Ohio House Working To Put Its Final Touches On State Operating Budget
A substitute HB 166
was unveiled this week which cut spending levels by nearly $300 million over two years compared to the Governor’s budget. The rational is that the cuts will align the bill to be closer to state revenue projections for State intake of funds. The House amendments incorporate a number of tax changes including tax cuts (mainly for incomes below $88,0000), changes to the small business tax exemptions, and reducing other specific tax exemptions. The House likely will make further changes early next week and then hope to hold a final floor vote Wednesday or Thursday. While the House continues its work on the budget, the Ohio Senate has started hearings also on the legislation due to the tight timeframe to finish the bill which is July 1st. CEA’s lobbying team continues to attend multiple hearings in both chambers and discuss CEA priorities with legislators.
Here is an update on some of the provisions in the budget that maybe of interest:
The introduced bill created the Construction and Manufacturing Mentorship Program which attempted to expose minors who are 16-or 17-years old to construction occupations and manufacturing occupations in Ohio through temporary employment with an employer.
CEA had major safety and operational concerns with this provision and submitted opponent testimony and its lobbying team reached out to multiple members to remove this provision.
The bill also provides for a general provision in state law that prohibits any vendor who has been debarred on any list of debarred vendors from participating in state contracts including those specific sections and any other section of the Revised Code. The bill defines “participate” and “state contract” for purposes of the general provision.
expands the scope of activities that are subject to regulation by applying the law to activities involving more than 3 linear or square feet of asbestos-containing material, rather than more than 50 linear or square feet as in current law. The introduced bill was changed to add a reference to the Asbestos Hazard Emergency Response Act.
This provision was removed to be dealt with in a separate bill.
Eliminates a provision of law stating that the Executive Director of the Ohio Facilities Construction Commission must exercise all powers that the Commission possesses.
Authorizes a nonrefundable tax credit equal to 10% of a taxpayer’s investment in an Ohio Opportunity Zone fund. Limits individual credits to $1 million per fiscal biennium and total credits to $50 million per biennium. Reduces the total biennial cap on the existing small business investment credit from $100 million to $50 million and otherwise modifies that credit.
The department of Health plans a multi-prong effort to combat lead poisoning in children, including abating properties, demolishing lead-blighted properties and supporting the training of licensed lead workers and contractors. The bill increase monies for tax credits.
EDGE Program Report Finalized
The Department of Administrative Services responded to the Ohio Inspector General’s investigation of the EDGE Program. The background of this situation is that a State review started when the Ohio Inspector General received a complaint questioning how CTL Engineering Inc, an engineering firm that made $35.5 million in 2016, qualified as a disadvantaged business and continued to be recertified into the EDGE program. The initial investigation started with looking at CTL, but the IG eventually expanded its review to the entire EDGE Program.
The Inspector General’s report listed ten corrective recommendations. Per the IG process, the Department of Administrative Services, which oversees the EDGE Program, was then given time to produce a response.
Here are a few of the remedies DAS proposed:
The Equal Opportunity Division (EOD) is in the process of writing an RFP for a new operating software system.
DAS is reviewing the 10 yr limit. One possible option is to repeal this rule.
EOD notified EDGE businesses that have exceeded the 10 yr limit, but certifications will remain valid until December 31, 2020.
EOD hired a business analyst to identify program needs and improvements to its software.
Opportunity Zone Bill Continues to Make Its Way Through the Legislature
Senate Bill 8
passed the Ohio Senate unanimously and is now undergoing hearings in the Ohio House Economic & Workforce Development Committee.
The legislation does the following:
- Authorizes a nonrefundable income tax credit equal to 10% of a taxpayer’s investment in an Ohio opportunity zone.
- Limits the total credit allowed to any individual to $1 million per fiscal biennium, and limits the total credits allowed to all taxpayers in a biennium to $50 million.
- Reduces the total biennial cap on the existing small business investment credit from $100 million to $50 million.