Ohio’s FY2018-19 Main Operating Budget Moves to Next Stage; GOPC Offers Recommendations

May 18th, 2017

By Jason Warner, GOPC Manager of Government Affairs

Recently, the Ohio House of Representatives approved a drastically different two-year state budget from the one proposed by Governor John Kasich in January. The House budget included roughly $632 million in reductions due to decreased state revenue collections, and so far for the fiscal year FY2016-17, receipts are $773.7 million, or 4.2 percent, below projections. This followed an announcement in April by state leaders that the budget would need to be revised downward by roughly $800 million for the next biennium (FY2018-19).

With passage of the House version, the budget now moves to the Ohio Senate, where additional reductions will be needed to meet the $800 million in cuts. The deadline to approve the budget is June 30, when the current state fiscal year (FY2017) ends. Greater Ohio Policy Center (GOPC) continues to testify on several changes to be made in HB49, including the following provisions. 

GOPC-Supported Provisions:

- The budget bill provides $4.8 million in annual funding over the biennium for lead remediation and associated testing services for homes under lead hazard orders, ensuring that more properties are made safe for families. This will be done through the use of federal funding available to the state.  GOPC is pleased by the state’s commitment on this important issue and encourages the Legislature to ensure local lead abatement programs are empowered to utilize the funding.

GOPC-Opposed Provisions:

- A House amendment would mandate stickers be affixed to retail service station pumps displaying the rates of federal and state taxes applicable to gasoline and diesel fuel. The stickers would be produced and distributed by the Department of Agriculture at an unknown cost. All pumps would be required to have the stickers affixed within 14 months of the bills effective date and would need to be replaced if damaged or if the state or federal tax rates change. 

- The House reduced funding for public transportation by more than 11% per year for both FY2018 and 2019. This line item provides funding for the Public Transportation Grant Program and the Elderly and Disabled Fare Assistance Program. This line item has been reduced by more than 68% or $17,969,134, since FY2000. 

GOPC’s Proposed Amendments to the Bill:

- GOPC proposes an amendment to make it easier for cities to clean up contaminated brownfield sites.  The proposal would modify Ohio law to make it clear that urban renewal projects can recover the costs of environmental remediation. In an urban renewal project, a municipality and a developer create a development agreement to mitigate a blighted area.  After development begins, the property owner makes service payments in lieu of taxes, based on the increased valuation of the property.  Service payments support bonds that have been issued to support redevelopment costs.

- The federal Center for Medicare and Medicaid Services has issued a directive that Ohio cannot continue applying state and local sales taxes on the premiums of Medicaid Managed Care Organizations. HB49 provides for a new service fee to be charged to make-up for lost state revenue, while only providing partial, temporary financial relief to counties and transit agencies. GOPC supports the inclusion of a provision in HB49 that will extend greater financial relief to counties and transit agencies. 

For more complete coverage of the Main Operating Budget, please visit here.

Pending Congressional Approval, Federal Budget Will Cut Important Transportation Grant Program

April 13th, 2017

By Alex Highley, GOPC Project Associate

Under the Trump administration’s recent budget proposal, a crucial grant program supporting capital investment for transportation projects across Ohio and the country is slated to be abolished. The federal program known as the Transportation Investment Generating Economic Recovery (TIGER) grants are earmarked to be eliminated, unless the House and Senate budget bills reverse the provision doing away with the program. Funding for TIGER, a program that was developed in 2009 as part of the federal Recovery Act, is allocated to state Departments of Transportation (DOT) and local jurisdictions by Congress following a merit-based award process. Should Congress decide to scrap the program, some planned transit, rail, and bike and pedestrian projects in Ohio could fail to produce the funds necessary for completion.

Since 2009, TIGER grants have funneled over $4 billion to a variety of innovative transportation projects around the country, including transit, rail, port, road, and bike and pedestrian. Since the program’s inception, the annual program budget has declined over time, reducing the number of awarded projects, while applications have ramped up. The US Department of Transportation’s (USDOT) latest round of TIGER grant awards, known as TIGER VII, are set to deliver $500 million to various projects nationwide. In total, this amount will support 39 capital projects in 33 states. However, award amounts have been slowly declining since the initial TIGER I, which funded 51 separate capital projects in the form of $1.5 billion in award money.

Downtown overhead

Akron’s downtown promenade was awarded a $5 million TIGER capital grant in 2016. Photo credit: AkronStock 

TIGER grants are immensely important in Ohio, where they offer needed funding assistance to multi-modal projects that would struggle to generate the necessary funding otherwise. For example, in 2015 $6.8 million was awarded to Ohio to divide among sparsely-funded public transit agencies in rural areas of the state such as Athens, Wilmington, Chillicothe, Knox, Lancaster, Marion, Logan, and others. Moreover, the Opportunity Corridor project, which is a path designed for transit, bikes, and pedestrians in northeast Ohio, along with the downtown promenade in Akron, have enjoyed the fruits of grant awards in recent years. In total, Ohio has received over $79 million from the TIGER program for transportation projects (see the table below for a year-by-year breakdown).

The success of the program is manifested by the substantial local investment it has spurred. USDOT calculates that TIGER’s initial investment has leveraged $1.74 billion in matching funds by state and local actors, including the private and public sectors contributing to the completion of the project. However, due to the program’s widespread appeal, acquiring TIGER grants have become increasingly more difficult. As local transportation projects face a dwindling supply of resources, the TIGER program has become more competitive given the increasing demand. Subsequently, many advocates have called for an expansion of the program to aid local governments in finishing important projects.

