OML UPDATE AT-A-GLANCE

Here are the top five things you need to know from this past week:

  •  On Wednesday, the House acted on a number of legislative issues related to municipalities, including legislation distributing the remaining $650 million in CARES Act funds to local government. The House also concurred on a bill to repeal local communities’ ability to impose a bag tax. Read more in the articles below.

  • The League is partnering with the Ohio Township Association, the Ohio Mayors Alliance and the County Commissioners Association of Ohio to host a webinar with Ohio Auditor of State Keith Faber’s office on Thursday, October 1 from 11 a.m. to 12 p.m. The webinar will discuss the CARES Act funds distributed to local governments and will cover accounting procedures, review how the funds will be audited, and provide best practices and additional resources. You can find out more information and register HERE.

  •  On Monday, September 21, the U.S. Treasury issued updated guidance clarifying the use of CARES Act dollars for public health and public safety employee payroll expenses. You can read the updated FAQ HERE. Read more in the article below.

  • Yesterday, Governor DeWine announced that nursing homes and assisted living facilities can begin allowing indoor visitation on Monday, October 12th if certain safety standards are met. These standards will be outlined in a forthcoming public health order. When visitation resumes, a Long-Term Care Facility Dashboard will be added to the COVID-19 data dashboard at coronavirus.ohio.gov where users can access facility-specific visitation information.

  • Governor DeWine presented a number of slides during yesterday’s press conference that can be accessed HERE. The information includes county rankings by highest COVID-19 cases through-out the state, an updated statewide perspective through the Ohio Public Health Advisory System and an update of “key indicators” including graphics indicating trends in each category.



BILL ALLOCATING REMAINING $650 MILLION IN CARES ACT FUNDS TO LOCAL GOVERNMENTS SENT TO GOVERNOR’S DESK FOR SIGNATURE

Legislation distributing the remaining $650 million in CARES Act aid to local governments cleared both the Ohio Senate and House on Wednesday afternoon. The bill is now on its way to Governor DeWine’s desk for his signature. Once the bill is signed, an emergency clause in the legislation ensures it will be immediately enacted.

The original language for allocating the CARES Act funds was in SB 357, which was sponsored by Sen. Dolan (R – Chagrin Falls). The Senate amended SB 357 into HB 614 earlier this week. HB 614, which was sponsored by Rep. Frazier (R - Newark) and Rep. Richardson (R - Marysville), was originally drafted to study and reform the application, processing, and administrative infrastructure of Ohio's unemployment compensation system. HB 614 was then passed by the full Senate unanimously and sent to the House for concurrence. The House concurred on the bill by a vote of 87-2. The bill’s analysis can be found HERE.

HB 614 allocates the remaining funds on a per capita basis, rather than the slightly-modified Local Government Fund (LFG) formula that was used to distribute previous CARES Act funds. The Legislative Service Commission (LSC) released a spreadsheet, originally drafted for SB 357, outlining a rough estimate of what local governments can expect to receive within the per capita distribution formula. You can access that spreadsheet HERE.

Several other important amendments were adopted in HB 614 regarding the CARES Act funds for local governments, including the following:

  • extends the deadline for when communities must encumber these funds for allowable expenses from October 15 to November 20.

  • states that returned revenue must be redistributed by counties by November 25. Returned revenue can only be distributed to eligible local governments, which are local governments that have encumbered all their CARES Act funds.

  • clarifies that if more than 25 municipalities and townships within an eligible county are also eligible for redistributed revenues, the county will retain 25% of redistributed revenues while the remaining 75% will be allocated to those eligible municipalities and townships on a per capita basis. If less than 25% of the municipalities and townships within an eligible county are eligible for redistributed funds, the eligible county will retain 50% of redistributed revenues while the remaining 50% will be allocated to those eligible municipalities and townships on a per capita basis.Using an example may help explain the procedure: Let’s use Henry County. Henry County has 22 municipalities and townships. If 5 municipalities/townships (22.7% of muni’s and twps. in the county) spend all their distribution and are thus eligible for redistribution, 50 percent of the redistribution funds will be sent to Henry County (assuming it spends all its funds) and 50 percent will be split between the qualifying five municipalities/townships on a population basis. If 6 municipalities/twps. (27.3% of muni’s and twps. in the county) spend all their distribution and are thus eligible for redistribution, 25 percent of the redistribution funds will be sent to Henry County and the remaining 75 percent of the redistribution funds will be split between the qualifying six municipalities/townships on a population basis.

