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Budget Amendment Blocks Local Hiring Quotas For Public Construction

Hours after construction contractors denounced local hiring quotas as "discrimination" on public infrastructure projects, the Senate amended the biennial budget to block the residency requirements.

The amendment the Senate Finance Committee tacked on to the two-year spending bill (HB 64*) Wednesday borrows language from legislation sponsored by Sen. Joe Uecker (R-Loveland) to prohibit political subdivisions from requiring contractors hire a certain percentage of the workforce from the local population (SB 152*).

Debate over local hiring quotas emerged earlier this year as an amendment to the transportation budget (HB 53*) that was ultimately scrapped under heavy opposition from cities, especially Akron, which had just launched a $1.4 billion sewer upgrade project. 

Senate President Keith Faber (R-Celina) told reporters that the budget amendment would ensure fairness for people who pay taxes that benefit local governments, but can't get jobs on their public construction projects because of the hiring quotas.

"Our caucus generally has taken a position that residency should not be a requirement to do work for government, especially in governments that receive a large portion of their revenue from non-residents," he said, presumably referring to municipal taxes, which are based on employers' location, and state funding for local governments.

"It's kind of ironic that the local entity that wants to charge non-residents also doesn't want non-residents to work there. So we just thought that was inconsistent and we need consistency in this area," he said.

Earlier in the day, the Senate Government Oversight & Reform Committee heard several witnesses argue in favor of Sen. Uecker's standalone legislation.

Chris Runyan, president of the Ohio Contractors Association, said the bill would prevent local governments from discriminating against Ohioans who don't live within the city limits.

"It is a violation of this nation's laws to restrict a citizen's right to a job based on race or gender or ethnicity. Yet, because of ordinances passed by some cities, we are holding a debate today over whether we can place that restriction on someone based on where they live," he said.

Mr. Runyan said the Privileges and Immunities Clause of the U.S. Constitution ensures that municipal residency requirements for construction projects don't apply to out-of-state contractors, which puts Ohio-based companies at a competitive disadvantage.

Responding to questions from Sen. Kenny Yuko (D-Richmond Hts.), Mr. Runyan said many of the employees hired locally lack rudimentary skills and require intensive training before they can do the job. About 50% of trainees dropout of apprenticeship programs when they realize how demanding the industry is, he added.

Sen. Bill Seitz (R-Cincinnati) asked the witness whether he agreed that large cities in Ohio reveal a "schizophrenic dichotomy" by stubbornly refusing to comply with statewide policies, "but wanting to be part of the state when it comes to soaking all the other residents of the state."

Mr. Runyan agreed, noting that some suburban residents living near construction projects with local hiring restrictions will pay higher fees or taxes for the infrastructure upgrades, but would nonetheless be excluded from the hiring preferences.

Mark Totman, legislative director of the International Union of Operating Engineers, Local 18, said residency requirements conflict with the union's exclusive hiring hall procedures.

"Simply put, we cannot pick and choose who is sent to a job when a contractor calls the union for an operator for one of their projects," he said.

"This type of job discrimination will do absolutely nothing to help Ohio's growing construction industry and it will only hamper our local's ability to keep pace with the industry's needs," he said.

Mr. Totman said the union has four training facilities around the state that have accepted more than 400 new apprentices over the past two years comprised of roughly one-third minority males, one-third women and one-third white men.

Andrea Ashley, VP of government relations for Associated General Contractors of Ohio, said local hiring quotas limit competition, which results in higher bids for public construction projects.

"The ultimate loser with residency mandates is the taxpayer. Taxpayers fund public projects, and must bear the added financial burden related to limited competition, increased project costs and loss of local revenue and opportunities," she said.

Residency requirements also fall heavier on small construction companies, which include the majority of minority and women-owned firms, she said. "These smaller contractors do not have the luxury of having a large staff to pull workers that reside in a certain zip code, nor do they have the ability to hire and train unskilled workers just to get a job."

Furthermore, Ms. Ashley said quotas create workforce concerns for construction companies tied to collective bargaining agreements because labor unions must comply with federal requirements that force them to go through a queue, which prohibits them from skipping a qualified tradesperson simply because he or she resides in the wrong zip code.

Michele Pomerantz, policy and labor liaison for the CEO of Cleveland Metropolitan School District, submitted written opposition testimony, arguing that the bill was unfair to Cleveland voters who passed a school construction bond issue in November to build 20-22 new schools and refurbish at least 20 older buildings.

"Prohibiting the geographic-preference in local construction projects goes against a commitment we made to Cleveland voters," she said, noting that the district campaigned on the premise that the bond issue would create hundreds of local jobs.

In 2003 Cleveland passed an ordinance requiring at least 20% of the total work hours performed on major city projects be performed by residents, she said. The city provides resources to help contractors meet the requirement and the law permits them to negotiate for a necessary reduction in the amount of work performed by Cleveland workers.