Scrapping the program entirely would represent a big blow to public transportation systems in Ohio in particular, given many local systems are insufficiently supported. The Ohio Department of Transportation’s (ODOT) 2015 Transit Needs Study estimates that Ohio’s public transportation systems suffer from a $192.5 million dollar funding shortfall in combined capital and operations needs. Moreover, the study finds that the state of Ohio spends just 63 cents per capita on public transportation over the course of each year, ranking Ohio 38th in the nation in its investment in this crucial policy area.

Greater Ohio Policy Center (GOPC) believes that Ohio’s recently-passed transportation budget, which includes a $10 million increase in flex funding for public transportation, is a positive step to modernizing the state’s transportation system. However, local systems will continue to struggle to meet the demands of riders, and the possible federal elimination of the TIGER program will increase the financial strain on cash-strapped agencies that are seeking the funds to ensure they can properly invest in their capital systems as well as operate sufficiently.

For more resources on transportation policy affecting Ohio’s cities and regions, please visit GOPC’s Transportation Modernization webpage.

 

TIGER Grants Total Award Amounts in Ohio

2009: $20 million

2010: $10.5 million

2011: $12.5 million

2012: $16 million

2013: no award

2014: $400,000

2015: $6.8 million

2016: $12.9 million

Grand Total: $79.1 million

 

Economic Impact Analysis Reveals Added Value to US Economy of Investing in Water Infrastructure and Warns of Multiplying Costs if Funding Gap is Deferred

April 7th, 2017

By John Collier, GOPC Intern

The Value of Water Campaign recently released the Economic Impact of Investing in Water Infrastructure – a report aimed at quantifying the economic impact water infrastructure has on the US economy. The campaign brings together leading water industry experts to better understand the economic benefits associated with closing the funding gap for water infrastructure spending, as well as the potential costs of failing to do so.

The US is at a tipping point when it comes to its water infrastructure. The infrastructure built in the last century, with a lifespan of 75 to 100 years, is coming to the end of its lifespan. Estimates from the American Society of Civil Engineers suggest the US will need to spend a minimum of $123 billion per year on capital improvements over the next 10 years to maintain a good state of repair. To put the scale of this infrastructure improvement into perspective, the report states that one-third of US water mains will need replaced by 2040. Current funding levels at all levels of government are not sufficient, and leave a sizeable funding gap. The report notes that aggregate capital spending across the local, state, and federal levels is only $41 billion per year, leaving an $82 billion annual funding gap. If current needs are left unmet, the report warns this funding gap will increase to $109 billion per year by the year 2026.

The benefits of meeting the funding gap are bigger than simply avoiding service disruptions, and would ripple to the farthest reaches of the economy. The US stands to gain $220 billion dollars in annual economic activity and would create 1.3 million jobs nationwide over ten years, should the water infrastructure funding gap be closed. Many of these jobs that are involved in the design and construction of improved water infrastructure are well paying and are attainable with a high school diploma. Moreover, indirect effects of investing in construction would create positive indirect effects on the economy, such as the purchase of working supplies in interrelated industries. An added benefit to the investment is the $94 billion businesses would save each year due to no longer needing to fund their own water supplies.

Water Treatment Plant - wikicommons

        Water Treatment Plant. Photo credit: Wikicommons

The campaign asserts that as the nation moves to assess and repair its aging infrastructure, there is need for significant federal investment. From 1977 to 2014, federal contributions have fallen from 63 percent of total spending to 9 percent of total capital spending on water infrastructure. Much of the burden has been picked up at the local level – per capita spending by local communities has risen from $45 in 1977 to upwards of $100 in 2014.

Greater Ohio Policy Center (GOPC) recently released Strengthening Ohio’s Water Infrastructure, a report exploring the opportunities at the state level to ensure long-term financial stability of Ohio’s water infrastructure. The use of asset-management, regionalization, and private-public partnerships may be the key for the financial stability of Ohio’s water systems and adequately funding capital improvements.  Affordability is becoming more of a strain for some communities as user charges continue to increase in parallel with national trends. 

Modernizing the water system for the 21st century remains one of GOPC’s main policy objectives. GOPC is in the midst of a multi-year project on Ohio’s water and sewer infrastructure – and is currently identifying the best practices from around the nation.

For further resources and reports, please visit GOPC’s Sewer and Water Infrastructure Resource Page

 

President’s Budget Blueprint Reduces Overall Federal Support for Water Infrastructure

April 6th, 2017

By Jon Honeck, GOPC Senior Policy Fellow

In March 2017, the Trump Administration released its summary budget blueprint for Federal Fiscal Year (FFY) 2018, which begins October 1, 2017.  The plan signals the administration’s overall intention to cut non-defense domestic programs in order to free up funds for increased military spending.  There is a long road to travel before any parts of the plan are enacted, and many members of Congress have already gone on record expressing reservations about specific elements of the proposal.  Nonetheless, the blueprint creates a starting point for agency budget plans that will be presented to Congress in the coming months.   

