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OML LEGISLATIVE BULLETIN No. 4 February 14, 2003 PLEASE CIRCULATE THIS BULLETIN TO YOUR COUNCIL, DEPARTMENT HEADS & STAFF House Passes Budget Fix Bill. The House this week passed HB 40 by a 68-31 margin. This budget correction bill contained no tax increases and no cuts to local government assistance. Though termed "incomplete" by the Governor, the budget fix passed by the House did mirror the Governor's plan to balance the current biennial budget except on taxes and local government cuts. While those are pretty significant exceptions, the sides seems to be coming together to the point where something acceptable to the House, Senate and Governor may be passed by the deadline set by the Governor. That deadline is next Thursday. The Senate, which began hearing the House version of the budget fix before the bill technically got there, says it will pass its version of the budget fix out of committee on Tuesday of next week and have the bill on the floor of the Senate on Wednesday. The budget fix passed by the House leaves the state with a balanced budget on June 30 or is potentially $85 million short or $120 million short, depending on whose estimates and comments are being voiced. For the moment, taxes on cigarettes and alcohol are off the table. A sales tax increase is very much on the table, but for how long and by what vehicle is unclear. The Governor has said he could accept a sales tax increase as a substitute for his proposals, as long as it is passed quickly enough and in HB 40. The Senate is looking at putting something of a sales tax increase in it version of HB 40. That provision may have a "trigger" that would effect that increase only if revenues are short. That increase, according to reports, might be for six months, rather than the two to three months the House is considering. The House leadership has said it could look at a sales tax increase, but only after the state has some idea about income tax returns after April 15. Thanks to the House, the cuts to local government assistance, for now, are off the table. We would really like those proposed cuts to stay there. Please, contact your members of the Senate to ask for their help on this important issue. We'd also like you to thank your House members for their support on this issue. Not a single member of the House, including those who voted against HB 40, for other reasons, voiced any support for cutting local government assistance in this bill. The Biennial Budget Now that the drama surrounding the budget fix seems to be coming to a close, the General Assembly will quickly turn its attention to the new biennial budget. The House began its hearings on that budget the day after passing HB 40. The wrangling over the biennial budget is likely to dwarf any problems faced in HB 40. For some in the General Assembly, the new biennial budget is a very difficult budget, one that will require very tough decisions to fill the estimated $4 billion hole looming within that budget. For others, the budget proposed by the administration is full of unnecessary tax increases that will allow state expenditures to rise by 11% over the next two years. And those are just the two views you hear before the cacophony of critics scream about their programs being cut or not increased enough, the school supporters who see the budget as not only inadequate, but unconstitutional, the state workers who see their raises disappear and a whole gaggle of interests which don't want to pay new or increased taxes. If it weren't all so serious, watching the state budget should be subject to the new, expanded sales tax as an entertainment event. The League will be watching and involved on a number of issues in the biennial budget. Obviously, any changes in the way the municipal corporate net profits tax is collected will be at the top of our list. Those proposed changes we have talked about before. The Governor's proposal on the Local Government Fund and Local Government Revenue Assistance Fund will also be given a lot of attention. Under that proposal, LGF and LGRAF would start with 2002 distribution as its base. The funds would then be allowed to grow at 2% a year for the state's FY's 2004 and 2005. On that basis, if the Governor would have his entire tax package passed and his growth estimates held, we estimate that local governments and libraries would see aid reduced from the statutory formula by $130 million over the two years of the new biennium. We will also be working very hard to help pass the Governor's proposal on the gas tax, a proposal that would result in a 27% increase in street funds in the first year (2004) of implementation. There are also a number of other tax proposals that have smaller implications for municipalities that we will be watching closely. Frankly, on many of those we will have more detail on as we get better numbers and are better able to assess their positive or negative impact. We will detail those issues as those numbers become available. Senate/House Committee Meeting Schedule - Week of February 17, 2003 TUESDAY, FEBRUARY 18 SENATE WAYS & MEANS & ECONOMIC DEVELOPMENT , 11 a.m., South Hearing Rm., Chr. Amstutz, Phone: 466-7505.Presentation by Ohio Tax Commissioner Tom Zaino of the final report of the Committee to Study State and Local Taxes. This meeting may be continued into the afternoon if necessary. SENATE FINANCE & FINANCIAL INSTITUTIONS, 2:30 p.m., Finance Hearing Rm., Chr. Harris, Phone: 466-8086. HB 40 BUDGET CORRECTIONS (Calvert) Makes program and budgetary modifications, establishes provisions regarding the possible closings of state institutional facilities for the purpose of expenditure reductions or budget cuts, and makes an appropriation. (3rd Hearing - Amendments - Possible vote) WEDNESDAY, FEBRUARY 19 HOUSE FINANCE & APPROPRIATIONS, 1:30 p.m., Rm. 313, Chr. Calvert, Phone: 466-8140. Issues pertaining to the Fiscal Year 2004-2005 budget: Department of Development and the Ohio Environmental Protection Agency. HOUSE TRANSPORTATION & PUBLIC SAFETY, 4:30 p.m., Rm. 121, Chr. Manning, Phone: 644-5076. HB 30 HANDICAPPED PARKING FINES (Williams) Permits a local authority to consider for purposes of the Local Noncriminal Parking Law a fine of up to $500 for a violation of an ordinance, resolution, or regulation that regulates the standing or parking of a vehicle in a disability parking space and provides that if a person fails to pay a fine for such a violation and the fine exceeds $100 that person may not be permitted to register a motor vehicle in that person’s name. (1st Hearing - Sponsor) |
