GRF uses totaled $21.45 billion for the first seven months of FY 2020. These uses were  
under estimate by $153.2 million (0.7%). All program categories, except for Medicaid, were under  
estimate YTD. YTD variances in GRF uses are shown in the preceding Table 4. The preceding  
Table 3 shows GRF uses compared to estimates for the month of January. GRF uses in January  
totaled $2.97 billion and were above estimate by $111.2 million (3.9%).  
Medicaids YTD variance went from a negative $53.7 million at the end of December to a  
positive $108.2 million at the end of January. Medicaids positive monthly variance of  
$
161.9 million in January combined with its positive monthly variance of $32.2 million in  
December have offset negative monthly variances from earlier in the fiscal year. The following  
section gives more details about Medicaid GRF and non-GRF variances.  
The program categories with negative YTD variances are led by Health and Human  
Services, which had a negative YTD variance of $73.5 million that grew by $34.5 million in  
January. Higher Education had the second largest YTD negative variance ($59.5 million), although  
it had a positive monthly variance of $8.3 million in January. Other program categories that were  
more than $30.0 million under their YTD estimates are: General Government ($38.5 million) and  
Justice and Public Protection ($31.6 million). Both of these categories also had negative monthly  
variances in January of $6.5 million and $10.6 million, respectively. These variances are discussed  
further in the following sections.  
Medicaid  
GRF Medicaid expenditures were above their monthly estimate in January by $161.9 million  
(12.7%), which brought their YTD expenditures to $108.2 million (1.1%) above their YTD estimate.  
Non-GRF Medicaid expenditures were below their monthly estimate, by $28.0 million (2.7%), and  
below their YTD estimate by $126.1 million (1.9%). Including both the GRF and non-GRF, all funds  
Medicaid expenditures were $133.9 million (5.8%) above estimate in January and $17.9 million  
(
and non-GRF Medicaid expenditures contain federal and state dollars.  
0.1%) below the YTD estimate at the end of January. As a joint federal-state program, both GRF  
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. ODM had a significant positive variance in  
January ($166.8 million) but had a relatively small positive variance of $7.0 million YTD. On the  
other hand, ODODD had a negative variance of $27.5 million in January that led to a negative  
variance of $33.8 million YTD. The other six agencies Job and Family Services, Health, Aging,  
8 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  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Mental Health and Addiction Services, State Board of Pharmacy, and Education account for the  
remaining 1% of the total Medicaid budget. Unlike ODM and ODODD, the sixsister agencies  
incur only administrative spending.  
Table 6 shows all funds Medicaid expenditures by payment category. Expenditures were  
below their YTD estimates for three of the four payment categories. Administration  
(
(
$94.0 million, 14.9%) had the largest overall negative variance, followed by Fee-For-Service  
FFS, $79.9 million, 1.6%), and Premium Assistance ($15.9 million, 2.4%). Managed Care  
expenditures were above their YTD estimate by $171.9 million (1.7%).  
The YTD variance in the Administration category is mostly due to timing and is expected  
to smooth out throughout the fiscal year. Januarys YTD negative variance is 15.3% smaller in  
magnitude than Decembers.  
Expenditures in the Managed Care category were kept above their YTD estimate by a  
positive variance in January of $159.1 million (10.3%). The largest factors contributing to this  
positive variance were the positive monthly variances in Covered Families and Children (CFC) and  
Group VIII expenditures of $100.6 million (18.4%) and $71.1 million (17.2%), respectively. The  
positive variances for Group VIII were influenced by higher than expected caseloads. For the first  
seven months of FY 2020, the average monthly managed care caseloads for Group VIII were 1.5%  
(8,381) above estimate.  
Health and Human Services  
The negative YTD variance in the Health and Human Services category increased by  
34.5 million in January to reach $73.5 million (7.9%).  
$
The January monthly variance was dominated by a negative variance of $35.1 million in  
the Ohio Department of Job and Family Services (ODJFS). This negative monthly variance offset  
a small positive YTD variance at the end of December resulting in a negative YTD variance of  
$
variance of $31.9 million in item 600523, Family and Children Services, which offset a positive  
variance in October, leaving the item with a negative variance of $13.5 million for the YTD. Item  
34.7 million at the end of January. ODJFSs monthly variance was primarily caused by a negative  
6
$
6
00450, Program Operations, also had a negative YTD variance of $13.5 million, which grew by  
3.1 million in January. All but two of ODJFSs line items had negative YTD variances. Item  
00535, Early Care and Education, had a positive YTD variance of $11.7 million, which was caused  
by an accumulation of positive monthly variances over the YTD.  