This blog discusses the administration’s proposed changes to how the federal government will support investments in water infrastructure.  The Trump Administration’s budget blueprint would eliminate the USDA Rural Development water and wastewater loan program, the Appalachian Regional Commission (ARC), the Community Development Block Grant (CDBG), and the U.S. Department of Commerce – Economic Development Administration (EDA).   The plan would preserve funding for the U.S. Environmental Protection Agency (USEPA) water and wastewater revolving loan funds, although the agency as a whole would face a 31 percent budget reduction, resulting in the elimination of 3,200 agency staff positions and a 45 percent reduction in categorical grant programs.  One of these categorical grant programs provides states with funding for the oversight of local drinking water systems.  It helps pay for the Ohio EPA to monitor local compliance with protocols for the control of lead and other contaminants. 

The budget proposal should be analyzed in the context of the nation’s critical need to modernize drinking water, wastewater, and stormwater infrastructure.  This issue is a high priority for Greater Ohio Policy Center (GOPC) because of its links to economic development, land use planning, and the potential for financial strain on Ohio families and communities (see our recent Water Infrastructure reports).  According to EPA estimates, Ohio water utilities (typically local governments) will need to make capital investments of $26 billion in drinking water and wastewater infrastructure to meet identified needs over the next 20 years.   User charges have been rising steadily, faster than the rate of general consumer inflation. 

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                           Photo courtesy of Wikicommons

The federal government plays a major role in financing water infrastructure investments, although the approach has changed significantly over the decades.  With the passage of the federal Clean Water Act in the early 1970s, Congress created a large grant program to assist local governments with the modernization of wastewater treatment plants and related infrastructure.  The federal government paid 75 percent of project costs in the initial program, which was changed to 55 percent in the 1980s.  This was one of largest federal infrastructure programs since the interstate highway program of the 1950s and 1960s. 

In the late 1980s, Congress phased out the wastewater grant program in favor of a revolving loan approach.  A revolving loan for drinking water infrastructure was added in the late 1990s.  Under the current policy, each year the U.S. EPA provides a capitalization grant to state revolving loan funds which lend directly to local governments at subsidized interest rates.  The state must provide a 20 percent match for the grant.  In FFY 2016, the Ohio EPA received a $75.2 million capitalization grant for its Water Pollution Control Loan Fund, and $23.1 million for the Drinking Water Assistance Fund.   Communities that want a market-rate loan with fewer administrative hurdles can approach the Ohio Water Development Authority, which runs a state-supported revolving loan fund.   

The result of this change in federal strategy is that local communities bear the largest responsibility for financing water infrastructure.  Communities that need a grant to complete their capital project must rely on other sources, which are extremely limited and competitive.  At the federal level, these sources include the USDA Rural Development – Water and Wastewater Loan program, the Appalachian Regional Commission (ARC), the Community Development Block Grant, and the Economic Development Administration.  The USDA and ARC programs are targeted at smaller, low income communities in rural counties that need them the most.  In FFY 2016, USDA Rural Development made 17 grants for a total of $14 million to Ohio communities, and an additional 16 loans for $44.6 million.  The ARC, a smaller agency, made 12 water infrastructure grants for a total of $2.7 million in Ohio.  The CDBG provides several million dollars in Ohio each year for water and infrastructure through its Critical Infrastructure Program.  (For more information on the challenges of water infrastructure in Ohio, see panelist presentations from GOPC’s Investing in Ohio’s Future 2017 Summit and our report Strengthening Ohio’s Water Infrastructure). 

The Budget Blueprint asserts that the USDA and EDA programs are duplicative of the state revolving funds and other programs, and that the CDBG is “not well-targeted to the poorest populations and has not demonstrated results.” The ARC is part of a long list of small, independent agencies slated for elimination.  The administration’s claims deserve close scrutiny from Congress, however.  The underlying issue is whether the federal government has any responsibility to provide grants, and the importance of grants in sustaining investments by small communities.  For small towns, grant funding can provide the missing piece of capital that makes a project affordable.  In Ohio, state and federal agencies have worked together for decades and often find ways to share responsibility for financing projects in small communities.  An interagency Small Communities Environmental Infrastructure Working Group (SCEIG), meets regularly throughout the year to provide advice to local governments seeking financing, and coordinates technical assistance programs. 

The elimination of these three federal programs would make the Ohio Public Works Commission (OPWC) the only significant remaining source of grant funding for water infrastructure in the Buckeye state.  (The EPA revolving loan funds have a limited number of loans that allow partial principal forgiveness.)  Most OPWC projects are prioritized at the local district level, and must compete with transportation projects.  In the context of rising concerns in Ohio and nationally about the affordability of infrastructure, a “one size fits all” approach to financing may backfire. 

For further resources and reports, please visit GOPC’s Sewer and Water Infrastructure Resource Page

 

Budget Update No. 4: Transportation Budget in the books; Main Operating inches along

April 3rd, 2017

By Jason Warner, GOPC Manager of Government Affairs

This is the fourth in a series of articles taking a closer look as specific items contained in the Governor’s proposed budget for FY2018-19, which the legislature must pass by June 30, 2017The third article is available here

The Ohio House of Representatives and Ohio Senate sent the final version of the State Transportation Budget (HB26) to Governor John Kasich on March 29, which he then approved on March 31.  The transportation budget will take effect on July 1 and will fund transportation operations and other transportation-related functions through June 30, 2019.

