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Fiscal Year '20: Wrap-Up

The Ohio Legislature wrapped up its spring session and headed home for the summer recess this week, officially. Specifically, the House finished their work in mid-June for the next couple of months, while the Senate wrapped up a few things this week and then plans to come back to Columbus once a month over the summer as they attempt to finalize a few more legislative issues.

A lot has happened the past couple of months, between May and June when the Legislature returned once the ‘Stay at Home’ orders gave way to the “Stay Safe Ohio” order. They passed some much-needed legislation as it related to the Pandemic as well as other important legislation that had stalled for the past several months.

As May 1st came and went, the state began allowing businesses to open back up, gradually, in phases over the months of May and June. As you know, the pandemic has drastically impacted our health care system, as well as our economy! The Legislature focused on addressing some of their legislative priorities, while also resolving some budget shortfalls (declining tax revenues, coupled with additional spending) that came about as a result of the Coronavirus.

To address the budget shortfall, Governor DeWine cut $775 million from his state agencies in the current budget for FY ’20, which expires on June 30th. The cuts were implemented in the following areas: Medicaid spending ($210 million); K-12 foundation payments ($300 million); other education line-items ($55 million); higher education ($110 million); all other state agencies ($100 million). The governor’s action also preserved hiring freezes, travel limitations, and contracting restrictions, and required additional cuts from cabinet directors.

Going into FY ’21, which starts July 1st, the State expects a $2.5 billion shortfall, which will be addressed sometime later this year, perhaps during the ‘Lame Duck’ session after the November elections. There is $2.7 billion in the state’s budget stabilization (“rainy-day”) fund. This has not yet been touched, but a portion of it will likely be used to assist in balancing the FY ’21 budget. The governor’s office hasn’t yet stated the exact amount they will propose to use, but we anticipate it to be significant. We expect some other spending cuts and revenue enhancements as well.

Below is a list of some of the priorities the Legislature has been working on over the past two months in anticipation of the summer recess:

  • Civil Liability due to COVID-19 – SB 308 & HB 606. HB 606 passed the Senate this week and will likely be the vehicle moving forward. It was amended in the Senate, so the House will need to concur on those changes, or go to Conference Committee to work out their differences, when they return before it goes to the Governor for his signature.

  • Capital funding bill – not likely at this time given the current financial situation; but maybe later this year if the fiscal climate is resolved and the economy turns around.

  • Capital Re-Appropriations Funding – SB 316 & HB 670. [The full funding language (SB 316) was amended into HB 481, a land conveyance bill, which passed and was recently signed into law.

  • CARES Act Federal Funding – distributes $350 million to local governments – SB 310 (was also amended into HB 481, the land conveyance bill), which passed and was recently signed into law.

  • Conveyance of State-owned Property/Capital Re-appropriations/CARES Act funding – HB 481, which became the Capital Re-appropriations Omnibus bill. It was passed on June 11th and signed by the Governor on June 19th.

  • Student Religious Rights – HB 164 (portions of SB 319/the 2020-2021 Education law- COVID-19 were amended into it). It was passed June 11th and signed by the Governor on June 19th.

  • Unemployment Compensation – HB 614 & SJR 4. Each passed their respective chambers in Mid-June.

  • Broadband/Internet - HB 13. Passed the House.

  • Drug Sentencing/Criminal Justice Reform – SB 3. Passed the Senate.

  • Temporary Tax Amnesty Program – HB 609. Passed the House.

  • Limit Department of Health Director Authority – SB 1 & SB 311, & a few others…still pending.

  • Budget Corrections - FY ’21, likely this fall.

So in conclusion, the General Assembly may return in the fall for a few days in September and October (“if needed”) and then for the “Lame Duck” session after the November Elections, in mid-November through early December. The Lame Duck session should prove to be very interesting and hectic, to say the least. It always is!

In the meantime, if you have any questions or if we can be of any assistance during this time, please feel free to contact our team. If you would like more information about this Buzz, please contact Rich Bitonte, Dan Dodd or Tom Zaino at 614-782-1440 or . Thank you.

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