A monthly newsletter of the Legislative Budget Office of LSC  
Volume: Fiscal Year 2020  
Issue: March 2020  
Highlights  
Ross Miller, Chief Economist  
February GRF tax revenue came in $111 million above the estimate published by  
the Office of Budget and Management (OBM) in August 2019. The sales and use tax  
had another strong month, above estimate by nearly $35 million, but much of the  
strength in tax revenue was due to the foreign insurance tax, above estimate by  
almost $65 million. A significant portion of the apparent strength of that tax is due to  
timing: taxpayerssecond tax payment of the year is due March 1, and it is difficult to  
predict the percentage of receipts collected in February rather than March.  
Nevertheless, most GRF tax sources were above estimates for the month. Only the  
natural gas consumption tax was significantly below estimate (by $9 million).  
For FY 2020 through February, GRF tax revenue was $249 million above  
estimate. The foreign insurance tax accounted for $83 million of that due to the  
timing issue mentioned above. But the sales and use tax and the commercial  
activity tax (CAT) also had notable positive year-to-date (YTD) variances.  
Through February 2020, GRF sources totaled $22.89 billion:  
Revenue from the sales and use tax was $145.4 million above estimate;  
Personal income tax (PIT) receipts were $17.6 million below estimate.  
Through February 2020, GRF uses totaled $23.87 billion:  
Program expenditures were $207.7 million below estimate;  
Expenditures from all program categories were below estimates except for  
Medicaid, for which spending was above estimate by $100.5 million.  
In this issue...  
More details on GRF Revenues (p. 2), Expenditures (p. 11),  
the National Economy (p. 25), and the Ohio Economy (p. 26).  
Also Issue Updates on:  
School Bus Purchase Program (p. 18)  
Quality Community School Awards (p. 18)  
Timber Sale Distributions (p. 19)  
Boating Safety Education Grants (p. 20)  
Child Care Quality Improvement Funds (p. 20)  
CPC for Kids Program is Launched (p. 22)  
Court Technology Grants (p. 22)  
Ohio Cyber Reserve (p. 24)  
Available online at: www.lsc.ohio.gov/Budget Central  
Legislative Budget Office of the Legislative Service Commission  
Table 1: General Revenue Fund Sources  
Actual vs. Estimate  
Month of February 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on March 3, 2020)  
State Sources  
Actual  
Estimate*  
Variance Percent  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
$102,891  
$680,892  
$783,783  
$92,300  
$656,700  
$749,000  
$10,591  
$24,192  
$34,783  
11.5%  
3.7%  
4.6%  
Personal Income  
Commercial Activity Tax  
Cigarette  
Kilowatt-Hour Excise  
Foreign Insurance  
Domestic Insurance  
Financial Institution  
Public Utility  
Natural Gas Consumption  
Alcoholic Beverage  
Liquor Gallonage  
Petroleum Activity Tax  
Corporate Franchise  
Estate  
$178,636  
$354,342  
$66,706  
$35,044  
$144,428  
$1  
$50,746  
$30,072  
$8,609  
$3,916  
$3,827  
$0  
$177,100  
$351,800  
$60,200  
$31,500  
$79,700  
$200  
$44,500  
$29,900  
$17,900  
$3,600  
$3,700  
$0  
$1,536  
$2,542  
$6,506  
$3,544  
$64,728  
-$200 -99.8%  
$6,246  
$172  
0.9%  
0.7%  
10.8%  
11.2%  
81.2%  
14.0%  
0.6%  
-$9,291 -51.9%  
$316  
$127  
$0  
$8  
$0  
8.8%  
3.4%  
---  
---  
---  
$8  
$0  
$0  
$0  
Total Tax Revenue  
$1,660,116 $1,549,100 $111,016  
7.2%  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$21  
$5,311  
$469  
$0  
$8,132  
$574  
$21  
---  
-$2,821 -34.7%  
-$104 -18.2%  
-$2,904 -33.4%  
Total Nontax Revenue  
$5,801  
$8,706  
Transfers In  
Total State Sources  
Federal Grants  
$833  
$0  
$833  
---  
7.0%  
0.7%  
5.1%  
$1,666,750 $1,557,806 $108,945  
$686,003 $681,417 $4,587  
$2,352,754 $2,239,222 $113,531  
Total GRF Sources  
*Estimates of the Office of Budget and Management as of August 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 2  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 2: General Revenue Fund Sources  
Actual vs. Estimate ($ in thousands)  
FY 2020 as of February 29, 2020  
($ in thousands)  
(Actual based on report run in OAKS Actuals Ledger on March 3, 2020)  
State Sources  
Tax Revenue  
Auto Sales  
Nonauto Sales and Use  
Total Sales and Use  
Actual  
Estimate*  
Variance Percent  
4.7%  
1.6% $6,047,586  
2.0% $7,004,346  
FY 2019**  
Percent  
$1,029,245  
$6,388,173 $6,289,100 $99,073  
$7,417,418 $7,272,000 $145,418  
$982,900 $46,345  
$956,760  
7.6%  
5.6%  
5.9%  
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  
$5,590,361 $5,608,000 -$17,639  
$1,246,186 $1,209,900 $36,286  
-0.3% $5,607,407  
3.0% $1,183,885  
-0.3%  
5.3%  
-2.5%  
-4.3%  
23.6%  
$543,536  
$228,384  
$316,474  
$3,971  
$86,364  
$95,904  
$29,061  
$35,406  
$35,143  
$4,041  
$92  
$537,800  
$229,200  
$233,200 $83,274  
$200  
$78,100  
$98,400  
$5,736  
-$816  
1.1%  
-0.4%  
35.7%  
$557,415  
$238,692  
$256,044  
$3,771 1885.6%  
$8,264  
-$2,496  
$5 73529.8%  
10.6%  
-2.5%  
-27.3%  
-6.8%  
3.1%  
-10.2%  
---  
$87,673  
-1.5%  
-7.7%  
-28.1%  
-5.0%  
3.4%  
-14.9%  
-92.6%  
16.9%  
3.1%  
$103,953  
$40,432  
$37,271  
$33,990  
$4,750  
$1,243  
$32  
$40,000 -$10,939  
$38,000  
$34,100  
$4,500  
$0  
-$2,594  
$1,043  
-$459  
$92  
$38  
$0  
$38  
---  
Total Tax Revenue  
$15,632,380 $15,383,400 $248,980  
1.6% $15,157,138  
Nontax Revenue  
Earnings on Investments  
Licenses and Fees  
Other Revenue  
$76,978  
$20,809  
$80,349  
$178,136  
$55,000 $21,978  
$20,101 $709  
$61,220 $19,129  
40.0%  
3.5%  
31.2%  
30.7%  
$55,110  
$21,895  
$55,814  
$132,819  
39.7%  
-5.0%  
44.0%  
34.1%  
Total Nontax Revenue  
$136,321 $41,815  
Transfers In  
$76,431  
$68,570  
$7,862  
11.5%  
$82,025  
-6.8%  
3.4%  
7.5%  
4.6%  
Total State Sources  
Federal Grants  
$15,886,947 $15,588,290 $298,657  
$7,004,470 $6,905,554 $98,916  
$22,891,417 $22,493,844 $397,573  
1.9% $15,371,982  
1.4% $6,517,763  
1.8% $21,889,745  
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  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
1
Revenues  
Jean J. Botomogno, Principal Economist  
Overview  
The YTD positive variance of GRF sources grew in February 2020 as monthly receipts  
surpassed estimate by $113.5 million (5.1%). Through the latest month, GRF sources totaling  
$
cumulative positive variance of $284.0 million through the end of January. Recent revenue trends  
continued at the end of February: all GRF categories were above estimate for the YTD, including  
22.89 billion were $397.6 million (1.8%) above the August 2019 OBM estimates, up from a  
2
tax revenue ($249.0 million, 1.6%), federal grants ($98.9 million, 1.4%), nontax revenues  
(
$41.8 million, 30.7%), and transfers in ($7.9 million, 11.5%). Tables 1 and 2 show GRF sources  
for the month of February and for FY 2020 through February, 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  
February 2020.  
