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

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.

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

 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 132^nd 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.

  

  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