OML UPDATE AT-A-GLANCE
Here are the top four things you need to know from this past week:
· This week, the U.S. Treasury released additional guidance to assist states with the distribution of American Rescue Plan Act (ARPA) funds to non-entitlement units of local government (NEUs), which are local governments typically serving a population under 50,000. This new guidance includes step-by-step guide for states regarding the allocation and distribution of ARPA funds to their NEUs. This guidance, along with additional information on ARPA funds for non-entitlement units of local government, can be found on the U.S. Treasury website HERE. Read more in the article below.
· The full Ohio House voted to pass Sub. HB 157, legislation impacting Sec. 29 of HB 197, which is the temporary provision instructing municipalities to withhold income tax at a taxpayer’s principal place of work, even if that taxpayer is working remotely in a different local jurisdiction due to the COVID-19 pandemic. While this legislation extends the temporary municipal income tax withholding provision until the end of this year, it would also allow taxpayers to retroactively request refunds for tax year 2021 even though those funds are protected under Sec. 29 of HB 197. The bill now heads to the Senate to begin the committee hearing process. Read more in the article below.
· Budget Watch: Senate President Huffman (R – Lima) has announced that the Senate will unveil its changes to Sub. HB 110, the state operating budget bill, next Tuesday, June 1. After the Senate Finance Committee accepts the omnibus amendment, the full Senate intends to vote the bill out on Tuesday, June 10. We will keep our members apprised of any changes made by the Senate that would affect Ohio’s municipalities.
· Ohio Attorney General Dave Yost has announced that a settlement has been reached in his lawsuit against the U.S. Census Bureau regarding the release of population data for Ohio, which I s needed for Ohio’s redistricting process this year. The bureau has agreed that is will release the data no later than August 16.
OHIO HOUSE PASSES BILL IMPACTING TEMPORARY MUNICIPAL INCOME TAX WITHHOLDING PROVISION
This week, the Ohio House passed Sub. HB 157 by a vote of 63-31, sending the bill to the Ohio Senate to begin the committee hearing process. While the legislation would extend the sunsetting of Sec. 29 of HB 197 until Dec. 31, 2021, which is supported by the League, the bill also allows taxpayers to retroactively request refunds for revenues that are protected under the temporary withholding provision.
Sub. HB 157 contains language stating that Sec. 29 of HB 197 applied only to withholding and not liability for tax year 2021, thus mandating that municipalities must comply with requests for refunds for that tax year from taxpayers who worked from home in a local jurisdiction other than where their principal place of work is located due to the COVID-19 pandemic. This language attempts to re-write the original intent of Sec. 29 of HB 197 to protect municipalities, which have made budgetary decisions that are dependent upon the revenue stability granted to them by this temporary provision.
The bill would also allow an employer to change the “principal place of work” designation at their discretion for any employee they choose back until March 9, 2020. This could create additional request for any employee receiving this designation back to tax year 2020. Additionally, a municipal tax administrator would not be able to require any documentation from the employer to process a refund request other than a statement verifying that the employer has not refunded any withholding to the employee as well as the number of days the employee worked at their employee’s principal place of work. You can read the full substitute bill HERE and the comparison document HERE to see the full list of changes made to the bill last week in the House Ways and Means Committee.
Municipalities are protected under Sec. 29 from HB 197, which made wages taxable to the principal place of work even if the taxpayer was working in another local jurisdiction due to the COVID-19 pandemic. We continue to object to retroactive changes to Sec. 29 of HB 197 and we are continuing to advocate for the language extending the termination of the temporary withholding policy. It is our request that the legislature remove all other language from Sub. HB 157 and considered in separate legislation and that the issue of refunds be left to the courts to decide.
We encourage municipal leaders to contact their state senator and express their opposition to Sub. HB 157. We will continue to keep our members updated on this bill.
TREASURY ISSUES AMERICAN RESCUE PLAN ACT (ARPA) GUIDANCE FOR NON-ENTITLEMENT UNITS OF LOCAL GOVERNMENT
The U.S. Treasury has released additional guidance to assist states with the distribution of American Rescue Plan Act (ARPA) funds to non-entitlement units of local government (NEUs), which are local governments typically serving a population under 50,000.
The guidance sets forth a process by which the state can download a list of local governments from the U.S. Treasury website alongside a step-by-step guide to allocating and distributing funds to their NEUs. This guidance along with additional information on ARPA funds for non-entitlement units of local government can be found on the U.S. Treasury website HERE.
