BY Chris Mohr President K-12 Business Consulting, Inc.

Global

National

State

Local

GLOBAL

• Global Economy CY2011 = $79 Trillion – $79,000,000,000,000

• EU= $15.9 T #1

• USA = $15.1 T #2 ….(National Debt Oct 27, 2012 = $16.2T)

• China = $11.3T #3

• Exports to European Union = 3.5% of US GDP or $528.5B

• Euro Debt crisis could affect USA but direct effect of little significance…but financial sector entangled causes Dow to fluctuate

• US growth rate CY 2012 est. 2% Global 3.3 %

• China growth rate Est. 7.5% Est.

National

• Economic growth Est. 2 to 2.3% 2012

• Unemployed 3.26 M ~ new claims 373,000 Oct 25th

• Unemployment rate 7.8% down to 44 month low

• Under employment Oct 25th per Gallup 16.2%

• Misery index 9.71 lowest since 8.5 in Sept 2009 (Adds Unemployment rate and inflation rate)

• U of Michigan Confidence Index up 82.6 up from 78.3in Sept. Highest since September 2007.

• Retails Sales up 1.1% September

• New home sales rose 27.1 % in past 12 months highest in 2 years …September was up 5.7%

• Why does confidence matter? U.S. Consumer = 70% GDP

NATIONAL

• Fiscal Cliff January 2013 If Congress Doesn’t Act to Increase Debt Limit

• Why? Super Committee Failed to Cut Debt in August 2011

• Both Bush Era and Obama Payroll Tax Cuts Expire Dec 2012

• Major Cuts in National Defense and Social Programs

• Title I and IDEA Funds Likely Cut and RTTT Could Be

• Tax Exempt Financing State and Local Govt. Eliminated = $37 B a year in taxes to US Treasury

• Cut Interest Subsidy for QSCB’s and BAB’s

• Could slow economic recovery by .5% in 2013 hurt consumer confidence at a pivotal time

STATEWIDE LEVEL

• Ohio jobless rate down to 7% from 8.6% a year ago • New business filings up from year ago to 66,734 new filings • State revenue in September up $59.35 M over estimates in FY13, but is

up $373.8M over same time in FY12. • Personal income tax up $29.7 M over est. and Corp Franchise Tax up

$30.3 M over estimates. • State expenditures down $145.5M under estimates in FY13 • Biggest variance is Education down $85 M and Public Assistance and

Medicaid down $90.5 M under Est. • We have built a $481.9 M Rainy Day Fund at Sept. 12 State is Looking

good • Cleveland Akron Area CPI 1.8% • Inflation under control and economy growing • Hard to cut state aid to schools when economy good and lots of talk

about investing in education…may see a reshuffle by cutting guarantee • Or new charge off

STATE & LOCAL LEVEL

• Ohio Tax Burden Rank falls to 20th from 7th overall tax 9.7%

• Ohio home sale prices up 4.5% to avg. $135,627

• 3rd quarter home sales up 10.8% over 3rd qtr. Year ago

• “Prices have begun to trend up”– Ohio Association of Realtors

• 85% of Realtors describe housing market moderate to strong

• 83% Realtors moderate to strong expectations for next 6 mos.

• Tristate Area had 3rd highest avg. sale price increase of 7.8%– Belmont, Harrison, Jefferson county area.

• Ohio median income $44,648 in 2011 down from $47,333 in 2010

• Ohio Wage Income Tax expected to grow 4.2% per ODT = form increase wages and new jobs.

• Look for value to moderate in reappraisals and updates

HOT ECONOMIC ITEMS REGIONALLY

• Utica Shale Est. U.S. Geological at 38 Trillion CFT of natural gas and 940 Million barrels of oil. Worth combined $224B but others say reserve is way low and could be $500B in value

• In 2013 USA expected to produce over 11.6 M Bbls. a day surpassing Saudi Arabia as #1 oil producer on earth…USA could be the new Middle East.

• What’s it mean to this part of the state for school districts?

• Will it increase property taxes…how and by how much?

• Will it increase SDIT revenues?

• Lets first understand what all the fracking is about.

The Next Saudi Arabia of oil? New Technology allows drillers to access the lower source beds of our earlier oil discoveries decades ago.

Conventional drill several holes vertically

Unconventional drill vertically then horizontally