  • moves the deadline for when local governments must return all unspent money to the state from December 28, 2020 to February 1, 2021. However, the amendment clarifies that during the period from December 31, 2020 to February 1, 2021, the local government’s CARES Act fund may be held open for accounting purposes only since CARES Act funds can only be spent for COVID-19 pandemic-related costs incurred no later than December 30, 2021.

The League, along with the County Commissioners Association of Ohio, the Ohio Township Association and the Ohio Mayors Alliance, released a statement thanking the legislature for passing this time-sensitive and much-needed legislation. You can read that statement in full HERE.

We are grateful that these amendments move back the deadlines for when local governments can encumber CARES Act funds, which gives cities and villages more time to use the federal aid available to them. We will alert our members when Governor DeWine signs and enacts this important legislation.

Local governments officials need to continue their efforts to communicate with their members of Congress the critical need for the Federal government to provide additional financial relief, along with greater flexibility for allowing any future or existing CARES Act funds to be used to help stabilize local budgets, as well as an extension of the federal deadlines for when the funds can be used. Ohio’s local leaders must continue to contact their federal partners and impress upon them the need for a phase 4 stimulus package that will include these provisions and help local governments begin a strong and sustainable economic recovery.


HOUSE PASSES BILL TO BAN “BAG TAX”, HEADS TO GOVERNOR’S DESK FOR FINAL ACTION

A bill that would preempt a local government’s ability to levy a tax on auxiliary containers such as plastic bags and to-go boxes was concurred upon by the full Ohio House by a vote of 57-34 on Wednesday and has now been sent to Governor DeWine for his signature.

HB 242, sponsored by Rep. Lang (R – West Chester Twp.) and Rep. Jones (R – Freeport), preempts a municipality from passing a plastic and paper bag tax, but also any tax on straws, plastic utensils, aluminum cans, glass bottles, Styrofoam cups and carry-out food containers. Additionally, the bill prohibits municipalities from discontinuing the use of plastic products, such as banning the use of plastic bags. The bill    was previously amended in the Senate to sunset the ban on local governments taxing auxiliary containers after one year. The changes were concurred upon by the House by a vote of 57-34.

The League objects to this legislation and the continued encroachment upon Home Rule. HB 242 prevents local governments from working with the businesses within their jurisdiction to enact the will and policy priorities of their local communities. The enactment of HB 242 would mean that 90 days after the Governor’s signature, local governments across the state would be unable to institute the will of their community members related to the use of single use of plastic products in their own communities, nullifying agreements that have been negotiated with businesses potentially impacted by the local efforts and with the support of their residents. That is why we call on Gov. DeWine to preserve the integrity of Home Rule principles and veto this legislation.

You can read a letter from the League calling for the Governor’s veto HERE.


BILL TO REPEAL STATE-IMPOSED MUNICIPAL INCOME TAX PANDEMIC WITHHOLDING POLICY GETS FIRST HEARING

This week, SB 352 received a first hearing in the Senate Local Government, Public Safety and Veterans Affairs Committee. SB 352, sponsored by Sen. Roegner (R – Hudson), would repeal Section 29 of HB 197. This provision instructs municipalities to continue withholding income tax at a taxpayer’s place of work, even if that taxpayer is currently working from home in another local jurisdiction due to the COVID-19 pandemic. This provision extends until the end of the Governor’s declaration of emergency.

The repeal of Section 29 of HB 197 would have an impact on Ohio’s economy. We can logically deduce that municipalities hosting large employers, whose employees are significantly comprised of individuals that may not live in that municipality, would experience a potentially devastating loss of municipal income tax revenue which would impede the ability of those communities to maintain critical services to their residents and the existing businesses that operate there. It would also impede their ability to attract new opportunities for economic development. Additionally, SB 352 would likely place a burden on businesses – particularly small businesses – who would have to keep track and report where a taxpayer was working and when in order to remit income tax accordingly.

The League understands through the sponsor’s testimony this week that the legislation is intended to provide an opportunity for state leaders to begin the discussion on the impact the withholding policy has on businesses, municipalities and taxpayers and to examine what the impact would be through a repeal or continuation of the withholding procedure. The legislation will also offer an opportunity for the legislature to begin to examine issues related to changes in revenue generation for municipalities as employers and employees adjust to changes in workplace environments.   

Last week, the Greater Ohio Policy Center (GOPC) released a detailed report explaining how this change to the municipal income tax would impact legacy cities and Ohio’s economy by setting off a “cascade of unintended consequences through Ohio’s tax system” and impede the ability of the state’s largest economic centers – municipalities – to continue to maintain and grow the economic health of the state. You can read that report in full HERE.