Not only would the legislation disappoint voters who believed that the bond issue would prioritize local labor, but it would jeopardize the school district's ability to renew an operating levy in November, Ms. Pomerantz said. "Our fight for quality school options in every neighborhood is long and we cannot afford to lose supporters' confidence."

The bill would also hamper the district's efforts to bolster career opportunities for students by limiting the apprenticeship program, she said. "Cleveland voters paid for new construction; their children should have greater access to share and compete for the modest quota of local hiring."

Several organizations submitted written testimony in support of the bill, including: American Council of Engineering Companies of Ohio; Transportation Advocacy Group of Northwest Ohio; Ohio Chamber of Commerce; National Federation of Independent Business-Ohio; and the National Electric Contractors Association.

 

 

EDGE Proposed Rules

Dear Stakeholder:

You are receiving this message pursuant to the requirements of EO 2011-01K and Senate Bill 2 of the 129th General Assembly, which requires state agencies, including the Department of Administrative Services, to draft rules in collaboration with stakeholders, assess and justify any adverse impact on the business community (as defined by SB2), and provide opportunity for the affected public to provide input on the rules.

Section 123.152 authorizes the Director of the Department of Administrative Services to establish a business assistance program known as the encouraging diversity, growth, and equity program, commonly referred to as the “EDGE” program. This section also authorizes the Director to adopt rules in accordance with Chapter 119. of the Revised Code to administer the EDGE program. The EDGE rules establish, among other things, the criteria and qualifications for participation in the EDGE program; procedures by which a business may apply for EDGE certification; the procedure for determining agency procurement goals for contracting with EDGE businesses; and standards to determine when an EDGE business no longer qualifies for EDGE certification.

Here are links where you can review the proposed rules, the Rules Summary Sheet, and the Business Impact Analysis; each of the above may also be found on the Equal Opportunity Division’s webpage, www.das.ohio.gov/eod.

If you wish to comment on the proposed rules or the Business Impact Analysis, please send your comments to the Equal Opportunity Division of the Department of Administrative Services at This email address is being protected from spambots. You need JavaScript enabled to view it., copying the Common Sense Initiative Office at This email address is being protected from spambots. You need JavaScript enabled to view it.  by June 26, 2015.

Catherine C. Perkins
Associate Legal Counsel
Department of Administrative Services
DAS has migrated to the new State of Ohio Voice over Internet  Protocol (VoIP) telephone solution. Please dial my full 11-digit phone number. Thank you.

 

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Senate Budget Bill Keeps Personal and Business Income Tax Reductions

The Senate Republican Caucus Monday released highlights of their FY16-17 budget proposal, HB64 (R. Smith), but details are still to come as the actual bill will be unveiled Tuesday in the full Senate Finance Committee and/or as negotiations continue -- both now and into the conference committee later this month.

Senate President Keith Faber (R-Celina) told reporters that, "This is a balanced budget that invests in Ohio's priorities, while still making our tax rate more competitive, saving for emergencies and putting millions of dollars back into the hands of the people who earned it. We're continuing to build on our commitment to fund what matters and return what isn't essential."

Broadly, this means maintaining the House-passed 6.3 percent across-the-board personal income tax cut; eliminating taxes on the first $250,000 of net income for small businesses and establishing a 3 percent flat tax rate on income above that amount; increasing funding for K-12 schools and working to phase-down the tangible personal property tax (TPPT) supplement; increasing the state share of instruction for higher education institutions by $240 million over the biennium; and reducing Medicaid spending by $1.5 billion while also restoring coverage for pregnant women up to 200 percent of poverty and for breast and cervical cancer screenings.  No increase is anticipated for the CAT tax and the severance tax will be addressed by future legislation, probably soon.

In another change, Faber said the Senate is proposing to increase the maximum that can be placed in the state's Rainy Day Fund (RDF) from 5 percent of the previous fiscal year’s General Revenue Fund (GRF) revenue to 8.5 percent. 

As questions continued about where all the funds to accomplish these ends came from, Faber noted that his caucus removed a lot of the earmarks and capital expenditures that had made it into the budget. "If it was a new program, it's likely not funded," he added, as he challenged reporters to go "line by line." 

Addressing how the Senate Finance Committee had approached the budget, committee chairman, Sen. Scott Oelslager (R-Canton) said that amendments are due on Thursday, June 11 with the omnibus amendment set for action on Tuesday, June 16. It is still the plan to have the bill on the Senate floor on Wednesday, June 17. 

He did indicate that there are drafting issues that could delay the substitute bill's unveiling on Tuesday, June 9.

Reacting to the Senate proposal, Gov. John Kasich spokesman said, "The governor proposed an aggressive strategy to keep moving Ohio forward. There is still work to be done, and we will continue to push for a larger income tax cut and urge against overly optimistic economic assumptions, but it's encouraging progress.”

