It’s hard to capture every nuisance and change in the budget when it takes the Senate GOP caucus fifteen pages just to describe the amendments, and I haven’t the time (or yet present ability) to read the amendments myself.
Workers Compensation Council. InnovationOhio was quick to declare a partial victory in that the Ohio Senate’s omnibus budget amendment eliminates the unstaffed Workers Compensation Council. That’s pretty remarkable when you consider ordinarily such a move should have been made in the separate budget for Workers Compensation that has already been signed into law. Also, we all know that the Council is the pet project of Speaker Batchelder. This might be a throw away item for the Senate once the budget goes into House-Senate conference negotiations (assuming the House doesn’t not agree to the Senate’s changes.) None the less, the Senate proposes it’s gone.
Merit pay for teachers. Again, we don’t have the actual legislative language but it appears that the Senate’s omnibus amendment removes the “merit pay” for teachers that seems to be a “cloning” of SB 5 into the budget bill. If so, that’s a pretty startling rebuke to the Kasich Administration, which has been campaigning hard on the teacher merit pay as a major component of the budget. I think this is a sign that some in the Statehouse is starting to look at Kasich’s polling numbers (and SB 5’s) and deciding political self-preservation trumps blind ideological partisan loyalty to a Governor with sub-40s approval rating in his “honeymoon” period.
This is a BFD.
Most of the charter school/e-school changes. For the most part, the Senate would remove most of the charter school/e-school changes that the House snuck into the budget at the behest of lobbyists for David Brennan and another e-school executive/major GOP donor. Yes, the oppressive Senate decided not to go along with the House’s proposal to, among other things, no longer require that e-schools provide computers for all of its e-students (seriously… this was one of their proposals. That e-students didn’t have to be provided with a computer.) Another House proposal the Senate struck would have allowed charter schools to continue to count a student as enrolled, for state funding purposes, if the student failed to formally re-enrolls (which, if left in the budget, would have allowed charter schools to get state aid to educate “phantom students.”)
However, the Senate version still requires school districts to give unused real property to charter schools by creating, by statute, a “right of refusal.” But the Senate version also holds that if a charter school is “rated in the top 50% by performance index score” it has the right of refusal to lease the property from the school district for $1 (this wasn’t even in the House version.) In other words, if the school district has a buyer or lessee who is willing to pay fair market value, the district must first offer the property to charter schools who all have the right of first refusal to match the offer. However, if a charter school rates in the top 50% (in other words average and above), then it not only has a right of first refusal, but it only needs to pay $1 for that same property lease.
Tax break for private prison operators. A couple of weeks ago, I had some fun with the “logic pretzel” House Finance Chairman Ron Amstutz (R-Wooster) was creating in justifying the House’s budget language that would exempt private prison operators from paying all but real property taxes. Apparently, someone in the State Senate GOP caucus agreed because they’ve removed that language as well.
Consumer Counsel gag order. The Senate omnibus budget amendment would restore $1.5 million in funding (even the House restored some funding from what Governor Kasich proposed) for the public consumer utility watchdog office known as the Consumer Counsel’s Office, whose cuts have been derided by every media outlet in Ohio since the budget was released. The House also prevented the Consumer Counsel from objecting to deregulation of the gas market, even if such deregulation would be harmful to consumers and drive up their costs. That gag would be lifted if the Senate’s version of the budget becomes law.
The Senate would also restore the mandate that the consumer counsel’s contact information be included on all utility bills, something the House tried to eliminate.
$4 million for Children’s Hospitals.
When Kasich introduced his budget, his “Savings Book” boasted about cutting funding for Children’s Hospital explaining (on page 45):
Beginning in FY2006, the General Assembly required ODJFS to make supplemental payments to Ohio’s children’s hospitals. In FY 2009 the General Assembly created a designated line item for these payments and earmarked $4.4 million in FY2010 and $4.0 million in FY2011 from the hospital franchise fee to provide additional payments to children’s hospitals.
[T]hese supplemental payments are not linked to the requirement of a specific policy or performance outcome, which is in contrast to most Medicaid payments where payments are made in exchange for the delivery of an actual service.
Effective July 1, 2011, the Executive Budget will eliminate these special payments…
When the Children’s Hospitals started to complain about being singled out for cuts, the Kasich Administration said it was all an “unintended consequence” of their budget. Well, the Senate is intentionally putting $4 million per fiscal year back into that line item, returning it to where it was roughly the past two fiscal years. In other words, they’re spared Kasich’s budgetary ax.
Ads on Government websites
Governor Kasich proposed that governments, as a way to generate revenues, should start selling ads on their websites and introduced statutory provisions to permit such ads. The Senate took it out.
More $ for schools and local governments
$115 million more for K-12 schools and $100 million to local governments, according to the Columbus Dispatch. The minimum amount a locality can receive from the local government fund was raised from $500k to $750k. Schools now can ask for both an income and property tax levy under one levy proposal (because the Kasich budget won’t raise local taxes, right, folks?)
More money for PASSPORT. The Senate would add $15 million in State funding from the House’s budget, which would result in an additional $27 million in federal funding). Given the Administration promotion (correctly) of home-based nursing over more expensive nursing home care, it made little sense why the Administration was cutting PASSPORT as much as they did. Apparently, the Senate Republicans agreed and restored more of its funding.