Chart 1: Cumulative Variances of GRF Sources in FY 2020  
(
Variances from Estimates, $ in millions)  
$
$
$
$
$
500  
400  
300  
200  
100  
$0  
-
-
-
-
$100  
$200  
$300  
$400  
Jul-19  
Aug-19  
Sep-19  
Oct-19  
Nov-19  
Dec-19  
Jan-20  
Feb-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. Through February 2020, GRF Medicaid spending was $100.5 million above estimate.  
Budget Footnotes  
P a g e | 4  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
The sales and use tax, the CAT, and the foreign insurance tax are driving the YTD  
performance of the GRF tax category: these taxes exceeded their respective YTD estimates by  
$
145.4 million, $36.3 million, and $83.3 million, respectively. In addition, the financial institution  
tax (FIT), the cigarette tax, and the domestic insurance tax were also above their respective YTD  
estimates by $8.3 million, $5.7 million, and $3.8 million, respectively. Those positive variances  
were partially offset by shortfalls of $17.6 million from the PIT, $14.3 million from the three  
utility-related taxes (the kilowatt-hour excise tax, the public utility tax, and the natural gas  
consumption tax) and $2.6 million from the alcoholic beverage tax.3  
In the month of February, GRF tax sources, which were 7.2% above anticipated receipts,  
contributed $111.0 million of the total GRF sourcespositive variance noted earlier. For the  
remaining GRF categories, federal grants were $4.6 million (0.7%) above estimate, revenue from  
transfers in was $0.8 million when none was expected for the month, but nontax revenue fell  
short $2.9 million (33.4%). The foreign insurance tax, with a surplus of $64.7 million in February,  
provided a mostly timing-related boost to GRF sources; the estimates for February and March,  
combined, totaled $177.5 million, and revenue in February amounted to $144.4 million,  
suggesting that March revenue will be significantly below the $97.8 million estimate. But, the  
majority of the remaining tax sources were also above estimates, including the sales and use tax  
4
(
$34.8 million), the cigarette tax ($6.5 million), the FIT ($6.2 million), and the kilowatt-hour  
excise tax ($3.5 million). The natural gas consumption tax was the only tax source with a  
significant shortfall, $9.3 million.  
YTD GRF sources were $1.00 billion (4.6%) higher than GRF sources in FY 2019 through  
February. Except for transfers in, which was $5.6 million below its FY 2019 level, revenue from  
the revenue categories grew relative to receipts in the previous year. Federal grants, tax  
sources, and nontax revenue increased $486.7 million, $475.2 million, and $45.3 million,  
respectively. Growth in GRF tax revenue was mostly due to the sales and use tax  
(
other hand, receipts fell for the utility-related taxes ($29.7 million), due to lower energy prices  
this year; the cigarette tax ($13.9 million), which is the normal trend; and the PIT  
$413.1 million), the CAT ($62.3 million), and the foreign insurance tax ($60.4 million). On the  
(
(
$17.0 million), due to two reductions made to withholding tax rates in the last 14 months.  
The section below analyzing the PIT provides additional details on the rate cuts.)  
Sales and Use Tax  
The sales and use tax continues to outperform expectations, having been substantially  
below estimates only once (December 2019) this fiscal year. February 2020 was another strong  
month. GRF sales and use taxes totaled $783.8 million, an amount $34.8 million (4.6%) above  
estimate. Both the auto sales and use tax and the nonauto sales and use tax were above their  
respective estimates. Through February 2020, YTD GRF revenue of $7.42 billion was  
$
145.4 million (2.0%) above anticipated receipts, and $413.1 million (5.9%) above collections in  
3 Remittances for sales of both beer/malt beverages and wine/mixed beverages were below  
estimates and also below last year revenues.  
4 Estimated FIT payments are made at the end of January, March, and May. However, a portion  
of each payment is posted the following month. The first FIT payment due at the end of January resulted  
in a combined positive variance of $20.7 million (19.8%) in the January-February period. The reconciliation  
between all estimated payments and final tax liability occurs in October.  
Budget Footnotes  
P a g e | 5  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
the corresponding period in FY 2019. For analysis and forecasting, revenue from the sales and  
use tax is separated into two parts: auto and nonauto. Auto sales and use tax collections generally  
arise from the sale of motor vehicles, but auto taxes arising from leases are paid at the lease  
signing and are mostly recorded under the nonauto tax instead of the auto tax.  
Nonauto Sales and Use Tax  
February GRF receipts from the nonauto sales and use tax totaling $680.9 million were  
24.2 million (3.7%) above estimate. This revenue was also $59.8 million (9.6%) above revenue  
$
in February 2019. The most recent months collections provided YTD receipts of $6.39 billion and  
raised the cumulative positive variance of this GRF source to $99.1 million (1.6%), up from  
$
74.9 million through January. For the fiscal year to date, GRF receipts were $340.6 million (5.6%)  
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 been uneven in FY 2020, but the rate of growth has turned up after this tax sources  
good performances in the last two months.  
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 by marketplace  
facilitators(MPFs) that were imposed by a law change in H.B. 166 (the main operating budget  
act for the biennium), thus boosting the year-over-year revenue growth rate by about one  
5
percentage point. However, the yearly performance of the nonauto sales and use tax also  
reflects strong labor markets and income, low inflation and interest rates, wide availability of  
credit, and robust financial markets.  
5 The impact of MPFs is discussed in detail in the previous edition of Budget Footnotes.  
Budget Footnotes  
P a g e | 6  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Auto Sales and Use Tax  
The auto sales and use tax suffered a substantial revenue setback only once this fiscal  
year when the tax source was $3.2 million below estimate in January. In February, GRF revenue  
from the auto sales and use tax of $102.9 million surpassed estimates by $10.6 million (11.5%),  
raising the YTD positive variance for this tax source to $46.3 million (4.7%), up from $35.8 million  
at the end of the previous month. YTD GRF revenue from this source totaling $1.03 billion was  
$
72.5 million (7.6%) above receipts during the corresponding period in FY 2019. As reported in  
the January edition of this publication, this revenue growth is supported both by an increase in  
sales of used vehicles and an increase in the average transaction price of vehicles.  
Chart 3 shows year-over-year growth in auto sales and use tax collections. The growth  
rate has been positive, if uneven throughout the fiscal year. After a reduced growth rate in the  
summer of 2019, it has turned up in the most recent month.  
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%  
Nationwide, U.S. light vehicle sales (autos and light trucks) started 2020 on a strong note,  
reaching about 17 million seasonally adjusted annualized units in January and in February.  
February vehicle sales were about 2.1% above their year-ago level, as the resilience of the  
U.S. consumer and a good labor market continue to support vehicle sales.  
Personal Income Tax  
A positive revenue variance of $1.5 million (0.9%) in February improved slightly the  
overall revenue picture for the PIT. YTD GRF receipts of $5.59 billion were $17.6 million (0.3%)  
below projections, down from a cumulative negative variance of $19.2 million through January.  
