Legislative News

Senate Passes Capital Budget

Senators on Wednesday signed off on the capital appropriations bill, sending it to Gov. John Kasich for his signature.

The $2.63 billion spending measure HB 529 received no changes since its introduction last month. It doubles past financial commitments for behavioral and mental health infrastructure and prioritizes projects addressing the opioid epidemic, according to sponsors.

It also includes $600 million for school facilities, $514 million for local infrastructure projects, $483 million for public colleges and universities and $150 million in community projects.

An additional $222 million is allocated for health and human services, developmental disabilities, mental health, addiction treatment and women’s health initiative facilities over the next two years.

Sen. Scott Oelslager (R-N. Canton) said the measure “provides a strong major investment in our schools, our community and our economy.”

He highlighted that $2.22 billion of the funding is supported by General Revenue Fund-backed debt obligations, with the remainder supported by non-GRF-backed bonds and cash funds. The bill also includes reappropriations for unfinished, previously authorized projects.

“Consistent with the legislature’s focus on strategic spending and pro-economic growth, HB529 represents a manageable and affordable legislation that remains within our current and future budget capacity,” he added. “More importantly, this bill keeps Ohio well under the constitutional 5% limitation on debt service as a percent of revenue.”

The budget passed 32-1 with Sen. Kris Jordan (R-Ostrander) objecting. It passed the House earlier this month in a similar near-unanimous (90-2) vote.

Tax Expenditure Review Panel to Asses Historic Preservation Tax Credits et. al.

The new Tax Expenditure Review Committee, created to give ongoing scrutiny to foregone state revenue in the form of exemptions, deductions and other special exceptions in the tax code, has announced its first meeting and the first set of tax expenditures to go under the microscope. Historic preservation tax credits are included among many “tax expenditures.”

After years of discussion among legislators and advocacy from outside groups across the political spectrum about the need for such reviews, lawmakers finally created the committee at the close of the previous General Assembly.

Under the law, the committee consists of six legislators and the tax commissioner, and it must review every tax expenditure listed in the Ohio Department of Taxation’s (ODT) biennial tax expenditure report at least once every eight years.

Sen. Scott Oelslager (R-North Canton), chair of the new committee and of the Senate Finance Committee, set an initial meeting for 10 a.m. Wednesday, April 11 in the Senate Finance Hearing Room, with the following five tax expenditures on the agenda:

  • Sales to churches and certain other nonprofit organizations, ORC 5739.02(B)(12), Department of Tax Code 1.01
  • Sales to the state, any of its political subdivisions and certain other states, ORC 5739.02(B)(1), Department of Tax Code 1.02
  • Sales by churches and certain types of nonprofit organizations, ORC 5739.02(B)(9), Department of Tax Code 1.03
  • Tangible personal property used primarily in manufacturing tangible personal property, ORC 5739.02(B)(42)(g), Department of Tax Code 1.04
  • Packaging and packaging equipment, ORC 5739.02(B)(15), Department of Tax Code 1.05

Other members of the committee include Sens. John Eklund (R-Chardon) and Vernon Sykes (D-Akron) and Reps. Tim Schaffer (R-Lancaster), Gary Scherer (R-Circleville) and John Rogers (D-Mentor-on-the-Lake.)

Additional meetings will take place at 10 a.m. on Wednesday, April 25 and Wednesday, May 9, according to Oelslager’s office, which said it will announce the tax expenditures to be reviewed ahead of those meetings.

The law calls for the committee to consider several criteria in reviewing tax expenditures, such as the number and types of people who benefit, the public policy objectives and how successfully it meets them, and whether it has turned out to be more expansive than intended, among others.

The committee is required to issue a report by July 1 of every even-numbered year.

Registration Board Review Bill Has Sponsor’s Hearing (SB255)

The State Government Oversight and Reform Committee took Sponsor’s testimony March 7 with regard to SB255 which would require “regular legislative oversight” of occupational licensing boards and reduce “onerous barriers” to entry in the workforce that some believe keep hard-working Ohioans sidelined.

Sponsor Robert McColley noted the hours of training required to become a licensed cosmetologist, barber or auctioneer and contrasted it to the far lower number of training hours to become a licensed Emergency Medical Technician, saying these requirements are “unjustly burdensome on some professions more than others.”

