(Columbus) – It has been busy season at the Ohio Statehouse these past few months – the first half in the House, followed by Senate consideration of the two-year operating budget proposal for FY ’22-23, HB 110. Wednesday afternoon, June 9th, the Ohio Senate completed work on its version of the budget bill with passage on a party-line vote, 25-8. Then the very next day, Thursday, June 10th, as expected, the House voted not to concur on Senate changes, thus sending the budget bill to Conference Committee to work out the differences between the two chambers along with the Governor’s introduced proposal as well. This process is scheduled to be finalized and agreed upon by both chambers and then signed into law by the Governor by June 30th, absent a few line-item vetoes. The Senate’s version added many new projects and funded several new programs. Highlights of the many new provisions include: (Primary & Secondary)
Establishes a new student-centered school funding formula:
Includes a rational base cost model that is easy to understand and will be regularly updated to provide responsible, stable growth in future years including a new base cost of $6,110 per pupil this biennium;
Directly funds 100% of the cost for students attending a community or STEM school or who receive EdChoice, Cleveland, Autism, or Jon Peterson scholarships, rather than funding these students in their districts of residence and then deducting funds to pay for the students at their schools of choice;
Increases the number of districts funded through the formula by decreasing the amount of guaranteed and capped funding;
Restores $650 million in Student Wellness and Success Funding over the biennium to help address students’ non-academic needs;
Provides “gap aid” to any district that does not raise the amount of local funding assumed by the formula, ensuring every district has its full foundation amount;
Restores funding for the Quality Community Schools program;
Increases max scholarship awards for students receiving an Ed Choice or Cleveland Scholarship to $5,500 (grades K-8) and $7,500 (grades 9-12);
Increases the maximum scholarship amount of the Autism Scholarship Program to $31,500 in FY22 and $32,455 in FY23;
Increases the formula amount for the determination of Jon Peterson Special Needs Scholarship awards and increases the appropriation amount for awarding of scholarships under this program;
Increases payment for community and STEM school facilities to $750 per pupil;
Establishes a process for a qualifying school district under an Academic Distress Commission to submit an improvement plan as an alternative to continued operational and managerial control by the district’s ADC, if approved;
Creates a $250 tax credit for parents who home educate their children for qualifying materials and supplies; also creates a $1,000 tax credit for those who donate to a Scholarship Granting Organization (SGO) providing scholarships, primarily to low income students, to attend a non-public school;
Creates a tax credit up to $2,500 per year for tuition paid for students to attend a non-chartered nonpublic school if the student’s household family income is below 300% FPL;
Restores funding distribution for ESCs to the As Introduced version, but increases the funding for ESCs to $28 per pupil in FY22 and $29 in FY23;
Creates a process to establish Afterschool Child Enrichment Educational Savings Accounts for parents of eligible students whose family income is at or below 300% FPL; uses $125M in federal funding over the biennium for this purpose;
Creates a structure permitting school districts to operate a school using an online learning model each school year;
Authorizes any school district subject to an academic distress commission (ADC) (Youngstown, East Cleveland and Lorain) to submit an improvement plan as an alternative to remaining under state oversight;
Revises the minimum amount of a payment in lieu of transportation offer to half the statewide average cost of pupil transportation for the previous year, rather than 50% of the cost of transporting that pupil;
Removes computer science education mandate from the bill but maintains requirement to develop a state plan for computer science education;
(Health and Human Services)
Extends for 1 year instead of current law 60 days, Medicaid postpartum coverage for women after giving birth and appropriates $23M over the biennium for this change;
Providing childcare to Ohioans as the state goes back to work by increasing the limits for qualifying for publicly funded childcare from 138% to 142% FPL. This is 12% higher than the last budget (130%) and 4% higher than the current budget proposal. To accomplish this, the Senate is adding $10M per FY or $20M over the biennium;
