March 8, 2019
OML UPDATE AT-A-GLANCE
Here are the top three things you need to know from this past week:
- The League will be holding our Lobbying Day on March 27 at the Statehouse in Columbus. If you are interested in attending, contact Zoe Wade at zwade@omlohio.org. You can also register on our website by clicking HERE.
- The Ohio Supreme Court will take up a case regarding a 2016 law attempting to restrict local hiring quotas. HB 180, from the 131st GA, has been found by previous courts to be "an unconstitutional attempt to eliminate a local authority's powers of local self-government." HB 180 was introduced as a response to Cleveland's Fannie Lewis law, which requires 20% of taxpayer-funded construction hours to go to city residence and that 4% of those hours are worked by low-income residents.
- Ohio U.S. Senator Sherrod Brown announced this week that he will not be seeking the Democratic party nomination for the presidency in 2020.
HOUSE PASSES HB 62 SUBSTITUTE BILL WITH LESSER GAS TAX INCREASE, OTHER SUBSTANTIAL CHANGES
Late Wednesday evening, the House Finance Committee voted 30-3 to pass Substitute HB 62, the Transportation Budget. On Thursday afternoon, the full House of Representatives passed Sub. HB 62 by a vote of 71-27. Due to an omnibus amendment adopted in the House Finance Committee and an amendment adopted on the House floor, Sub. HB 62 was passed with several changes to several key components - many of which impact municipalities.
According to Sub. HB 62 as passed by the full House of Representatives, the gas tax would be increased by 10.7 cents over two years; 7 cents in October of this year and 3.7 cents in October of 2020. This varies from the Governor's proposed 18-cent increase effective July of this year. The original omnibus amendment phased in the gas tax over three years, but the bill was amended on the House floor to phase the gas tax in over two years. The indexing included in the Governor's proposal has been removed in the substitute bill. Sub. HB 62 would also increase the diesel tax by 20 cents over three years. Additionally, electric and hybrid vehicles would be charged a $200 and $100 motor vehicle registration fee, respectively. 50% of these revenues will be directed to the Highway Operating Fund under the Ohio Department of Transportation, and 50% will be distributed among local governments.
Here are the changes made in Sub. HB 62 that benefit municipalities:
- State and local gas tax share change
The substitute bill changes the distribution of the gas tax between the state and the local governments. As opposed to the current 60-40% split, the bill directs 55% of the gas tax to the state and 45% to local governments.
- Catastrophic Snowfall Fund
Sub. HB 62 designates $250,000 each year to the newly-created Catastrophic Snowfall Fund, which will provide finding assistance to local governments that encounter 18 or more inches of snowfall at one time.
- $5 permissive license fee to municipalities and townships
The bill allows a $5 permissive licensing fee for municipalities and townships. The revenues collected from these fees would be designated for infrastructure maintenance and improvements.
- Transportation improvement district funding
Sub. HB 62 would earmark $4.5 million a year for Transportation Improvement Districts (TID) facilitating funding for cost of projects with local governments. This continues the amount currently earmarked in the previous budget, keeping an important source of funding running for many local projects.
The bill redistributes $5 million a year from Oil and Gas Well Fund to local governments in the Utica and Marcellus shale region. $3 million of those funds are to be used for capital improvements; $1 million is to be used by townships for road maintenance and construction; and $1 million is dedicated to the general funds of municipalities and townships with a shale oil or gas well.
Sub. HB 62 increases funding for public transit to $100 million a year.
- Ohio's Road to Our Future Joint Legislative Study Committee
The bill would create the Ohio's Road to Our Future Joint Legislative Study Committee to study alternative sources of revenues, expense mitigation, evolving technology, innovative finance techniques, asset leverage and conditions, employee demographics and a vehicle-miles traveled approach to transportation funding. The creation of this committee was recommended by the League and we are grateful the legislature has recognized the merits of such a committee aim to dedicate time and resources to consciously planning future funding for Ohio's transportation infrastructure system.