We will be sure to communicate with our members any future legislative activity related to this issue.



AMENDMENT RECTIFIES POTENTIAL LOCAL GOVERNMENT FUND (LGF) ISSUES WITH RED LIGHT TRAFFIC CAMERAS

An amendment was adopted into SB 163 that made a technical correction to a provision in HB 62, the transportation budget, regarding local government use of traffic cameras. SB 163 was sponsored by Sen. Kunze (R – Hilliard) and creates and amends multiple nonstandard license plates.

The original provision in HB 62 penalized local governments for using red light traffic cameras by mandating that the revenue obtained through traffic tickets issued by red light traffic cameras must be reported to the Ohio Department of Taxation (ODT) so that the amount of revenue in tickets is deducted from that local government’s Local Government Fund (LGF) distribution.

ODT’s interpretation of the language meant that if a jurisdiction collected more revenue through red light traffic camera tickets than they received through the LGF, then those extra revenues are deducted from the county in which that local government resides. This in turn reduces the LGF distribution to the other local governments in that county. Legislators have stated that since this was not the original intention of this provision, this interpretation is incorrect.

The League had been contacted by a number of our members regarding the impact this language would have on their LGF distribution and were alarmed by what this would mean for the ability to delivery critical local services.

The amendment of SB 163 clarifies the original language to ensure local governments that are not operating red light traffic cameras do not have their LGF distribution affected by the revenues collected by local governments that are using red light traffic cameras. You can read the amendment language HERE.



U.S. TREASURY RELEASES UPDATED GUIDANCE ON ELIGIBLE EXPENSES FOR CARES ACT FUNDS USED BY LOCAL GOVERNMENTS

The U.S. Treasury has issued an updated FAQ on September 21 that clarifies local governments can use revenues from the Coronavirus Relief Fund (CRF) allocated by the CARES Act for public health and safety payroll expenses. This update can be found in FAQs #63 and #70-#72, which are related to the recordkeeping requirements for public health and public safety employees significantly dedicated to mitigating or responding to the COVID-19 public health emergency.
Earlier this month, the Treasury Department Office of Inspector General (OIG) issued guidance on reporting requirements for state and local governments using Coronavirus Relief Funds under the CARES Act. The guidance would have over-ruled a presumption that all payroll costs for public health and public safety employees would be treated as payments for services to mitigate the impact of COVID-19, as required by the CARES Act. This was a concern as local governments across the nation have already relied on this presumption to make budgeting, payroll, and employment decisions. 

The National League of Cities (NLC) sent a letter to Treasury explaining the issue in detail. You can read that letter HERE.

On Monday, the Treasury issued the new guidance reinforcing the original presumption. We will continue to keep our members up-to-date on all guidance issued by the federal government regarding the use of CRF revenues.
 

OHIO CORONAVIRUS RESPONSE UPDATE

·        As of Thursday afternoon, Ohio is reporting 147,744 cases of coronavirus, 4,715 deaths, 15,051 hospitalizations and 3,228 ICU admissions.


  • Upgraded to Level 3 (Red): Ashland, Delaware, Pike, Scioto, and Stark
  • Remaining at Level 3 (Red): Butler, Mercer, Montgomery, and Putnam
  • Downgraded to Level 2 (Orange): Portage
  • There are no counties on Ohio’s Watch List
 
  • Following a request from authorities in Cleveland, Governor DeWine today issued a proclamation to activate approximately 300 members of the Ohio National Guard to assist the Cleveland Police Department during the presidential debate in Cleveland on Tuesday. The Ohio National Guard has provided support for similar events in the past, including the Republican National Convention in 2016 and several presidential inaugurations.

  • Gov. DeWine unveiled a new case demographics dashboard on coronavirus.ohio.gov. The new dashboard gives citizens access to COVID-19 case data by race or ethnicity. The data can be broken down by age and county and compared to the overall Ohio population.

  • Gov. DeWine encouraged Ohioans to answer the call if contacted by a contact tracer. Contact tracing slows the spread of   COVID-19 by notifying people who may have been exposed to COVID-19 and advising them to monitor their health for signs and symptoms; helping those who may have been exposed get tested; asking people to self-isolate or self-quarantine if appropriate; helping people identify the resources they need to safely stay at home.

  • Ford is donating 2 million medical grade face masks to the state of Ohio for healthcare providers, first responders, underserved populations, and senior living communities. The donation is part of the Ford Fund’s commitment of 100 million medical-grade face masks through 2021.