YTD GRF revenue from the tax declined $17.0 million (0.3%) compared to such receipts through  
February in FY 2019, due to two reductions in withholding rates. Year-over-year growth in  
withholding receipts during the first half of FY 2020 was limited by a 3.3% reduction in  
withholding rates implemented in January 2019. Year-over-year growth in withholding receipts  
for January and February this year was limited due to a 4.0% reduction in withholding rates  
Budget Footnotes  
P a g e | 7  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
effective January 2020. The more recent reduction was due to a 4.0% reduction in income tax  
rates for nonbusiness income enacted by H.B. 166. The OBM revenue estimates for FY 2020  
incorporated the fiscal impact of this rate reduction for the January to June period.  
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,  
6
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 influenced the shortfall in PIT receipts this fiscal year.  
In the month of February, gross collections were above projections by $15.4 million  
(
2.0%) with all components above their respective estimates. Withholding, payments with  
annual returns, and quarterly estimated payments had positive variances of $5.4 million,  
4.0 million, and $3.8 million, respectively. Refunds, which were $13.8 million (2.6%) above  
$
estimate, partially offset the positive variance of gross collections.  
The annual tax return filing season started in January and refunds continue to play a large  
role in the weak performance of the PIT. For the January-February period, refunds were  
$
44.7 million (6.8%) above estimates and $94.6 million (15.6%) above refunds in the  
corresponding period in FY 2019. Similarly, for the fiscal year to date, refunds were $81.3 million  
7.7%) higher than expected and taxpayers have received $176.2 million (18.3%) more in refunds  
(
YTD than in the corresponding period in FY 2019.  
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 $68.9 million above  
estimate, with all components above their YTD estimates. However, refunds and distributions to  
the LGF as a whole were $86.5 million higher than expected.  
Compared to PIT components in FY 2019, the increase in gross collections in FY 2020 was  
nearly offset by the increase in refunds, and the decrease in PIT revenues was essentially the  
amount of increased LGF distributions. 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 receipts in the corresponding period in FY 2019, YTD FY 2020  
7
employer withholding receipts grew 1.8%, despite the reductions in withholding rates described  
above.  
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 February of the  
following year. Most estimated payments are made by high-income taxpayers.  
7 Withholding receipts consist of monthly employer withholding (about 99% of the total) and  
annual employer withholding.  
Budget Footnotes  
P a g e | 8  
March 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  
$43.8  
$12.0  
$5.8  
0.7%  
$108.4  
$40.2  
$3.8  
1.8%  
7.5%  
Quarterly Estimated Payments  
Trust Payments  
2.1%  
19.3%  
3.0%  
5.6%  
1.0%  
7.7%  
1.9%  
-0.3%  
11.8%  
15.6%  
8.0%  
Annual Return Payments  
Miscellaneous Payments  
Gross Collections  
$4.4  
$20.0  
$4.0  
$2.9  
$68.9  
$81.3  
$5.3  
$176.4  
$176.2  
$17.3  
-$17.0  
2.6%  
Less Refunds  
18.3%  
6.4%  
Less LGF Distribution  
GRF PIT Revenue  
-$17.6  
-0.3%  
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. Payrolls are estimated to have grown about 3.7%, on average,  
in the last three months.  
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  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Commercial Activity Tax  
Following a dismal second fiscal quarter in which the CAT was below both estimates and  
prior-year receipts, the CAT started calendar year (CY) 2020 with a positive variance of  
$
11.0 million in January. The improvement continued in February with the third CAT payment  
by quarterly calendar taxpayers in FY 2020. The payment provided GRF receipts of $354.3 million,  
an amount $2.5 million (0.7%) above estimate, and $5.5 million (1.6%) above such revenue in the  
same month last year. As a result, the cumulative positive variance of the CAT increased to  
$
above revenue through February in FY 2019. The increase in GRF revenue in FY 2020, has been  
driven, in part, by a decline in tax credits claimed against the CAT. Through February, FY 2020  
36.3 million (3.0%) YTD. YTD GRF receipts totaled $1.25 billion, which was $62.3 million (5.3%)  
8
gross collections (i.e., all funds revenue) grew only 3.8% while refunds and credits fell 15.8%,  
resulting in a higher growth rate for the GRF.  
Under continuing law, CAT receipts are deposited into the GRF (85.0%), the School District  
Tangible Property Tax Replacement Fund (Fund 7047, 13.0%), and the Local Government  
Tangible Property Tax Replacement Fund (Fund 7081, 2.0%). Through February, Fund 7047 and  
Fund 7081 received $190.6 million and $29.3 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. In FY 2020, OBM  
estimates a CAT excess of $141.5 million will be transferred to the GRF.  
8 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  
February, refunds and credits totaled $76.9 million, $16.1 million below those in the corresponding period  
in FY 2019.  
Budget Footnotes  
P a g e | 10  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 3: General Revenue Fund Uses  
Actual vs. Estimate  
Month of February 2020  
($ in thousands)  
(Actual based on OAKS reports run March 3, 2020)  
Program Category  
Actual  
Estimate* Variance Percent  
Primary and Secondary Education  
Higher Education  
$738,529  
$215,124  
$5,740  
$760,773 -$22,244  
$226,222 -$11,098  
-2.9%  
-4.9%  
7.6%  
Other Education  
$5,334  
$406  
Total Education  
$959,394  
$992,330 -$32,936  
-3.3%  
Medicaid  
$1,083,269 $1,090,936  
$105,287 $106,620  
$1,188,556 $1,197,556  
-$7,667  
-$1,333  
-$9,000  
-0.7%  
-1.3%  
-0.8%  
Health and Human Services  
Total Health and Human Services  
Justice and Public Protection  
General Government  
$163,247  
$31,497  
$166,442  
-$3,195  
-1.9%  
$45,127 -$13,630 -30.2%  
Total Government Operations  
$194,744  
$211,569 -$16,825  
-8.0%  
Property Tax Reimbursements  
Debt Service  
$2  
$76,287  
$76,289  
$0  
$78,370  
$78,370  
$2  
-$2,083  
-$2,081  
---  
-2.7%  
-2.7%  
Total Other Expenditures  
Total Program Expenditures  
Transfers Out  
$2,418,983 $2,479,825 -$60,842  
$0 $0 $0  
$2,418,983 $2,479,825 -$60,842  
-2.5%  
---  
Total GRF Uses  
-2.5%  
*September 2019 estimates of the Office of Budget and Management.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 11  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 4: General Revenue Fund Uses  
Actual vs. Estimate  
FY 2020 as of February 29, 2020  
($ in thousands)  
(Actual based on OAKS reports run March 3, 2020)  
Program Category  
Actual  
Estimate*  
Variance Percent FY 2019** Percent  
Primary and Secondary Education  
Higher Education  
$5,725,073 $5,777,160  
$1,546,261 $1,616,849  
-$52,087  
-$70,589  
-$261  
-0.9%  
-4.4%  
-0.4%  
$5,711,349  
$1,541,708  
$54,426  
0.2%  
0.3%  
Other Education  
$60,785  
$61,046  
11.7%  
0.3%  
Total Education  
$7,332,118 $7,455,055 -$122,937  
-1.6% $7,307,483  
Medicaid  
$10,949,244 $10,848,737 $100,507  
0.9% $10,077,264  
8.7%  
6.6%  
8.5%  
Health and Human Services  
Total Health and Human Services  
$964,473 $1,039,326  
-$74,853  
-7.2%  
$904,564  
$11,913,717 $11,888,064  
$25,654  
0.2% $10,981,828  
Justice and Public Protection  
General Government  
$1,663,473 $1,698,311  
-$34,838  
-2.1%  
$1,556,186  
$253,956  
6.9%  
16.0%  
8.2%  
$294,707  
$346,826  
-$52,118 -15.0%  
Total Government Operations  
$1,958,180 $2,045,136  
-$86,956  
-4.3% $1,810,141  
Property Tax Reimbursements  
Debt Service  
$905,292  
$926,004  
-$20,712  
-$2,774  
-2.2%  
-0.3%  
$905,542  
0.0%  
-2.4%  
-1.3%  
$1,100,934 $1,103,708  
$1,127,660  
Total Other Expenditures  
$2,006,226 $2,029,712  
-$23,487  
-1.2% $2,033,201  
Total Program Expenditures  
Transfers Out  
$23,210,241 $23,417,967 -$207,726  
$663,620 $669,975 -$6,356  
$23,873,861 $24,087,942 -$214,082  
-0.9% $22,132,654  
4.9%  
-0.9%  
$752,927 -11.9%  
4.3%  
Total GRF Uses  
-0.9% $22,885,581  
*
*
September 2019 estimates of the Office of Budget and Management.  
