Updates From Ohio

ATTORNEY GENERAL In advance of Data Privacy Day on Saturday, Jan. 28, the Ohio Attorney General's Office released a 2016 update on its Identity Theft Unit. The unit, which helps victims correct the effects of identity theft, received 1,057 complaints and helped victims clear more than $890,000 in fraudulent charges in 2016, according to complaint information.
FY18-19 BUDGET Gov. John Kasich introduced his final biennial budget proposal Monday, describing a $144.3 billion total spending package with modest increases for K-12 education and a mix of tax changes meant to result in a net tax cut for Ohioans. The FY18-19 executive budget proposal includes $71.5 billion in all-funds appropriations for FY18, a 4.4 percent increase from estimated FY17 spending; and $72.8 billion in FY19, a 1.8 percent increase from FY18. For the General Revenue Fund (GRF), proposed appropriations are $33.1 billion in FY18, a 5.6 percent reduction from FY17 estimates; and $33.8 billion in FY19, a 2.2 percent increase from FY18. Excluding federal Medicaid appropriations, state share GRF appropriations total $22.8 billion in FY18, a 0.8 percent decrease from FY17, and $23.3 billion in FY19, a 2.3 percent increase from FY18.
Kasich has again included tax proposals floated in previous budgets including the severance tax and a broadening of items subject to the sales tax. He has also proposed reducing the number of personal income tax brackets and consolidating some municipal taxes to one form and payment through the Ohio Business Gateway. He also increases certain cigarette and tobacco taxes, including applying the tax to e-cigarettes.
On the higher education front, Ohio's institutions of higher education will freeze their tuition and be required to cover the costs of textbooks for students.
Even though all major tax sources are below estimates through the first six months of FY17, underspending in some areas and other factors will likely keep the state out of the hole, Budget Director Tim Keen told the House Finance Committee Wednesday. However, Keen advised lawmakers to be cautious when considering the Office of Budget and Management's (OBM) forecast, which predicts $22.14 billion in revenues for FY17. Later in the hearing, the committee heard from Mark Flanders, director of the Ohio Legislative Service Commission (LSC), who highlighted their revenue estimates, telling the committee they are "slightly higher" than OBM's. Beginning with the current fiscal year, he said LSC estimates the state will receive nearly $112 million more than OBM currently estimates.
Ohio Department of Transportation (ODOT) Director Jerry Wray offered further details on his agency's plan to improve traffic flow on the state's highways during testimony to the House Finance Committee on Thursday. The transportation budget, HB26 (McColley), would grant ODOT the authority to use variable speed limits and change the shoulder into an additional lane during rush hour. Wray discussed the idea briefly over the last couple of weeks. He said the concept would be tested on I-670 in Columbus starting in 2018, noting dynamic message signs will be placed above the roadway to alert drivers to when the shoulder lane is open.
ECONOMIC DEVELOPMENT Governor John Kasich and Speaker of the House Cliff Rosenberger (R-Clarksville) expressed disappointment in Amazon's decision to choose the Cincinnati/Northern Kentucky International Airport (CVG) in Hebron, Kentucky over Wilmington Air Park (ILN) in Ohio as the location for a new centralized air hub.
The Kasich administration announced more than $4 million in Job Creation Tax Credits this week with the goal of spurring $164 million in additional commercial investment around the state. The actual ratio of old to new positions projected for the 12 project sites is more than 3-to-1, or 694 jobs created versus 2,501 jobs retained.
EDUCATION The Capitol Square Review and Advisory Board said Tuesday that the Ohio Statehouse will celebrate Black History Month throughout February with a special art exhibit and free historical performances each Tuesday at noon.
ENERGY American Electric Power (AEP) affirmed this week that earnings from AEP Ohio customers are the highest of all states where the company operates, based on fourth quarter results. AEP's November 2016 fact sheet puts those profits at 17 percent higher than Ohio Power Company's closest rival, AEP Kentucky Power, and 67 percent higher than AEP Southwest Electric Power (Texas).
Major consumer voices including the Ohio Consumers' Counsel and the Ohio Manufacturers' Association (OMA) told a Capitol Square conference Tuesday that markets rather than government intervention are the best guarantee of a competitive energy product, but Chairman Asim Haque of the Public Utilities Commission of Ohio (PUCO) appeared to offer a somewhat different vision of Ohio's energy future as one embracing "disruptive regulation." Haque joined Consumers' Counsel Bruce Weston and OMA policy advisor Ryan Augsburger at "The Future of Ohio's Energy" conference hosted by Vorys Advisors at the Sheraton Capitol Square.
GENERAL ASSEMBLY/STATEHOUSE Both Speaker of the House Cliff Rosenberger (R-Clarksville) and Senate President Larry Obhof (R-Medina) released the list of members of their standing committees. In the Senate, it included a reduction in the total number of standing committees to 13. Changes among chairmen include the following: Sen. Bill Beagle (R-Tipp City) will chair the Senate Public Utilities Committee; and Sen. John Eklund (R-Chardon) will now chair the Senate Ways and Means Committee. Sen. Bob Hackett (R-London) will chair the Senate Finance Subcommittee on Health and Medicaid.
Majority and minority leaders of House and Senate finance committees generally agreed Wednesday that basic priorities – schools, public infrastructure and public safety – must come first in the FY18-19 budget, though it was unclear how far Republicans are willing to go in funding those and other needs, or how far they'll go in supporting another round of the governor's proposed income tax cuts. Chairman Scott Oelslager (R-Canton) of the Senate Finance Committee, Chairman Ryan Smith (R-Bidwell) of the House Finance Committee, and their ranking minority members, Sen. Joe Schiavoni (D-Boardman) and Rep. Fred Strahorn (D-Dayton), were part of discussions at the Ohio Associated Press's daylong "2017 Legislative and Political Preview Session."
GOVERNOR Gov. John Kasich faced reporters Wednesday at the annual Associated Press forum, hitting broad themes of his new budget, defending his drive to further cut income taxes and addressing how Ohio should fight the drug epidemic, among other topics.
LOCAL GOVERNMENT The state is planning to appeal the decision of a Cuyahoga County court that ruled 131-HB180 unconstitutional because it violates home rule. The city of Cleveland sued after Gov. John Kasich signed the bill, which banned municipalities from requiring a contractor to hire a certain percentage of local residents for the construction of public projects. Opponents of the law said the measures allow cities to make sure local workers are getting jobs on local construction projects, while supporters said such laws raise costs and hurt competition.
MARIJUANA The Medical Marijuana Advisory Committee discussed Friday whether to increase the initial number of marijuana dispensaries while reducing their licensure fees and dropping the requirement they all employ a clinical director. The committee also discussed possible revisions to rules for doctors and took a first look at proposed rules for processors, patients and caregivers.
STATE GOVERNMENT The Kasich administration's Common Sense Initiative (CSI) office reviewed 2,309 state agency rules in 2016, according to an annual report released this week by Lt. Gov. Mary Taylor. More than 68 percent of those rules were either amended or rescinded.
UTILITIES A new poll released by the Alliance for Energy Choice (AEC) shows Ohioans "overwhelmingly" oppose allowing the Public Utilities Commission of Ohio (PUCO) to effectively re-regulate electric generation in the state by providing big utilities subsidies to develop power plants that are already being built with private capital, former PUCO Chairman Todd Snitchler announced Thursday. Respondents also stated by a 4-to-1 margin that they oppose any law that would erode customer choice for competitive electric suppliers.

Source: Ohio Society of CPA's