State governments that have made a request for their own funds in the Treasury Submission Portal under the Coronavirus State and Local Fiscal Recovery Funds will be considered by Treasury to have requested funding for their non-entitlement units of local government as well, and no further action is required on their part to receive payments. States that have requested funding for their own state funds should expect to receive their first tranche of payments for NEUs within several days.
We will continue to keep our members up to date on all ARPA guidance as it is released.
Additionally, The National League of Cities (NLC) has created a series of fact sheets for local governments with critical information on how to access, spend and properly report ARPA funds:
· How to Spend Coronavirus State & Local Recovery Funds (HERE)
· How to Use ARPA to Access Coronavirus State & Local Recovery Funds (HERE)
· How to Meet Reporting Requirements for Coronavirus State & Local Fiscal Recovery Funds (HERE)
· How States Can Allocate Coronavirus State & Local Fiscal Recovery Funds to Local Governments (HERE)
· How to Use Coronavirus State & Local Fiscal Recovery Funds to Ease Budget Shortfalls (HERE)
Members can also use this Revenue Loss Calculator (HERE) to measure losses in revenue due to the COVID-19 pandemic. (excel spreadsheet)
You can access all NLC resources for local governments regarding ARPA funds HERE.
STATE OF OHIO TO DETERMINE TOWNSHIP ELIGIBILITY FOR AMERICAN RESCUE PLAN ACT (ARPA) FUNDS
The following is a press release from the Ohio Township Association regarding the determination of whether Ohio townships will be considered eligible to receive American Rescue Plan Act (ARPA) funding. The League will continue to keep our members updated on this issue. Read the full press release below:
After weeks of uncertainty regarding Ohio townships’ eligibility status for direct American Rescue Plan (ARP) funds, the US Treasury today released further guidance regarding non-entitlement units of local government (NEUs) and ARP funds. Treasury’s “Guidance on Distribution of Funds to Non-entitlement Units of Local Government” defines Ohio’s townships as “minor civil divisions” (MCDs) and Ohio as a “weak-MCD State.” Each weak-MCD State will determine if its weak MCDs should be eligible for an NEU distribution; the State of Ohio will therefore decide the ARP status of 1,305 of Ohio’s 1,308 townships, with three Ohio townships already included on a Treasury ARP list of metropolitan cities with populations +50K.
The Ohio Township Association (OTA) has reached out to the Ohio Office of Budget and Management (OBM), which was the point of contact for CARES Act money, to learn if OBM will be making the determination for Ohio’s weak MCDs. The OTA has also inquired as to the State’s timeline. The OTA will provide updated information to townships as it becomes available.
“While in some states the definition of a township varies, Ohio townships provide essential services to millions of residents, just like cities and villages,” said OTA Executive Director Heidi M. Fought. “The OTA cannot emphasize strongly enough that the rest of Ohio’s townships deserve to be included in direct funding from the American Rescue Plan. The OTA is grateful for each and every legislator, organization and entity that is advocating for Ohio townships on this issue.”
The confusion regarding ARP funding for Ohio’s townships was caused by language inconsistencies between bill versions – more specifically, a definition change in the term “non-entitlement unit of local government.” Townships in Ohio and in several other states were included during the House process but were left out of the final version of the legislation. Today’s Treasury guidance clarified that Ohio and seven other states are considered weak-MCD States, and 12 other states are considered strong-MCD States.
FEDERAL UPDATE: U.S. SENATE RELEASES BIPARTISAN SURFACE TRANSPORTATION LEGISLATION
The U.S. Senate released a bipartisan $303.5 billion Surface Transportation Reauthorization bill. This new legislation is a being considered in Congress along with the Jobs Act, and Families Plan offered by the Biden Administration. You can find all NLC resources on the need for local transportation funding HERE.
The Surface Transportation Reauthorization bill would do the following for municipalities across the country:
· Increases overall suballocations of core programs to urban areas
· Includes a 65% suballocation to urban areas for a new carbon reduction program
· Substantially increases funding and obligation authority for the Transportation Alternatives Program (TAP)
· Includes greater accountability on how states spend Surface Transportation Block Grant Program (STBG) funding on smaller cities
· Increases leverage with STBG funds for metropolitan areas of 50-200k and Rural Transportation Planning Organizations
· Makes cybersecurity an eligible expense in several programs including STBG
· Increases safety program funding with a highlight on the pedestrian issues
You can access the full bill text HERE, a section-by-section breakdown HERE, apportionments for the proposed funding HERE and highway authorizations under the committee HERE
We encourage our members to contact their congressional delegation and emphasize the importance of ensuring proper funding for local infrastructure. Additionally, NLC will be releasing a new infrastructure report with city stories from across the country in early June. We will make this report available to our members after it is released.