Architect's Board Seeks Increased CE Flexibility (HB 243)

The Ohio Architect's Board is seeking increased CE flexibility via HB 243, which was introduced June 8 by Rep. Tim Schaffer with the support of AIA Ohio.  The bill would modify continuing education requirements for both architects and landscape architects.

According to Schaffer, this bill will simplify the continuing education (CE) requirements for Architects and Landscape Architects and will give the state board more control over CE requirements. Ohio’s requirements are currently in conflict with model law set forth by the respective national associations, which is used in many other states.

The reason for this request is an issue that arose during the Landscape Architects Five Year Rule Review with JCARR in 2014.

JCARR staff decided the Landscape Architect’s Board did not have authority to modify the continuing education rule, OAC 4703:1-1-06, the way the board proposed.  This same rule was modified without objection in 2006, 2008, and 2010.

JCARR’s position is that the Board did not have authority to change the types of activities which qualified for CE credit. After almost a decade of experience with mandatory continuing education, both boards have found that some of the activities do not constitute the acquisition of new knowledge. But JCARR has insisted they remain in the rules as options.

The Architects Board continuing education language in 4703.02 is identical to that of the Landscape Architects Board. The architects would also like to fix their language to avoid future issues.

Many architects and landscape architects are registered in multiple states, because their clients often have locations across the country. Many CE activities listed in Ohio statute are not in model law and are not recognized by other states. This creates a burden on licensees who have to earn more hours to meet CE requirements. The state board believes that these changes will make it easier for architects to meet CE needs and make Ohio more business friendly. 

Former Chardon Superintendent Leery of Door Barricades

The local school administrator in charge during a high school shooting that left three students dead says door-security barricades give him “anxiety.”

Former Chardon School District Superintendent Joe Bergant told members of the Ohio Board of Buildings Standards (BBS) Friday that barricades have the potential to backfire and make active shooter situations more dangerous.

“There was a situation in Colorado … where a gentleman came into the school, went up the hallway, went into a classroom, and he barricaded himself in that particular room and ended up killing one child,” he said. “The police had a difficult time getting into that room because the door opened in the opposite way, and they actually had to blow the door off with some kind of explosive.”

BBS was continuing its examination of the Ohio Building Code as it relates to educational buildings during a public hearing in Reynoldsburg on June 5. Approximately 20 people testified, including parents, firefighters, public safety officials, building officials and security industry representatives. Former Ohio Department of Commerce (DOC) Director Andre Porter, now chairman of the Public Utilities Commission of Ohio (PUCO), asked the board to examine the code shortly after a local school district was prohibited from using barricades it had purchased because they didn’t comply with Ohio code. The BBS Code Committee is scheduled to present its recommendations to the full board at its next meeting, Friday, July 24, according to DOC Public Information Officer Matt Mullins. 

Bergant, currently superintendent of Cuyahoga Heights Schools, said barricades could be dangerous if a bomb started a fire in the school or if a teacher left a room unattended with a barricade available.

“In a lot of situations, people need to get out of the building in some capacity,” he said. “There have been situations where kids have locked other kids in classrooms. I have huge anxiety with that. If the teacher is not in the room, what do you do? Somebody could barricade themselves in a room and kill everybody.”

Bergant said keeping school doors locked at all times and engaging in regular, appropriate training and drills for how to respond to emergency situations is most effective in preparing for active shooters. He also said he does not think “gadgets and gimmicks” like metal detectors and door buzzers are effective in stopping school shooters.

“It’s an emotional blanket for people because, you do have to stop, you do have to buzz in. If you don’t have the proper training for a secretary -- most secretaries … just buzz people in even if they don’t know who it is. It could be anybody,” he said. “You cannot stop somebody from coming into a school to shoot you. There is no way to do it.”

Bergant noted several times during the presentation that Chardon shooter T.J. Lane shot several students and left the building in 22 seconds. 

A number of firefighters testified, saying barricades could make schools more dangerous during fires. Many noted that children are much more likely to face a fire than an active shooter. Lindsay Burnworth, DOC public information officer, said in an email that State Fire Marshal Larry Flowers “believes that the code has been effective in protecting Ohioans, but will defer the decision regarding school barricade devices” to BBS. 

Erin West, a mother of a seven-year-old who had helped raise money for barricades in her school district, also testified. Her remarks were similar to proponent testimony she provided for HB114 (Roegner-Bishoff), which would allow school districts to use barricades in emergencies and prohibit the fire code from prohibiting the devices. That bill has been reported out of the House State Government Committee. 

The Senate’s version, SB125 (LaRose-Hottinger), has yet to receiving a hearing in the Senate Transportation, Commerce and Labor Committee.

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    AIA Ohio’s Legislative affairs program provides information and leadership through advocacy and monitoring of legislation and regulations at the state level.  By collaborating with allied professionals, industry representatives, code officials, and state and local representatives, AIA Ohio strives to build strategic alliances to address issues of public health, safety and welfate, design excellence and in advancing the quality of life through the built environment.

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