*Cumulative totals through the same month in FY 2019.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 12  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 5: Medicaid Expenditures by Department  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on March 5, 2020)  
Month of February 2020  
Year to Date through February 2020  
Actual Estimate* Variance Percent  
Department  
Medicaid  
GRF  
Actual  
Estimate* Variance Percent  
$1,016,205 $1,024,011  
-$7,806  
-0.8% $10,409,074 $10,311,247  
$97,826  
0.9%  
-2.5%  
-0.3%  
Non-GRF  
$979,056 $1,032,780 -$53,724  
1,995,261 $2,056,791 -$61,530  
-5.2% $6,046,612 $6,198,944 -$152,332  
$
-3.0% $16,455,686 $16,510,191  
-0.6% $464,118 $464,250  
-$54,505  
All Funds  
Developmental Disabilities  
GRF  
$57,858  
179,646  
237,504  
$58,179  
-$321  
-$132  
-$44,818  
-$44,950  
0.0%  
-2.7%  
-2.1%  
$
$190,547 -$10,901  
$248,726 -$11,222  
-5.7% $1,595,648 $1,640,466  
-4.5% $2,059,766 $2,104,717  
Non-GRF  
All Funds  
$
Job and Family Services  
GRF  
$7,980  
$15,018  
22,998  
$7,993  
$18,267  
$26,260  
-$13  
-0.2%  
$68,853  
$126,282  
$195,135  
$66,082  
$122,979  
$189,061  
$2,771  
$3,303  
$6,074  
4.2%  
2.7%  
3.2%  
Non-GRF  
-$3,249 -17.8%  
-$3,262 -12.4%  
$
All Funds  
Health, Mental Health and Addiction, Aging, Pharmacy Board, and Education  
GRF  
$1,225  
$4,997  
$752  
$3,984  
$4,736  
$473  
$1,013  
$1,486  
62.8%  
25.4%  
31.4%  
$7,199  
$29,492  
$36,690  
$7,157  
$28,592  
$35,749  
$41  
$899  
$941  
0.6%  
3.1%  
2.6%  
Non-GRF  
$
6,222  
All Funds  
All Departments:  
GRF  
$1,083,269 $1,090,936  
-$7,667  
-0.7% $10,949,244 $10,848,737 $100,507  
-5.4% $7,798,034 $7,990,982 -$192,948  
0.9%  
-2.4%  
-0.5%  
Non-GRF  
All Funds  
$1,178,717 $1,245,578 -$66,862  
$2,261,985 $2,336,514 -$74,529  
-3.2% $18,747,278 $18,839,719  
-$92,441  
*September 2019 estimates from the Department of Medicaid.  
Detail may not sum to total due to rounding.  
Budget Footnotes  
P a g e | 13  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Table 6: All Funds Medicaid Expenditures by Payment Category  
Actual vs. Estimate  
($ in thousands)  
(Actuals based on OAKS report run on March 5, 2020)  
Month of February 2020  
Year to Date through February 2020  
Actual Estimate* Variance Percent  
Payment Category  
Actual  
Estimate* Variance Percent  
Managed Care  
CFC†  
$1,540,114 $1,545,377  
-$5,263  
-0.3% $11,797,811 $11,631,188  
-0.4% $4,131,005 $4,051,892  
7.7% $3,129,101 $3,002,670  
-6.0% $1,919,966 $1,955,206  
$166,624  
$79,113  
$126,431  
-$35,239  
$5,711  
1.4%  
2.0%  
4.2%  
-1.8%  
0.9%  
-0.6%  
0.8%  
$545,163  
$445,890  
$252,343  
$80,438  
$216,280  
$0  
$547,519  
-$2,356  
Group VIII  
ABD†  
$413,922 $31,968  
$268,375 -$16,032  
ABD Kids  
My Care  
P4P†  
$85,068  
$230,493 -$14,213  
$0 $0  
-$4,629  
-5.4% $630,011  
-6.2% $1,775,895 $1,786,927  
--- $206,121 $204,482  
$635,722  
-$11,032  
$1,639  
Fee-For-Service  
ODM Services  
DDD Services  
$530,973  
$340,312  
$224,913  
-$34,252  
$0  
$590,228 -$59,255  
$355,315 -$15,002  
$234,914 -$10,001  
$0 -$34,252  
-10.0% $5,578,000 $5,717,130 -$139,130  
-2.4%  
-2.6%  
-1.9%  
-3.3%  
-3.3%  
-4.2% $2,795,516 $2,869,132  
-4.3% $1,995,323 $2,033,898  
-$73,617  
-$38,575  
-$22,236  
-$4,703  
Hospital - HCAP†  
Hospital - Other  
---  
---  
$647,208  
$139,953  
$669,444  
$144,655  
$0  
$0  
Premium Assistance  
$96,196  
$99,215  
-$3,019  
-3.0%  
$740,790  
$759,707  
-$18,917  
-2.5%  
Medicare Buy-In  
$55,870  
$56,869  
-$999  
-1.8%  
$428,723  
$439,778  
-$11,055  
-2.5%  
Medicare Part D  
$40,325  
$42,346  
-$2,021  
-4.8%  
$312,067  
$319,929  
-$7,862  
-2.5%  
Administration  
Total  
$94,703  
$101,694  
-$6,992  
-6.9%  
$630,677  
$731,694 -$101,018 -13.8%  
$2,261,985 $2,336,514 -$74,529  
-3.2% $18,747,278 $18,839,719 -$92,441 -0.5%  
*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  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
EMexlanpey Cearnter,dDiriecttorures9  
Ivy Chen, Principal Economist  
Overview  
After being above estimate for the month of January, GRF uses of $2.42 billion were  
below estimate in February by $60.8 million. For the YTD, GRF uses of $23.87 billion were below  
estimate by $214.1 million (0.9%). All program categories, except for Medicaid, were under  
estimate YTD. YTD variances in GRF uses compared to estimates are shown in the preceding  
Table 4. The preceding Table 3 shows GRF uses compared to estimates for the month of February.  
Medicaids GRF expenditures were below estimate by $7.7 million for the month of  
February after two months of positive variances in December ($32.2 million) and January  
(
of February. The following section gives more details about Medicaid GRF and non-GRF variances.  
$161.9 million). Medicaids YTD expenditures were above estimate by $100.5 million at the end  
All but two of the remaining program categories saw their negative YTD variances grow  
in February. The largest negative YTD variance was in Health and Human Services, which had a  
negative YTD variance of $74.9 million that grew by $1.3 million in February. Higher Education  
had the second largest YTD negative variance ($70.6 million), which grew by $11.1 million in  
February. Other program categories that were more than $30.0 million under their YTD estimates  
are: General Government ($52.1 million, growing by $13.6 million in February), Primary and  
Secondary Education ($52.1 million, growing by $22.2 million), and Justice and Public Protection  
($34.8 million, growing by $3.2 million). These variances are discussed further in the following  
sections.  
