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 February 16, 2018

OML UPDATE AT-A-GLANCE

Here are the top 3 things you need to know from this past week:

  • The state revenue numbers for January came as a surprise to many. While non-auto sale tax revenue was projected for $852 million, the actual revenues were $793 million -- $59 million below estimates. However, auto sales revenue came in $20 million above projections, while personal income tax revenue was reported as 25% above expectations.  

  • Over 2,000 Ohio citizens will receive checks averaging $830 each as a portion of Cephalon Inc. and affiliates' settlement with the state. Several states, including Ohio, sued the pharmaceutical companies, alleging that they used anticompetitive conduct to delay generic version of Provigil, a sleep disorder drug, from entering the market. The total settlement payout for affected consumers totaled $35 million. 

  • The Pew Charitable Trusts have released the findings of a study showing that although Ohio crime rates have decreased by 24% from 2008 to 2016, the state's imprisonment rate has remained the same. Compared with the national level, the U.S. crime rate has decreased 23% over the same time period, with an 11% decrease in imprisonment.
 
CENTRALIZED COLLECTION LAWSUIT RECEIVES INJUNCTION HEARING

This week, Franklin County Common Pleas Court Judge David Cain presided over an injunction hearing in the lawsuit brought by over 100 municipalities across Ohio against a budget bill provision authorizing the centralized collection by the state of municipal net profit business filings. 

The cities and villages in the suit are asking that Judge Cain issue an injunction that would prevent the budget provision from going into effect before February 24 - the deadline by which municipalities would otherwise be required to pass ordinances allowing the state to centrally collect the net profits tax under pain of losing the ability to levy any tax at all. 

Frank Reed, the attorney arguing on behalf of the municipalities, explained the lawsuit's challenge of state overreach, and how the budget provision not only violates the Ohio Constitution's grant of Home Rule authority to municipalities, but also violates its single-subject rule. His argument for the injunction detailed the risk of injury not only to the municipalities in question, but also the negative effects passed down to third parties like businesses and taxpayers. 

The state, represented by attorney Jeffrey Miller, argued that the Legislature has the constitutional authority to limit any political subdivision's ability to levy taxes and insisted businesses would be harmed if the provision did not go into effect. 

The League's Municipal Income Tax Committee member and City of Columbus income tax administrator, Mindy Frank, spoke to how the provision will not only affect the city's constitutional Home Rule powers of levying and collecting taxes, but also about the harm the city's bond rating would experience due to the impeded cash flow. She also voiced her doubts that municipalities would ever be able to review net profit business filings through the Ohio Business Gateway - a huge blow to the crucial work of auditing and reviewing filings done by the municipal tax administrators. 

The League will continue to track and report on the lawsuit and its progress.


SMALL CELL INFRASTRUCTURE BILL AMENDED AND VOTED OUT OF COMMITTEE 

HB 478, the small cell wireless infrastructure bill sponsored by Rep. Smith (R - Bidwell) and Rep. LaTourette (R - Chesterland) has been amended and voted out of the House Government Accountability and Oversight Committee. A substitute bill has been amended into the bill, which includes such changes as:

  • A technical clarification to prevent any redundancy and confusion regarding small cell infrastructure collocation structures
  • A clarification stating certain video service providers qualify as small cell facility operators
  • Clarifying language ensuring nothing in the bill can be interpreted as imposing new requirements on electric utilities
  • Codifies several existing standard practices governing cable infrastructure installation as well as clarifying that cable micro wireless facilities are to be treated the same as small cell wireless facilities within the bill

These amendments were agreed to by all the interested parties that have been involved in drafting this legislation for the past several months, including the League and representatives from major municipal groups, as well as representatives from the cable industry. The legislators present during the committee hearing passed the bill out of committee 9-3. The following day, it was heard before the entire House of Representatives and voted out of the House 76-15. The bill now moves to the Senate for consideration. We will continue to track and report on the bill's progress as it moves through the legislative process.

 
OML AND OHIO MAYOR'S ALLIANCE HOLD JOINT BOARD MEETING

Last week, the boards of the Ohio Municipal League and the Ohio Mayor's Alliance met in a joint meeting to discuss the successes of the past year and to strategize how to collaborate on advocating for and advancing the agenda items most important to both groups.

