Senate Approves 6 Veto Overrides - Delays Vote on Funding for Counties and Transit Agencies

ohio-statehouse-3x2jpg-42a1e9b8e601ccc8.jpg

By Jason Warner, Manager of Government Affairs, Greater Ohio Policy Center

In a rare August session, the Ohio Senate voted on 6 of the 11 veto overrides that the Ohio House of Representatives approved during a special voting session on July 6. They held over five other veto overrides for a possible future vote, including a provision that seeks to provide additional funding for counties and transit agencies.

The proposal would require the state Department of Medicaid to seek permission from the U.S. Center for Medicare and Medicaid Services (CMS) to increase the Health Insurance Corporation (HIC) fee that CMS approved in 2016 that is currently generating $615 million in annual revenue for the state. This fee replaced a previous sales tax on Medicaid Managed Care Organizations (MCO) that CMS disallowed earlier in 2016. The HIC fee covers losses that the state realized through the loss of the MCO sales tax revenue, but does not account for lost revenue that counties and transit agencies received through their piggyback sales taxes. This has resulted in a loss of approximately $207 million annually. The request to CMS would be to raise the HIC fee to a rate substantially high enough to generate the additional $207 million per year to assist counties and transit agencies.

In remarks on the Senate floor during the session yesterday, both Senate Minority Leader Kenny Yuko (D-Richmond Heights) and Senate Finance Committee Chairman Scott Oelslager (R-N. Canton) stated a desire to ensure counties and transit agencies are not left out, but said discussions on the issue are “ongoing”.

The earliest possible date for another vote on the override by the Senate is Wednesday, September 6 when they have a tentative voting session scheduled. Full session is expected to resume the week of September 18. 

GOPC's Successes in the State Budget: An Open Letter

July 5, 2017

To Governor John Kasich and the Members of the 132nd Ohio General Assembly: 

The Greater Ohio Policy Center (GOPC) wish to express our sincere gratitude for all you have accomplished in creating the two-year budget for the State of Ohio. While there may be areas of disagreement, we appreciate the work that went into the document and want to single out a number of policies that House Bill 49 will enact into law.

 

Brownfields

GOPC, working with Senator Bob Peterson and Representative Rick Perales, developed an amendment that changes Chapter 725 of the Ohio Revised Code governing Urban Renewal Projects. 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 amendment makes it absolutely clear that environmental remediation is an allowable cost whether the land is publicly or privately owned, and allows the semiannual service payment amount to exceed the foregone real estate taxes on the improvements, if the parties to the development agreement agree. This latter provision would better accommodate the cleanup of very highly contaminated sites. (The difference would be made up with charges passed through to tenants or from other project revenue.)
This permissive amendment will not cost the state any revenue. Rather, this amendment will serve as a revenue and jobs generator for the state, turning vacant, blighted land into profitable parcels of economic growth.


Lead Abatement

The budget creates the Lead-safe Residential Rental Unit Registry, maintained by the director of the Ohio Department of Health. This voluntary, online registry will provide an opportunity for families to more easily find lead-safe homes when looking for places to live. Owners can register qualified properties which have undergone documented lead-safe maintenance practices. 

GOPC supports policies and practices that help to revitalize neighborhoods in Ohio’s cities so that they attract people and thrive economically. We were pleased that House Bill 49 will do much to help to reduce the risks of lead exposure to children.The budget 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, and their children. 

We also thank the legislature for removing a shortsighted proposal which would have overrule municipal home rule authority concerning health and safety standards regarding lead abatement activities. This proposal would have undermined efforts to strengthen standards and ensure more properties are made lead-free. If in the future the state decides that it needs to strengthen state regulations, we would encourage the state to look at local ordinances as a model for statewide reform.


Fuel Transparency

The final budget agreement removed an amendment that would have mandated stickers be affixed to retail service station pumps displaying the rates of federal and state taxes applicable to gasoline and diesel fuels. There was no affixed cost for the program, which would have had to be fully implemented in 14 months. 

GOPC actively opposed the inclusion of this provision in the budget. At a time when the legislature was forced to cut nearly $1 billion in funding across the board, reducing spending and cutting funding to a number of important and crucial programs across the board, GOPC did not believe that it made sense to include a new mandate with no fixed cost associated with it and no clear, defined purpose. Both the Ohio Senate and the Conference Committee eliminated this provision and GOPC would like to single out Senators Matt Dolan and John Eklund, who responded to our requests and drafted amendments to have this provision removed. 

Once again, we wish to thank you for all of the efforts you have put forth in the creation of the two year operating budget for the State of Ohio. These changes, outlined above, create a policy environment that fosters revitalization in Ohio to create economically competitive communities.

Main Operating Budget Moves to Next Stage; GOPC Offers Recommendations

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. 

Greater Ohio 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.

Greater Ohio 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. 

Greater Ohio'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.