Medicaid  
GRF Medicaid expenditures were below their monthly estimate in February by  
7.7 million (0.7%), which caused the variance in Medicaid YTD expenditures to decrease to  
100.5 million (0.9%) above estimate. Non-GRF Medicaid expenditures were also below their  
$
$
monthly estimate, by $66.9 million (5.4%), and below their YTD estimate by $192.9 million  
(
(
2.4%). Including both the GRF and non-GRF, all funds Medicaid expenditures were $74.5 million  
3.2%) below estimate in February and $92.4 million (0.5%) below the YTD estimate at the end  
of February. 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  
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 negative variance in February of  
sisteragencies that also take part in administering Ohio Medicaid. ODM and ODODD account  
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  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
$
61.5 million and had a negative YTD variance of $54.5 million (0.3%). Februarys negative  
variance for all funds ODM expenditures counteracted Januarys significant positive variance and  
returned ODMs all funds expenditure variance to negative territory. This is in contrast to the  
positive YTD variance that was seen in all funds ODM expenditures at the end of January. ODODD  
had a negative variance ($11.2 million) in February that increased the magnitude of ODODDs  
negative YTD variance to $45.0 million (2.1%). The other sixsister agencies Job and Family  
Services, Health, Aging, 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 six sisteragencies 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. Fee-For-Service  
(
(
FFS, $139.1 million, 2.4%) had the largest overall negative variance, followed by Administration  
$101.0 million, 13.8%), and Premium Assistance ($18.9 million, 2.5%). Managed Care  
expenditures were above their YTD estimate by $166.6 million (1.4%).  
The YTD variance in the Administration category is mostly due to timing and is expected  
to smooth out throughout the fiscal year. Administrative expenses for information technology  
have been below estimate thus far this fiscal year.  
Expenditures in the Managed Care category experienced a relatively small negative  
variance of $5.3 million (0.3%) in February, which decreased the YTD positive variance to  
$
166.6 million (1.4%). Through the fiscal year, the largest factors which have contributed to this  
positive YTD variance have been positive monthly variances in the Covered Families and Children  
CFC) and Group VIII categories. Managed Care rates, which are legally required to be actuarially  
(
sound, have increased in CY 2020, and according to ODM, these rates are approximately 3%  
higher than was estimated in the budget for the final six months of the fiscal year. In addition,  
the positive variances for Group VIII have been influenced by higher than expected caseloads.  
For the first eight months of FY 2020, the average monthly managed care caseloads for Group  
VIII were 1.6% (8,738) above estimate.  
Health and Human Services  
The negative $74.9 million (7.2%) YTD variance in the Health and Human Services  
category includes a negative monthly variance of $1.3 million in February.  
The Ohio Department of Job and Family Services (ODJFS) leads the agencies in this  
category with the largest negative YTD variance of $33.8 million. ODJFSs YTD variance continues  
to be dominated by items 600450, Program Operations, ($16.3 million) and 600523, Family and  
Children Services, ($14.0 million). These items negative YTD variances increased in February by  
$
2.9 million and $0.4 million, respectively. The negative YTD variances in most of ODJFSs line  
items continued to be partially offset by a positive variance in item 600535, Early Care and  
Education. This items positive YTD variance increased by $4.7 million in February to reach  
$
16.4 million.  
The Ohio Department of Mental Health and Addiction Services (OMHAS) continues to  
have a significant negative YTD variance ($25.0 million at the end of February). As reported in  
prior issues of Budget Footnotes, this negative variance is primarily from expenditures in October.  
For the month of February, OMHAS had a negative variance of $1.9 million.  
Budget Footnotes  
P a g e | 16  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Also contributing to the negative YTD variance in this category was the Department of  
Health (DOH), which had a negative YTD variance which fell from $9.9 million at the end of  
January to $8.3 million at the end of February. 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 positive variance for the month of February is primarily from  
item 440459, Help Me Grow, which had a positive variance of $2.7 million in February, which  
decreased this items negative YTD variance to $1.0 million. 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 health outcomes for children.  
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 $5.5 million at the  
end of February. This variance is primarily from item 900321, VeteransHomes, which pays the  
operating costs of the states two veteranshomes.  
Higher Education  
The Higher Education category was under its YTD estimate by $70.6 million (4.4%) at the  
end of February. For the month of February, this category was under estimate by $11.1 million.  
As reported in the last issue of Budget Footnotes, expenditures from two line items have been  
delayed since December. These two items are listed below with their negative YTD variances  
indicated in parentheses:  
235535, Ohio Agricultural Research and Development Center ($24.9 million);  
235511, Cooperative Extension Service ($16.7 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. These items include 235563, Ohio College Opportunity Grant, ($9.6 million) and  
2
dependent on when the Department receives requests from higher education institutions, so  
they often have timing-related variances.  
35438, Choose Ohio First Scholarship, ($6.8 million). Expenditures in these two items are  
General Government  
The General Government category had a negative YTD variance of $52.1 million (15.0%)  
at the end of February and a negative variance of $13.6 million for the month of February. These  
variances were largely the result of a negative monthly variance of $5.2 million and a negative  
YTD variance of $25.8 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.  
Primary and Secondary Education  
The Primary and Secondary Education category had a negative YTD variance at the end of  
February of $52.1 million (0.9%), which increased by $22.2 million in the month of February. The  
YTD variance is dominated by items 200437, Student Assessment, ($25.3 million) and  
Budget Footnotes  
P a g e | 17  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
2
00550, Foundation Funding, ($11.4 million). Item 200437 is spent primarily on contracts with  
the states vendors responsible for providing and scoring state assessments. This negative YTD  
variance is mostly from the months of October and January. Item 200550 provides the majority  
of the states funding to local schools. This item had a positive YTD variance at the end of January,  
but this was offset by a negative variance of $24.0 million in February.  
Justice and Public Protection  
The Justice and Public Protection category had a negative variance for the month of  
February of $3.2 million, which increased this categorys negative YTD variance to $34.8 million  
(2.1%). The most significant negative YTD variances were for the Department of Public Safety  
(DPS, $12.8 million), the Attorney General ($10.3 million), the Department of Youth Services  
($6.9 million), and the Judiciary/Supreme Court ($6.3 million).  
Budget Footnotes  
P a g e | 18  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
Issue Updates  
ODE and DPS Release Details on New School Bus Purchase  
Program  
Dan Redmond, Budget Analyst  
In January 2020, the Ohio Department of Education (ODE), in conjunction with DPS,  
released a legislatively required report describing how the new $20 million School Bus Purchase  
Program, funded by H.B. 166, will operate in FY 2021. Under the program, school districts will be  
ranked based on the percentage of regular service buses that are eight years old or older, with  
awards going to districts with the highest percentages first. ODE will award funds to a district  
based on the ranking list for one bus at a time. If funds remain available after the first time  
through the ranking list, a subsequent award will be made using the same rank order until  
funds are exhausted. A districts award for each bus will equal $86,700 (the average purchase  
price of a new school bus over the last three years, according to the report) multiplied by the  
districts state share index for FY 2019. The state share index is an element in the state foundation  
aid formula used to account for each districts capacity to raise local revenues. Lower wealth  
districts have higher state share index values and vice versa.  