Highlights of the final budget include an increase in federal flex funding for purposes of replacing Ohio’s aging public transportation fleet. Flexing federal highway dollars reallocates funding Ohio already receives. At present, the state flexes around $23 million per year for public transportation purposes. House Bill 26 increases this amount by $10 million per year, to $33 million annually. This is a significant increase in funding which will help support the purchase of new rural transit vans and full sized buses.

The conference report removed Senate provisions adding $48 million to the Ohio Public Works Commission’s Local Transportation Improvement Program (LTIP) and requiring $30 million of the forthcoming Volkswagen Emissions Mitigation Trust Fund to be sent to public transit authorities for rolling stock. Conferees also agreed to allow county commissioners to approve a $5 motor vehicle license (MVL) fee increase by resolution, but specifies that any increase must take effect after 30 days. This will allow local voters an opportunity to subject the increase to a referendum. If a referendum is approved, the increase would only take effect if it is approved by voters.

The removal of the $30 million in funding from the Volkswagen settlement came at the request of the Ohio EPA and Ohio Attorney General Mike DeWine. They indicated to the conference committee there were still issues around the settlement which needed to be worked out and cautioned that allocating money from the settlement was premature. The chair of the Senate Transportation, Commerce and Workforce Committee, Frank LaRose (R-Copley), has indicated that he wants to see the settlement money appropriated for this purpose and will work to do so either through an amendment to the main operating budget (HB49) or through stand-alone legislation. GOPC will work with the senator to ensure that this does happen.

Other highlights from HB26 include:

  • Requires the Registrar of Motor Vehicles, within 9 months after the effective date of the bill, to establish by rule the service fee that is paid to a deputy registrar, a limited authority deputy registrar, or the Registrar, as applicable, for specified services at a rate that is not more than $5.25.  The current rate is $3.75. 
  • Requires the Registrar or Motor Vehicles to conduct a study of the benefits and detriments of lowering the permanent registration fee for commercial trailers and semitrailers and streamlining the registration process. A pilot program will be conducted between January 1, 2018 and December 31, 2019 with the fees being reduced from $30 to $15 for vehicle registrations in Clinton, Franklin, Lucas, Mahoning, Montgomery and Stark counties.
  • Limits the proposal to permit the ODOT director to establish variable speed limits to a pilot program to be limited to all or part of I-670 (Franklin County), all or part of I-275 (Hamilton County) and the portion of I-90 between I-71 and the Pennsylvania border.

At the same time, the Ohio House continues its work on the Main Operating Budget (HB49). This week, the bill resumed hearings in the full House Finance Committee following a month of hearings in five subcommittees and the House Ways and Means Committee. Various interest groups and members of the public shared their views on the budget in multiple hearings during the past week, and will continue sharing their thoughts this week before the legislature goes on recess for the next two weeks to observe Easter. Also last week, the Ohio Senate Finance Committee began holding informal hearings receiving background testimony from state agencies in advance of beginning formal hearings after the House approves their version of the state budget. That is expected to occur sometime in early May.

Visit GOPC’s Transportation Modernization page to learn more about this important issue area

 

GOPC’s Recommendation to Boost Public Transit Included in 2018-19 Ohio Senate Transportation Budget

March 27th, 2017

By Jason Warner, GOPC Manager of Government Affairs

This is the third in a series of articles taking a closer look as specific items contained in the Governor’s proposed budget for FY2018-19, which the legislature must pass by June 30, 2017. The second article is available here.

Greater Ohio Policy Center (GOPC) would like to thank the Ohio Senate for approving a transportation budget that would allocate an additional $15 million over two years to public transportation. In alignment with GOPC’s recommendations that Ohio repower its ailing bus fleet, the Senate’s budget would support a new grant program using funds from the Volkswagen Mitigation Trust Fund to support public transit.

In a strong bipartisan effort, the Ohio Senate unanimously approved Am. Sub. HB 26, the state transportation budget for fiscal years 2018 and 2019 on March 22nd. All 24 Republican members and the 9 Democratic members of the chamber voted to support passage of the budget. Over the course of eight hearings, Senators heard testimony from a number of organizations, including GOPC, who advocated for an increase in funding for public transportation.

As GOPC noted in testimony before the Transportation, Commerce and Workforce Committee last week, Ohio appropriates only 2% of the state transportation budget to public transportation, while peer states spend between 10-20% of their transportation funds on transit-related needs and services. Governor Kasich’s proposed budget recommended spending an additional roughly $33 million annually in federal highway “flex” funds for public transit capital appropriations (purchasing new “rolling stock”, or buses), which was an increase of $10 million per year over the current budget.

GOPC thanks the members of the Ohio Senate for recognizing the need for additional support for public transit in the state and encourages the Ohio House of Representatives to support this Senate-backed provision in the budget.

In testimony, GOPC encouraged the legislature to spend an additional $17 million per year, boosting overall funding in public transportation to $50 million annually. The Senate-approved budget plan to strengthen public transportation using Volkswagen Mitigation Trust Funds would support a grant program that assists local transit agencies in purchasing new buses and transit vans across the state.

Later that same day, the Ohio House, which was the first to pass the transportation budget on March 1, voted to reject the full slate of Senate-approved changes 88-0. The bill now moves to a conference committee which will settle the differences between the two bills. Final passage of the budget bill will occur later this week, as state law requires Governor Kasich to sign the transportation budget by April 1.  

