No. 09                                                                       April   15, 2005

PLEASE CIRCULATE THIS BULLETIN TO YOUR COUNCIL,  DEPARTMENT HEADS & STAFF

Budget Passes on House Floor.

This week, the Ohio House passed, by a margin of 54-45, its version of the state’s biennial budget. The House version keeps intact the tax changes proposed by the Taft administration, for the most part. It also made but a few changes in the Taft cuts to local government funds, thereby supporting the largest cuts in local government aid in the history of Ohio.

The vote on the $51.4 billion two-year budget came down mostly on partisan lines, 54-45. Eight Republicans voted against the budget and one Democrat supported it. (The vote of each House member is posted on our website at www.omunileague.org).

The House budget maintains the Taft local government fund cuts of 20% for cities and 10% for villages. Those cuts are from the four-year freeze on local government aid that has been in place. Those cuts below the freeze would occur in January, 2006 and continue throughout the biennium.

For the counties, the House decided to play its version of “weird Santa.” Counties would also receive a 20% cut from the freeze, unless, by October 1, 2005, the County Auditor submits a report to the Auditor of State of all that the county has done, is doing and plans on doing in the future to implement consolidation of services in the county. Throughout the directive on this report, the County Auditor is to specify the cost savings of these county initiatives to consolidate services and cooperate regionally on services.

The report is also  to describe the county’s future plans to cooperate with one or more of its neighboring political subdivisions to finance services that serve all the political subdivisions of the county.

In return for filing this report, which neither the Auditor of State nor anyone else grades for truth, accuracy or quality, the county government’s LGF and LGRAF funds are reduced by 10% from the freeze, instead of 20%.

These reports about cooperation should foster, well, a certain lack of cooperation. Many of these reports will rely on information and cooperation from municipalities, in most case, cities. How do you consolidate services, unless you’re consolidating with someone else? And who gets rewarded for this cooperation? Just the county. The city, village or township, which equally made the consolidation or cooperation possible, will now be called upon by the County Auditor to furnish information and future cooperation to fatten the county coffers. It should be interesting.

By the way, nowhere is the county called upon in this study to examine the cost savings that might be realized by the consolidation of such offices as the County Treasurer and County Auditor into a County Department of Finance.

Other municipal issues included in the budget:

_    A new sunset for “residential” or “area-wide” TIF’s of December 31, 2005. The current sunset of this provision is June 30, 2007.

_    A small fund ($5 MILLION) to match local funds for political entities' collaboration studies.

_    A small fund ($10 million over the biennium) to some of those smaller villages and small rural townships for which local government funds make up a large portion of their entire budget.  Requires the Tax Commissioner to determine the distribution method.

_    Reduces the Estate Tax.  Estimated costs for municipal corporations $32 million.

_    Elimination of the machinery and equipment credit with a grandfather provision for existing credits.  To cover the cost of this phase out the House increases the funding to local entities $4.3 million in FY 2006 and $30 million in FY 2007.

_    Eliminates an annual payment of $1.2 million, known as the “state contribution” to the Ohio Police & Fire Pension Fund.

_    Reauthorizes municipal corporations to levy income taxes to be shared with an overlapping school district.

_    Provides that revenue collected by municipal electric companies that are derived from the rate increase be distributed like those collected by other electric companies.

_    Permits agencies and instrumentalities of political subdivisions to establish and participate in individual and join self-insurance programs to provide health care benefits to officers and employee of the agency or instrumentality.

_    Allows Specified Public Authorities, including municipal corporations, to award single-prime contract under the Public Improvement Law.

_    A sharp reduction of the tipping fee for solid waste, which would be of some help for those municipalities which have “no fee” public collection of solid waste.

_    The indexing for inflation of local “force accounts” limits on public projects.

_    Prohibits political subdivisions from regulating or enacting legislation relating to registration, packing, labeling, etc. of seeds and fertilizer.

Thank You.

Thanks to all municipal officials who made their way to Columbus last week to participate in the League's Annual Legislative Luncheon.  The entire state was well represented and the event was a great success.  We also thank all the member of the General Assembly who took the time to join us at the luncheon and visit with their municipal officials.

LEGISLATIVE COMMITTEES FOR THE WEEK OF APRIL 18, 2005

TUESDAY, APRIL 19

Senate Insurance, Commerce & Labor, (Chr. Hottinger, 466-5838), North Hearing Rm., 9 a.m.

SB 7 WORKERS' COMPENSATION  (Cates)  To direct the General Assembly in its deliberations regarding the enactment of reforms of the state's workers' compensation law.  (7th Hearing - Proponent/Opponent/Interested party) 

House Commerce & Labor, (Chr. Schaffer, 466-8100), Taft Rm. (formerly 122), 1:30 p.m.

HB 148 HOME CONTRACTORS  (Trakas)  To adopt the Home Improvement Contractor Law, establish the Home Improvement Contractor Registration Board in the Department of Commerce, establish civil and criminal penalties for violation of the law, and grant the attorney general enforcement powers.  (1st Hearing-Sponsor)  

Senate Ways & Means & Economic Development, (Chr. Amstutz, 466-7505), South Hearing Rm., 3 p.m.

SB 1 TAX LAWS (Amstutz) To formally state the General Assembly's intentions in its upcoming deliberations on reforming Ohio's tax laws.  (8th Hearing - Review of House tax language)  

WEDNESDAY, APRIL 20

Senate Ways & Means & Economic Development, (Chr. Amstutz, 466-7505), Grant Hearing Rm. (formerly Rm. 110), 9 a.m.

SB 1 TAX LAWS (Amstutz) To formally state the General Assembly's intentions in its upcoming deliberations on reforming Ohio's tax laws.  (9th Hearing - Proponent/Opponent/Interested party) 

House Civil & Commercial Law, (Chr. Seitz, 466-8258), Hayes Rm. (formerly 114), 9:30 a.m.

HB 9 PUBLIC RECORDS LAW (Oelslager) To revise the Public Records Law.  (7th Hearing - Proponent/Opponent/Interested party)