In order to receive funds, districts are required to remove at least one regular service bus  
eight years old or older from regular bus service for each bus acquired using an award. ODE will  
notify school districts awarded funds on or before March 20, 2020. In turn, districts must notify  
ODE, by June 1, 2020, of their intent to use the funding. H.B. 166 financed the program through  
a one-time transfer of $20 million from the FY 2019 GRF year-end balance to the School Bus  
Purchase Fund (Fund 5VU0).  
ODE Announces Quality Community School Support Awards  
Nick Ciolli, Budget Analyst  
In January 2020, ODE announced the schools awarded Quality Community School Support  
funds for the 2019-2020 school year. H.B. 166 established the program to provide additional  
funding to community schools that meet certain criteria with respect to sponsor ratings, report  
card performance, and other factors. Designated community schools receive up to $1,750 for  
each economically disadvantaged student and up to $1,000 for each other student. The budget  
allocates $30 million each fiscal year from lottery profits for the program. A total of  
6
3 community schools serving more than 20,000 students, 18,000 (nearly 90%) of whom are  
economically disadvantaged, qualified for funding. The number of students in qualifying schools  
required each schools payment to be prorated to 88.6% of the calculated amount to fit within  
the appropriation. Individual awards ranged from about $50,000 to Huber Heights Preparatory  
Academy to $2.1 million to KIPP Columbus.  
A community school must meet at least one of three criteria to earn the Quality  
Community School designation, all of which require the schools sponsor to have been rated as  
number of schools and award amounts by the designation criteria met. As the table shows, 47  
exemplaryor effectiveon its most recent evaluation. The table below summarizes the  
Budget Footnotes  
P a g e | 19  
March 2020  
Legislative Budget Office of the Legislative Service Commission  
(
74.6%) schools receiving a total of $24.5 million qualified under Criteria 1, which focuses on the  
academic performance of the schools. In general, this criteria takes into account performance  
index scores relative to the school district in which the school is located, the value-added  
progress dimension on the report cards, and the schools economically disadvantaged  
percentage. Six (9.5%) schools, receiving a total of about $940,000, qualified under Criteria 2,  
which designates certain schools that are either new or opened within the last four years and  
that are replicating an instructional or operational model of a school designated under Criteria 1.  
Ten (15.9%) schools, receiving a total of $4.6 million, qualified under Criteria 3, which depends  
on certain characteristics of school operators that also operate schools in other states.  
Summary of Quality Community School Support Awards, FY 2020  
Economically  
Number of  
Schools  
Total Award  
($ in millions)  
Criteria  
Disadvantaged Total Students  
Students  
1
2
replicating model of school  
qualifying under Criteria 1  
Academic performance  
New or newer school  
47  
14,801  
16,511  
$24.5  
$0.9  
6
0
454  
722  
3
certain operators  
Schools contracting with  
1
2,887  
3,031  
$4.6  
Total  
63  
18,142  
20,265  
$30.0  
Schools that receive the designation retain it for the subsequent two fiscal years, although  
the size of awards may change based on the schools enrollment and as additional schools receive  
awards. Payments for each fiscal year are calculated using the final full-time equivalent (FTE)  
number of students enrolled in the school for the prior fiscal year. However, if a school is in its  
first year of operation, the payment is calculated using the schools FTE number of students for  
the current fiscal year as of the date the payment is made.  
State Forest Timber Sales Provide $1.5 million to Local  
Governments and School Districts  
Shannon Pleiman, Senior Budget Analyst  
On January 17, 2020, the Department of Natural Resources (DNR) announced that  
4 school districts, 23 townships, and 13 county governments will receive over $1.5 million from  
1
the sale of timber from state forest lands in FY 2019. Under current law, 65% of the net proceeds  
from the sale of timber must be distributed to the county, townships, and school districts from  
which the timber was harvested. The remaining 35% is retained by DNRs Division of Forestry and  
deposited to the credit of the State Forest Fund (Fund 5090). Of the amount distributed to local  
communities, 50% goes to school districts, 25% goes to townships, and 25% goes to the county.  
The table below shows the amounts received by each type of recipient by county in this latest  
distribution of timber sales revenue. A full list of recipients can be found at: ohiodnr.gov. More  
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March 2020  
Legislative Budget Office of the Legislative Service Commission  
than $32.0 million in timber revenue has been distributed to school districts, townships, and  
counties since the distribution started in CY 1999. There are 23 state forests across the state, the  
largest being Shawnee State Forest located in Scioto and Adams counties.  
FY 2019 Timber Sale Distributions by Recipient Type  
County  
Scioto  
School Districts  
$256,784  
$169,833  
$156,874  
$101,615  
$44,135  
$8,004  
County  
$128,392  
Townships  
$128,392  
Total  
$513,568  
Vinton  
Ross  
$84,917  
$78,437  
$50,807  
$22,067  
$4,002  
$2,264  
$1,690  
$1,244  
$650  
$84,917  
$78,437  
$50,807  
$22,067  
$4,002  
$2,264  
$1,690  
$1,244  
$650  
$339,666  
$313,748  
$203,230  
$88,269  
$16,007  
$9,055  
Adams  
Pike  
Athens  
Highland  
Meigs  
$4,528  
$3,379  
$6,758  
Ashland  
Fulton  
$2,488  
$4,976  
$1,300  
$2,599  
Jackson  
Jefferson  
Muskingum  
$1,300  
$650  
$650  
$2,599  
$1,300  
$650  
$650  
$2,599  
$195  
$97  
$97  
$390  
Total  
$751,735  
$375,867  
$375,867  
$1,503,469  
Department of Natural Resources Awards $250,000 in Boating  
Safety Education Grants  
Tom Wert, Senior Budget Analyst  
On January 28, 2020, DNR announced the recipients of Boating Safety Education Grants  
totaling $250,000. As shown in the table below, 19 community boating safety programs in  
1
4 counties will receive grants of between nearly $4,500 and $24,500. These grants are used by  
state and local governments, nonprofit organizations, educational institutions, and other eligible  
entities to provide watercraft safety programs that benefit the general boating public. Boating  
Safety Education Grants may range from $1,000 to $30,000 and require a grantee cost share or  
in-kind contribution of 25%. Grants are made from the Waterways Safety Fund (Fund 7086),  
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March 2020  
Legislative Budget Office of the Legislative Service Commission  
which receives a portion of Ohios motor fuel tax revenues (0.875% of the first 28¢ per gallon  
taxed), boating registration and related fees, federal grants, and fines.  
FY 2020 Boating Safety Education Grant Recipients  
County  
Ashtabula  
Grant Recipient  
Ashtabula County YMCA  
Bay Sea Scouts  
Grant Amount  
$9,300  
$7,043  
$7,584  
Cuyahoga  
City of Cleveland  
Cleveland Metroparks  
City of Sandusky  
$24,514  
$15,599  
$9,232  
Erie  
Erie Metroparks  
Fairfield  
River Rangers  
$16,793  
Boy Scouts of America Simon  
Kenton Council  
$
4,548  
Franklin  
West Ohio Conference United  
Methodist Church  
$
22,217  
Geauga  
Hamilton  
Hocking  
Lake  
Camp Ho Mita Koda  
Rivers Unlimited  
$6,899  
$16,384  
$14,622  
$10,835  
$4,488  
Big Brothers/Big Sisters  
Lake Metroparks  
Logan  
Kirkmont Center  
Lorain  
Lorain Metroparks  
$16,687  
$18,200  
$16,507  
$13,789  
$14,762  
$250,000  
Lucas  
Toledo Power Squadron  
Youngstown State University  
Akron Sail & Power Squadron  
Girl Scouts of NE Ohio  
Mahoning  
Summit  
Total  
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Legislative Budget Office of the Legislative Service Commission  
$
9.2 million Made Available to Expand Quality Child Care  
Nicholas J. Blaine, Budget Analyst  
On January 29, 2020, ODJFS announced that $9.2 million in funds would be made  
available to expand access to quality child care. Of this amount, $6.2 million was awarded in the  
form of capacity-building grants to nine organizations located across Ohio. All 88 counties will be  
served by at least one of the organizations selected. The organizations will work with child care  
providers in their service area to help them become rated or to improve their rating in the Step  
Up to Quality (SUTQ) Program. Specifically, funds will be used to improve workforce recruitment  
and retention and to provide professional development and technical assistance. In addition,  
some funds may also be used to provide facility improvement and classroom supplies and to  
support curriculum development and assessment. The remaining $3.0 million will be offered in  
the form of incentive payments to help providers become rated or to improve their rating in  
SUTQ. Unrated programs that submitted an SUTQ registration and one-star and two-star rated  
programs that improved their ratings between January 1, 2020, and February 29, 2020, are  
eligible for an incentive payment. Child care centers can receive $4,000 and family child care  
providers are eligible to receive $2,000. Funding for both activities is provided through GRF  
appropriation item 600555, Quality Infrastructure Grants.  