Modern, where’s this additional money coming from? I’m so glad I asked. The Senate decided to go with the non-partisan Legislative Service Commission’s budgetary forecast which was slightly rosier than the Administration. That results in a larger projection of state revenues caused by a growing economy in the State= more money for the Senate to budget for, meaning less cuts necessary to balance.
Turnpike privatization. In what potentially could be fatal to the prospects of privatizing the Ohio Turnpike, the Senate takes the House provision and adds a silly requirement like… the sale or lease of the Turnpike will require future separate legislative approval.
So the Kasich Administration started with a provision that would allowed them to privatized, at will, any State function on their own. That was limited by the House to apply only to the Turnpike, and now the Senate has added that they’ll have to come back for the General Assembly to approve such a deal.
The Senate would increase the State’s share of the selling of standing timber from 25% to 35% and mandates that the share be deposited into ODNR’s State Forest Fund rather than the ubiquitous General Revenue Fund.
I’m STILL trying to decipher this one. I’m assuming that this change makes the standard for exclusion from the State’s minimum wage laws disjunctive (where you only had to belong to one of the three classes) as opposed to being disjunctive which would require a combination of more than one.
I’m going to wait to read the actual statutory language on this one, but if my assumption is correct, this could be a major (and subtle) re-write of Ohio’s minimum wage laws. You see, the federal minimum wage doesn’t apply to businesses who gross less than $500,000. The State’s minimum wage law, under Art. II, Sec. 34 of the Ohio Constitution, states that for employers making more than $271,000, you have to pay the State’s higher minimum wage of $7.40, which is higher than the federal rate of $7.25. This would seemingly create a conflict between a State statute and the stated intentions of Ohio’s Constitution.
So this is either just a technical amendment to clarify confusing present language…. or, it unconstitutionally reduces the term of “employee” under Ohio law so that if you aren’t required to pay federal minimum wage law, you aren’t required to pay the State’s higher rate either. Worst case scenario: many Ohioans who presently fall under the State’s minimum wage law, including some who are paid no more than the lower, federal rate, may not be covered at all.
The main reason I suspect the doomsday scenario? In announcing his Common Sense Initiative (CSI) plan during the campaign, Kasich announced that Ohio should have no regulation or law beyond what the federal government already mandates. Many interpreted this as a veiled attack on Ohio’s minimum wage law, although the Kasich camp denied that the “minimum wage” was on their radar during the transition.
[UPDATE:] LSC confirms in their analysis that the change “may result in fewer individuals subject to the minimum wage.”
Stay tuned on this one.
Joseph’s piece covers it all nicely: Before the weekend, we’re told that a lobbyist for a private lottery vendor with deep Kasich ties submits proposed legislation to privatize the Ohio Lottery Commission. The next business day—viola—the Senate includes a privatization proposal of the lottery into the budget, even though there was no such proposal in the Kasich or House versions of the budget.
Oh, and the lottery commission would no longer have to say in its advertising, tickets, or website what percentage of its revenues wind up going to fund education anymore, if the Senate gets its way.
Tax expenditures commission
It could just be window dressing, but the Senate calls for the creation of Joint Tax Expenditure Review Commission, which would be charged with reviewing Ohio’s $7 billion a year in tax expenditures (specialized tax breaks.) Some of these are popular tax breaks that joint, married filers claim for example. Others seem to be nothing less than corporate giveaways like the tax deduction for owning a time share for a corporate jet.
Nuclear tax exemption
But then the Senate takes the populism of the last proposal by then exempting “the sale, exchange, or other disposition on unenriched and enriched uranium from the commercial activities tax.” There’s what remains of an uranium enrichment plant in Piketon, Ohio, which there has been talks about turning into a modern centrifuge-type enrichment plant to a flat-0ut nuclear waste storage facility. Presumably, this would also benefit the nuclear power plants in the State. However, the CAT tax was specifically intended to avoid this very kind of tax loophole by industry environment by exchanging a lower tax rate for less exemptions, but a much broader tax base.
Maybe this will help the JobsOhio liquor profits scheme, but the Senate budget increases the maximum alcohol content of beer from 12% to 18%.
WHAT’S STILL IN
Pretty much everything else.
Prevailing wage reform, which has gotten scant attention from the press, is still in the budget bill. So is the repeal of the State’s estate tax by 2013. The changes to Ohio’s civil service laws that Kasich proposed isn’t change much further than the House already has, even after they’ve been featured by the Dayton Daily News.
Although the uranium industry in Piketon gets a CAT tax break, apparently there’s been no movement in the General Assembly for casinos.
Most of the coverage so far of these budget changes have focused on the “good changes” for local governments, PASSPORT, and schools. But as we’ve discussed, it’s still a crappy budget. A $100 million less in cuts is good, but let’s not fool ourselves. The cities and schools are still seeing over a billion in cuts.
[UPDATE II:] I forgot to mention that Kasich’s 2% shift in pension contributions is still out. Whether it’s inserted later or becomes part of still pending “pension solvency reform” legislation or not remains to be seen. The Dispatch reported this morning that the prevailing wage language remains, but could be removed later.
The good news is that the Senate took some of the more insane proposals of the House out. The bad news is that they put some of their own in. While the Senate has exerted more independence over Kasich than we’ve seen. Don’t be fooled. For the most part, Kasich is getting most of what he’s seeking.
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