Ohio House passes state budget along party lines

Board consolidation proposal remains a concern

Ohio’s 2010-11 biennium budget passed the House along party lines, with Republicans condemning the increased levels of spending and majority Democrats defending their plan as an appropriate response to a difficult economy.

After more than four hours of floor debate, House Bill 1 passed by a 53-46 vote with all Democrats voting in favor and all Republicans opposed. As passed by the House, HB 1 would boost total state spending to more than $114 billion across fiscal years 2010 and 2011, a $10 billion increase over the current two-year budget amount.

Greatest contention centered on the significant use of one-time money and the “evidence based” school funding plan proposed by Gov. Strickland. House Democrats significantly altered the governor’s initial education proposal to provide more revenue for poorer rural districts and shift some of the funding burden to the state after a phase-in period of 10 years. Republicans balked at the extended time frame, labeling it “residual budgeting.”

On the House floor, Democrats amended the bill with additional earmarks and other changes including providing additional funds for social service programs such as food banks, libraries, child welfare and adult protective services, and after-school programs for children. It will also permit hospitals and nursing homes to draw down more federal matching funds to care for Medicaid patients, curbing some of the cost of the Medicaid franchise fee that Gov. Strickland had proposed charging.

Specific amendments added include:

Aligning Ohio’s tax code to recent federal tax changes 

• Eliminating the cost for startup companies by covering the base price of $125 for new business filings
• Allocating to the secretary of state’s office an additional $250,000 to speed up business filings
• Authorizing up to $250,000 in state co-op/internship funds toward awards for college students starting businesses
• Expanding the Ohio Venture Capital Authority by $100 million
• Adding $1 million per year for a micro loan program for small businesses

Provisions not changed from the governor’s proposed budget include moving the annual CAT return filing date out of tax season from Feb. 9 to May 10, a change which OSCPA has lobbied for very aggressively. Other changes to the CAT proposed by the governor that remained unchanged in the House version of HB 1 are:

• Moves the quarterly return filing due date from the fortieth day after the end of a quarter to the tenth day of the second month after the end of a quarter
• Requires new companies to register and pay a fee no later than 30 days after they first have more than $150,000 in taxable gross receipts
• Specifies that the $150,000 exemption applies to members of an affiliated group that do not elect to be treated as a consolidated group and permits affiliated companies that have elected to be treated as a consolidated group to change the ownership test on which the initial election was made

While the governor’s proposal to consolidate “back office” functions of the state’s boards and commissions was amended to eliminate some of the problematic language, the language is still not clear that only those services that are mutually beneficial and agreeable will be turned over to a centralized agency under the Department of Administrative Services. OSCPA and other major licensing boards continue to push for language that is in the best interests of Ohio and its licensed professionals.

OSCPA staff continues to review the legislation as it is considered in the Senate and will closely monitor its progress throughout the spring and early summer. For more information, contact Amy Mignogna in OSCPA governmental affairs.

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