State Operating Budget – HB 110, Passes and Becomes Law


Ohio Senate Passes State Operating Budget - HB 110

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(Columbus) – It has been busy week, let alone the past five months, at the Ohio Statehouse as the Legislature has been considering the two-year biennial operating budget proposal for FY ’22-23, Am. Sub. HB 110 (Budget). It all concluded this week. Monday afternoon, June 28th, the Budget Conference Committee met and unanimously approved the Conference Committee Report, after going through more than 400 pages of differences and nearly 200 amendments in just about two hours’ time, and then sent it to both Chambers for final approval. That finally came late Monday evening, as both the Ohio House and Ohio Senate approved the Budget Conference Committee Report, thus sending it on to Governor DeWine on Wednesday for his signature. The governor signed, but not before he issued some line-item vetoes, all done before the June 30th deadline, or shortly thereafter, in the very early morning of July 1st. Many provisions of this new Budget go into effect starting on July 1st, while others may take 90 days before they become effective. With passage of House Bill 110, the Budget, there seemed to be something for everybody to like. The Budget passed with overwhelming bipartisan support, including a 32-1 vote in the Senate and an 82-13 vote in the House, respectively. Governor DeWine did veto 14 provisions contained within the budget, including one that would have forgiven fines to businesses that violated COVID-19 orders, one that proposed revisions to procurement contracts for Medicaid managed care, and one that would have exempted private K-12 school from mandatory participation in College Credit Plus. The budget item that captured most of the attention of the media was an adoption, of sorts, of the Cupp-Patterson (later becoming the Callender-Sweeney) “Fair School Funding” plan. Aside from pumping more money into public schools, the goal of the plan is to provide a more stable, predictable funding formula in future sessions of the General Assembly. Worth noting is that the final bill eliminated the language stating that it is the intent of the General Assembly for future legislators to follow the plan. Whether or not legislators follow the plan in two years will remain to be seen. What is likely a longer-lasting change is the elimination of the practice of deducting the costs of charter school and voucher students from the district’s state share of funding. Those students, and the costs that go along with them, will be funded directly by the state, which both sides hope will reduce the consternation between the various education stakeholders. Depending on where you live in Ohio, the $250 million investment in broadband deployment could be the biggest economic development initiative that Ohio has deployed in quite some time. Accentuated by the dependence on the need for reliable internet to educate children during the COVID epidemic, rural and Appalachian communities are hopeful that dependable internet access will be a game changer in regions of the state that have struggled to remain competitive economically. Add the $500 million designated for brownfield remediation and demolition, and Ohio is spending a sizable amount of money trying to get Ohio business-ready for future development. The Budget also: Increases rates for home- and community-based care in addition to $490 million in nursing home quality incentive dollars and $250 million for base rate increases. Increases state support for Ohio’s colleges and universities, and makes investments in several programs, including STEMM education, workforce training and a new commercial truck driver student aid program. Provides $170 million over the biennium for the H2Ohio initiative. Establishes electronic instant bingo as a separate type of bingo, along with traditional bingo, raffles, and instant bingo, but largely regulates the operation of electronic instant bingo in the same manner as instant bingo. Restores and revises the Step Up to Quality child care program. Establishes a committee to study ways to improve efficiencies and long-term funding strategies. Creates a task force to study public assistance benefit fraud. Includes language allowing intercollegiate athletes to earn compensation from their "name/image/likeness (NIL)". Specifies that the information in the Vax-a-Million database is confidential and not public record. Extends the municipal income tax temporary COVID-19 withholding rule through Dec. 31, 2021. Authorizes various tax incentives for operators and certain suppliers of a "mega project," i.e., a development project that includes at least $1 billion in investment or creates at least $75 million in Ohio payroll. These “mega projects” would be eligible for the existing Job Creation Tax Credit program. Another provision getting attention (and some criticism) is the $1.6 billion in personal income tax cuts (3% across the Board) contained in the budget. Democrats were largely critical of the tax cuts, claiming they would not do much to create jobs, while Republicans promoted a further flattening and reduction of tax rates, pointing to those items as a way to create jobs and bolster Ohio’s economic competitiveness. The tax reform plan reduces the number of tax brackets from five to four, and eliminates the income tax for anyone making less than $25,000 per year.


For more detailed tax information contained in this Budget, please see the link to our ZHF tax buzz.


These are just a few of the highlights in the new two-year $75 Billion Budget. For more details and a copy of the nearly 2,500 page Budget, here is a link to the legislation, Am. Sub. HB 110.


I hope you find this BUZZ informative. Please contact Rich Bitonte, Dan Dodd or any other ZHF Consulting Professional if you have questions, would like more details, or if we can be of any assistance now or in the future.

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