No. 22 July 17, 2003
PLEASE CIRCULATE THIS BULLETIN TO YOUR
COUNCIL, DEPARTMENT HEADS & STAFF
Recap of the Session.
We thought it might be helpful, now that all
the dust has settled, for us to summarize these first few months of this session of the
General Assembly. Following the passage of the state’s new biennial budget (HB 95),
the General Assembly adjourned for the summer, almost. With millions in federal aid to
education at stake, it is probable that the General Assembly will convene for a short
(perhaps one day) session in August. If leadership has its way, that session would only
act on a bill that would put the state in compliance with federal "Leave No Child
Behind" mandates prior to the beginning of a new school year. Efforts to accomplish
that prior to adjournment failed to garner the necessary support in the House to make the
compliance measure "emergency" legislation, that would take effect immediately.
Without the passage of such legislation the state would have to forego over $400 million
in federal aid to primary and secondary education.
With that exception, the legislature is not
expected to be in session until September. While some days of session are scheduled for
September through December, that schedule currently is fairly sparse. Next year, being a
non-budget (hopefully), election year, the number of days the General Assembly will be in
session will be relatively small.
This past spurt of session has seen many
municipally related issues pop up in the General Assembly. Those include:
_ The passage of a new and far-reaching
transportation bill that will, when fully implemented in three years, increase the number
of dollars cities and villages see from the state gas tax by more than 80%. The package
will also provide ODOT with the funding necessary to complete a large number of its
projects which are of great interest to many of Ohio’s municipalities. For a complete
breakdown of the number of dollars that will become available directly to your community
through this new transportation project go to www.omunileague.org.
Though some minor changes were made to the package through the legislative process, the
numbers in the spreadsheet on our website are still fairly accurate.
_ In that same transportation bill, the force
account limit was increased from $10,000 per project to $30,000 per project. The force
account limit is the limit on the dollars that can be spent on a street or bridge project
using municipal employees without putting that project out for a private sector bid. The
limit is mostly of interest to our village members and does not affect charter cities. The
change in the force account limit took effect June 30.
_ The estate tax was not reduced in the final
version of the biennial budget, though that had been proposed in early versions of that
bill.
_ The bill, which was inserted in the House
version of the budget, that would bar public agencies from offering public records to the
public, if a private company was already making a buck by selling such records, was
deleted from the final version of the budget bill.
_ The limit for when cities and villages must
put purchases out for competitive bids (the bid limit) was raised from $15,000 to $25,000.
This change, inserted at the request of the League, was made in the biennial budget bill
and takes effect September 26.
_ The Local Government Fund and the Local
Government Revenue Assistance Fund were "frozen" for the biennium in the budget
bill. That freeze was also put in place for the Local Government and Library Fund. The
freeze will mean that, in fiscal years 2004 and 2005, those three funds will receive the
same amounts they received in FY 2003, minus each fund’s portion of the $30 million
cut which was levied against the funds by the April state "budget fix" bill.
Thus, the LGF is budgeted to receive $705 million for FY 2004 and FY 2005. For FY 2003, it
was $720 million. For FY’s 2004 and 2005, LGRAF is set at $96.5 million, as opposed
to $100 million in FY 2003. While this is hardly what we would like to see, these levels
of funding do compare favorably to the 60% cut to these funds that was proposed in the
House early in the process.
_ A package of municipal income tax
"reforms" was also inserted in the state budget. While we were deeply
disappointed by the lack of forthright negotiations that occurred during the latter stages
of the process, we were able to get a package that is relatively revenue-neutral, in the
long run, and put to rest the idea of the state acting as the tax collector for
business’ municipal income taxes. The changes include a uniform withholding base, the
deletion from statute of the $150 de minimus withholding provisions, uniform treatment of
nonqualified deferred compensation, unfunded provisions for the state to pursue the idea
of a state-funded central electronic transfer program for municipal income taxes paid by
businesses. While many of these items were acceptable, it was with utter dismay that we
saw the administration push through the General Assembly a municipal tax holiday for
thousands of highly-paid executives who have previously received millions of untaxed
dollars in their nonqualified deferred compensation accounts.