SUTQ is a five-star quality rating and improvement system administered by ODE and  
ODJFS. The system recognizes and promotes learning and development programs that meet  
quality program standards that exceed licensing health and safety regulations. Beginning July 1,  
2
020, all licensed child care providers that receive state funding are required to participate in  
SUTQ (ODJFS reports 86% of providers are currently quality rated). Additionally, ODJFS is  
responsible for ensuring that the share of providers rated three-stars or higher in SUTQ increases  
to 60% by June 30, 2021, 80% by June 30, 2023, and 100% by June 30, 2025.  
Comprehensive Primary Care Program for Kids is Launched  
Nelson V. Lindgren, Economist  
In January 2020, ODM launched the Comprehensive Primary Care (CPC) for Kids Program.  
CPC for Kids is a value-based reimbursement program aimed at improving child health and  
wellness by focusing on preventive health services. Pediatric primary care providers that wish to  
participate in the program must meet certain eligibility requirements including serving at least  
1
50 children enrolled in Medicaid. In addition, these providers must adhere to certain access and  
care standards, such as providing 24/7 and same-day access to care and offering a team-based  
care coordination framework. ODM has provided $8 million for this initiative in FY 2020. Of this  
amount, $6 million will be distributed to participating providers or practices and used for  
primary-care activities. The remaining $2 million will be distributed as a performance bonus for  
high-performing providers or practices that provide counseling for nutrition and physical activity  
to children and adolescents and make the greatest improvements in well-child visits and child  
lead screenings.  
While the CPC for Kids is a new initiative, a broader CPC program that covers individuals  
of all ages has been in effect in Ohio since January of 2017. The programs goal is to improve  
quality of care and lower healthcare costs. Participating providers may receive two forms of  
financial support: (1) a per-member, per-month payment based on a patients risk tier that is  
Budget Footnotes  
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March 2020  
Legislative Budget Office of the Legislative Service Commission  
used to support required activities and (2) a shared savings payment that is used to reward  
practices for achieving total cost of care savings. CPC additionally leverages its program data to  
assist practices via the provision of reports and quantitative information, which provide  
actionable information to enable providers to make the best care and referral decisions for their  
patients. The program currently covers approximately 1.4 million Medicaid enrollees through  
2
50 enrolled primary care providers.  
Supreme Court Awards $3.2 million in Court Technology Grants  
Robert Meeker, Budget Analyst  
On January 6, 2020, the Ohio Supreme Court announced the award of 54 court technology  
grants totaling $3.2 million to 45 appellate, common pleas, municipal, and county courts in  
3
4 counties. Individual grants range from $1,034 (Ross County Court of Common Pleas) to  
$
232,033 (Wyandot County Court of Common Pleas) with an average award of $59,308. The table  
below summarizes the grants by the four types of projects funded. Projects focused on upgrading  
existing case management systems received the largest amount of funding with 33 grants totaling  
$
2.6 million.  
Court Technology Grant Awards by Project Type  
Project Type  
Award Count  
Award Total  
Average Award  
$79,391  
Case management system  
33  
13  
4
$2,619,897  
$439,220  
$75,975  
Physical security of courtroom or building  
Pretrial/risk assessment technology10  
$33,786  
$18,994  
Nonsecurity-related hardware, software, or  
equipment  
4
$67,530  
$16,882  
Total  
54  
$3,202,622  
$59,308  
A 27-member committee scored all of the grant applications using a formula that assigned  
weights to project priorities and considered factors such as geographical impact and the poverty  
index.11 Priority was given to courts located within an area deemed high need (poverty level,  
fiscal emergency, or economic distress) and to courts that had not been awarded funding during  
the prior 2015 through 2019 grant cycles. Including this year, about $17 million in GRF-backed  
grants have been awarded to appellate, common pleas, municipal, and county courts for more  
than 450 projects.  
10 Pretrial risk assessments are designed to provide information about the risk of failure that a  
given person poses if released before adjudication of his or her case.  
11  
The committee consisted of judges, court administrators, clerks of court, information  
technology professionals, security experts, and local court personnel from across the state.  
Budget Footnotes  
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Legislative Budget Office of the Legislative Service Commission  
Adjutant Generals Ohio Cyber Reserve Underway  
Shaina Morris, Budget Analyst  
Effective January 24, 2020, S.B. 52 of the 133rd General Assembly created the Ohio Cyber  
Reserve (OhCR). Similar to how the Ohio National Guard is placed on state active duty, OhCR is  
available at the direction of the Governor to assist in responding to eligible small governments  
affected by cyberattacks and is tasked with providing recommendations to reduce cyber threats.  
For expenses related to establishing and maintaining OhCR, S.B. 52 appropriated to the  
Adjutant General $100,000 in FY 2020 and $550,000 in FY 2021 from the GRF. The funding is to  
be used to create and support up to five, regionally based ten-person teams that can be expanded  
based on need. Members are provided training, equipment (including laptops), and identification  
badges and uniforms. While in training status, members are not paid, but when activated are  
paid as state civilian employees. The teams will work out of Ohio National Guard readiness  
centers.  
OhCR is an initiative born from the Ohio Cyber Collaboration Committee (OC3), an Ohio  
partnership of the Adjutant General with representatives from public, private, military, and  
educational organizations. OC3 was originally formed in 2017 to develop a stronger cybersecurity  
infrastructure and workforce in the state. The OC3 initiative has developed the Ohio Cyber Range,  
a virtual environment used for cybersecurity training and technology development. The range  
currently has sites at the University of Cincinnati and the University of Akron. The range is  
available for cyber competitions, training, and testing for schools, governments, and businesses.  
Sites will continue to grow as Ohios cyber defense capabilities increase.  
Budget Footnotes  
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March 2020  
Legislative Budget Office of the Legislative Service Commission  
Tracking the Economy  
Phil Cummins, Senior Economist  
Ruhaiza Ridzwan, Senior Economist  
Overview  
The U.S. economy continued to grow through February. The evolving COVID-19 crisis is  
slowing economies abroad, disrupting supply chains serving markets across a range of  
U.S. industries, beginning to adversely affect travel and tourism in this country, altering buying  
patterns, and posing risks of more severe effects on the U.S. economy. The Federal Reserve on  
March 3 responded to these risks by cutting its short-term interest rate target for federal funds  
by one-half percentage point to a range of 1.0% to 1.25%. In announcing the change, the central  
bank noted that U.S. economic fundamentals remain strong. The interest rate cut follows  
reductions totaling 0.75 percentage point last year. Employment and incomes rose in January  
and February. Industrial output slowed in January. Inflation-adjusted gross domestic product  
(
inflation remained low through January.  
real GDP) continued to expand at a slow pace through last years fourth quarter. Consumer price  
Total nonfarm payroll employment in Ohio fell 6,300 from December to January,  
following gains in December and November. Ohios total nonfarm payroll employment was also  
lower in January than a year ago. The unemployment rate in Ohio was at 4.1% in January,  
unchanged from the month before and little changed since February 2019. Economic activity in  
the region continued to expand into early 2020, according to a Federal Reserve report.  