Here are the changes that are a concern for municipalities:
- Change in township distribution amount
Sub. HB 62 contains a change in increased gas tax distributions to townships that could give certain townships an unfair and disproportionate portion of the local government share of the gas tax. The change allows townships to choose between getting their designated percentage of the local government share of the gas tax, or receiving a figure based on their township road mileage and township vehicle registration - which ever figure is higher. This allows townships to receive a disproportionate amount of the local government share of the gas tax, with the difference being taken from the pockets of the municipalities and the counties.
- Red light traffic cameras and LGF
Changes were made regarding local government use of traffic cameras. Sub. HB 62 eliminates administrative hearings for traffic violations issued by traffic cameras and specifies that the local authority must file a certified copy of the ticket in question with the court while making a non-refundable advanced deposited of all applicable court costs and fees. Despite the Ohio Supreme Court ruling confirming municipalities have the constitutional authority to use red light traffic cameras, it would require all local governments using traffic cameras to file a report each fiscal year with the Tax Commissioner showing civil fines collected for traffic violations issued via traffic camera. The Tax Commissioner would then reduce the monthly LGF funding to that local government in an amount equal to one-twelfth the gross amount of all such fines collected. If a local government did not report, their LGF distribution would be halted entirely.
- Electric scooters: possible preemption
More ambiguous language is included in HB 62 dealing with the use of low-speed electric scooters on public roads. There is concern Sub. HB 62 would give the state the exclusive right to regulate low-speed electric scooters, maintaining they are not vehicles and they are subject to traffic law requirements regardless of where they are operated. It also mandates that municipalities and counties process any violations, while providing no funding for the processing of those violations. The League is still examining this language.
Sub. HB 62 now heads to the Senate for further hearings and more possible changes. The bill will continue to move quickly through the legislative process as it must be sent to the Governor's desk by the end of March.
We want to thank the both the Governor and the House of Representatives for hearing and taking seriously the concerns of our local governments, and we look forward to continuing our work with the legislature on Sub. HB 62. We also want to thank each local official who came to Columbus to testify, as City Manager Shelley Dickstein of Dayton did this week. Our work on the Transportation Budget is not finished, and we will continue alert our members of the bill's movement through the legislative process.
GOVERNOR DEWINE DELIVERS FIRST STATE OF THE STATE ADDRESS
Governor DeWine covered a variety of topics during his first State of the State address, including
several issues important to Ohio's municipalities. The topic Gov. DeWine devoted the majority
of his speaking time to was the propose gas tax increase outlined in HB 62, the governor's
proposed Transportation Budget.
The Governor reiterated the urgency of Ohio's transportation funding needs, saying borrowing
and turnpike bonds have "propped" Ohio up and "masked" the true funding shortfalls Ohio
faces. Gov. DeWine stated simply that Ohio should not continue to borrow funds, but should
instead institute a gas tax increase to properly fund Ohio's roads and bridges. He also spoke to the dangers of not funding the maintenance and improvement of Ohio's transportation system, saying, "More Ohioans will get hurt and more Ohioans will die," in the event Ohio's roads and bridges continue to remain underfunded.
The State of the State address also touched on several programs Gov. DeWine aims to fund in the upcoming Biennial Budget, Ohio's two-year operating budget. One such program would address Ohio's ongoing opioid epidemic. This program, the Public Health Fund, would be comprised of several agencies dedicated to addressing issues compound by the state's addiction epidemic.
Lake Erie's algal blooms was also addressed in the Governor's speech, which has affected the
water quality of the local communities around the lake while also having an impact on boating
and tourism to those municipalities. The Governor's proposed H2-Ohio Fund would be aimed at
addressing not only the issue of Lake Erie's algal blooms but water quality issues around the state.