It is always difficult to judge the relative
success or disappointment of any session when it comes to municipal issues. The list above
demonstrates that. Add to that list all the outstanding issues we are still certain to
face this session (civil service reform, anti-residency requirements, uniform building
codes and many more) and the relative importance of each issue to the wide variety of our
membership, it becomes nearly impossible to judge how good or bad this session has been
for Ohio cities and villages.
Congratulations!
We wish to congratulate Akron
Mayor Don Plusquellic and Cleveland Mayor Jane Campbell for their new posts with the
United States Conference of Mayors. In June, Mayor Plusquellic was elected Vice-President
of the Conference and Mayor Campbell was appointed as the Chair of the Conference’s
Standing Committee on Education. We certainly wish them both the best of luck in their new
posts.
A Special Report from the Public
Employees Retirement System.
Employer Contribution Update
The legislature recessed for the summer
without taking any action on legislation OPERS is pursuing to require monthly payment of
employer contributions and establish a payment schedule for affected employers for the
second quarter 2003 employer amount due, referred to as the transitional liability. OPERS
staff will continue to pursue enactment of the law changes necessary to accomplish this
goal when the legislature returns for scheduled voting sessions in September and October.
The language drafted for accomplishing this goal will be revised during the summer recess
and will be either introduced as stand alone legislation or combined with other
legislative changes already approved by the board as an omnibus bill.
In anticipation of the law change, some
employers have already made the changes necessary to begin monthly reporting. In order to
encourage monthly reporting until the legislative changes are finalized, OPERS staff is
exploring an option whereby OPERS staff would enter into payment plans with employers that
elect to voluntarily comply with the new monthly reporting schedule. The payment
plan would allow such employers to defer payment of the second or third quarter 2003
employer payments if the employer voluntarily elects to comply with the new monthly
reporting schedule. This approach is authorized under an existing OPERS administrative
rule that authorizes OPERS staff to enter into payment plans to satisfy employer billings.
OPERS staff will notify employers about the
details of this option after the July board meeting. The deferral of the second or third
quarter payment would be under the same terms previously approved by the board which means
that the affected employer would make 11 OPERS payments in 2003 and 13 OPERS payments in
2004, 2005 and 2006.
New re-employment restrictions on
certain public employees and employers
A couple of provisions were added to
the budget that affect the ability of certain OPERS members to retire, draw their pension,
and return to work in the same position. These provisions go into effect on September 25,
2003. Although these provisions were not initiated by OPERS or reviewed by the Ohio
Retirement Study Council, they are not expected to have a negative financial impact on the
retirement system.
For elected officials, the bill modifies the
deadline for giving notice to the board of elections that the elected official intends to
retire, draw his pension and return to work in the same position. HB 95
requires the notice to be given at least 90 days prior to the primary election instead of
90 days prior to the general election as required currently.
HB 95 also affects certain public
employees employed in a position that is customarily filled by a vote of a board,
commission, or the legislative authority of a county, city or township. If the board,
commission or legislative authority proposes to allow such a public employee to retire,
draw his pension and return to the same position, the above-described public
employer must take the following actions:
(1) make public, at least 60 days before the
re-employment is to begin, the fact that the person is seeking to retire, draw his
pension, and return to work in the same position, and
(2) hold a public meeting on the issue of the
person being re-hired by the public employer in the same position.
Land Use Panel to Hold Hearings.
The Ohio House has a special Subcommittee on
Growth and Land Use that expects to hold hearings around the state. Those hearings will be
held to get the input of municipal officials and others about what the state’s role
in these issues ought to be. In some states, the state has adopted some fairly intrusive
programs into issues that have been traditionally local issues. We are concerned anytime
these issues arise in the General Assembly and hope you will be too. Often, we have seen
issues in this area propped up by phony numbers and sparking efforts at the state level to
solve problems through state solutions for regional or local concerns.
The committee has held one hearing in
Columbus and will hold another over the summer. Regional hearings, which we hope you will
participate in, are expected to begin in September, but the schedule for these hearings is
not yet published.
We will keep a close eye on this effort and
keep you informed on the committee’s future hearings, as they become available.