The Executive Directors of both organizations, Kent Scarrett and Keary McCarthy, launched the meeting by thanking the participants and expressing expectations of a meaningful, productive collaboration in the months to come. They detailed their history in working with one another over the past several years, often tag-teaming on many of the same issues. Dir. McCarthy explained the history of the founding of the Mayor's Alliance, outlining the goals the organization was founded to accomplish. Dir. Scarrett brought the members up to speed with a legislative update, and both directors expressed anticipation for greater cooperation between both organizations going forward.

The Mayor's Alliance Board President, Findlay Mayor Lydia Mihalik, recapped the mission and achievements of the Mayor's Alliance during the past year. OML Board President, Marion Mayor Scott Schertzer, facilitated the meeting's open-floor discussion. The boards' members discussed ways to increase sharing of best practices among municipalities, rebuild trust and dialogue between municipalities and the state, and how to move forward with big priorities - specifically the great need for increased infrastructure funding. 

The League wants to thank the Mayor's Alliance and all the board members who participated in what was an informative and productive conversation. We look forward to continued conversation and coordination between both organizations as we build a more safe, sound and healthy future for Ohio's municipalities. 

 
PRESIDENT TRUMP UNVEILS INFRASTRUCTURE PLAN IN FEDERAL BUDGET PROPOSAL

This week, President Trump revealed his long-promised infrastructure plan, which asks states and local governments to pay a substantial portion of the bill. 

The initiative's initial price tag is $1.3 trillion dollars, but that entire amount is what the federal government is hoping to entice via just $200 billion in federal spending, coupled with a proposed increased speed of the federal government's existing approval process. Half of that initial amount - $100 billion - would be funneled through what the White House is calling an "incentive program", in which the states or local governments would be required to pay for the majority of the cost of an infrastructure project in order to qualify for the funds. The Department of Transportation, the Environmental Protection Agency and the Army Corps of Engineers are proposed as the agencies to oversee this incentive program. 

The remaining $100 billion would find its way into the hands of state and local infrastructure projects via $50 billion in block grants designated for rural state governors; $20 billion in expanded federal loan programs; $20 billion for what the White House is calling "transformative projects"; and $10 billion deposited into a capital financing fund for federal office buildings. Spending just $200 billion out of the proposed $1.3 trillion in total infrastructure spending across the nation's states, cities and villages is part of the White House's efforts to curb what they have called an "overreliance on federal grants and other federal funding." 

To find out more about the proposed infrastructure initiative and what it may mean for your municipality, please visit https://www.whitehouse.gov/briefings-statements/building-stronger-america-president-donald-j-trumps-american-infrastructure-initiative/

 
OML HOLDS QUARTERLY MUNICIPAL LEGISLATIVE BREAKFAST ON "PLACEMAKING"

This Wednesday, the League held the first quarterly Municipal Legislative Breakfast for 2018. Legislators from both chambers, along with their aides, joined League staff in the Sheraton in downtown Columbus for a breakfast buffet, networking and a presentation and discussion on placemaking.

The presentation, given by Heritage Ohio's Executive Director Joyce Barrett and Greater Ohio Policy Center's Executive Director Alison Goebel, explained placemaking as the process of creating quality places where people want to spend time working and living. The goal behind placemaking is designed to make communities attractive to both businesses and workers who are increasingly mobile, such as the millennial workforce, who are considering more than just employment when deciding where to live.

The League wants to thank the legislators and their staff who joined us for the breakfast and discussion, as well as Directors Barrett and Goebel for their informative and thought-provoking presentation. We look forward to future breakfasts for discussions on other issues important to the health of our municipalities and aiding their role as the economic engines of Ohio.
 