Other issues Gov. DeWine's State of the State address touched on include enhanced
"opportunity zones" in the state's economically distressed areas and additional law
enforcement task forces.
The League appreciates the Governor's continued dedication to the issues facing municipalities all across our state and we look forward to working with his administration to create solutions and invest in strong, safe and thriving cities and villages to ensure a bright future for Ohio.
NEW LEGISLATION: BILLS OF MUNICIPAL INTEREST
Here are the bills impacting municipalities that were introduced this week:
- HB 119 - TRAFFIC VIOLATIONS. Sponsored by Rep. Stoltzfus (R - Minerva), would grant municipal and county courts original and exclusive jurisdiction over any civil action concerning a traffic law violation, modify certain requirements governing the use of traffic law photo-monitoring devices by a local authority, and make corrective changes to the distracted driving and texting-while-driving law.
- SB 72 - FIREWORKS LAW. Sponsored by Sen. Burke (R - Marysville), would revise the Fireworks Law.
- SB 95 - BUSINESS INVESTMENTS. Sponsored by Sen. Peterson (R - Sabina) and Sen. Kunze (Hilliard), would enhance state and local tax inducements for businesses making substantial fixed asset and employment investments and their suppliers.
- HB 124 - RESIDENTIAL SMALL LIVESTOCK. Sponsored by Rep. Brinkman (R - Cincinnati), would allow an owner of residential property to keep small livestock on the property and to prohibit zoning authorities from regulating certain noncommercial agricultural activities on residential property.
COMMITTEE UPDATE: BILLS OF MUNICIPAL INTEREST
Here are the bills of municipal interest that received committee hearings this week;
- SB 10 - THEFT IN OFFICE. Sponsored by Sen. Wilson (R - Maineville), would expand the penalties for theft in office based on the amount stolen and include as restitution audit costs of the entity that suffered the loss. During its second hearing before the Senate Government Oversight and Reform Committee, State Auditor Keith Faber testified in support of the bill, pointing out the fact that over 85 government officials have been charged with theft in office since 2011. The County Commissioners Association of Ohio also offered written proponent testimony. The League submitted written proponent testimony for this legislation, which you can read HERE.
- SB 52 - CYBER SECURITY. Sponsored by Sen. Gavarone (R - Bowling Green), would create the civilian cyber security reserve forces, make the Secretary of State a member of the Homeland Security Advisory Council, require the Secretary of State to appoint a chief information security officer, require the boards of elections to audit election results, and make an appropriation. During its second hearing before the Senate Government Oversight and Reform Committee, the director of the Madison County Board of Elections asked that the bill only require post-election audits for regularly scheduled primary and general elections. The bill's sponsor said her office is working to draft those amendment to the bill as proposed. The League submitted proponent testimony for this legislation, which you can read HERE.
- SB 8 -OPPORTUNITY ZONES. Sponsored by Rep. Schuring (R - Canton), would authorize tax credits for investments in an Ohio Opportunity Zone. During its third hearing before the Senate Ways and Means Committee, a representative from Policy Matters Ohio testified in opposition to the bill due to the organization's belief's that the current structure of the bill could drain state resources. The League is supportive of this legislation.
- SB 16 - PEACE OFFICERS. Sponsored by Sen. Williams (D - Cleveland), is regarding instruction for peace officers, students, and new or student drivers on proper interactions with peace officers. During its second hearing before the Senate Judiciary Committee, the ACLU and representatives from the Public Safety Driving School offered testimony in support of the bill. The League is still looking into this legislation.
COMMITTEE SCHEDULE FOR THE WEEK OF MARCH 11, 2019
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Monday, March 11, 2019
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SENATE TRANSPORTATION, COMMERCE AND WORKFORCE
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Mon., Mar. 11, 2019, 1:30 PM, South Hearing Room
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Sen. McColley: 614-466-8150
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TRANSPORTATION BUDGET (OELSLAGER S) To make appropriations for programs related to transportation and public safety for the biennium beginning July 1, 2019, and ending June 30, 2021, and to provide authorization and conditions for the operation of those programs.
