Senate Votes Out Budget.

This week, the Ohio Senate passed its version of the state’s new biennial budget, which will go into effect July 1, 2003. Under provisions of that bill (HB 95), many of the cuts made in the House version of the bill would be restored. The most significant restorations are in the areas of primary, secondary and higher education and some social service programs. The Senate’s version, which actually spends $200 million more than the Governor’s version of the budget, also makes tax changes from the House version.

In the House, the one-cent sales tax would last the entire biennium only if the voters in November turned down a proposal allowing the state to install thousands of video lottery terminals in the state’ seven horse racing tracks. In the Senate version, VLT’s are decoupled from the sales tax. The sales tax would continue through the entire biennium no matter what happens with the expected vote in November on VLT’s.

The Senate also included in its version of the budget cuts in the tangible personal property tax and accelerated depreciation for investments in new machinery. Those cuts are estimated to cost municipalities $70 million in annual tax revenue. The cuts would also cost schools almost one-half billion dollars in annual tax revenue and other local governments over $250 million in annual losses. While we appreciate the fact that the Senate chose to follow the House in at least not cutting local government funds, these losses also must be calculated into the evaluation of the Senate budget. And certainly these cuts will be very harmful to local governments. We will urge the Governor and the conference committee, where the budget will now be debated, to not allow these cuts.

Earlier this week, the Senate Finance Committee, in a rare moment of bipartisanship, voted 12-1 in favor of the Senate version of the budget. That "rare moment" lasted all of twelve nanoseconds when the Taft administration announced that new estimates gauged that the state was again shy of the money needed to even balance the current biennium’s budget. The gap was estimated at $200 million. That money will have to be found in the next 24 days to balance the current budget. The administration said it would be okay with a few administrative fixes, including the delay in some payments. Legislators of the Governor’s own party were described as "irritated" over this, the fourth adjustment down in the state’s fiscal estimates. Legislators of the opposite party were "outraged" that the administration didn’t let them know about this pickle until after their show of bipartisanship and, once again, called for the resignation of the Director of the Office of Budget and Management, the office that makes the estimates.

Conference Committee on the budget begins next week.

Municipal Income Tax issues still up in the Air.

Though attempts occurred this week to further clarify key issues on the municipal income tax reforms which are to go into the state budget at some point, the issue of what to do with nonqualified deferred compensation continue to be nettlesome. As we reported last week, four corporations (Key Corp., Sherwin Williams, National City Corp., and Eaton) want their executives to never pay municipal tax on any dollars already deferred in their nonqualified deferred compensation packages. Following a "clarification" meeting called by Senator Ron Amstutz, it is clear that Tax Commissioner Tom Zaino and the Ohio Chamber of Commerce share that view not only for executives of those four companies, but for all executives in Ohio who earned that compensation in the dozens of communities across Ohio which tax such plans when the executive receives the payment from those plans.

We, of course, do not share that view; a view that would, in the name of municipal tax base uniformity, create a special class of folks who would see millions of dollars in earned income suddenly become free of municipal taxes. Because we trust Senator Amstutz as an honest broker, we will continue to work through this issue and hopefully come to a fair settlement on this matter. As always, we will keep you informed on this issue.

Senate/House Committee Meeting Schedule - Week of June 9, 2003

HOUSE COMMERCE & LABOR, 1:30 p.m., Rm. 121, Chr. Young, Phone: 644-6074.

HB 208 RETAINAGE PERCENTAGE (Young) Modifies provisions governing the practice of withholding a percentage of payment from contractors, subcontractors, and material suppliers in the form of retainage. (1^st Hearing - Sponsor)

HOUSE STATE GOVERNMENT, 3 p.m., Rm. 122, Chr. Carmichael, Phone: 466-1474.

HB 164 ELECTION PETITIONS (Setzer) Permits the resigning of an election petition after the elector’s signature is stricken and increases the number of signatures needed on a municipal referendum petition. (4^th Hearing - Proponent, opponent & interested party)

HB 154 LIQUOR PERMITS (Redfern) Reduces from 100,000 to 20,000 the minimum population of a municipal corporation required for issuance of a D-5j liquor permit to a premises located within a community entertainment district located in that municipal corporation. (3^rd Hearing - Proponent & opponent)

HB 176 ELECTED OFFICIAL RETIREMENT NOTICE (Hoops) Concerning the deadline for an elected official seeking re-election to file a notice of intent to retire and continue in public office. (3^rd Hearing - Proponent & opponent)

HB 181 ELECTED OFFICIAL SUSPENSIONS (Schaffer) Permits the Governor to suspend from office in accordance with a specified procedure any elected local official charged with a felony related to the official’s administration of, or conduct in the performance of the duties of, the office and prohibits a person who is convicted of certain theft offenses, or any other felony or recent misdemeanor involving fraud, deceit, or theft, from holding a public office or position of public employment, or serving in certain unpaid volunteer positions, that involve substantial management or control of certain public or private property. (3^rd Hearing - Proponent & opponent)

HOUSE HOMELAND SECURITY, ENGINEERING & ARCHITECTURAL DESIGN, 4 p.m., Rm. 116, Chr. Schaffer, Phone: 466-8100.

HB 175 CONTRACTOR LICENSING (Buehrer) Requires statewide licensing of residential contractors. (3^rd Hearing - Proponent, opponent & interested party)

HOUSE CIVIL & COMMERCIAL LAW, 9:30 a.m., Rm. 114, Chr. Seitz, Phone: 466-8258.

HB 180 TOWNSHIP FIREARM REGULATIONS (Wolpert) Permits a township to prohibit the discharge of a firearm in designated districts in the unincorporated area of the township. (3^rd Hearing - Opponent)

HOUSE HUMAN SERVICES & AGING, 10:30 a.m., Rm. 122, Chr. Schneider, Phone: 644-6023.

HB 198 PERS PROVISIONS (Willamowski) Creates special provisions in the Public Employees Retirement System for public safety officials. (2^nd Hearing - Proponent, opponent & interested party)

PREDATORY LENDING STUDY COMMITTEE, 3:30 p.m., Hearing Rm. 116, Chr. Rep. Blasdel, Phone: 466-8022.
Presentation on recommendations for inclusion in committee report.

HOUSE TRANSPORTATION & PUBLIC SAFETY, 4:30 p.m., Rm. 121, Chr. Reinhard, Phone: 644-6265.

HB 186 TRUCK SPEEDS (Gibbs) Increases from 55 to 65 miles per hour the truck speed limit. (2^nd Hearing - Proponent)

HOUSE BANKING, PENSIONS & SECURITIES, 10:30 a.m., Rm. 018, Chr. Blasdel, Phone: 466-8022.

HB 63 PERS RETIREMENT EXCEPTION (Olman) Eliminates an exception to the law that keeps certain officials from receiving a Public Employees Retirement System pension while serving in an elective office. (3^rd Hearing - Proponent, opponent & interested party)