We want to alert our members that late yesterday afternoon, the Ohio Senate Finance committee released their proposed changes to sub. HB 110, the $75 billion state operating budget bill. You can find the Legislative Service Commission (LSC) Comparison Document HERE.
As part of the changes made to the two year spending bill, the Senate essentially included the language previously passed by the Ohio House of Representatives in sub. HB 157 and the senate version, sub. SB 97, which would retroactively alter the operating language included in sec.29 of HB 197, adopted March 9, 2020. This provision temporarily froze the municipal income tax withholding procedures for non-resident workers. Although the language includes an extension of the continuation of the temporary withholding policy until December 30, 2021, the proposal would also fundamentally alter the purpose of the emergency authority which was intended to shield municipalities from the potential significant loss in municipal tax revenues due to emergency orders directing individuals to work from home. The language added to sub. HB110 is HERE.
The language amended into the budget bill would retroactively mandate municipalities to comply to refund requests made by employees who, if not for the orders related to the prevention of the spread of the pandemic, would be working at their principal place of work. The senate increased the potential financial loss to municipalities across the state by allowing for refunds to be requested all the way back to March 9, 2020, when HB 197 was enacted, impacting the closed tax year’s revenue collections.
Municipalities across the state expressed their opposition to this revisionist approach to the intent and application of legislation passed and enacted over a year ago. This legislative maneuver will have potentially devastating consequences to the ability of Ohio cities and villages to support first responder services and other critical functions of municipal government.
The Ohio Senate Finance Committee is limiting hearings on their new version of the biennial spending bill to today, tomorrow and if needed, Friday. We encourage League members to immediately communicate their opposition to this drastic change in the temporary application of the municipal income tax withholding procedure with their members of the Ohio House and Ohio Senate.
