Ohio Municipal League
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Columbus, Ohio 43215

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Legislative Inquiries
John Mahoney
General Inquiries
info@omunileague.org

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OML E- BULLETIN
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OML LEGISLATIVE BULLETIN

Budget Sent to the Governor.

Last week, the House and Senate pretty much split their differences on spending levels and sent the Governor a 3,000 page biennial budget.

Included in that document is a freeze on local government funds. The freeze, set after the $30 million cut included in the last budget fix, sets the Local Government Fund at $705 million and the Local Government Revenue Assistance Fund at $96.5 million for each year of the biennium, which begins July 1. In FY 2003, LGF and LGRAF distributed $720.4 million and $100 million, respectively, to municipalities, counties and townships.

The "e-commerce" bill and estate tax changes, which we opposed, were not included in the budget. The most costly of the business tax breaks, which were to be paid for by local governments and schools, were also deleted in the final conference committee version of the bill.

Finally, the "agreed to" (which it wasn’t), "revenue-neutral" (which it isn’t) "municipal income tax reforms" were included in the bill. Fully supported by the Taft administration, this measure contains many provisions that will make the municipal income tax more uniform.

However, the measure is fatally flawed in that it also declares a big tax holiday for Ohio’s most compensated executives. Such employees often receive nonqualified deferred compensation. In many communities, the municipal income tax is paid when the employee receives that bonus. Under the new uniform withholding base, included in the budget, all municipalities would apply the municipal income tax when that compensation is set aside. A simple, acceptable change, it seems to us, if, like a normal person, you think all tax bills tax and untax things as we go forward. The new sales tax increase in the budget, for instance, will not increase the tax on purchases you made last year. Right?

Wrong, according to the Taft administration, the Ohio Chamber of Commerce and their ilk. According to them, as they revealed at the eleventh hour of negotiations, millions in nonqualified deferred comp, set aside prior to the effective date of their "reforms" and not yet taxed, would be exempt from municipal tax when the person receives his or her tidy little bonus.

This is the Alice in Wonderland version of tax reform. In the world of the Taft administration, you make tax law by holding a looking glass over your shoulder to see what’s behind you and available to be taxed or untaxed. Using this concept consistently, the Taft administration wouldn’t have ever had to fool with those pesky "budget correction" bills. Need more money for schools? No problem. We could all just pay a little more property tax, you know, on houses we used to own.

Worse yet, the Taft administration and their friends were amazed that when we came to their tea party, we didn’t think exactly the same way. We’ll bring our own smoke and mirrors next time. It seems that "tax reform" with this administration is any tax bonus some other government can pay for.

When the full budget document becomes available later this week, we will begin reporting the other provisions buried therein that may be of interest of cities and villages.

Call for Witnesses: Civil Service Bill.

As you will note below, HB 94, the civil service reform bill, is up for hearings, both Tuesday and Wednesday, before the House Finance and Appropriations Committee. We really need witnesses for these hearings. If you wish to testify on this important bill and the good changes it makes, please, contact us, especially if you need additional background or other information. For those who can’t testify, phone calls to member of the House committee would also be very helpful. Now is a crucial time if we are to get civil service reform this session. Thanks for any help you can give us on this legislation.

Senate/House Committee Meeting Schedule - Week of June 23, 2003

PREDATORY LENDING STUDY COMMITTEE, 1 p.m., Hearing Rm. 018, Chr. Rep. Blasdel, Phone: 466-8022.

Discussion of final report.

HOUSE FINANCE & APPROPRIATIONS, 1:30 p.m., Rm. 313, Chr. Calvert, Phone: 466-8140.

HB 94 CIVIL SERVICE (Buehrer) Implements the recommendations of the Civil Service Review Commission. (8^th Hearing - Proponent, opponent & interested party)

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

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 certain offenses. (5^th Hearing - Proponent, opponent & interested party - Possible vote)

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. (5^th Hearing - Proponent, opponent & interested party)

WEDNESDAY, JUNE 25

HOUSE FINANCE & APPROPRIATIONS, 9 a.m., Rm. 313, Chr. Calvert, Phone: 466-8140.

HB 94 CIVIL SERVICE (Buehrer) Implements the recommendations of the Civil Service Review Commission. (9^th Hearing - Proponent, opponent & interested party - Possible vote)

PREDATORY LENDING STUDY COMMITTEE, 3:30 p.m., Hearing Rm. 116, Chr. Rep. Blasdel, Phone: 466-8022.

Discussion of final report.

THURSDAY, JUNE 26

PREDATORY LENDING STUDY COMMITTEE, 11:30 a.m., Hearing Rm. 018, Chr. Rep. Blasdel, Phone: 466-8022.