Legislative Bulletin - March 10, 2023

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Legislative Bulletin

March 10, 2023

UPDATE AT A GLANCE

LOBBYING DAY REGISTRATION CLOSES MARCH 15

OML is inviting its members to the 2023 OML Lobbying Day that will take place on March 22. A list of scheduled Senate meetings is available here. Those attending will be responsible for scheduling a meeting with your House representative. We highly encourage you to participate, as this is a pivotal time for state legislation affecting municipalities. Register

IMPACTS OF HOUSE BILL 1 HIGHLIGHTED IN NEWLY RELEASED ANALYSES

The bill analysis and fiscal analysis on House Bill 1, legislation that would flatten the state income tax and decouple it from property taxes, was made available by the Legislative Service Commission. The bill analysis provides greater explanation of what's in the bill, and the fiscal analysis takes a closer look at the financial impact to the state and communities. The fiscal analysis highlights the loss of local revenue and increased costs to the state, while also noting the vagueness of how local entities would be kept whole. OML provided a media statement on HB1 this week, and opponent testimony on the bill is taking place at the House Ways and Means Committees' hearing on Tuesday, March 14, at 2:30 p.m. in Hearing Room 122. See more below.

Bill Analysis | Fiscal Analysis | OML Statement

MUNICIPALITIES INVITED TO TAKE ACTION ON RAIL SAFETY

OML is continuing discussions with members of the Ohio General Assembly, as well as its federal partners, to be engaged and advocate for rail-safety solutions. Municipalities are asked to sign on to a letter from the National League of Cities asking Congress to address rail safety. A PDF of the letter with the letter sign-on link is available here. If your community would like to pass a resolution urging Congress to address rail safety, there is a draft sample resolution Word document available here.

OML HOSTS ENHANCED ADVOCACY WEBINAR

OML would like to thank all those who joined us in the webinar this week on our enhanced advocacy efforts. We were pleased to introduce The Montrose Group and are grateful for the many communities that have already contributed toward this effort. You can view the original announcement here.

TRANSPORTATION BUDGET AND OPERATING BUDGET HEARINGS CONTINUE

Hearings are continuing on the state operating budget and state transportation budget. Of note, the Senate Transportation committee heard testimony regarding the rail safety provisions in the transportation budget (two-man crews and wayside detectors), with the rail industry and rail unions remaining at odds. Transit agencies testified in support of the $70 million they would receive each fiscal year, as well as in support of $30 million over two years to address their workforce needs through the Regional Workforce Mobility Partnership Program.

Most notably concerning municipalities on the state operating budget, the House Finance Subcommittee on Safety heard from Attorney General Yost's office about the need for a dedicated revenue source to fund law enforcement training. The Ohio Association of Chiefs of Police testified to the same effect.

SAVE THE DATE: MEAO SPRING MEETING

The Municipal Engineers Association of Ohio -- a subsidiary organization of OML -- will be having its annual spring meeting on April 20 at the Delaware Community Center YMCA. More details are yet to come, but those who wish to be a member of the association are encouraged to complete the membership form.

IMPACTS OF HOUSE BILL 1 HIGHLIGHTED IN NEWLY RELEASED FISCAL ANALYSIS

LSC noted the vagueness of how local entities would be kept whole, writing "The bill states that the legislature intends to appropriate funds to local governments affected by the bill, but does not specify details or include these appropriations."

LSC estimates:

The income tax cut would reduce all-funds revenue by approximately $1,734 million in FY 2024, $1,854 million in FY 2025, and increasing amounts in future years.
A one-time revenue loss is expected in FY 2024 resulting from revised employer withholding tables issued by the Tax Commissioner. LSC's preliminary estimate of this loss is $867 million, which would bring the all-funds revenue loss estimate to $2,601 million in FY 2024.
The revenue losses will be shared by the state General Revenue Fund (96.68%), the Local Government Fund, and Public Library Fund. Therefore, the revenue loss to the GRF is estimated to be $2,515 million in FY 2024 and $1,792 million in FY 2025, and the loss to both the LGF and PLF is estimated to be $43 million in FY 2024 and $31 million in FY 2025.
The proposed cut in the property tax assessment rate from 35% to 31.5% in tax year 2024 and inflation indexing would result in revenue losses to school districts and local governments estimated at $538 million in FY 2025 and increasing amounts in future years.
The bill's decreasing real property assessment rates generally are expected to increase state aid to school districts through the state foundation aid formula, offsetting local tax revenue losses to some degree beginning in FY 2026.
The bill's elimination of the General Revenue Fund reimbursement of the 10% property tax rollback starting in TY 2024 reduces GRF expenditures by an estimated $1,309 million per year.
The proposed change to the rollback for owner-occupied residences from 2.5% of most taxes levied to $125 beginning in TY 2024 may increase expenditures from the GRF to reimburse school districts and local governments for the rollback by $150 million to $180 million per year.
An enhanced homestead exemption for long-time, low-income residents may increase expenditures from the GRF to reimburse school districts and local governments by an estimated $121 million per year.
Indexing for inflation the amount exempted by the homestead exemption is estimated to increase the amount of the exemption and GRF reimbursements by about $28 million for TY 2024 and by similar amounts in years thereafter.

The bill also received proponent testimony this week from organizations such as Americans for Tax Reform, Americans for Prosperity, the Ohio Manufactured Homes Association, as well as Lebanon Mayor Mark Messer – with all of them generally emphasizing the need for Ohio to be economically competitive.

OML provided a media statement on HB1 this week, and the bill is set to receive opponent testimony at the House Ways and Means Committees' hearing on Tuesday, March 14, at 2:30 p.m. in Hearing Room 122. If you are interested in testifying on this bill, please contact OML.

Bill Analysis | Fiscal Analysis | OML Statement

GOVERNOR ANNOUNCES DATA DASHBOARD ON OVERDOSE DEATHS AND SUBSTANCE USE – GRANTS AVAILABLE FOR RESIDENTIAL SUBSTANCE USE DISORDER TREATMENT

Gov. DeWine announced a new state dashboard to better track and report data on overdose deaths and substance use-related measures. The goal of the dashboard is to better investigate the best tools for preventing opioid abuse at the local level. More Info

Meanwhile, Ohio's Office of Criminal Justice Services announced that local governments with residential substance use disorder treatment programs may apply for a total of $1.2 million in federal grants through the Residential Substance Use Disorder Treatment Program. The application deadline is April 3. More Info

NEWLY INTRODUCED

BILLS OF MUNICIPAL INTEREST

Below is the list of bills that were newly introduced and that are impactful to Ohio municipalities:

HB93 - LIMITATIONS ON RECOVERY, LIEN IMPOSITION

Sponsored by Rep. Mark Johnson (R-Chillicothe) and Rep. Riordan McClain (R-Upper Sandusky)

Regarding limitations on recovery and lien imposition by municipalities against property owners of non-owner-occupied properties for unpaid water, sewer, and disposal services rates and charges.

Bill Text

HB99 - REGULATE BENEFITS REDUCTIONS - EMERGENCY SERVICES

Sponsored by Rep. Susan Manchester (R-Lakeview)

To regulate the practice of reducing benefits related to emergency services if a condition is determined, after the fact, to not be an emergency.