McColley also said the occupational licensing boards can act unilaterally on issues regarding issuance or revocation of licenses, fees, renewal processes and conduct rules. This kind of occupational regulation, he said, “is the antithesis of job creation” and requires well-intentioned people to “ask the government for a permission slip to simply earn a living.”

He said that reducing licensure has bipartisan appeal, with support from the Heritage Foundation, Buckeye Institute and Brookings Institute and backing from the administrations of former President Barack Obama and President Donald Trump.

The bill describes the board review process– the Legislative Service Commission (LSC) would: submit a public report on the board’s impact; create an official state policy on review of occupational licensing boards and regulations; require the chief of the Common Sense Initiative be notified of each board’s review and testify regarding the board’s effectiveness and efficiency; and establish a sunsetting process where licensing boards are reviewed every five years in a staggered process of 20 percent of the boards each year. If they fail to be renewed, boards would automatically sunset on Dec. 31 of the fifth year after they were established or last renewed. McColley qualified that by saying it is “highly unlikely” boards would be eliminated en masse.

Community Projects in Capital Budget Run Gamut

FC Cincinnati currently shares Nippert Stadium (pictured above) with the Cincinnati Bearcats football program. Plans for their own professional soccer stadium are in the making.

Total community project funding of $147 million represents between 5 percent and 6 percent of the total capital budget appropriations proposed in SB266 (Oelslager) and HB529 (Ryan).

Among Ohio’s three largest counties, Cuyahoga County stands out for the number of community projects, though its share of funding is not significantly higher than those for Franklin and Hamilton counties.

Cuyahoga County is in line for about 50 projects worth $20.5 million, from about $2.5 million apiece for a Franklin Hill stabilization project and the Cleveland Museum of Natural History, to $32,500 for an emergency boat shelter in Bay Village.

Franklin and Hamilton counties each have about 30 projects and are in line for about $19.5 million each. They also have the two of the three largest funding awards in the capital budget — $5 million for Columbus’ Center of Science and Industry (COSI) and $4 million for a professional soccer stadium project in Cincinnati, contingent on the award of an expansion franchise from Major League Soccer.

Outside of the three largest counties, seven-figure funding allocations are proposed for:

– Clinton County, with $1.5 million for the Laurel Oaks Career Campus and $1 million for the county airport.

– Lawrence County, whose sole community project award is $1 million for Lawrence EMS Services and Senior Center.

– Lucas County, with $1 million apiece for the Toledo Museum of Art and the Imagination Station Theater Experience.

– Mahoning County, with $4 million for the Mahoning Valley Innovation and Commercialization Center.

– Montgomery County, with $1 million for the Dayton Arcade Innovation Hub.

– Sandusky County, with $1 million for the Ohio Partnership for Water, Industrial and Cyber Security.

– Stark County, with $1 million for the Pro Football Hall of Fame Center of Excellence.

– Summit County, with $1.3 million for Blossom Music Center.

– Wood County, with $1.6 million for the Wood County Senior Center.

The smallest funding award in the budget is $5,000 for the Medina County village of Seville’s Vietnam War Memorial.

Eight Ohio counties do not have any community projects listed, according to the Legislative Service Commission county-by-county analysis — Hardin, Knox, Logan, Mercer, Morgan, Morrow, Noble and Paulding.

Of those eight, six also lack state agency and higher education institution projects. In Knox County, a state developmental center is in line for a share of $4.5 million allocated to the Ohio Department of Developmental Disabilities. Morgan County is among three counties getting $6.8 million for Muskingum River lock and dam projects.

Legislators Debut $2.6B Capital Budget

Lawmakers introduced the $2.6 billion capital budget for FY19-20 Monday, highlighting a $222 million portion dedicated to addiction and other health and human services purposes.

Both chambers plan hearings this week on their respective measures — SB266 (Oelslager) and HB529 (Ryan) — as the General Assembly looks to make quick work of the bill. Senate President Larry Obhof (R-Medina) told reporters Monday he hopes to finish work on the bill in the third week of March. The House version is expected to be the final vehicle.

Obhof said the $222 million for health and human services projects is more than double what the previous capital budget allocated. Within that is a $20 million pool of money to be made available through competitive grants for “opioid community resiliency projects” that focus on youth. The Ohio Department of Mental Health and Addiction Services (Ohio MHAS) will set rules for distributing that money.