Learn more about GOPC’s policy research and advocacy to modernize Ohio’s transportation system

 

Cota on high st

2018-19 Transportation Budget Passes Ohio House and Advances to Senate

March 10th, 2017

By Jason Warner, GOPC Manager of Government Affairs

This is the second in a series of articles taking a closer look as specific items contained in the Governor’s proposed budget for FY2018-19, which the legislature must pass by June 30, 2017. The first article is available here.

It has been a busy couple of weeks at the Ohio Statehouse as work continues on the drafting of the state Transportation Budget for Fiscal Years 2018 and 2019.  The House Finance Committee passed the transportation budget on February 24, while the full House approved the bill on March 1. The Senate Transportation, Commerce and Workforce Committee held its initial hearing on the bill with testimony from ODOT Director Wray and other administration officials a day before, on February 28. Hearings have been ongoing during the week of March 6th as well.

The House-passed budget maintained the as-introduced budget proposal to increase the amount of federal flex-funding dedicated towards public transportation by $10 million annually, up from $23 million currently. A portion of this funding ($10 million per year), will be distributed by formula to transit agencies, while the remaining funds will be competitively awarded through grants to replace the state’s aging fleet of vans and buses with more modern equipment that is more fuel efficient and requires less maintenance. Greater Ohio Policy Center (GOPC) continues to advocate for additional funding for this program, asking the legislature to appropriate a total of $50 million annually (this would require an additional $17 million per year above what is in the current budget proposal).

Visit GOPC’s Transportation Modernization page to learn more about this important issue area

Among the other highlights of the House version of the ODOT budget:

  • Maintains exemption from the motor fuel tax (MFT) for aviation fuel, K-1 kerosene and compressed natural gas (CNG);
  • Eliminates the change from collecting the MFT from the point when it is ‘received’ in Ohio to the terminal refinery rack;
  • Increases the service fee paid to a deputy registrar from $3.50 to $5.25 and increases the multi-year registration fee by a similar percentage;
  • Permits a county commission to levy a $5 motor vehicle license fee for transportation purposes. Under current law, cities, townships and counties may establish a combination of local motor vehicle registration taxes totaling up-to $20. This new fee (which is optional for counties) increases the total amount of local motor vehicle registration taxes totaling up-to $25;
  • Requires the Registrar or Motor Vehicles to conduct a study of the benefits and detriments of lowering the permanent registration fee for commercial trailers and semitrailers and streamlining the registration process. A pilot program will be conducted between January 1, 2018 and December 31, 2019 with the fees being reduced from $30 to $15 for vehicle registrations in Clinton, Lucas, Montgomery and Stark counties;
  • Increases the earmark for Transportation Improvement Districts (TID’s) to $4.5 million in each fiscal year. A TID is a special-purpose district created by an Ohio county for the purpose of coordinating and financing road construction projects among local governments and private partnerships in that county. At present, there are 30 TID’s across Ohio;
  • Limits the proposal to permit the ODOT director to establish variable speed limits to a pilot program on highways that are a part of ODOT’s Smart Mobility Initiative, specifically I-670 (Franklin County), I-90 (Cuyahoga County) and U.S. Route 33 (Franklin, Union Counties); pilot program expires December 31, 2018.

GOPC continues to advocate for the increase in federal flex funding for public transportation, as well as advocate for establishment of dedicated funding for public transit, adoption of a statewide active transportation policy, and comprehensive reform of the ODOT budget. This is happening in one-on-one meetings with members of the Ohio Senate, as well as testimony before the Transportation, Commerce and Workforce committee, which is planned to occur next week.

Visit GOPC’s Transportation Modernization page to learn more about this important issue area

 

 

GOPC Testifies on Transportation Budget in House Subcommittee

February 16th, 2017

Recently, Greater Ohio’s Manager of Government Affairs, Jason Warner, had the opportunity to testify before the House Finance Subcommittee on Transportation regarding House Bill 26, the state transportation budget for FY2018-2019. The subcommittee held hearings throughout the week on the proposed budget, which provides appropriations for programs funded with motor vehicle fuel taxes and registration fees (primarily in the Departments of Transportation and Public Safety.

GOPC full testimony is below and can also be found in PDF format here. You may also review all the testimony which the subcommittee heard on the committee’s website.

 

House Finance – Transportation Subcommittee
House Bill 26: State Transportation Budget | Interested Party Testimony
Jason Warner, Greater Ohio Policy Center
February 9, 2017

Chairman McColley, Ranking Member Reece and members of the Transportation Subcommittee, I want to thank you for providing me this opportunity to speak to you today about transportation in Ohio and the state’s transportation budget for FY2018-19.

My name is Jason Warner and I am the Manager of Government Affairs at the Greater Ohio Policy Center. Greater Ohio is a nonprofit nonpartisan organization that is valued for its data-driven research. Our mission is to champion revitalization in Ohio to create economically competitive communities.

As I am sure you are aware, Ohio is a cornerstone of our nation’s transportation infrastructure. I would like to focus my testimony today on what Greater Ohio sees as a policy platform to support a robust, competitive transportation system that will continue to keep Ohio at the forefront of meeting the increasing demands for a 21st Century transportation system for a 21st Century economy. We do not consider these to be aspirational goals, but rather a blueprint and effective strategic plan.

I would like to begin my remarks today with an overview of public transportation in Ohio. Ohio boasts a strong and productive public transportation network, which includes 28 urban and 33 rural systems. ODOT data shows that over 115.1 million passenger trips were provided by the state’s transit systems in 2013, the most recent year statistics are available.

