The Senate Finance Committee is expected to take up changes to House Bill 96, the state budget for fiscal years 2026 and 2027, at a hearing later this afternoon. These will be the latest in a series of changes made to the bill by the Senate since last week. On June 4, lawmakers accepted a substitute bill that made major changes to a number of areas GOPC has been tracking throughout the budget process. Below is a summary of those changes by area.
Brownfields
The Senate has made the following changes to the Brownfield Remediation Program:
Reduces the appropriation from $125M in each fiscal year to $100M, for a total of $200M for the program.
Limits brownfield grants only to economic development projects, and defines an economic development project to mean one developed by a for-profit entity that demonstrates site control, a plan for development, and documented support for the economic development project from the city or township. The language includes demolition as a remediation cost.
Provides a set-aside for the first year of the program for each county, and eliminates the first come, first serve granting for the second year. The grants are to be awarded on a rolling basis after review by the ODOD Director on a case by case basis that assesses the economic merit of the project to the county and surrounding counties, and the state. The language also requires the ODOD Director to ensure projects are not specific to one region of the state.
GOPC has concerns about the changes to the Brownfield Remediation Program that the Senate has put forth.
More than 200 of the sites have received assessment grants, totaling nearly $44 million. Unless those sites have a proposed economic development end use, this spending will go to waste as clean-up efforts will not be able to proceed under the program.
GOPC’s review of all BRP grants to date shows that, of the 631 total grant awards issued since 2021, 21% of project awards have fallen under the “economic development” category.
It would be a disservice to the people of Ohio to restrict ongoing funding only for projects that have an “economic development” end use, when the state is facing innumerable challenges, including a housing crisis where these sites could be redeveloped for future residential development (as 26% of current grant awards are planned).
GOPC will be advocating for changes to the language during Conference Committee, when both the House and the Senate come together in the coming weeks. GOPC will share opportunities for brownfields stakeholders to submit testimony during that time. GOPC encourages stakeholders to contact your local elected officials and share how the Senate’s programmatic changes may negatively impact potential brownfield projects in your work.
Act Now To Save The Brownfield Program
Contact your local lawmakers and tell them to adopt the House-Version of the Brownfield Remediation Program in the State Budget.
Tax Credits
The Senate proposal doubles the annual Opportunity Zone Tax Credit cap to $50 million per fiscal year. It also caps the Historic Preservation Tax Credit at $60 million per year, and increases the Transformational Mixed Use Tax Credit (TMUD) to $150 million per year. All three of these tax credits would then sunset under the Senate proposal at the end of Fiscal Year 2027. As explained by the Senate, this will enable decisions about the future of these tax credits to be made by a future General Assembly.
The House-passed budget would have extended the TMUD program in perpetuity. In reality, as evidenced by the above changes, any and all tax credits are subject to being ended by any future General Assembly, and there are significant risks to all of these programs if the Senate-proposed language automatically sunsets the programs after 2027.
Housing
The Senate has dropped the House-passed proposal to end the Ohio Housing Trust Fund. However, under the Senate proposal, the Ohio Housing Finance Agency (OHFA) would end as an independent agency and would instead be placed under the administrative control of the Ohio Department of Development (ODOD). The current OHFA board would be terminated, and the OHFA Director would “serve at the pleasure of the ODOD Director.”
The Senate has also nixed the House-proposal Housing Accelerator Program and the planned $5 million in grant funds that would be available to communities that adopted at least three defined “pro-housing” policies and instead replaced it with two new grant programs that are aimed at supporting development of infrastructure associated with new single-family residential development. The first is the Residential Development Revolving Loan Program which provides $90 million to fund housing infrastructure development in rural areas.
The companion Residential Economic Development District proposal would provide a total of $9 million over the biennium for infrastructure development for communities with pro-housing policies that are located within 20 miles of a major economic development site, defined under that bill as those that create a minimum of 700 jobs and have a total economic development impact of at least $700 million.
The Welcome Home Ohio Program was further tweaked by the Senate to increase the marketability of tax credits offered under the program.
Zoning
The Senate proposal would set the signature threshold for township zoning referendums at 35% of the electors, instead of the current 15%.
Transportation
The Senate made no changes to the funding for public transportation, keeping the line item supported at $37.5 million per year. The Senate also largely retained the House-passed proposal that would ban the use of eminent domain for recreational trail projects for all local government and parks district entities, with the exception of regional transit authorities.
The Senate proposal also removes the ratification of the Midwest Interstate Rail Compact and the $50,000 earmark for membership in the compact for the next two years. The Senate would further alter the Ohio Rail Development Commission by removing a member who represents the interests of passenger rail services.
Next Steps
The Senate Finance Committee is scheduled to meet at 2:30pm on Tuesday, June 10 where a large package of amendments known as an omnibus amendment is expected to be offered by the majority party, with other amendments offered by the minority party members. Once completed, the bill will be voted out of committee. If final amendments are not completed, the committee may also return on Wednesday, June 11, though this is not expected.
The full Senate will vote on final passage of the budget on Wednesday, June 11. That vote will send the bill back to the Ohio House of Representatives. The House will vote on weather to accept the Senate changes to the budget, or reject those changes and call for a conference committee to negotiate differences between the two bills (every budget since at least 2000 has required a conference committee).
Lawmakers have until June 30 to reach an agreement and pass a budget to send to Governor DeWine for this approval. The Governor must sign the budget before midnight June 30, before which he has the ability to exercise line-item veto power and reject some provisions while approving the rest of the bill.
The new state fiscal year begins July 1, 2025 at 12:00am. Without a budget in place, state government operations would enter a ‘shut-down’ mode. This is unlikely and lawmakers would prevent this with a continuation budget if negotiations appear to be taking longer than is needed.
Continue to follow GOPC for the latest developments on the state budget, both on our social media channels, here on our blog, and through our online bill tracker.