The Ohio Department of Mental Health and Addiction Services (OMHAS) continues to  
have a significant negative YTD variance ($23.1 million at the end of January). As reported in prior  
issues of Budget Footnotes, this negative variance is primarily from expenditures in October. For  
the month of January, OMHAS had a small positive variance.  
Also contributing to the negative YTD variance in this category was the Department of  
Health (DOH), which had a negative YTD variance at the end of January of $9.9 million. This  
YTD variance was a result of an accumulation of negative monthly variances for most months of  
the fiscal year. DOHs variances are spread out over most of its line items. The largest variance is  
for item 440459, Help Me Grow, which had a negative variance of $1.4 million in January and a  
negative YTD variance of $3.7 million at the end of January. The Help Me Grow Home Visiting  
Program is the states parenting education program for expectant, first-time, and other parents  
at highest risk for poor child outcomes.  
Budget Footnotes  
P a g e | 16  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
The agency in this category with the fourth highest negative YTD variance is the  
Department of Veterans Services (DVS), which had a negative YTD variance of $4.6 million at the  
end of January. This variance is primarily from item 900321, Veterans Homes, which pays the  
operating costs of the states two veteranshomes.  
Higher Education  
The Higher Education category was under its YTD estimate by $59.5 million (4.3%) at the  
end of January. For the month of January, this category was over estimate by $8.3 million. As  
reported in the last two issues of Budget Footnotes, expenditures from a number of line items  
were delayed beginning in December. Of the five line items mentioned last month,  
disbursements still had not begun, at the end of January, from two of them. These are listed  
below with their negative YTD variances indicated in parentheses:  
235535, Ohio Agricultural Research and Development Center ($21.8 million);  
235511, Cooperative Extension Service ($14.6 million).  
Once agreements between the Department and these organizations are finalized, these negative  
variances should be reversed. In addition to these, most other line items in this category were  
also under estimate for the YTD.  
General Government  
The General Government category had a negative YTD variance of $38.5 million (12.8%)  
at the end of January and a negative variance of $6.5 million for the month of January. These  
variances were largely the result of a negative monthly variance of $7.5 million and a negative  
YTD variance of $20.6 million in item 775470, Public Transportation State, in the Department  
of Transportation budget. Also contributing to the negative YTD variance was a negative  
YTD variance of $10.0 million in item 700417, Soil and Water Phosphorus Program, in the  
Department of Agriculture budget. The variances in both of these items were due to delays in  
payments for these programs.  
Justice and Public Protection  
The Justice and Public Protection category had a negative variance for the month of  
January of $10.6 million, which increased this categorys negative YTD variance to $31.6 million  
(
2.1%). The negative January variance was mainly caused by a negative variance of $10.2 million  
for the Department of Rehabilitation and Correction (DRC). DRCs negative variance in January  
was due to a negative variance of $16.6 million in item 501405, Halfway House, that offset a  
positive variance of $17.4 million for this item in December. Despite DRCs negative January  
variance, it maintained a positive YTD variance of $4.4 million. Most other agencies in this  
category had negative YTD variances at the end of January. The most significant were the  
Department of Public Safety ($10.6 million), the Attorney General ($9.7 million), and the  
Department of Youth Services ($8.4 million).  
Budget Footnotes  
P a g e | 17  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
More than $6.6 million to be Awarded to 20 Local Trail Projects  
Tom Wert, Senior Budget Analyst  
On January 9, 2020, the Department of Natural Resources (DNR) announced calendar  
year 2019 Clean Ohio Trail Fund grant awards totaling more than $6.6 million for projects in  
Ashtabula, Clinton, Columbiana, Cuyahoga, Delaware, Franklin, Greene, Hamilton, Lorain,  
Medina, Summit, Warren, and Williams counties. In all, 20 projects will receive grants ranging  
from approximately $19,000 to $500,000 to build new or improve existing trails for hiking, biking,  
9
and other outdoor activities.  
Funding for Clean Ohio Trail Fund grants is supported by bond proceeds that are  
deposited into the Clean Ohio Fund (Fund 7061). Recipients of Clean Ohio Trail Fund grants must  
provide a 25% local match for their projects. Eligible uses of the money include land acquisition,  
existing trail improvement, construction of trailhead facilities, and engineering and design costs  
for bridges or other necessary infrastructure. All projects must be completed within 15 months.  
nd  
H.B. 529 of the 132 General Assembly, the capital budget bill for the FY 2019-FY 2020 capital  
biennium, provided $12.5 million to support these grants.  