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First Hearing, All Testimony
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Tuesday, March 12, 2019
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SENATE TRANSPORTATION, COMMERCE AND WORKFORCE
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Tue., Mar. 12, 2019, 9:00 AM, Senate Finance Hearing Room
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Sen. McColley: 614-466-8150
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TRANSPORTATION BUDGET (OELSLAGER S) To make appropriations for programs related to transportation and public safety for the biennium beginning July 1, 2019, and ending June 30, 2021, and to provide authorization and conditions for the operation of those programs.
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Second Hearing, All Testimony
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SENATE FINANCE
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Tue., Mar. 12, 2019, 2:30 PM, Senate Finance Hearing Room
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Sen. Dolan: 614-466-8056
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INCREASE SOLID WASTE DISPOSAL FEE (EKLUND J) To increase state solid waste disposal fee that is deposited into the Soil and Water Conservation District Assistance Fund, and to make an appropriation.
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First Hearing, Sponsor Testimony
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MIXED USE DEVELOPMENT PROJECTS-TAX CREDIT (SCHURING K) To authorize an insurance premiums tax credit for capital contributions to transformational mixed use development projects.
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First Hearing, Sponsor Testimony
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HOUSE WAYS AND MEANS
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Tue., Mar. 12, 2019, 3:00 PM, Hearing Room 116
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Rep. Schaffer: 614-466-8100
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BALLOT LANGUAGE UNIFORMITY (MERRIN D) To enact the "Ballot Uniformity and Transparency Act" to modify the form of election notices and ballot language for property tax levies.
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First Hearing, Sponsor Testimony
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Wednesday, March 13, 2019
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SENATE TRANSPORTATION, COMMERCE AND WORKFORCE
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Wed., Mar. 13, 2019, 9:00 AM, South Hearing Room
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Sen. McColley: 614-466-8150
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TRANSPORTATION BUDGET (OELSLAGER S) To make appropriations for programs related to transportation and public safety for the biennium beginning July 1, 2019, and ending June 30, 2021, and to provide authorization and conditions for the operation of those programs.
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Third Hearing, All Testimony
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SENATE JUDICIARY
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Wed., Mar. 13, 2019, 9:15 AM, North Hearing Room
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Sen. Eklund: 614-644-7718
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PUBLIC RECORDS LAW EXEMPTION-EMERGENCY SERVICE TELECOMMUNICATORS (ROEGNER K) To include emergency service telecommunicators as individuals whose residential and familial information is exempt from disclosure under the Public Records Law.
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First Hearing, Sponsor Testimony
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Thursday, March 14, 2019
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SENATE TRANSPORTATION, COMMERCE AND WORKFORCE
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Thu., Mar. 14, 2019, 9:00 AM, Senate Finance Hearing Room
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Sen. McColley: 614-466-8150
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TRANSPORTATION BUDGET (OELSLAGER S) To make appropriations for programs related to transportation and public safety for the biennium beginning July 1, 2019, and ending June 30, 2021, and to provide authorization and conditions for the operation of those programs.
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Fourth Hearing, All Testimony
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OHIO RETIREMENT STUDY COUNCIL
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Thu., Mar. 14, 2019, 10:00 AM, TBA
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Bethany Rhodes: 614-228-1346
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On the agenda: swearing-in of members; election of officers; appointment of advisory subcommittee; 2019 meeting dates; valuations for OP&F, STRS and SERS; health care reports from STRS and SERS; Iran-Sudan reports from all systems; disability reports for OPERS, OP&F and HPRS; OP&F communication plan; staff activities reports; approval of next issue brief topic on unfunded liabilities and 30-year amortization.
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PLEASE CHECK OUR WEBSITE MONDAY FOR ANY CHANGES TO THE COMMITTEE SCHEDULE
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