The Senate plan supports those who are helping some of our most in need, providing a 4% rate increase (2% per FY) for services in an Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICFs/IID) and also increases rates by the same amount for adult day services and residential services provided under a DD-administered waiver. Additionally for waiver-funded and state plan-funded providers under PASSPORT, Ohio Home Care waiver, MyCare and Assisted Living waiver, the bill provides a 6% rate increase (4% and 2%) for the following services: private duty nursing; nursing; personal care; home care attendant and homemaker; assisted living; speech therapy; and physical therapy;
Requires the rebasing of Skilled Nursing Facilities’ rates to proceed in FY 22 as required by continuing law but prioritizes rates for costs to be adjusted in the following order: direct care, ancillary and support, taxes and then capital. Limits the capital calculation to no more than 10% in any future rebasing. Provides for $25M per year for quality payments and adds $40.5M in each FY to account for these changes;
Provides $6M per FY to continue the Transcranial Magnetic Stimulation (TMS) program for veterans in need of qualifying medical treatment. Allows for the expansion of the program to first responders and law enforcement officers and renames the program and other conforming changes;
Increases funding for the Appalachian Children Coalition to $1.25M per FY. This includes funding for the training, hiring, and retention of entry-level child mental and behavioral health workers in school settings;
Expands eligibility for Medically Handicapped Children by extending the age limit by one year each year for 2021 and 2022. Provides $500K per FY for this change;
Continues providing a supplemental dispensing fee for FY 22 and FY 23 at a rate determined by Department of Medicaid based on available dollars to assist smaller pharmacies and access to care for patients;
Designates the month of May as "Maternal Mortality Awareness Month" to increase awareness about the causes of pregnancy-associated deaths;
Provides for expansion of the All-inclusive Care for the Elderly (PACE) program. PACE provides comprehensive medical and social services for the elderly living in the community currently operating only in Cleveland. (targeted expansion areas include Columbus, Cincinnati, Dayton, Lorain and Toledo);
Allows county level drug overdose and suicide fatality review committees to be established;
Provides additional funding for county JFS departments for fraud prevention activities, early fraud detection measures and public assistance program fraud investigations. Also, creates an Employment Incentive Program to incentivize individuals to achieve and maintain self-sufficiency through employment;
Provides an additional $1.5M in FY22 for the Positive Education Program (PEP) supporting children with significant behavioral or developmental challenges;
Extends rate increase in sub bill for HCBS services to PASSPORT adult day services;
Appropriates federal funding for a number of initiatives including Ohio Council of YWCAs, Boys and Girls Clubs, Big Brothers, Big Sisters, Communities in Schools, Children’s Trust Fund and Kinship Caregiver programs;
Provides an additional $10M per FY for public children services agencies of Ohio;
Designates fourth week of June as “Postpartum Cardiomyopathy Awareness Week”;
Provides $50M in FY22 using one-time federal grants for reduced child care co-pays to make child care more affordable; and clarifies language that hero pay for child care workers previously appropriated in Senate Bill 109 is unaffected by the bill’s provisions.
(Finance / Tax)
Increases the income tax cut for Ohioans from 2% to 5%. This across the board reduction, over 2 years, would save Ohioans an estimated $874M and will include funding to immediately adjust tax withholding rates. This reduction, coupled with previous cuts since 2005 are cumulatively saving Ohioans billions in tax liabilities annually. Additionally, Ohioans making below $21,150 see their tax liability eliminated;
Increases the Public Library fund share of GRF to 1.70% for the biennium;
Exempts employment services and placement services from sales and use tax. This excludes from taxation the cost of locating employment for a job-seeker or locating job candidates for an employer;
Repeals the campaign contribution tax credit starting in tax year 2021;
Extends municipal income tax withholding rule established in H.B. 197 of the 133rd General Assembly through December 31, 2021. Allows individuals to file for a refund in TY 2021 and TY 2020 (post pandemic) and makes other conforming changes;
Maintains $15M for the Law Enforcement Reimbursement Training Pilot, but pays for with GRF rather than Unclaimed Funds;