The National Economy  
Total nonfarm payroll employment nationwide rose a strong 273,000 in both January  
and February. Unemployment as a share of the labor force fell slightly to 3.5%, matching the  
5
0-year low reached last year. The surveys on which these figures are based were conducted  
th  
for the pay period and the calendar week, respectively, that included the 12 of each month,  
so were little affected by mounting concerns about the COVID-19 virus. Chart 5 shows total  
U.S. nonfarm payroll employment since recession year 2009, and Chart 6 shows the nationwide  
unemployment rate.  
Employment rose in February in several service-sector industries including health care  
and social assistance, food services and drinking places, professional and technical services,  
financial activities, and government, and also rose in goods-producing industries including  
construction and various manufacturing industries. Aggregate private-sector hours worked and  
payrolls, proxies for production and incomes, continued to advance. Average hourly earnings of  
all private-sector employees in February were 3.7% higher than a year earlier, continuing gains  
of 3.0% or more in most recent months.  
Budget Footnotes  
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March 2020  
Legislative Budget Office of the Legislative Service Commission  
Chart 5: 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
009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
U.S. Employment Ohio Employment (right scale)  
In February, 5.8 million people were counted as unemployed nationwide, down from  
.2 million a year earlier. Of these, 1.1 million had been looking for work for more than six  
6
months, down from 1.3 million in February 2019. Persons working part time for economic  
reasons, such as slack work or unfavorable business conditions, inability to find full-time work, or  
seasonal declines in demand, totaled 4.3 million, about unchanged from a year earlier.  
Chart 6: 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
009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  
United States Ohio  
Budget Footnotes  
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March 2020  
Legislative Budget Office of the Legislative Service Commission  
U.S. real GDP grew at a 2.1% annual rate in last years fourth quarter, and by 2.3% for all  
of last year, slower than a year earlier when real GDP rose 2.9%. Since the current expansion  
began in 2009, real GDP growth has averaged 2.3% per year, half of the 4.6% average growth rate  
in previous post-World War II expansions.  
In the fourth quarter, growth of real personal consumption expenditures (PCE) slowed to  
a 1.7% annual rate of increase, and rose in January at about the same slow pace. In contrast,  
private residential fixed investment expanded in the fourth quarter at a brisk 6.2% annual rate,  
after 4.6% in the third quarter. This upturn, in apparent response to lower mortgage rates,  
followed six consecutive quarters of falling investment. Stronger housing construction continued  
in January, likely aided by mild weather for the month. But business fixed investment fell in the  
fourth quarter for the third consecutive time, declining at a 2.3% annual rate. Further weakness  
appears likely in the current quarter as a result of cessation of Boeing 737 MAX production and  
disruption of international supply chains by the spreading COVID-19 virus.  
Industrial production fell 0.3% in January, as factory output fell 0.1% and utility output  
dropped 4.0%. The fall in manufacturing production resulted from reductions in several  
industries, notably a 7.4% fall in output of aerospace and miscellaneous transportation  
equipment. Lower output of electric and natural gas utilities was attributed to unseasonably  
warm weather. Both total industrial production and manufacturing fell on balance during 2019  
and as of January remained below recent peaks in December 2018.  
The consumer price index (CPI) rose 0.1% in January to 2.5% higher than a year earlier,  
the largest increase in this measure in 15 months. Gasoline prices fell in January but were 12.8%  
higher than in January 2019. Excluding prices for food and energy, the CPI was 2.3% higher in  
January than a year earlier, the same as in the previous three months. A related measure, the  
price index for PCE, also rose 0.1% in January, to 1.7% higher than in the year-earlier month. The  
PCE price index excluding food and energy was 1.6% higher than a year earlier, below the Federal  
Reserves 2% inflation target.  
The Ohio Economy  
In January, Ohios economy lost 6,300 jobs and the states unemployment rate held  
steady. The states unemployment rate was 4.1% in January, same as the revised unemployment  
rate in December, but dropped from 4.3% in January of last year. The U.S. unemployment rate  
for January was 3.6%, 3.5% in December, and 4.0% in January of last year. The number of  
unemployed workers in Ohio increased from 237,000 in December to 238,000 in January,  
1
employment, and Chart 6 shows the Ohio unemployment rate.  
,000 more than in December, and 10,000 less than January of last year. Chart 5 shows Ohio  
Ohios total nonfarm payroll employment, seasonally adjusted, decreased from the  
revised total of 5,591,900 in December to 5,585,600 in January. Employment in private goods-  
producing industries and government contracted by 900 and 8,600, respectively, while  
employment in private service-providing industries increased by 3,200. Job gains in private  
service-producing industries, mostly in educational and health services, leisure and hospitality,  
and trade, transportation, and utilities, exceeded losses in professional and business services and  
financial activities. The goods-producing industries showed decreases in manufacturing and in  
mining and logging but an increase in construction. Employment in state and local governments  
shrank, but the federal government added jobs in Ohio.  
Budget Footnotes  
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March 2020  
Legislative Budget Office of the Legislative Service Commission  
The states nonfarm payroll employment lost 12,500 jobs between January 2019 and  
January 2020. The biggest job losses among major private sector industries during the past year  
were in professional and business services, durable goods manufacturing, and trade,  
transportation, and utilities. Job losses also occurred in state and local governments; a  
1
2,200 decline in overall government employment accounted for nearly all of the total job loss  
for the year.  
The economy in the Cleveland Federal Reserve District continued to expand modestly,  
though at a slower pace during the past seven weeks, according to the Beige Book.12 Overall  
employment in the region increased slightly with most job gains in the service sector. Wage  
growth remained modest in most sectors, but some freight haulers reported wages were flat.  
Overall manufacturing activity remained steady, while activity in the aerospace parts  
manufacturing sector weakened due to stopped production of Boeing 737 MAX airplanes. In  
addition, many manufacturing contacts were worried about slow global economic growth and  
supply-chain disruptions as the result of shutdowns of various commercial centers in China  
because of the COVID-19 virus outbreak. Retail contacts and auto dealers reported mild winter  
temperatures, a strong economy, and low interest rates as factors contributing to strong sales.  
Residential real estate demand in the region continued to increase modestly. Demand for  
commercial building remained strong. Activity in freight services was stable but at lower volumes.  
Overall lending activity was stable while mortgage demand improved due to low interest rates.  
The number of homes sold in Ohio increased from 7,878 in January 2019 to 8,692 in  
January 2020, or a 10.3% increase, according to the Ohio Association of Realtors. In January, the  
average sale price of homes sold statewide was $197,410, or 15.8% higher than in the same  
month in 2019.  
12 The Federal Reserve Bank of Clevelands district consists of all of Ohio, western Pennsylvania,  
eastern Kentucky, and the northern panhandle of West Virginia. Comments here are derived from the  
latest edition of the Beige Book, a Federal Reserve publication that summarizes reports from business and  
industry contacts outside of the Federal Reserve System collected on or before February 24, 2020.  
Budget Footnotes  
P a g e | 29  
March 2020