Yet, 27 counties in Ohio feature no form of public transportation (either fixed route or on-demand service) and the state spends only 63 cents per capita for public transit. That is why Ohio ranked 38th in the nation in terms of state investment in public transportation, below North Dakota. It’s worth noting, that among Ohio’s neighboring states, the state ranks ahead of only Kentucky:

  • Pennsylvania – 9th ($85.55 per capita) 
  • Michigan – 15th ($24.33 per capita) 
  • Indiana – 19th ($8.57 per capita) 
  • West Virginia – 32nd ($1.50 per capita) 
  • Ohio – 38th ($0.63 per capita) 
  • Kentucky – 42nd ($0.34 per capita) 

Only 2% of ODOT’s budget is dedicated to public transportation, which is why the department’s own 2014 Transit Needs Study found that current service does not meet demand. Ohio’s peer states dedicate between 10-20% of their state transportation budgets to transit and the state needs to do much to make up for this deficiency. Public transportation is critical to a number of sectors in Ohio, including the elderly, disabled, and is a key component in successfully supporting the state’s priority of job creation, job growth, and workforce development.

We thank Director Wray for his leadership on this issue. Through his efforts and those of the team at the Ohio Department of Transportation, the governor’s budget proposed a substantial increase in funding for public transportation over the next two years. However, as the ODOT Transit Needs Study acknowledged, the backlog of capital needs is great and will require substantial support. There are several ways to address that gap.

Increase Federal Highway Administration Funding for Public Transportation

One option, which involves a simple reprioritization of goals and projects at the Department of Transportation is the idea of flexing Federal Highway Administration (FHWA) dollars.

Flexing FHWA dollars reallocated federal funding Ohio already receives. At present, the state flexes around $23 million per year for public transportation purposes. House Bill 26 proposes to increase this amount by $10 million per year, to $33 million annually. This is a significant increase in funding and we applaud the move by the administration to increase this support, which will help support the purchase of new rural transit vans and full sized buses.

Greater Ohio Policy Center believes that this support would be greatly enhanced with a commitment by the legislature and Department of Transportation to flex an additional $17 million annually, boosting the total amount of flexed FHWA dollars to $50 million per year of the biennium. Doing so will not adversely impact ODOT and its primary mission, as outlined recently by Director Wray in his testimony to the House Finance Committee, which is to “to take care of what we have.”

Setting aside a total of $50 million in FHWA funding to public transit will result in 7.5 fewer miles of highway expansion, or 24 miles of highway repaired per year. For perspective, ODOT paved 5,564 lane miles in 2015.

Allocating $50 million per year of FHWA fund to transit-related capital investments will have negligible impact on Ohio’s crucial highway maintenance and construction programs, while significantly improving safety, performance, and use of Ohio’s public transportation systems.

Create a Dedicated Funding Stream for Public Transportation

Flexing FHWA funding is just one option Ohio has to support Ohio’s public transportation network. Another option, which will require action on the part of the legislature, is to create a dedicated funding stream for public transportation.

Nationwide, 25 states along with the District of Columbia dedicate fees and taxes for the exclusive use of public transit. This, in turn, provides a relatively reliable source of assured funding for these systems. While local transit systems can seek support for dedicated sales tax funding from local voters, it is still not sufficient to meet all needs, and thus most systems rely on funding from the state.

There are several possible sources Ohio could dedicate to support transit-related equipment and vehicle investments; examples of potential funding sources include. At Greater Ohio, we believe Ohio should consider dedicated funding derived from the sales tax collected on rental vehicles, a revenue source that is largely paid by out-of-state visitors to Ohio. By dispersing the equivalent amount of sales tax collected on rental vehicles to fund public transportation, Ohio would take a major step forward in assisting Ohio’s existing transit systems modernize and expand to meet the growing demands for service statewide.

There are other options available beyond the rental vehicle sales tax, including a tax on motor vehicle sales or a fee on the sale of new tires, among others. Regardless of the source, dedicated funding is an important and necessary step forward if Ohio is to have a modern, competitive system.

Dedicated funding for capital improvements will increase the safety and reach of Ohio’s transit agencies. In addition, dedicated funding will help to expand Ohio’s existing transit services, including helping to reach residents in the 27 mostly rural counties that lack access to any form of public transportation.

Adopt and Implement a Statewide Active Transportation Policy

Public transportation is just one aspect of a robust transportation network which Ohioans have come to expect and rely upon. But as we near the beginning of the third decade of the 21st Century, we must look beyond four wheeled transportation as being the sole aspect of the transportation network.
Every day in Ohio, 2 pedestrians and 1 bicyclist dies or is seriously injured in roadway accidents.

Nationally, elderly people and children are at greater risk of pedestrian fatalities than other age groups. A 2015 analysis of 37 active transportation projects across the country determined the projects avoided a total of $18.1 million in collision and injury costs in one year alone. An active transportation policy that ensures state roadways and municipal streets that receive ODOT investment can be safely traveled by all users’ needs to be implemented.

