CEA Legislative Update Week in Review - July 7, 2017

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July 7, 2017
The state legislature hoped to begin their summer break this week after months of work on various budget bills but it was short-lived as the Ohio House met to vote to override 11 of Governor Kasich’s 47 line-item budget vetoes. This was the first time in forty years that multiple budget provisions by a Governor were overridden.  The Ohio Senate now must decide if they will take up veto items to make the override of the Governor complete. Locally, the upcoming municipal elections are now more in focus. At the county level, CEA continues to monitor legislation and agenda items including the five year economic plan by the County.   
Cleveland Mayor’s Race
Eleven people filed as potential candidates for Mayor of Cleveland.  The deadline was June 29th to file.  Elections staff still has to validate some of the petitions.  Those submitting petitions were:
Cleveland Mayor Frank Jackson
State Representative Bill Patmon
Cleveland City Councilman Zack Reed 
Cleveland City Councilman Jeff Johnson
Brandon Chrostowski – Leader of the nonprofit EDWINS leadership and Restaurant Institute
Dyron W. Smith – Former economics student at Cleveland State University
Tony Madalone – CEO of Fresh Brewed Tees a T-shirt company
Eric Brewer – A former mayor of East Cleveland, who worked under former Mayor Mike White
Robert Kilo – A Republican who ran in 2009 finishing third in the primary
 
At the time of this publication, candidates Madalone, Brewer, and Kilo all had to submit additional signatures - which they did.  These additional signatures are now under review. 

Two candidates - James Jerome Bell and Camry S. Kincaid - filed to be write-in candidates.

After signatures and petitions are validated, the candidates will run for the city's primary ballot race which is September 12th. The top two finishers in the primary will advance to the November ballot. 
 
The State Budget and Your Business’ Budget 
 
HB 49 (State Budget)
Both the House and the Senate finished their work on the state budget by approving the conference committee report. The Senate approved the conference report by a vote of 24-8 with Senator Kris Jordan (R)  voting "no" and Senator Sandra Williams (D) voting “yes.”  The House of Representatives voted 59-38.  There were no Democrats that joined the majority Republicans in the affirmative while seven Republicans opposed the report. 
 
The bill was signed by the Governor June 30th with 47 line item vetoes.  The House returned to Columbus on July 6 to override 11 vetoes mostly to the Medicaid / Health care portions of the bill.  The Administration believes the overrides could impact the budget and cause some Medicaid spending problems.  The House did not override the Medicaid Expansion veto but may considered to do so at a later date. Procedurally, the House now has the entire rest of their session to do a possible override of more provisions. The Ohio Senate now looks to decide if it will take up veto items also.
 
The state's operating budget totals nearly $65.5 billion in General Revenue Fund spending over the biennium, and $132.8 billion in all-funds spending. 
GRF outlays to agencies over the next two years:
Ohio Facilities Construction Commission: $859.3 million.
Public Works Commission: $527.3 million
 
CEA and its lobbying team worked on issues including: 
 
State level municipal taxation of business profits - Current Ohio law allows taxpayers the option to file net profits returns and make payments via the Ohio Business Gateway - it is NOT an ideal process. The Senate enhanced centralized tax collection by streamlining the process.   The bill now gives businesses the option to file one form and make a single payment online through OBG, with the Department of Taxation (ODT) processing payments and distributing revenues back to the appropriate local government, just as ODT does for county sales taxes, school district income taxes, and municipal income tax on electric, light, and telephone companies. The legislation allows entities to file through OBG renews automatically every year until terminated by the taxpayer. The current bill also eliminates the current "throw-back" provision for all taxpayers but retains the other two current law rules for apportioning the sale of goods whereby sales are apportioned to a municipality in certain conditions. 
 
Authority over contracts for improvements to existing facilities – This provision would have changed DAS and OFCC law in a negative way. The legislation would have changed the protections of competitive bidding and long established law.  CEA advocated to delete the provision in the bill. CEA was successful as these provisions remain out in the bill before the Governor. 
 
Fuel pump stickers showing fuel excise tax rates – Advocated to delete provisions in bill.  CEA was successful as these provisions remain out in the bill before the Governor. 
 
Sales tax base expansion - Landscape design services and interior design and decorating were services listed in the original bill to have sales tax expanded to them.  The concern was these definitions were broad and could inadvertently include pre-construction services. CEA advocated successfully to delete provisions in bill. 
 
Sales and use rate increase - Provisions would have increased the state sales and use tax rate from 5.75% to 6.25% beginning October 1, 2017. Advocated successfully to delete provisions in bill. 
 
Pre-apprenticeship training programs - Successfully advocated to have ODE and the Department of Job and Family Services to establish an option for career-technical education students to participate in pre-apprenticeship training programs that impart the skills and knowledge needed for successful participation in a registered apprenticeship occupation course.
 
Port authority competitive bid threshold - The bill was amended in the House to increase the threshold for competitive bidding for port authorities to $250,000 from current law of $100,000.  We successfully had the provision removed in the Senate, but the conference committee approved a threshold of $150,000. 
 
Storage of firearm in privately owned motor vehicle - In the final stage of Senate deliberation, provisions were added which create a civil cause of action against a business entity, property owner, or employer who establishes, maintains, or enforces a policy that prohibits a valid concealed handgun licensee from transporting or storing a firearm or ammunition in the person's privately owned motor vehicle in accordance with existing law conditions. Because this provision was expansive in the form it was added late in the Senate, CEA advocated this was hurtful to employers.  An amendment was added in conference committee that now limits the court to granting injunctive relief it finds appropriate.
  
BWC Budget Impacts
Senators approved the BWC bill by a party line vote of 24-9. The Ohio House then concurred with the Senate's changes 60-38.  
 
The bill was a $581 million measure covering the next two fiscal years (HB 27), funded through employer premiums.
 
The bill was signed by the Governor on June 30th. The bill makes a number of changes which are highlighted below. 
(See attached) 
  
Other BWC Proposals at the State Level
HB 269 Workers Compensation (Henne) To rename the entities who carry out workers’ compensation functions in this state, to require the Administrator of  Worker Safety and Rehabilitation to develop incentives for employers to participate in safety consultations and loss prevention programs, to require an employee who is receiving temporary total disability compensation to comply with a return to work plan, and to make changes with respect to compensation for permanent total disability and death benefits. The bill was introduced and referred to the Senate Insurance Committee on 6/20/17.
(See attached)
 
HB 268 Workers Compensation (Henne) To make changes to the Workers’ Compensation Law with respect to self-insuring employers.  The bill was introduced and referred to the Senate Insurance Committee on 6/20/17.
 
State Looks to Enhance Workforce Policy
Two bills continued to make their way through the process. The bills revise the laws governing the state’s workforce development system, programs that may be offered by primary and secondary schools, certificates of qualification for employment and to designate the first week of May as In-Demand Jobs Week. The bills contain no funding. The measures are based on recommendations from the Governor's Executive Workforce Board and the Office of Workforce Transformation. The recommendations look to make education more responsive to students, parents and employers by providing students the skills employers are demanding. This is done by either developing connections between business and schools or by strengthening and broadening existing relationships.  Both bills are in the House Higher Education & Workforce Development Committee.  They are companion bills which both have had three hearings in the House committee. 
 
If you have any questions on these articles or legislation, please contact Glen Shumate at CEA at [email protected].