OFCC Releases Report on Storm Shelters for Schools  
Jason Glover, Budget Analyst  
In December 2019, the Ohio Facilities Construction Commission (OFCC) released a report  
on its study regarding appropriate requirements for storm shelters for Ohio school buildings. The  
study, required by H.B. 166, found that Ohio ranks among the top 20 states for fatalities, injuries,  
and dollar losses from tornadoes. The study also found that while there have been no fatalities  
from tornadoes hitting a school building in Ohio since 1887, schools built to modern building  
codes are still susceptible to collapse due to tornadoes.  
Beginning in November 2017, the Ohio Building Code required certain buildings, including  
K-12 schools, to have storm shelters in accordance with the International Building Code. According  
to the report, the requirement can be met through a stand-alone structure, or a specifically  
designed, hardened area within a school building. Prior to the new requirements effective date,  
OFCC staff developed estimates of the cost to incorporate a storm shelter into public school  
construction projects that were in design at the time. According to OFCCs model, a storm shelter  
added an average of $589,000 (3.8%) to the total cost of a new public school. H.B. 21 of the  
nd  
1
32 General Assembly enacted a moratorium on the school storm shelter requirement until  
September 15, 2019, and H.B. 166 extended the moratorium until September 15, 2020.  
OFCCs report found that few code-compliant storm shelters have been built in Ohio. As  
a result of that and the multiple ways in which a facility can meet the storm shelter requirement,  
there is not one specific model for designing a cost-effective and compliant storm shelter.  
9
A
complete list of grant recipients can be found on DNRs website at:  
http://ohiodnr.gov/Portals/realestate/pdfs/grants/clean_ohio_trails/2019COTFAwards.pdf.  
Budget Footnotes  
P a g e | 18  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
However, the report suggests that the additional cost associated with the storm shelter  
requirement will decrease as the storm shelter designs and building materials become more  
widespread. OFCC concluded by recommending the following actions be taken before the storm  
shelter requirement for Ohio schools takes effect:  
School district officials should participate directly in the Ohio Board of Building Standards  
(BBS) rule-development process to share their perspective on building code impacts on  
their districts;  
BBS should provide additional detailed guidance on the code requirement for school  
renovations and additions;  
BBS should discuss with the design community storm shelter compliance paths that  
provide the necessary level of safety for the least cost;  
OFCC and the design and construction community should widely share real-world  
experiences on storm shelters in Ohio, with the goal of reducing risk and cost through  
lessons learned.  
National Motor Vehicle Title Information Systems Study  
Committee Issues Report and Recommendations  
Jamie Doskocil, Fiscal Supervisor  
On December 16, 2019, the National Motor Vehicle Title Information Systems (NMVTIS)  
study committee issued its final report and recommendations. The study committee was created  
nd  
by S.B. 263 of the 132 General Assembly and tasked to research the advantages and  
disadvantages of utilizing information reported within the NMVTIS for making decisions on the  
1
0
issuance of salvage certificates of title in Ohio. A salvage title is typically issued when a vehicle  
is wrecked or rendered a total loss in an insurance claim. The legislation, which took effect on  
March 19, 2019, issued a moratorium generally prohibiting clerks of court from issuing salvage  
certificates of title based solely on information provided by the NMVTIS until January 21, 2021.  
The study committee also addressed the accuracy of information entered into the system, public  
access to the information, and how other states utilize NMVTIS Junk, Salvage, and Insurance (JSI)  
information when titling vehicles.  
The study committee, consisting of 13 members and chaired by the Director of Public  
Safetys designee, issued the following recommendations:  
Continue the moratorium on use of NMVTIS JSI information for purposes of issuing  
salvage titles beyond January 1, 2021;  
Continue use of NMVTIS JSI information for purposes of the clerks identification of a  
scrap or crush vehicle;  
Increase public awareness and education about availability and accessibility of vehicle  
title information.  
10 The final report is available at the Legislative Service Commission library.  
Budget Footnotes  
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February 2020  
Legislative Budget Office of the Legislative Service Commission  
The NMVTIS is a federal repository housed within the U.S. Department of Justice. It was  
created under the Car Theft Act of 1992 and was reauthorized under the Anti Car Theft  
Improvements Act of 1996. The purpose of NMVTIS is to provide consumers protection from  
unsafe vehicles, protect states and consumers (individual and commercial) from fraud, prevent  
the introduction or reintroduction of stolen motor vehicles into interstate commerce, and reduce  
the use of stolen vehicles for illicit purposes, including funding of criminal enterprises.  