Active transportation, by definition any human-powered transportation system such as walking or bicycling, is increasing in frequency across the state for a variety of reasons. Adoption of a policy that would be sensitive to context (rural vs. suburban vs. urban) and that would facilitate the safe and efficient movement of people and goods is key. At present, 33 states have an active transportation policy. Agencies such as ODOT and the Ohio Department of Health have been working on a policy for some time. I recently had the opportunity to share this plea with both the Joint Task Force on Transportation Issues and the Joint Education Oversight Committee, as part of its review of school transportation issues, and share it with you now in the hope that this committee will urge the department to pursue this policy on a statewide basis and ensure safe travel for all Ohioans.

Comprehensive Funding Reform of the ODOT Budget

As I have previously mentioned, Ohio is a key component in our national transportation network. Ohio’s interstate highway system is the 12th largest in the nation, and ranks 5th in overall traffic volume and 4th in truck traffic volume. Ohio boasts the 2nd largest inventory of bridges in the nation. Beyond roadways, Ohio also ranks 4th nationally in freight rail mileage, hosting 35 freight railroads and 5,305 miles of rail. Ohio’s maritime ports saw 48,267,276 short tons of cargo traded in 2013, and features 7 ports ranked in the top 100 nationally that year.

Yet, in spite of these impressive statistics, the American Society of Civil Engineers has graded Ohio’s 125,000 plus miles of roads a ‘D’, finding that 43% of the state’s roadways are in critical, poor, or fair condition. Of greater concern is a finding that 2,242 of the state’s 27,015 bridges (8% of total bridges), are ‘structurally deficient.’ The overall cost to motorists in the state, the personal cost of driving on roads in need of repair, is $3.3 billion per year, which amounts to $413 per motorist.

Adequately maintaining and upgrading all modes of transportation in Ohio is becoming a challenge, as there are not enough resources available to ensure this is done effectively. The cost of transportation materials and equipment has increased substantially in the last decade, while local, state and federal funds have flat-lined. This is not a problem that is unique to Ohio, and ODOT should be lauded for the work it has been able to accomplish in light of these challenges.

That said, Ohio needs to take a serious look at these challenges going forward, and can look close by to see an effective model that is meeting the needs of the public and private sector in a strategic manner.

In 2012, Pennsylvania had been found to have the most dire of infrastructure systems in the nation; the bridges were rated as the most structurally deficient, roadways were crumbling and there was a growing, unmet demand for public transportation. Through a comprehensive 5-year transportation budget package enacted in 2013, Pennsylvania is now producing $2.1 billion in additional funds and recalibrating resources to better support all modes of transportation. The state has now adopted a Fix-It-First Policy that focuses on funding repairs and maintenance programs on existing infrastructure, doing more to improve asset management and limiting capital expansions.

Like Ohio, Pennsylvania restricts its motor fuels tax to highways and bridges, so in order to provide for the needs of additional transportation modes like transit, rail, aviation, and maritime ports, the state instituted new fees and aggregates small increases on existing taxes and fees to provide additional funding to expand transit services, modernize ports and airports and generate additional revenue for traditional maintenance programs. Among these revenue generators were:

  • A new $1 fee on all new tires sold 
  • A higher fine for lapsed vehicle insurance in lieu of license suspension 
  • A flat $150 fine for disobeying traffic control devices 
  • A $2 per day vehicle rental fee 
  • A 3% vehicle lease tax 
  • A clear formula for assessing the gas tax on alternative fuel vehicles 
  • A switch from taxing at the pump to taxing “at the rack”

One of these elements is already included in House Bill 26. A provision in the bill moves the point at which the motor fuel tax is applied from the point when the fuel is received to, generally, the terminal or refinery rack, affecting who is required to report and pay the tax.

GOPC believes that other elements of the Pennsylvania reform package can and should be considered in Ohio, in order to ensure the state’s economic stability in the years ahead.

Conclusion

In conclusion, it is crucial that Ohio support and maintain a system supporting all modes of transportation. Such a robust, competitive system as outlined here today can serve as a blueprint for addressing our state’s critical infrastructure needs while simultaneously enhancing Ohio as a place where businesses can thrive and where people want to live.

Chairman McColley and members of the Transportation Subcommittee, thank you for your time and thoughtful consideration. I am happy to answer any questions you may have.

Season’s Greetings! GOPC’s 2016 Accomplishments and a 2017 Preview

December 20th, 2016

Staff holiday pic 16

Pictured from left: Jason Warner, Sheldon Johnson, Alex Highley, Meg Montgomery, Torey Hollingsworth, Jon Honeck, Alison Goebel, and John Collier

 

Dear Friends,

From everyone at the Greater Ohio Policy Center, we wish you a safe and enjoyable holiday season!

Throughout 2016, GOPC has been a leader in championing revitalization and sustainable growth in Ohio, ensuring the state is equipped with policies and practices that create robust cities and regions. With so much happening around Ohio, the past twelve months have proven to be busy and rewarding for GOPC in equal measure. We introduced Alison Goebel as our new Executive Director following the departure of Lavea Brachman, and in conjunction with this smooth transition, we achieved many important goals and started planning for even greater success next year. In 2016, we:

  • Published original research reports on many critical revitalization issues in Ohio, including:

o   Akron Urban Health and Competitiveness Report finds that Akron is at a crossroads for further growth and economic development.  This work received extensive coverage from news media, including Akron Beacon Journal, Cleveland Plain Dealer, and WCPN

o   Transportation Modernization Memos analyze strategies that improve multimodal transportation and underscore the outsized economic benefits of implementing policies that support all modes

o   Credit Gaps in Opportunity Neighborhoods assesses redevelopment needs and highlights the barriers to revitalization in many of Ohio’s opportunity neighborhoods

o   Green Infrastructure for Stormwater Control analyzes grey and green water and sewer infrastructure and highlights modern, cost-effective strategies for maintaining aging stormwater systems

o   Ohio’s Small and Mid-Sized Legacy Cities highlights the serious economic and demographic challenges facing smaller legacy cities – received extensive coverage from news media, including WKSU Chillicothe Gazette, and Youngstown Business Journal 

