G2G has been active on Capitol Square attending fundraisers, committee hearings, and meeting with state representatives and senators, House and Senate leadership, and the Governor’s administration as the State Operating Budget, Am. Sub. H.B. 166, continues to make its way through the legislative process, as well as, U.S. Senators Brown and Portman on Capitol Hill. Although behind schedule, the House Finance Committee unanimously passed its version of the Budget in early May and sent it to the full House where it passed by a vote of 85-9. The bill is now in the Senate where it has completed subcommittee hearings with full Finance committee hearings scheduled to begin the week of May 27. Following the hearings and passage from the Senate, the bill will go to Conference Committee to remedy Governor, House, and Senate differences and decide on the final version. The budget must pass both chambers and be signed by the Governor by June 30 to begin the fiscal year on July 1. More on the budget and other updates are below.
The House further reined in Ohio's small business tax deduction to finance more across-the-board income tax cuts and added several health policy changes among dozens of final revisions to the state budget bill. The House Finance Committee unanimously passed its version of the Budget, which is a rarity, especially given the fact that nearly all of the standalone amendments offered by Democrats were rejected. The bill then passed the floor 85-9, with eight Republicans and only one Democrat voting “no.”
After zeroing out the bottom two income tax brackets and cutting other rates by 4.7 percent, the House included an across-the-board cut of 6.6 percent from current rates. Eliminating the bottom brackets means Ohioans wouldn't pay income tax on earnings below $22,250. The new bottom bracket, on income from $22,250 to $44,400, would be taxed at a rate of 2.773 percent, down from 2.969 percent. The rate on the highest bracket, for income of $222,200 and above, would drop to 4.667 percent. The committee paid for that cut by eliminating the ability for those claiming the small business tax deduction to pay a flat 3 percent tax rate on earnings above the deduction threshold. The House also shrank that threshold from $250,000 to $100,000.
Healthcare price transparency provisions were added to the budget to allow people seeking non-emergency care to get a price estimate. Past price transparency legislation has been contentious and sparked court battles. The House’s version of the Budget included an updated version of the "Healthy Ohio" initiative meant to incentivize primary care visits for Medicaid beneficiaries and establish health savings accounts they can use to help pay for coverage costs after moving off Medicaid. However, red flags were raised, and the initiative was stripped for further vetting as a standalone bill.
A state version of the International Pricing Index (IPI) which is currently being debated at the federal level to import price controls from foreign government-run healthcare systems was added to the budget late in the process by the House. This proposal aims to apply a foreign-based pricing scheme to Ohio’s Medicaid program. Interestingly, the IPI is not being considered at the federal level for use with Medicaid programs because the rebates received through the Medicaid Drug Rebate Program result in greater savings. Several organizations representing patients, drug companies, and research institutions are working to have the Senate remove the IPI, stating it will reduce patient access to life-saving medications and stifle research and innovation.
Work continues toward implementing the new funding formula Reps. Cupp (R-Lima) and Patterson (D-Jefferson) developed with local officials, with a variety of cost studies included in the House budget to help flesh out the details. The budget does put $20 million toward one priority outlined in the Cupp-Patterson Plan, state assistance to school districts for replacing aging school buses, a particular concern for high-mileage rural districts and Appalachian schools.
Secretary of State Frank LaRose, Sen. Nathan Manning (R-Lorain), and Rep. Bride Rose Sweeney are crafting legislation to reform the state’s voting system, including automated voter registration and increasing the sharing of information between agencies to avoid voter purges. LaRose hopes within the next few months to hammer out a final proposal to the state legislature that would also contain additional measures to “modernize” Ohio’s voting process. LaRose’s office is working to create an “opt-out” voter registration system so when voting-eligible Ohioans file taxes, renew a driver’s license, get a fishing license, or have other interactions with a state agency, they would be registered to vote unless they push a button or check a box declaring they don’t want to be. Fifteen states and Washington D.C. already have similar “opt-out” registration systems in place.
State lawmakers were given a mid-June deadline to redraw the congressional district map that the federal court says unfairly favors Republicans. However, Ohio Attorney General Dave Yost is asking the United States Supreme Court to block that order until the high court rules on two gerrymandering cases that are already before the court. Republicans pointed out that a new map will be drawn anyway after the 2020 Census, but Democrats say that’s not soon enough and have called on Republicans to get the ball rolling.