Medicaid Awarded $16 million Integrated Care for Kids Grant  
Nelson V. Lindgren, Economist  
In December 2019, the U.S. Centers for Medicare and Medicaid Services (CMS) awarded  
the Ohio Department of Medicaid (ODM) a seven-year, $16 million, Integrated Care for Kids  
grant. The goal of the grant is to reduce expenditures and improve the quality of care for children  
through prevention, early identification, and treatment of behavioral and physical health needs.  
Grant funds will be used to design and test early intervention models that do all of the following:  
improve childrens health outcomes; reduce in-patient and out-of-home placements for children,  
including foster care placements; and create sustainable alternative payment models that ensure  
provider accountability for cost and quality outcomes. To achieve this, ODM will partner with  
Nationwide Childrens Hospital to develop and test an integrated care coordination model for all  
Medicaid-eligible children from birth to age 21 residing in Licking and Muskingum counties.  
Special focus within these counties will be placed on eligible children who live in out-of-home  
placements, those at risk for out-of-home placement in the future, and children with acute  
behavioral health needs. As part of this process, Nationwide Childrens Hospital will convene  
community partners to integrate coordination and management of core child services, including  
clinical care, early care and education, school-based health services, and housing. Integrating  
these core child services will provide children and caregivers with a single point of coordination  
for all providers, which should make accessing services easier.  
Ohio is one of seven states chosen by CMS to receive grants. Other states receiving grants  
include Connecticut, Illinois, New Jersey, New York, North Carolina, and Oregon. Grant activities  
will begin on January 1, 2020, and conclude on December 31, 2026. The first two years of the  
grant will focus primarily on pre-implementation work. During this phase, CMS will assist states  
in developing the infrastructure and procedures necessary for model implementation. A five-year  
model implementation period will follow. This period will be devoted to implementing and  
monitoring models. States will be required to report specific data to CMS during the  
implementation period.  
Reducing Falls with Artificial Intelligence Project Launched  
Nelson V. Lindgren, Economist  
On December 1, 2019, a three-year Reducing Falls with Artificial Intelligence (AI) project  
was launched in Ohio to improve the overall quality of life for nursing home residents. The project  
will be administered by VirtuSense Technologies, which is based out of Illinois. VirtuSense  
Technologies will work with ODM to select ten nursing facilities to participate in the project. As part  
of the project, residents at these selected nursing facilities will be assessed for their risk level for  
falls by using AI to identify musculoskeletal and sensory deficiencies. Each assessment conducted  
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Legislative Budget Office of the Legislative Service Commission  
will provide data concerning the residents mobility level, gait speed, and their sit-to-stand time. In  
addition, for those residents over the age of 70, the assessment will also calculate the probability  
that the resident will suffer a fall in the next 12 months. The information generated by the  
assessments will be used by the facilitys staff to form a plan of care appropriate for each resident.  
Once the plan is begun, residents showing minimal progress will be provided an alternative plan of  
care. The project is anticipated to do the following: reduce hip fractures by 10%, reduce falls and  
falls with injury by 10%, and improve the gait speed for participating residents by 20%. This will  
allow residents to live with a greater degree of independence and should decrease medical costs  
associated with fall injuries. As part of the project, one onsite training and unlimited virtual  
trainings will be provided to appropriate staff at each nursing facility. In addition, each facility will  
receive balance software, a laptop, and a sensor to be used to conduct the assessments.  
CMS approved approximately $400,000 in funding for the project. The funding comes from  
civil monetary penalties paid by nursing facilities that do not meet federal health and safety  
standards. States have discretion to use these funds for projects to improve resident outcomes in  
Medicare and Medicaid certified nursing facilities. ODM recommended the project to CMS and will  
receive from VirtuSense quarterly progress reports and a final report that evaluates project  
outcomes and results.  
Attorney General Awards $4.0 million Under the Ohio Law  
Enforcement Body Armor Program  
Jessica Murphy, Budget Analyst  
As of January 1, 2020, the Ohio Attorney Generals Office had awarded $4.0 million of the  
7.0 million available to purchase body armor vests under the Ohio Law Enforcement Body  
$
Armor Program. The money was awarded to 426 local law enforcement agencies across  
8
2 counties and used to purchase an estimated 5,621 body vests. Under the program, a local law  
enforcement agency that has a mandatory wear policy for all uniformed officers on duty is eligible  
to receive up to $40,000 in grant funding, with a required 25% local match, to purchase body  
armor that meets National Institute of Justice standards. The award amount is based on an  
itemized cost quote from the vendor that is submitted as part of the application, which is then  
reimbursed by the Attorney General upon receipt of proof of payment documentation.  