Other major funding allocations in the bills are as follows:

  •  $600 million for school construction through the Ohio Facilities Construction Commission,
  •  $483 million for universities and community colleges
  •  $514 million for local infrastructure projects through the Ohio Public Works commission, including $100 million for the Clean Ohio program.
  •  $234 million for parks, dams, trails, waterways and wildlife.
  •  About $147 million for community projects.

Obhof said school security upgrades are likely to be discussed as part of separate safety legislation.

The House Finance Committee is scheduled to consider HB529 at hearings Tuesday and Wednesday, while the Senate Finance Committee has hearings on SB266 scheduled for Tuesday and Thursday.

Twin Capital Budget Bills Planned For Introduction Next Week

In a departure from prior years, lawmakers are planning not one but two capital appropriations bills, according to the Senate’s leader.

Senate President Larry Obhof (R-Medina) said lawmakers are on track to introduce House and Senate bills early next week.

In prior cycles, it was the Senate that has taken the lead in authoring a single two-year spending bill. But the thought is that by introducing twin bills, lawmakers can begin hearings in both chambers simultaneously, expediting the legislative process.

“I think we’ve worked very well together with the administration and with the House and it’ll be a pretty smooth process,” Sen. Obhof said in an interview.

It’s the House version, Sen. Obhof said, that he believes will ultimately be passed. Brad Miller, a spokesman for House Speaker Cliff Rosenberger (R-Clarksville) confirmed the House measure is on track to be unveiled early next week.

Sen. Obhof has previously predicted this cycle’s capital budget will be “a little bit tighter” than 2016’s $2.6 billion spending bill.

Lawmakers in both chambers have spent recent weeks meeting among themselves and with interested parties to hammer out the finer points of the proposal in advance of its introduction. The goal, as in past years, is to have the legislation as close to a final product as possible before the formal hearings begin.

Gov. John Kasich, meanwhile, is expected to push for the inclusion of $20 million in bond-backed funds to be set aside for funding community service organizations. That’s on top of about $130 million being targeted for other “community projects.”

The 2019-2020 funding bill is also expected to include reappropriations for ongoing projects, a topic tackled in years past through separate legislation.

If it pans out like recent capital bills, the measure that’s enacted will clear both chambers with few if any changes, having been worked out behind the scenes beforehand.

Universities, Community Colleges Focus on Existing Buildings in Capital Requests

Ohio’s institutions of higher education are heeding the Kasich administration’s order that they focus state capital dollars on maintaining what Ohio already has rather than building entirely new facilities, with only two projects seeking funds for new buildings.

The state’s four-year public universities are asking lawmakers for nearly $300 million in funds for capital projects, while community colleges are requesting $100 million, according to submissions made to the administration late last month.

The higher education institutions took a different route for their requests in this budget cycle, with four-year universities and community colleges submitting separate lists instead of having one recommendation coming from a combined panel.

In a letter to the administration, Cleveland State President Ronald Berkman said the projects submitted on behalf of the state’s 14 public universities embody at least one of the guiding principles set out by Gov. John Kasich, including building world-class programs, focusing on maintaining the investments the state has already made in existing campus facilities, advancing strategic collaborations through partnerships, and strengthening learning environments.

According to information submitted to the Office of Budget and Management (OBM), each of the public universities has at least one item on the wish list, totaling $299,999,937 million. The requested funds range from $1.8 million for the Northeast Ohio Medical University (NEOMED), which is asking for state funds for four projects to replace and upgrade electrical and air conditioning infrastructure to $85 million for Ohio State, including $47 million for renovations to Celeste Lab, Hamilton Hall, and Newton Hall.

Of the projects, only Ohio State University and the University of Toledo (UT) are asking for funds for new construction projects totaling $7 million between the two universities. Ohio State is seeking $6 million for a new lab building for its Wooster campus, while UT is asking for $1 million for a UT/Ohio State Highway Patrol public safety facility.

Community colleges, led through the capital budget process this biennium by Stark State President Para Jones, have requested $100 million in projects, all for renovations, repair and expansions and none for new construction.

“We have heard and adhered to the governor’s desire that the largest portion of each capital budget be dedicated to maintaining the state’s investments in existing campus facilities,” community college presidents said in a letter to the administration noting that the upcoming recommendation does not include a single new building request.