Expands income tax deductions for families saving for college with contributions to 529 accounts, allowing deductions to apply to any 529 plan, not just Ohio’s;
(Workforce & Higher Education)
Increases OCOG funding by $2.5M per FY for additional scholarships;
Provides $5M per FY for a Short-Term Certificates program providing need-based financial aid to students enrolled at a community or technical college;
Increases support for Central State University by $1.79M each FY;
Restores funding for the Choose Ohio First Scholarship;
Provides $3M in FY 22 for the Second Chance Grant Pilot for eligible students;
Makes fees for room and board, health insurance and the cost of providing textbooks subject to the cap on general and instructional fees;
Requires Ohio History Connection to designate Poindexter Village as a state historic site;
Restores reductions to most clinical teaching lines for FY 22;
Provides all needed funding for Central State University to meet federal land-grant university match requirements;
Specifies that the need-based financial aid distributed through the Short-Term Certificates program is also available to students enrolled in Ohio Technical Centers;
Provides $813K each FY for the Appalachian New Economy Workforce Partnership;
(Local Government & Elections)
Removes the Ohio residency requirement for veterans who wish to obtain a free fishing license, hunting license, and certain other licenses;
Restores Dept. of Agriculture’s H2Ohio appropriations by adding $10M per FY;
Accelerates timetable for ODNR to assume operational control and ownership of Geneva Lodge and Conference Center and operate it as a state lodge;
Clarifies provision to ensure that all agencies (not just DAS) utilize Buy Ohio and Buy U.S. preferences for PPE purchases under $50K;
Increases GRF for Animal Health Programs by $750K in FY22 and $1M in FY23;
Appropriates $11M in FY22 and $12M FY23 (non GRF) for the Ohio Maritime Assistance Program, to issue grants to qualifying port authorities;
Expands eligibility for the Rural Industrial Park Loan Program to projects located in any rural area;
Increases force account limits for highway projects undertaken by unchartered municipalities, a county engineer or a board of township trustees;
(General Government)
Increases funding for 13 Ohio veterans organizations that receive GRF annually;
Provides funding for the construction of temporary housing for homeless female veterans;
Increases funding for the Ohio Rural Industrial Park Loan program to $15M per FY;
Establishes a procedure within the Court of Claims to hear Open Meetings violations;
Restores voluntary TCAP and offers grants to counties that voluntarily extend TCAP to Felony 4 offenses;
Clarifies that an individual cannot bring a lawsuit if an employer terminates an employee for failing the company’s drug policy;
Increases funding for the Public Defender’s administration of Ohio’s indigent legal defense appropriations;
Increases funding for Ohio’s rape crisis centers by $2.7M in FY22;
Restores funding for the Rapid DNA Pilot Project at BCII;
Increases appropriation for Domestic Violence programs by $2.475M in FY22;
Appropriates $2.5M in FY22 for the Crime Victim Compensation Program;
Restores $4M each FY for additional School Safety Training Grants;
Provides $300K per FY for at-risk youth services at the Cleveland Rape Crisis Center Human Trafficking Drop-in Center;
Continuing COVID relief for Ohioans and businesses
Building on Senate Bill 108 and 109 enacted earlier this General Assembly, the sub bill provides another round of funding in FY 22 for these four critical programs:
$100M in FY 22 for grants to bars & restaurants;
$25M in grants for the lodging industry;
$20M to support entertainment venues;
$10M to assist new business with relief grants.
Now the Biennial Budget moves to Conference Committee for final deliberations, before being recommended for passage in both chambers, and then is signed into law, along with line-item vetoes by Governor DeWine, no later than June 30th. The Conference Committee (CC) met briefly on Tuesday, July 15th, where they adopted CC rules and then adjourned until Thursday, June 17th, when they will hear from the Office of Budget and Management and the Legislative Service Commission regarding revised revenue estimates. They also named Sen. Vernon Sykes the Committee Secretary. The Budget Conferees are as follows (as expected):
House Finance Chair - Rep. Scott Oelslager – Co-Chair
House Finance Vice Chair - Rep. Phil Plummer
House Finance Ranking D - Rep. Erica Crawley
Senate Finance Chair - Sen. Matt Dolan – Co-Chair
Senate Finance Vice Chair - Sen. Theresa Gavarone
Senate Finance Ranking D - Sen. Vernon Sykes
Please contact Rich Bitonte or any other ZHF Consulting Professional if you have questions, would like more details, or if we can be of any assistance throughout the remaining budget process.