The program, created in FY 2019 and continuing through FY 2020, is funded by the Bureau  
of WorkersCompensation (BWC) and administered by the Attorney General. The funding consists  
of safety and hygiene assessments charged to employers along with their workerscompensation  
premiums, which is transferred from BWC to the General Holding Fund (Fund R004), from which  
the Attorney General disburses the grant awards. Of the awardees, 16 received over $30,000 in  
1
1
funding, with four receiving the maximum. The largest share of funding around 9% benefited  
Cuyahoga County with 38 local law enforcement agencies receiving a combined total of $373,290,  
followed by Trumbull County with 24 local law enforcement agencies receiving $197,154, or  
around 5% of the amount awarded.  
11  
A list of awards can be found at this link: https://www.ohioattorneygeneral.gov/Law-  
Enforcement/Ohio-Law-Enforcement-Gateway/Body-Armor-Grants.  
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February 2020  
Legislative Budget Office of the Legislative Service Commission  
State Fire Marshal Awards $2.9 million in MARCS Grants  
Shannon Pleiman, Senior Budget Analyst  
On December 27, 2019, the State Fire Marshals Office within the Department of  
Commerce announced nearly $2.9 million in awards under the Multi-Agency Radio  
Communications System (MARCS) Grant program. Overall, 283 fire departments in 43 counties  
received awards, ranging from $120 to $50,000, the maximum award amount under the  
1
2
program. H.B. 166 earmarked up to $3.0 million for the program for FY 2020.  
The MARCS grants offset the costs that local fire departments incur for MARCS-related  
radio user fees and equipment that promotes interoperability between fire services. The State  
Fire Marshal uses a variety of criteria to decide award amounts, including: (1) the fire  
departments annual budget, (2) the annual number of fire incidents, (3) the resident population  
served by the department, and (4) requests from multiple jurisdictions within the same county  
or region collaborating to acquire or complete MARCS service for their fire departments. Eligible  
grant recipients include volunteer fire departments, municipal or small township fire  
departments that serve one or more small municipalities or townships, joint fire districts, and  
certain private fire companies that serve a population of 25,000 or less. Funding for the MARCS  
grants comes from taxes on insurance companies selling fire insurance in Ohio and from  
inspection fees, hotel permits, and fireworks licenses. The receipts from these various sources  
are deposited into the State Fire Marshal Fund (Fund 5460).  
Auditor of State Releases Phase 1 ODOT Performance Audit  
Terry Steele, Senior Budget Analyst  
On January 9, 2020, the Auditor of State released its Phase 1 performance audit findings  
for the Ohio Department of Transportation (ODOT). As shown in the table below, the audit report  
identified recommendations in four areas that, if adopted, could yield savings of between nearly  
$
32.5 million and $63.5 million annually. The largest portion of potential savings comes from a  
recommendation that ODOT retain the current fleet management policy rather than transitioning  
to a more expensive leasing model for specified vehicles, thereby avoiding estimated new costs  
of between $22.0 million and $42.0 million. The second largest area of savings ($10.0 million to  
$
21.0 million) comes from the recommendation that ODOT deploy internal staff before hiring  
private-sector construction inspectors. The audit also calculated savings of approximately  
450,000 from replacing information technology (IT) consultants with permanent staff and  
$
recommended that ODOT develop a plan for evaluating the most cost-effective use of  
department staff and consultants on IT projects. Finally, the audit report recommended that  
ODOT improve its data collection and management practices to improve decision making.  
12  
A list of all the fire departments awarded MARCS grants can be found at:  
https://apps2.com.ohio.gov/admn/pressroom/View.aspx?FileName=3854.pdf.  
Budget Footnotes  
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February 2020  
Legislative Budget Office of the Legislative Service Commission  
ODOT Phase 1 Performance Audit Summary  
Recommendation  
Potential Annual Savings  
Retain current fleet management model and forego leasing plan  
Use in-house construction inspection staff instead of consultants  
Develop plan for rationalizing use of IT staff and consultants  
Total  
$22,000,000 to $42,000,000  
$10,000,000 to $21,000,000  
$450,000  
$32,450,000 to $63,450,000  
H.B. 62 of the 133rd General Assembly, the transportation budget for the FY 2020-FY 2021  
biennium, requires the Auditor of State to undertake a performance audit of ODOT. The Auditor  
divided the performance audit into two phases. The first phase, just released, focused on the  
areas of fleet management, construction inspection, seasonal staffing, and IT. The second phase,  
currently ongoing, focuses on highway management and maintenance practices, specifically  
pavement, bridge construction, and other maintenance operations. The costs of performance  
audits for state agencies are generally paid from the Public Audit Intrastate Fund (Fund 1090).  
