General Assembly Breaks for Thanksgiving Week.

The Ohio General Assembly is on break this week and will return to full session on December 3. There are no committee or floor sessions scheduled for this week, which is why the Bulletin is coming to you a little later than usual. This week, the schedule for next week's hearings will be posted on the League's website (omunileague.org) by Friday evening and there will be no Bulletin because of the lack of activity this week.

When the General Assembly returns, they will try to make quick work of a state capital bill and some version of a medical malpractice bill. The Speaker of the House, Larry Householder, said last week that he is hoping to finish up the work of this session by the end of the December 3rd week of session. Tentative session dates are set for the following week, if necessary.

Because of the brief session schedule left and relying on discussions with key senate figures, we think the "Anti-Residency" bill (HB 258) will not be acted on in the Senate and will be a fight we will have to take up early next session.

We believe there is still a good chance that SB 106, which limits municipal premise and street liability, can pass this session. That bill is currently in the House Rules Committee waiting for a House floor vote to be scheduled by that committee.

Attempt to Limit S Corp Municipal Taxes Slipped in Bill.

One day last week, municipal officials came before the Committee to Study State and Local Taxes to argue the importance of the municipal income tax as the financial lifeblood of the cities and villages of Ohio. Not to worry, that panel assured the municipal officials. Any changes recommended by that panel would be well discussed and considered, especially if those recommendations might harm the municipal income tax.

The following day, a member of that panel put into SB 180 an amendment to overturn a court case that gave municipalities the clear right to tax the profits of "S Corporations," If the bill is successful, that amendment will effectively reduce municipal income tax revenues. The amendment was floated as a protector against "double taxation." It doesn't. Double municipal income tax of S Corps. was clearly prohibited by HB 477, which was passed by the last General Assembly. The amendment was adopted without hearings in a bill which had nothing to do with municipal income taxes.

Guess we could spend our time whining about the lack of hearings, but the violation of the "single subject" rule of the Ohio Constitution seems a more serious matter. SB 180, in its current form, clearly violates the single subject rule, will cost municipalities untold amounts of tax revenue and simply proposes a tax break for some taxpayers which the courts have said they don't deserve.

Please, contact your members of the General Assembly this week and, after wishing them a "Happy Thanksgiving," ask them to vote "NO" on SB 180. The bill is currently in the House Rules Committee. If that Committee schedules the bill for a floor vote and that vote is successful, the bill would return to the Senate for its concurrence.

Taxation to Pursue Municipal Tax Break; Doesn't Know Cost.

The Ohio Department of Taxation is still pursuing a 30% Bonus Depreciation on municipal income taxes for electric utility companies. This tax break was initially given to all corporations by the federal government and applied in part to the state income tax. Taxation, under deregulation, collects the municipal net profits tax for all electric utilities and wants to make this tax break apply to those municipal income taxes through an amendment in the state capital bill.

Just to add to the "caring" image of Taxation, the Department informed us this week that they could not give us any figures as to how much giving this tax break would cost in municipal tax revenues. "We'd like to give away some of your money, we just don't know how much," just doesn't seem very fair to us, for some reason.

A letter from the League opposing this change, which was sent to the Tax Commissioner and the Governor, is posted on the League's website (omunileague.org).

E-Bulletin Still Available.