  • Over the last 27 weeks, ODJFS has distributed more than $6.6 billion in unemployment compensation payments to more than 809,000 Ohioans. Of the more than 1 million applications the agency has received, more than 94% have been processed, with less than 6% pending. In addition, ODJFS has issued more than $6 billion in Pandemic Unemployment Assistance (PUA) payments to more than 569,000 PUA claimants.



THE OHIO STATE UNIVERSITY OFFERING MAPS COURSES/CONTINUING EDUCATION OPPORTUNITY FOR LOCAL LEADERS

Last year, more than 1,400 public and nonprofit professionals participated in Management Advancement for the Public Service (MAPS) courses through the John Glenn College of Public Affairs. This year, the MAPS program is offering 70 skill-building courses from October 2020 to June 2021 in practical categories like grant writing, finance and budgeting, and project management along with more than a dozen courses on diversity, equity and inclusion.

The goal of MAPS is to provide simple, one-stop access to high quality professional development for public agencies and their employees. Each one-day course results in six hours of continuing education unit (CEU) credit. MAPS courses are 100% online through December. Individuals pay $275 per course and employers, including municipal employers, pay $225 per course when they purchase 12 or more courses in advance.

To find out more and to register, click HERE.




BILLS OF MUNICIPAL INTEREST PASSED BY LEGISLATURE

Here are the bills impacting municipalities that were passed by the House and Senate this week:

  • HB 669 – ALCOHOL SALES. Sponsored by Rep. Swearingen (R – Huron) and Rep. LaRe (R – Violet Twp.) would enact provisions of law relative to the sale and delivery of alcoholic beverages by liquor permit holders and declare an emergency. During its third hearing before the Senate Agriculture and Natural Resources Committee, an amendment was adopted that. Among other changes, enables to-go alcohol sales within set parameters and sunsets the sales area expansion provision. The bill was then voted out of committee and was unanimously passed by the full Senate, then concurred upon by the House by a vote of 80-4. The bill now heads to the Governor’s desk for his signature. The League is neutral on this legislation. (Link: https://bit.ly/3crpm4G)

  • HB 17 – HOMESTEAD EXEMPTION. Sponsored by Rep. Ginter (R – Salem), would allow an enhanced homestead exemption for surviving spouses of public safety personnel killed in the line of duty. During its second hearing before the Senate Ways and Means Committee, the Fraternal Order of Police of Ohio testified in support. The bill was then voted out of committee and passed unanimously by the full Senate. The League is neutral on this legislation. (Link: https://bit.ly/3mQF3XS)




COMMITTEE UPDATE: BILLS OF MUNICIPAL INTEREST

Here are the bills impacting municipalities that received committee hearings this week:

  • HB 450 – FISCAL OFFICERS. Sponsored by Rep. Stephens (R – Kitts Hill), would require fiscal officers of certain political subdivisions to provide certificates of transition to their successors when leaving office and modify language regarding the duty of a treasurer of a board of education to deliver to the treasurer's successor all papers related to the affairs of the district. During its first hearing before the Senate Local Government, Public Safety and Veterans Affairs Committee, the bill’s sponsor explained that the legislation creates a “checklist to ensure a smooth exchange of information between outgoing and incoming fiscal officers.” The League is neutral on this legislation. (Link: https://bit.ly/32Z3zOI)

  • HB 674 – LIQUOR LAWS. Sponsored by Rep. Hillyer (R – Urichsville), would revise specified provisions of the liquor control law and declare an emergency. During its third hearing before the Senate Agriculture and Natural Resources Committee, opponents testified against the bill. The League is neutral on this legislation.(Link: https://bit.ly/2FQpPSi)

  •  SB 286 – TAX CREDIT. Sponsored by Sen. Schaffer (R – Lancaster), would authorize an income tax credit for volunteer firefighters who purchase firefighting-related safety or protective items. During its second hearing before the Senate Ways and Means Committee, the Volunteer Committee for the Ohio Fire Chiefs’ Association and the Ohio Township Association testified in support of the bill. The League is supportive of this legislation. (Link: https://bit.ly/334lDqV)

  • SB 190           -- INCOME TAX CREDIT. Sponsored by Sen. Schaffer (R - Lancaster), would allow an income tax credit for law enforcement officials who purchase safety or protective items to be used in the course of official law enforcement activities. During its fourth hearing before the Senate Ways and Means Committee, not testimony was heard on the bill. The League is supportive of this legislation (Link: https://bit.ly/3mO9b6j)