Requested funding for the 23 community colleges ranges from $1.1 million from Belmont Tech for basic renovations and its industrial trades center to $15.4 million for Cuyahoga Community College, which is asking for $13.5 million for structural concrete repairs and the rest for its east campus exterior plaza.

The capital budget is expected to be introduced by the end of the month and legislative leaders are hoping to get the bill to the governor’s desk by the end of March.

Capital Budget Priorities: Soccer Stadium, Convention Center, Cultural Projects Highlight Metro Areas’ 

Cincinnati soccer boosters are hoping to score $4 million in the state capital budget with the goal of bringing a major league soccer franchise to the city.

The request is part of a much larger package of infrastructure initiatives that local governments in Hamilton County are hoping will lead to a 21,000-seat soccer stadium and a Major League Soccer franchise for the city.

In Toledo, economic development leaders are looking to the state capital budget process for $10 million to cover convention center improvements. In Columbus, local leaders want $5 million for upgrades at the Center of Science and Industry downtown, while Cleveland is requesting $5 million of its own for riverfront improvements.

The requests are among many big-ticket items local governments and development groups are targeting for the local projects portion of the coming state capital appropriations bill.

Legislators and metro-area economic development groups have submitted their requests for the funding measure. The bill, which is also expected to include reappropriations for ongoing capital projects, is being eyed for introduction later in February and passage by April.

The local projects make up a relatively small portion of the capital spending bill, which includes funding for other large state projects, but usually consumes most of the planning and negotiations among lawmakers. The capital budget for last biennium totaled $2.62 billion in appropriations, but just $160 million of that was for community projects. Officials say the preliminary funding target for local projects is less this cycle at about $130 million.

Senate President Larry Obhof (R-Medina) said this week the overall total is also expected to be lower than it was two years ago.

Cincinnati Region: The highlight of the Cincinnati area’s requests is the FC Cincinnati stadium proposal, but that project accounts for a fraction of the nearly $22 million in requests from the region.

Other major items include $2 million from the Cincinnati Museum Center for a project to advance STEM education, and $2.5 million for the expansion of capacity and recovery units at the Hamilton County Justice Center.

The region is also proposing $1.25 million for the Cincinnati Playhouse in the Park, and $1 million for building envelope improvements at the Cincinnati Art Museum.

Dayton Region: The region’s top priority in the Montgomery County region’s list is the Arcade Innovation HUB, a joint venture between the University of Dayton and The Entrepreneurs Center. The region requested $2 million for the HUB, which would include mixed-use space for academic, research and experiential learning programs from UD and programs to help startup companies through TEC. The total project is expected to cost more than $41 million.

Another top request in Montgomery County is $1 million for a $17 million renovation project for YWCA Dayton’s flagship facility.

The region also requested money for projects in surrounding counties, led by nearly $1.9 million for the Greene County Career Center. That project, called the Take Flight Initiative, is designed to provide aviation, aerospace, engineering, manufacturing and technology training. The overall price tag for that project is $60 million.

Area officials also requested $2.2 million for the modernization of the archives center at Wright State University. That project would include environmental controls to preserve records and the space to house 16,000 linear feet of collections and more than 20,000 books and journals. The total cost is anticipated to be $8.2 million.

Irishtown Bend Plans, The Plain Dealer

Cleveland Region: The Greater Cleveland Partnership’s recommendations are led by a $5 million request for the second phase of restoring the Irishtown Bend on the city’s riverfront. The work would include stabilizing the bulkheads along the bend and starting work to turn the top of the hillside into a public green space. (See Gongwer Ohio Report, December 18, 2017)

CCH Development Corporation, part of the MetroHealth System, asked for $1.25 million for a neighborhood innovation space along the W. 25th Street corridor, and Karamu House asked for $2 million as part of a $4 million capital campaign aimed at redesigning its campus.

Columbus Region: The biggest ask on the Columbus Partnership’s wish list was for $5 million for the redevelopment of COSI. That project has a total cost of $40 million.

The group is also asking for $2 million as part of a larger project for a 35-story tower where the parking lot of North Market now sits. The Market Tower grand atrium and arcade project is expected to cost $115 million in total.

Another request comes from the Columbus Regional Airport Authority, which is asking for $2 million as part of a $4.85 million air cargo terminal ramp expansion.

The Columbus region also asked for $2 million for park development on former quarry land in Northwest Columbus. The overall cost of the project is $20 million.