BILLS IMPACTING MUNICIPALITIES HEARD IN COMMITTEE THIS WEEK

Here are the bills that are important to municipalities that received committee hearings this week:
  • HB 382 - UNEMPLOYMENT COMPENSATION LAW. Sponsored by Rep. Schuring (R - Canton), this bill would modify terms describing payments made under the Unemployment Compensation Law, increase the amount of wages subject to unemployment compensation premiums, require qualifying employees to make payments to the Unemployment Compensation Insurance Fund, allow the Director of Job and Family Services to adjust maximum weekly benefit amounts, to reduce the maximum number of benefit weeks, and make other changes to the Unemployment Compensation Law. During its fourteenth hearing before the House Government Accountability and Oversight Committee, no testimony was heard on the bill. The League is neutral on this legislation.
  • HJR 4 - UNEMPLOYMENT COMPENSATION BONDS. Also sponsored by Rep. Schuring (R - Canton), this joint resolution would enact Section 2t of Article VIII of the Constitution of the State of Ohio to allow the General Assembly to provide by law for the issuance of bonds to pay unemployment compensation benefits when the fund created for that purpose is or will be depleted or to repay outstanding advances made by the federal government to the unemployment compensation program. During its fourteenth hearing before the House Government Accountability and Oversight Committee, no testimony was heard on this legislation. The League is neutral on this bill.
 
  • HB 352 - DOGS LAW REVISIONS. Sponsored by Rep. Rezabek (R - Clayton) and Rep. Huffman (R - Tipp City), this bill would revise provisions of the Dogs Law governing nuisance, dangerous, and vicious dogs, revise enforcement of that Law, and establish a notification process regarding complaints of certain violations of that Law. During its first hearing before the House Government Accountability and Oversight Committee, the sponsoring representatives explained how the bill focuses on owner accountability involving vicious or dangerous dogs. In addition to creating guidelines directing how authorities respond to or follow up on calls alleging a dog is dangerous, the bill grants dog wardens arresting authority. Violent felons would not be allowed to own dogs for five years, all dogs labeled "dangerous" would have to be registered, and certain criminal penalties are increased. This bill is a "companion bill" for SB 195, which is sponsored by Sen. Beagle (R - Tipp City). The League is supportive of this legislation.
 
  • HB 278 - VEHICULAR ASSAULT. This bill, sponsored by Rep. Patton (R - Strongville) and Rep. Kelly (D - Cincinnati), would include negligently causing serious physical harm to a law enforcement officer while operating a motor vehicle or other specified mode of transportation as a violation of the offense of vehicular assault. A substitute bill was adopted during its third hearing before the House Criminal Justice Committee, making the section of the Ohio Revised Code changed by the bill from vehicular assault law to the move-over law. No testimony was heard on the bill. The League is supportive of this legislation.
 
  • HB 422 - WATER/SEWER ACQUISITION. Sponsored by Rep. Ginter (R - Salem) and Rep. Rogers (D - Mentor-on-the-Lake), this bill would govern acquisitions of municipal water-works and sewage disposal system companies by certain larger nonmunicipal water-works or sewage disposal system companies. During its fifth hearing before the House Energy and Natural Resources Committee, the bill was passed out of committee 11-0. The League is supportive of this bill.
 
  • HB 314 - LAW ENFORCEMENT TAX CREDIT. This bill, sponsored by Rep. 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 third hearing before the House State and Local Government Committee, the League's Executive Director Kent Scarrett submitted proponent testimony supporting the bill's creation of a mechanism by which law enforcement are better able to afford equipment that helps ensure they go home to their families at night. You can read that testimony HERE. An amendment was offered that moved the first year the tax credit could be claimed from 2017 to 2018. That amendment was adopted unanimously. A second amendment was offered by Rep. Holmes (D - Girard) that protected the Local Government Fund and Public Library Fund from being affected by the fiscal impact of the bill. The current estimated amount that would be deducted from the state General Revenue Fund is project at $21.7 million for fiscal year 2019, with an annual loss between $12.2 million and $16.2 million each year going forward. For local government and public library funds, those losses are projected for up to $0.7 million for fiscal year 2019 and a loss between $0.4 million and $0.6 million each year going forward. That amendment was tabled, with four Democratic representatives casting dissenting votes. The bill was voted unanimously out of committee.
 
  • HB 470 - PUBLIC LIGHTING TAX LEVY. Sponsored by Rep. Edwards (R - Nelsonville), this bill would authorize a property tax levy specifically to fund lighting for roads and public places. During its second hearing before the House State and Local Government Committee, both the League's Executive Director Kent Scarrett and the city council president of the city of Nelsonville wrote in support of the bill, which allows voters to know exactly how their tax money will be spent in regards to public lighting. You can read Dir. Scarrett's proponent testimony HERE.