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Cleveland Lawsuit Seeks To Block Law Banning Local Hiring Quotas
A controversial measure banning local hiring quotas that took effect earlier this year is unconstitutional, according to a lawsuit filed Tuesday by the City of Cleveland.
The lawsuit, filed in Cuyahoga County Common Pleas Court, alleges that the law (HB 180) is a violation of home rule authority granted by the state's constitution.
The law "violates the Ohio Constitution by purporting to preempt and deprive the city of its powers of local self-government established by Article XVIII, Section 3 of the Ohio Constitution, Ohio Home Rule Amendment," the complaint reads.
Signed into law by Gov. John Kasich on May 31, it is set to take effect Aug. 31.
If it does, the city argues, it would override a 2003 ordinance that requires 20% of taxpayer-funded construction hours to go to city residents. The law also requires that 4% of those hours are worked by low-income residents.
Since 2013, according to the lawsuit, the law has allowed city residents to work 897,870 hours on taxpayer funded construction projects, generating more than $34 million in wages. More than 100,000 were worked by low-income city residents.
Those numbers, the city claims, demonstrate the irreparable harm that would beset the city if the law is allowed to take effect.
"There is no way the loss of such hours would be compensated in the future. The economic benefit to the city and the direct loss by Cleveland citizens would be irreparable," the lawsuit reads. "The city law was put into place because the city council had determined that citizens of Cleveland were not getting the opportunities associated with public construction contracts funded by the city."
Sponsoring Rep. Ron Maag (R-Lebanon) said the local hiring quotas build "walls against employment."
"When an Ohio governmental entity implements a residency restriction, that restriction cannot be applied to out-of-state employees of any contractor, or out-of-state contractors," he said during sponsor testimony. "Ironically, this gives an unintended competitive advantage to out-of-state contractors."
He also pointed to a 2009 Ohio Supreme Court Case - Lima v. State - that found cities cannot require their employees to reside in the city of employment as justification for the bill.
Democrats, however, argued throughout the process that it would strip local governments of home-rule powers and sought to insert language that would have allowed for 5% local hiring quotas. However, that proposal was rejected.
The bill was approved in a party-line vote in the Senate, where it was spared a provision inserted into companion legislation (SB 152) in the House that Democrats described as "Senate Bill 5-lite." (See
On the House floor, Democrats sought to add language that would have allowed local hiring quotas of up to 5%. However, the proposal was rejected.
Rep. Alicia Reece (D-Cincinnati) welcomed the suit on Tuesday, saying the Ohio constitution is intended, in part, "to protect the freedom of local decision making in communities across Ohio."
"Local hiring standards have been an effective tool to push back against the high unemployment that plagues too many minority communities in our urban cores," she added. "For the state to take away tools that increase broad-based economic opportunity and increase our skilled workforce is unconscionable, but I applaud Cleveland leaders for fighting back against what is effectively taxation without participation."
Governor Signs Redevelopment Legislation
Governor John Kasich has signed HB 233 which authorizes municipal corporations to create downtown redevelopment districts and innovation districts for the purposes of promoting the rehabilitation of historic buildings, creating jobs, encouraging economic development in commercial and mixed-use areas, and supporting grants and loans to technology-oriented and other businesses.
2020 Commission Takes More Testimony on Historic Tax Credit
The 2020 Tax Study Commission took more testimony June 20 on the benefits resulting from Ohio's Historic Preservation Tax Credit. Deputy Tax Commissioner Marjorie Kruse and Deputy State Historic Preservation Officer Amanda Terrell spoke on the historic preservation tax credit, with Kruse summarizing the department’s role in processing, verifying, tracking, and refunding the credit. Terrell said the effectiveness of the program is seen in the number of reapplications for the credit – up to three and four times.
“What that says to us is that many of these owners need the credit in order to make the financing work -- otherwise, would they really sit on a property for months or years longer than necessary?” she said.
Arguing for the success of the program, Terrell said Ohio ranked third nationally in FFY15 for the number of certified historic buildings seeking the federal credit; no. 2 for the number of completed projects reviewed and forwarded to the National Park Service; and no. 1 for the number of applications for buildings preparing to begin rehabilitation and construction.
After the hearing, Sen. Bob Peterson (R-Sabina), chairman of the commission, said the next meeting would be held in the last week of July.
Capital Construction Bill Awaits Kasich's Signature
The state's Capital Construction Bill, SB 310, passed the House May 4 (89-1) and now goes to the Governor's desk for his expected signature. CLICK HERE for a summary of included projects.
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