BILLS IMPACTING MUNICIPALITIES PASSED BY OHIO HOUSE
· HB 228 – Municipal Corporation Tax. Sponsored by Rep. Roemer (R – Richfield), would make changes related to state-administered municipal net profits taxes. The bill was passed by the House 91-1. The League is supportive of this legislation.
· HB 123 – Community Reinvestment Areas. Sponsored by Rep, Fraizer (R – Newark) and Rep. Cross (R – Kenton), would modify the law governing community reinvestment areas and the terms under which property may be exempted in such areas. The bill was passed by the House 57-36. The League is neutral on this legislation.
COMMITTEE RECAP: BILLS OF MUNICIPAL INTEREST
· HB 175 – Water Pollution. Sponsored by Rep. Hillyer (R – Urichsville), would deregulate certain ephemeral water features under various water pollution control laws. During its fourth hearing before the House Agriculture and Conservation Committee, the bill was amended to exclude wetlands from the definition of an ephemeral feature. The League is supportive of this legislation.
· HB 201 – Natural Gas. Sponsored by Rep. Stephens (R – Kitts Hill), would prevent local governments from limiting use of natural gas. During its second hearing before the Senate Energy and Public Utilities Committee, proponents including the Ohio Chamber of Commerce and the Ohio Consumer Energy Alliance testified in support of the bill. The League is opposed to this legislation.
· SB 176 – Sports Gaming. Sponsored by Sen. Antani (R – Miamisburg) and Sen. Manning (R – N. Ridgeville), would legalize and regulate sports gaming in this state, to levy a tax on businesses that provide sports gaming, and to make other changes to the Gambling Law. During its third hearing before the Senate Select Committee on Gaming, representatives from organizations including the Ohio Licensed Beverage Association and companies such as MGM Resorts International testified as interested parties on the bill. The League is neutral on this legislation.
OHIO CORONAVIRUS RESPONSE UPDATE
· As of Thursday afternoon, Ohio is reporting 1,100,312 cases of coronavirus, 19,748 resident deaths, 59,012 hospitalizations and 8,104 ICU admissions.
· Governor DeWine announced that Ohio continues to see increased uptake of the COVID-19 vaccine following the announcement of the Ohio Vax-a-Million promotion.
· From May 14 through May 19 as compared to May 7 through May 12, vaccinations in Ohio increased 94 percent among those 16 and 17 years old, 46 percent among those 18 and 19 years old, and 55 percent among those between 20 and 49 years old.
· In total, 2,758,470 individual Ohioans have registered for the $1 million Vax-a-Million drawing and 104,386 young Ohioans have registered for the scholarship drawings.
o Ohio's first Vax-a-Million drawing will take place at 7:29 p.m. on Wednesday, May 26.
· Vaccinated Ohioans can register for subsequent drawings at ohiovaxamillion.com or by calling 833-4-ASK-ODH.
o Once you register, your entry will be carried over for future drawings; Ohio Lottery will remove duplicate entries.
Vaccine Uptake Among Ohio Medicaid Beneficiaries:
· Governor DeWine called on managed care companies to continue efforts to increase vaccine uptake among Ohio Medicaid beneficiaries.
o Right now, the vaccine uptake among Medicaid beneficiaries is 22 percent as compared to a 45 percent uptake among Ohioans overall.
· Governor DeWine initially challenged managed care plans to implement new efforts earlier this month, and since then, new efforts include:
o Partnering with pharmacies and providing incentives, such as gift cards, to those on Medicaid who are vaccinated at a pharmacy.
o Incentivizing pharmacists to counsel those picking up prescriptions about vaccinations.
o Working with local health departments, community providers, and faith-based initiatives to help spread the word about vaccination events to those on Medicaid.
o Providing staff to help run vaccination events when needed and providing transportation to make sure people can get to and from the vaccination locations.
o Tailoring strategies to meet people where they are, such as identifying individuals who can’t leave their homes and working with providers to go to these locations to administer vaccinations.
o Working with providers to help them create vaccine opportunities outside of normal business hours.
Isolation and Quarantine:
· Governor DeWine clarified information about isolation and quarantine in regard to Ohio's school students.
· Beginning on June 2 and in accordance with CDC guidance, vaccinated children do not have to quarantine or be tested if they are exposed to COVID-19.
o Unvaccinated children who are exposed to COVID-19 should quarantine if the exposure took place outside of a classroom setting where masks were required to be worn.
o Unvaccinated children should also isolate if they test positive for the coronavirus.
o Local health departments should determine if quarantine or isolation should occur.
· Individual school districts will decide whether or not to continue masking and social distancing in school settings.
Case Data and Vaccine Information: