FINAL BUDGET BILL CONTAINS RETROACTIVE TREATMENT OF TEMPORARY WITHHOLDING POLICY; MUNICIPAL BROADBAND PREEMPTION REMOVED
The Conference Committee on Sub. HB 110, the state operating budget bill, has released their report the final version of the budget bill. We wanted to make our members aware of the final budget language on two provisions with a substantial impact to municipalities: the temporary municipal income tax withholding provision and the preemption of municipal broadband systems.
• Retroactive Treatment of Temporary Withholding Policy: The final budget bill still contains the harmful language added by the Senate causing retroactive treatment of Sec. 29 of HB 197, the temporary municipal income tax withholding provision, with an amendment added by the Conference Committee to allow taxpayers to request for refunds for only tax year 2021 and not tax year 2020. This means that although the language includes an extension of the temporary withholding policy until December 30, 2021, it also fundamentally alters the purpose of the emergency authority by allowing taxpayers to file refund requests for tax year 2021 for withholdings lawfully provided. This retroactive change to the intent and application of HB 197 will result in potentially devastating financial consequences to the ability of Ohio’s cities and villages to support first responder services and other critical functions of municipal government. The League strongly urges that Governor DeWine veto this provision.
• Removal of Municipal Broadband Systems Preemption: The Conference Committee has removed the provision that would have effectively banned new municipal broadband projects and severely inhibit the service of existing systems while preventing municipalities from using federal funds for broadband expansion. This provision would have restricted municipalities from providing this essential service, especially in rural areas, and would reduce critical internet services that make educational opportunities and economic development possible. We thank the Conference Committee for removing this harmful preemption from the final version of Sub. HB 110.
The legislature must vote to approve the budget bill by Wednesday. We will be providing our members with a complete list of all budget language that affects municipalities in a member alert tomorrow.