These costs are then reimbursed by the agency being audited.  
Development Services Agency Begins Accepting Applications for  
the Rural Industrial Park Loan Program  
Tom Middleton, Senior Budget Analyst  
In December 2019, the Development Services Agency (DSA) began accepting applications  
for the Rural Industrial Park Loan Program. A total of $25 million is available in FY 2020 for loans  
to develop rural industrial parks in certain areas of the state. Applications for the program are  
accepted on a first-come, first-served basis. Inactive since FY 2011, H.B. 166 revived the Rural  
Industrial Park Loan Fund (Fund 4Z60) and transferred $25 million from the Facilities  
Establishment Fund (Fund 7037) for loans in FY 2020. There are no appropriations for the  
program in FY 2021.  
Under program guidelines set by DSA, loans may range in size from $500,000 to  
2.5 million, or up to 75% of the total project cost, and may last up to ten years for machinery  
$
and equipment or 20 years for real estate. Interest rates will vary but may be 0% for the first  
five years of the loan and will be fixed below market rates subsequently. The terms of the loan  
allow at least 50% loan forgiveness upon successful completion of the project and after loan  
agreement terms are met.  
Eligible entities include counties, municipalities, townships, nonprofits, port authorities,  
community improvement corporations, or private entities. Loans are available in counties that  
both contain less than 125,000 in population and qualify as a distressed county or a labor  
surplus county as defined under R.C. 122.19. Most of the 35 eligible counties are in southeast  
Budget Footnotes  
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February 2020  
Legislative Budget Office of the Legislative Service Commission  
Ohio.13 Eligible project costs include (1) land or building purchase, (2) machinery or equipment  
purchase, and (3) other site and infrastructure development, such as utility installation,  
drainage improvements, or telecommunications hook-up.  
ODE Reports School Use of Economically Disadvantaged Funds  
in FY 2018 and FY 2019  
Alexander Moon, Economist  
In December 2019, the Ohio Department of Education (ODE) issued its biennial report on  
the use of economically disadvantaged funds allocated to public schools through the state  
foundation formula. The report describes the initiatives on which school districts, community  
schools, and STEM schools reported spending the funds, which provide well over $400 million  
each year in support of additional resources and opportunities for economically disadvantaged  
students. The chart below shows the relative popularity of each of the nine initiatives for which  
the funds are permitted to be used. The percentages in the chart represent the prevalence with  
which the initiatives were identified by districts and schools in reports to ODE. Percentages are  
for the FY 2018-FY 2019 biennium; usage generally remained stable from year to year.  
Chart 5: Percentage Share of Economically Disadvantaged Funds Initiatives Used  
FY 2018-FY 2019  
2
.3% 0.1%  
Reading improvement and intervention  
5
.4%  
8
.6%  
23.8%  
Instructional technology or blended  
learning  
School safety and security  
Extended school day and school year  
Dropout prevention  
1
1.9%  
Academic interventions for grades 6-12  
Professional development in reading  
instruction for K-3 teachers  
1
8.5%  
1
3.1%  
Community learning centers  
Bright New Leaders for Ohio Schools  
1
6.3%  
Reading improvement and intervention was the most commonly used initiative, at 23.8%  
of all initiatives reported. Schools used their funds to develop reading initiatives, hire additional  
intervention specialists, purchase materials, and provide professional development for reading  
teachers.  
13  
The map of eligible counties may be accessed at the following link:  
https://development.ohio.gov/files/bs/RuralIndLoanProg20.pdf.  
Budget Footnotes  
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February 2020  
Legislative Budget Office of the Legislative Service Commission  
The next most common initiative, at 18.5% of initiatives reported, was instructional  
technology or blended learning, including costs associated with bringing technology into the  
classroom, as well as distance learning with or without the aid of an instructor or aide being  
present.  
The third most popular initiative was school safety and security, at 16.3%. Schools  
reported using the funds for various measures to keep students, teachers, staff, and visitors safe,  
including security personnel, equipment or supplies, and costs for professional development.  
Costs for nursing or health services are also permitted if those services are provided to all  
students within a building.  
Many schools combined initiatives to maximize opportunities for students. For example,  
a district might pay for security during extended hours and provide resources such as tutors  
during that time. Another combination might involve a summer reading program (under an  
extended school day and school year initiative), reading improvement and intervention services,  
and professional development in reading instruction for teachers in grades K-3.  
Budget Footnotes  
P a g e | 25  
February 2020  
Legislative Budget Office of the Legislative Service Commission  
TErric Maakcelak, Eiconnomgist the Economy  
Overview  
The national and state economies continue to expand, as production and employment  
increased. Inflation-adjusted gross domestic product (real GDP) grew 2.3% in 2019, compared  
with the 2.9% growth rate in 2018. According to the U.S. Bureau of Labor Statistics (BLS), the  
nation added 225,000 nonfarm payroll jobs in January, and the national unemployment rate  
increased to 3.6%. In December, the Federal Reserve Boards industrial production index (IPI) was  
1
time period. In their most recent estimate of the nations residents, the U.S. Census Bureau  
measured the countrys resident population to be just under 328.2 million as of July 1, 2019.  
.0% below its December 2018 level, with manufacturing production down 1.3% during the same  
Ohios economy added 9,800 nonfarm payroll jobs in December, maintaining the higher  
pace of job gains observed in November, as compared to previous months. The unemployment  
rate in the state was 4.2%, 0.4 percentage point below the unemployment rate a year prior. The  
number of existing home sales in Ohio increased by 1.6% from 2018 to 2019, and the average  
sale price of those homes was 5.9% greater in 2019 than in the previous year.  
Addressing the Coronavirus outbreak in China, a recent presentation by IHS Markit noted  
that any potential effects on production and consumption are as of yet unclear and are not yet  
evident in national or subnational data.  
The National Economy  
Real GDP rose at an annual rate of 2.3% in 2019, according to the first estimate released  
by the U.S. Bureau of Economic Analysis (BEA). The value of consumer spending on goods  
increased 3.8% year over year, while the value of services consumed increased by 2.1%.  
Nonresidential fixed investment increased 2.1% in 2019, down from a 6.4% increase the previous  
year; residential fixed investment fell 1.5% from a year prior, although this industry segment has  
grown in the most recent two quarters. The value of goods and services exported to other nations  
was essentially unchanged from 2018. Imports grew 1.0% in 2019, after growth of 4.7% and 4.4%  
in 2017 and 2018, respectively. Expenditures of the federal government increased by 3.5%, while  
the expenditures of state and local governments increased 1.6% in 2019.  
The seasonally adjusted annualized rate of real GDP growth was 2.1% in the fourth  
quarter of 2019. This rate of economic expansion was greater than the 1.1% rate of growth in the  
fourth quarter of 2018 and follows growth rates of 2.0% and 2.1% in the second and third  
quarters of 2019, respectively.  
The U.S. economy added 225,000 employees to nonfarm payrolls in January, and the  
national unemployment rate ticked up slightly to a seasonally adjusted 3.6% from 3.5%.  
Industries with notable job gains were construction (+44,000), leisure and hospitality (+36,000),  
health care (+36,000), and transportation and warehousing (+28,000). Decreases in employment  
in the manufacturing sector (-12,000) were largely due to job losses in the motor vehicles and  
parts manufacturing industry.  
Effective with the BLS data release on February 7, 2020, updated population estimates  
were incorporated into one of the two surveys comprising the national employment and  
unemployment estimates. The reduction in previously estimated population growth reduced the  
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February 2020  
Legislative Budget Office of the Legislative Service Commission  
estimated number of employed persons during 2019. The adjustments decreased BLSs  
December calculation of the civilian labor force by 524,000, total employment by 507,000, and  
unemployment by 17,000; previous unemployment rate estimates were unaffected. Historical  
payroll employment estimates were also revised. Average monthly growth in nonfarm payroll  
jobs during 2019 decreased from around 175,700 to around 174,700. Chart 6 shows  
U.S. employment and unemployment.  
Chart 6: U.S. Employment and Unemployment  
1
1
1
1
1
1
1
1
1
1
55  
52  
49  
46  
43  
40  
37  
34  
31  
28  
12.0%  
11.0%  
10.0%  
9.0%  
8.0%  
7.0%  
6.0%  
5.0%  
4.0%  
3.0%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
Nonfarm Payroll Employment Unemployment Rate (right scale)  
The personal income (PI) of Americans increased 4.5% in 2019, a decrease from the 5.6%  
growth in 2018. Growth of real personal consumption expenditures in 2019 was down from a  
year earlier in each expenditure category, including durable goods, nondurable goods, and  
services. Real PI excluding transfer payments increased at a 2.6% annual rate in 2019 after rising  
3
.7% in 2018.  
According to the Federal Reserve Boards IPI, overall production declined 0.3% in  
December despite increases of 0.2% and 1.3% in manufacturing and mining activity, respectively.  
Between December 2018 and December 2019, the IPI decreased by 1.0%. Over the year,  
production is down for consumer goods, business equipment, nonindustrial supplies, and  
materials; production of construction supplies, a subcategory of nonindustrial supplies, was up  
0
.7% year over year, while the production of motor vehicles and parts decreased 8.3% nationally.  
A private survey of purchasing managers, the Institute for Supply Managements purchasing  
managers index, measured a growing manufacturing sector in the month of January, after five  
months measuring contraction in manufacturing activity.  
According to the U.S. Census Bureaus Building Permits Survey, the rate of privately owned  
housing permit authorizations in December was a seasonally adjusted 3.9% below the rate of  
permit issuance in November but still 5.8% above the rate of issuances a year prior. The number  
of privately owned housing units started in 2019 was 3.2% greater than in 2018. Among the types  
of housing, the greatest increase in building starts was for the subset of houses with five or more  
units. Privately owned housing starts decreased in 2019 in the Midwest Census region.  
Budget Footnotes  
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February 2020  
Legislative Budget Office of the Legislative Service Commission  
The resident population of the United States was estimated to be just over 328.2 million  
in the Census Bureaus most recent release of its long-term population estimates. This is the  
estimated number of persons living in the country as of July 1, 2019. According to the Census  
Bureau, the resident population grew by 0.5% from July 2018 to July 2019. The estimated  
population growth rate has been slowing each year since 2015.  
The Ohio Economy  
Employers in Ohio added an estimated 9,800 nonfarm wage and salary jobs in December,  
increasing the total to 5,610,600. Employers in the education and health care industries added  
3
Manufacturing payroll employment was up by 1,100 in Ohio in December.  
,400 to their payrolls, while employment in the construction industry also increased by 3,400.  
Ohios unemployment rate remained at a seasonally adjusted 4.2%, with approximately  
42,600 Ohioans classified as unemployed in December. Between December 2018 and December  
019, both the state and national unemployment rates have decreased by 0.4 percentage point.  
2
2
The rate of unemployment among persons in the Cleveland-Elyria metropolitan statistical area  
decreased by 1.1 percentage points in that time and was 4.0% in December. The state added just  
over 81,000 additional labor force participants from December 2018 to December 2019. Chart 7  
shows Ohio employment and unemployment.  
Chart 7: Ohio Employment and Unemployment  
5
5
5
5
5
5
5
5
5
4
.8  
.7  
.6  
.5  
.4  
.3  
.2  
.1  
.0  
.9  
12.0%  
11.0%  
10.0%  
9.0%  
8.0%  
7.0%  
6.0%  
5.0%  
4.0%  
3.0%  
2
008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019  
Nonfarm Payroll Employment Unemployment Rate (right scale)  
According to the Ohio Realtors Association, existing home unit sales in December were  
2.4% above the number of sales in December 2018. For CY 2019, 154,650 existing homes in Ohio  
1
transferred ownership; the average sale price for the homes was around $193,663, thus the total  
dollar value of existing homes sold in Ohio was approximately $29.95 billion. The dollar value of  
existing home sales was 7.6% greater than the dollar value of home sales in 2018.  
Budget Footnotes  
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February 2020  
Legislative Budget Office of the Legislative Service Commission  
Economic activity in the Cleveland Federal Reserve District continued to expand at a  
modest pace during the survey period, according to a recent Federal Reserve System publication,  
1
4
the Beige Book. According to surveyed firms, activity and employment in the professional and  
business services industry remained strong since the previous report. Firms in most industries  
reported increasing wages, particularly in regions where labor is scarce. The price of outputs  
continued to decline in manufacturing, according to surveyed businesses, however output prices  
continued to rise in the retail, professional and business services, and construction industries.  
Consumer spending increased solidly in the region; increases in demand for auto loans and home  
mortgages were offset by weak demand for business loans. Reports from the transportation  
sector suggested a contraction of freight demand, as shipping volumes decreased in most  
industries.  
14 The Federal Reserve Bank of Clevelands district consists of all Ohio, western Pennsylvania,  
eastern Kentucky, and the northern panhandle of West Virginia. Comments above are from the latest  
edition of the Beige Book, a publication that summarizes anecdotal and other information from business  
and industry contacts outside of the Federal Reserve System collected on or before January 6, 2020.  
Budget Footnotes  
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February 2020