Largely Bipartisan State Budget Passes Legislature Early

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Largely Bipartisan State Budget Passes Legislature Early

June 29, 2021

Yesterday, the conference committee on House Bill 110 (HB 110) released the Legislature’s final changes to the State’s Fiscal Year 2022 and 2023 Biennial Operating Budget. The members of the committee unanimously voted to approve the report, which highlights the bipartisan nature of this budget. Late Monday night and early Tuesday morning, the House and Senate approved the conference report by a vote of 82-13 and 32-1, respectively. HB 110 heads to Governor DeWine for his review and the Governor will have an opportunity to make line-item vetoes of provisions in the budget. The Governor will need to act quick, as the budget process must be completed and signed into law by July 1st.

The main points of contention in the budget negotiations included the school funding formula, income tax cuts, healthcare and broadband funding. However, both chambers negotiated their priorities in the final version of the budget. For example, the House largely received their preferred version of a new school funding plan, whereas the Senate was able to deliver one of the largest tax cuts in Ohio history. If you would like to read the report of the conference committee, please click here. Highlights of the provisions included in HB 110 can be found below.

Education

  • Increases school funding by $226 million for K-12 education in 2022, and an additional $141 million in 2023.
  • Changes the school funding formula, which will be implemented over the next two years.
  • The base amount of funding per student will be determined by local costs as opposed to a single statewide figure that is currently used to determine funding.
  • Bases the local share of school funding on a combination of local income and property values.
  • Increases EdChoice scholarships, or vouchers, from $4,650 to $5,500 per year for K-8 students and from $6,000 to $7,500 per year for high school students.
  • Establishes a committee through the Ohio Department of Education and Ohio Department of Higher Education to develop a state plan for computer science education but does not require that all high school students have access to computer science courses.
  • Provides a pathway for the Lorain, East Cleveland, and Youngstown City School Districts to no longer be under the control of a state “academic distress commission.”

Tax Reform

  • Personal income tax rates were cut by 3% across the board.
  • Ohioans who earn $25,000 or less are exempt from paying state income tax. This exemption previously applied to Ohioans who earn less than $22,150.
  • The state’s top income tax bracket was eliminated, which reduces the number of income tax brackets to four (4) in Ohio.
  • Requires Ohio employers to collect and remit income tax in the municipality in which the employee primarily worked pre-pandemic until December 31, 2021. Employees are permitted to seek a tax refund for those municipal income taxes collected and remitted in 2021.
  • Reduces the Commercial Activities Tax (CAT) from 0.65% to 0.5% beginning July 1, 2021.

Broadband Expansion Funding

  • Provides $250 million (an increase over the original appropriation of $190 million) to expand broadband networks in underserved areas through the Ohio Residential Broadband Expansion Grant Program and the Ohio Broadband Expansion Program Authority.

Local Government Provisions

  • Provides $170 million over the biennium for the H2Ohio water quality initiative.
  • Creates a task force to study public assistance benefit fraud.
  • Appropriates $350 million to clean up “brownfield” sites, which are abandoned industrial or commercial sites that are too contaminated to redevelop.
  • Appropriates $150 million to demolish blighted or nuisance buildings” around the state.

Healthcare and Human Services

  • Requires the Department of Medicaid to contract with Medicaid Managed Care Organizations (MCO’s) that are domiciled in Ohio, are currently Medicaid MCO’s and have a proven history of quality and customer satisfaction.
  • Creates an appeals process that allows Medicaid MCO applicants to appeal adverse application decisions of the Department of Medicaid within 30 days of the decision (instead of the current 10 days).
  • 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.
  • Restores and revises the Step Up to Quality childcare program.
  • Establishes a study committee to evaluate ways to improve efficiencies and long-term funding strategies of the Step Up to Quality childcare program. Also requires an evaluation of the program as well as publicly funded childcare.
  • Allows a medical practitioner, healthcare institution or health care payer to decline to perform or pay for health care services that violate the entity’s “conscience”. Existing insurance contracts are exempt from this provision, and it only applies to insurance contracts entered into after July 1st.

Miscellaneous

  • Declares “Juneteenth” on June 19th as a state holiday.
  • Allows college athletes to seek endorsements and otherwise profit off from the use of their name, image and likeness.
  • Authorizes various tax incentives for megaprojects, which are development projects that include at least $1 billion in investment or creates at least $75 million in Ohio payroll.
  • Restores the campaign contribution tax credit of $100.
  • Legalizes electronic instant bingo (eBingo) at veterans and fraternal organizations. Existing bingo providers are allowed up to 10 single-person terminals to offer eBingo.
  • Specifies that the information in the Vax-a-Million database is confidential and not public record.
  • Allows the Senate President and House Speaker to intervene in lawsuits over a new redistricting plan. The Ohio Attorney General typically litigates such cases on their behalf.


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