Toledo Region: The list from the Toledo Regional Chamber of Commerce included the biggest single project ask: $10 million for the renovation of SeaGate Convention Center, including the renovation of existing space and the construction of a new ballroom.

Another big project from northwest Ohio is a $5 million request for the first phase of changes to the Toledo Museum of Art. That project includes the installation of new elevators to make it more accessible, the renovation of the Glass Crafts Building and the creation of an art support building.

Other big projects out of Toledo include the Imagination Station Theater Experience, for which the chamber is asking for $3 million and a new senior center and $2 million for the Wood County Committee on Aging.

Akron Region: The Greater Akron Chamber’s list of recommendations total $16.2 million, led by $1.5 million for the Akron Civic Theater restoration and expansion and $2.5 million for Hudson’s downtown district parking facility.

The Akron Civic Theater project is expected to cost a total of $6.35 million, with the anticipated project cost of the Hudson parking facility at $5.56 million.

Bigger projects that the chamber is requesting help with include the Akron Community Health Center’s One Campus Project, with a total cost of more than $38 million. The chamber is requesting $1.14 million from the capital budget for that project.

Other big projects include the Barberton Municipal Justice Center, with the city seeking $1 million in the capital budget of a total project cost of $14.3 million.

Youngstown Region: The Youngstown/Warren Regional Chamber list of priorities include $7 million for the Mahoning Valley Innovation and Commercialization Center.

Another major project requested was a community literacy, workforce and cultural center in Campbell, for which it asked for $3 million. The chamber also requested $1.4 million for a transitional housing project helping veterans in Mahoning County.

In Trumbull County, the chamber requested a number of projects, including $1.8 million for the City of Niles to modernize the Eastwood Field baseball facility. That project would include a new video board, energy efficient lighting upgrades and a new playing surface.

The Eastwood Field project and others in Trumbull County also appeared in requests from the office of Sen. Sean O’Brien (D-Bazetta). Both lists of requests also included $2.3 million for the construction of a compressed natural gas fueling station.

Capital Budget Bill In Progress

Ohio Budget and Management Director Tim Keen says he expects the capital bill to go to the Legislature by the end of February and be passed by April 1. That gets it in ahead of the General Assembly’s break and 90 days out from July 1 when many of the provisions will need to be effective.

After two previous rounds where Gov. John Kasich convened a panel of higher education leaders to pare down capital requests from institutions, the administration has changed things up for the upcoming capital budget.

Instead of using a higher education funding commission, Cleveland State President Ron Berkman is working with four-year institutions on a list of their needs, while Stark State President Para Jones is working with the community colleges. According to the Ohio Department of Higher Education (ODHE), both presidents are asking their colleagues for input and are narrowing the list of requested projects to those that align closest with the principles given to them by the administration.

Previously, Kasich had convened one panel representing both four-year and community colleges to help divide up the pot for capital budget dollars in higher education. Schools are also expecting to have a smaller pool of money to work with in this capital budget than under 131-SB310, the last capital appropriations budget.

ODHE said colleges and universities were asked to devote the vast majority of their capital requests to maintaining what they already have, “with an extremely high bar for new construction projects.” The institutions are also being asked to submit recommendations based on a number of guiding principles, including the following:

  • Help build world-class programs.
  • Focus on maintaining the investment the state has already made in existing campus facilities.
  • Stimulate creativity by advancing strategic collaborations through partnerships, both on campus and with others in the public and private sector.
  • Reflect the needs of today’s students by strengthening their learning environments, ensuring their safety and encouraging new degree and certificate completion opportunities.
  • Increase Ohio’s competitive advantage by capitalizing on existing strengths.
  • Strengthen the ability to respond to new or increased workforce development opportunities in the state.
  • Encourage joint efforts to reduce construction costs and generate ongoing efficiencies.

ODHE said it will review the funding proposals along with the Office of Budget and Management (OBM).

Bruce Johnson, president of the Inter-University Council of Ohio, said higher education institutions are expecting to have $400 million in the capital budget, with $300 million for four-year institutions and $100 million for community colleges. He said that is about 10 percent less than what schools had in 131-SB310. While there is more need than funding available, Johnson said schools understand the constraints of the budget this time around.

He said Berkman has asked the IUC’s executive committee to help him review projects that are submitted and make the recommendations to the state. He expected the list of projects to be submitted early in the new year.