  • Hosted a successful Webinar, attended by over 150 people, examining how Ohio’s smaller legacy cities from Akron to Zanesville have fared over the past 15 years
  • Presented our work at over 25 conferences and meetings in Akron, Baltimore, Cincinnati, Cleveland, Columbus, Dayton, Marietta, Toledo, Washington DC, and Youngstown
  • Testified at the statehouse on state policy on issues concerning revitalization including active transportation, foreclosure reform, and brownfield redevelopment
  • Launched brand new Water and Sewer Infrastructure and Smaller Legacy Cities web resources with up-to-date news, original research, and previews of upcoming reports

Coming in 2017…

In 2017, we will build on this momentum and to continue to underscore the importance of Ohio’s cities as the economic drivers of the state. With partners from around the state and nation, we look forward to continuing to research and advocate for policies that revitalize neighborhoods, diversify transportation systems, modernize water and sewer infrastructure, and build strong cities and regions in Ohio.

We can’t wait to host our 2017 Summit, Investing in Ohio’s Future: Maximizing Growth in our Cities and Regions on March 7th & 8th in Columbus. The Summit will explore best practices in financing and accelerating comprehensive and sustainable growth in communities throughout Ohio. We are meticulously planning an exciting and informative event that we predict will be our best Summit yet. We hope you join us!

If you believe in creating vibrant, sustainable cities and regions in Ohio, we invite you to support GOPC with a year-end contribution. We are grateful for your support.

Warm wishes for 2017,

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Alison Goebel and the Greater Ohio Policy Center Team

 

Ohio General Assembly: 2016 Election Review, Lame Duck, and Upcoming Budget

November 16th, 2016

 By Jason Warner, GOPC Manager of Government Affairs

While much of the focus of the 2016 elections has been at the national level, voters across Ohio cast ballots last Tuesday on down ticket races to elect members of the 132nd Ohio General Assembly. Now that the dust has settled, we can look ahead to the new General Assembly, which will take office on January 3, 2017. The new legislative session will include Governor John Kasich’s final state budget and will prelude the 2018 statewide election when Ohioans will elect Mr. Kasich’s successor and other statewide executive officers.

Prior to the election, Republicans in the state legislature enjoyed a majority of 65/34 in the Ohio House and 23/10 in the Ohio Senate. Defying expectations, Republicans in the state legislature gained one seat each in the Ohio House and Ohio Senate, increasing their majorities to 66/33 in the House and 24/9 in the Senate. Both majorities are now large enough to override any vetoes which may be issued by Governor Kasich and to pass legislation as emergency measures (allowing them to take effect immediately as opposed to 90 days after executive approval), without the necessary support of legislative Democrats.

  StatehouseBirdseye

  Ohio Statehouse

The short term impact of the election at this stage is hard to determine. GOPC will be attentive to leadership changes and will continue working with members on both sides of the aisle to advance policies on urban and neighborhood revitalization, development of a diverse transportation system and modernization of the state’s water and sewer infrastructure. GOPC has already been reaching out to members of the General Assembly to highlight policy initiatives and will be working with members to ensure these issues are emphasized in budget meetings and other legislative conversations.

Before the new General Assembly is seated in January, the current session will wrap up with lame duck session, when any remaining bills that are poised for legislative passage will be completed and sent to Governor Kasich for his approval. Since political upheaval in the state legislature did not occur, most observers expect that any lingering issues that are not in need of immediate action will be held off until the start of the new session. However, Senate President Keith Faber said recently, “If you have any bills out there…pay attention. Anything can happen.”

Several bills GOPC has been tracking could see action during lame duck. HB482 (Dever) makes changes to the calculation of the exempt value of improved property subject to a community reinvestment area exemption. The bill clarifies the calculation of the exempt value of property subject to a brownfield remediation exemption while authorizing the filing of a complaint with the county auditor challenging the assessed value of fully or partially exempt property. GOPC has worked with Representative Dever on this bill and the measure is highly likely to see action during the next month.

SB333 (Hite) makes changes to laws relating to environmental protection and could also move during lame duck. While SB333 has yet to receive a hearing, the bill was a priority for Governor Kasich earlier this year. The bill complements HB512 (Ginter), which passed earlier in 2016 and established requirements governing lead and copper testing for community water systems and revised the law governing lead contamination from plumbing fixtures. Both bills emerged in response to recent water crises in Flint, Michigan and Sebring, Ohio.

SB235 (Coley/Beagle) offers an incentive to property owners to enhance land sites for future business and development, and ultimately encourage job growth throughout the state. GOPC testified on SB235 while the bill was pending in the Senate Ways & Means Committee in April, expressing support for the bill’s intent to spur economic development. However, GOPC believes a statewide “automation” of offering tax incentives could result in negative side effects. GOPC will seek to modify the bill, which passed the Senate and should see action in the House during lame duck.

 

*Names listed in parentheses are the legislators who are chief bill sponsors