Black Maternal Health Caucus
State Reps. Janine Boyd (D-Cleveland Heights) and Stephanie Howse (D-Cleveland) announced the creation of Ohio’s first ever Black Maternal Health Caucus, a group of state lawmakers dedicated to improving black maternal health outcomes across the state. The group is currently working to strengthen language in the state budget dedicated to reducing maternal mortality. They hope to add more funding for home visits, programs to link pregnant mothers to health care services, expanding post-partum care initiatives and increased funds for treatment for mothers and babies born with opioid addiction. The group had their first meeting in early May. Founding members of the Black Maternal Health Caucus include Sykes, Boyd and Reps. Juanita Brent (D-Cleveland), Erica Crawley (D-Columbus), Tavia Galonski (D-Akron), Paula Hicks-Hudson (D-Toledo), Stephanie Howse (D-Cleveland), Catherine Ingram (D-Cincinnati), Michele Lepore-Hagan (D-Youngstown), and Senators Tina Maharath (D-Columbus) and Sandra Williams (D-Cleveland).
According to the Ohio Board of Pharmacy, with only 15 of a possible 60 medical marijuana dispensaries having received a certificate of operation so far, Ohio patients are having trouble obtaining legal cannabis. Cultivator lawsuits, lack of marijuana processors and high prices are among the factors leading to only 10,000 of the 25,000 registered patients (as of March 2019) having bought product so far.
Following his testimony to the Senate Finance committee, State Superintendent Paolo DeMaria faced questions largely centered on DeWine's proposal for $550 million over the biennium ($200 million in FY20 and $250 million in FY21) in direct funding for schools, proportional to their level of poverty and enrollment, to fund things like physical or mental health services, wraparound supports or mentoring programs that address the non-academic needs of children. These funds are required to be used in conjunction with a community partner like a mental health board, a community based mental health provider, or another nonprofit serving children.
DeMaria said the goal was to preserve local control, and districts will be required to report back on their implementation of the funds to the Ohio Department of Education. DeMaria stated the policy in the budget is designed to be infinitely configurable and flexible for the districts and the local communities to define for themselves. He also believes that partnerships with mental health providers may look different across three different districts and this is partially intended to infuse money into existing practices and allow those districts to do more with additional resources.
InnovateOhio’s 14 advisory board members were announced in April and the first meeting was held shortly after. Board members will have no role in procurement or selection of services or products but will review and advise on current developments in technology and innovation. Board members include:
Ohio agencies will be moving information to a centralized platform in the coming 12 months. The effort is meant to provide increased security, better online services and data analytics and eventual taxpayer savings and builds on previous and ongoing work toward having similar computer systems across state agencies.
Workforce Development & STEM
Demographic projections show there will be more Ohioans turning 65 than 18 over the next 10 years. A net loss in working age population requires providing the right training to both current and future workers in order for Ohio to prosper as the nature of work changes. Lieutenant Governor Husted recently outlined a range of budget proposals aimed toward education and job training to develop talent, including supporting early learning, “unprecedented” investment in wraparound services and funding for industry credentials, community colleges and STEM scholarships to retain talent.
One example is the TechCred program which would provide upskilling training to businesses through government reimbursement and provide employees with better pay and a credential they can use should they move to a different company. This would involve an initial appropriation of $35 million.
Lt. Governor Husted visited Tri-State Science, Technology, Engineering, Math and Medicine public high school in South Point as part of his In-Demand Jobs Week tour. He shared that he wants to see STEM schools succeed stating the three big components to education are life skills, academic skills and career skills and that Ohio needs specialization.
Start-ups, Government and Innovation
Lieutenant Governor Jon Husted and Cuyahoga County Executive Armond Budish spoke at the Global Center for Health Innovation in downtown Cleveland about ways local governments can work with entrepreneurs and start-up businesses to use innovation to solve government problems. The event was called “FastForward Cuyahoga” and was made possible by a partnership between Cuyahoga County, Plug and Play Cleveland, and the Healthcare Information and Management Systems Society (HIMSS). A panel of civic leaders who have worked in Columbus, Pittsburgh, Detroit, South Bend and Chicago talked about how they’ve collaborated with the private sector to solve community challenges. A second panel included startups that have worked with government to solve issues including road improvement, food insecurity, procurement and conducting pilot projects, and the use of blockchain.