Legislative News

Higher education officials want to incorporate about $405 million for facility projects at all 37 public institutions into the upcoming capital bill.

Several college and university presidents joined Gov. John Kasich in detailing recommendations of the Ohio Higher Education Funding Commission during a conference call with reporters.

The state’s public college and university presidents have spent the last several months collaborating on the construction recommendations for the proposal. 

If approved by the legislature, the bond-backed funding would be included in the biennial capital appropriations bill that’s expected to be introduced next month.

“Members of the commission put a great deal of hard work into creating a unified list of recommendations for the administration and the General Assembly to consider,” Board of Regents Chancellor John Carey told reporters. “For the second consecutive capital budget, the commission has developed an unselfish list of recommendations for how Ohio can best spend capital dollars to meet the true needs of the entire university system.

“Before we transitioned to this collaborative process, bureaucrats at the state relied on a formula-driven capital funding process that was not a strategic way to spend limited capital resources for higher education.”

The recommendations have the support of all 37 presidents leading public universities and colleges – all of which have projects on the recommendation list – as well as the University System of Ohio, Commission Co-chairman and Ohio University President Roderick McDavis said.

“The capital projects we recommend in our report will help us stay competitive and best serve the needs of the entire university system and our great state,” he said.

Gov. Kasich said he and the legislative leaders have taken a “hasty” look at the recommendations, but that what he saw there had him “almost getting really choked up” because the proposals put the students and the state before the institutions themselves.

“They have come up with recommendations that are unique,” he said. “There are some recommendations that actually involve shared services between, for example at Wright State, between the city and the Department of Transportation. This is unbelievable stuff.”

The governor’s comments were in reference to a proposal that would spend $1 million to construct a 3,000-ton salt storage structure on the edge of Wright State University campus to be shared with ODOT District 8 and the cities of Beavercreek and Fairborn.

He said he was “delighted” to give the higher education institutions a little more money than last cycle. In 2012, the state allocated $350 million to the school projects and spent $50 million on statewide higher education projects.

Commission Co-Chairman and Southern State Community College President Kevin Boys said, “We fully understand that these are recommendations that are made to the General Assembly and would just respectfully ask our friends in the House and the Senate to support the recommendations.”

Ohio State University again leads the pack with the largest amount of recommended funding, which primarily supports its new data analytics undergraduate degree. About $37.2 million is recommended for the renovation of Pomerence Hall and another $15.6 million for the renovation of Oxley hall.

“Employers and large companies are quickly looking for experts in the emerging field of data analytics to develop new business insights, new data driven product and new business applications,” Mr. McDavis said.

OSU interim President Joe Alutto said the project goal is to provide the space to accommodate the development of additional faculty in the subject area and for additional students.

“It also gives us an opportunity to renovate and really retain two of the iconic buildings on this campus and use them for a very different purpose than they were originally designed,” he said.

The report also recommends for OSU $6.3 million for roof repair and replacement and $5.2 million for HVAC repair and replacement, among other projects.

The bulk of the other projects similarly are for renovation or maintenance, Mr. McDavis said. About 85% of the projects impact existing space and 15% are new endeavors.

“We believe that, for instance, foremost we have to take care of the existing facilities and existing labs and existing spaces on our campuses,” he said. “The second priority was to look at those projects, those capital projects that focused on workforce development, or JobsOhio or things that would help economic development in Ohio.”

The OU president said the group started its work by gathering six-year capital project proposals that institutions had submitted to the Board of Regents. It then looked at the first two years of those proposals as a base line. The panel considered how much money institutions had received during the 2012 process and tried to ensure each received more this time.

Among other projects highlighted by the commission was Cleveland State University’s Center for Research and Innovation, which is proposed to receive $1.6 million.

“This project will create flexible, state-of-the-art, shared use facilities for physical science and engineering disciplines,” Mr. McDavis said.

Columbus State Community College seeks $10.5 million to expand its online course program that is also available to high school students. The funding would be used to increase network capacity, buy new hardware and software and make space modifications to allow for expansion in the number of students taking online classes.

Sinclair Community College is proposed to receive $4 million to renovate 28,000 square feet at the downtown Dayton campus to house the National Unmanned Aerial Systems Training and Certification Center. The center would allow for the consolidation and integration of academic and workforce development initiatives in aviation and UAS, according to the report.

About $2 million is proposed for Lorain County Community College’s smart center, which “will be the only resource in the Midwest for testing and packaging to support the sensor technologies,” Mr. McDavis said. It supports the processes between R&D and market entry, which represent 70% of the total cost of commercializing technology.

The University of Toledo, Northwest Community College, and Terra State Community College meanwhile plan to create with $2 million a workplace development center focused on the plastics industry. The program would allow students to work from a certificate to an associate’s degree to a bachelor’s degree on one campus.

“There are approximately 6 million plastic manufacturers in Ohio with a large percentage of these companies located in northwest Ohio,” Mr. McDavis said.

Smaller colleges meanwhile could benefit from the proposed creation of a $16 million pool that would provide funding to projects that are typically too large for the capital bill process, co-chairman and Southern State Community College President Kevin Boys said.

“The commission envisions a process that would be administered through the chancellor’s office and each funded project would require some sort of local match by the college to leverage the use of these state funds,” he said.

House Speaker, Bill Batchelder (R-Medina) said during the conference call that the proposals would produce “an outstanding result for our students.”

Senate President, Keith Faber (R-Celina), meanwhile, said the proposals were a good move going forward.

“We have to collaborate and cooperate if we’re going to be successful. We can’t keep duplicating and everyone worrying about their own turf,” he said. “Let’s keep finding efficiencies and ways to be more effective.”

Ohio Association of Community Colleges Interim President Karen Rafinski said her group supports the recommendations.

“The OACC believes that the commission’s recommendations promote smart and strategic investments in public higher education infrastructure,” she said in a statement. “As such, the OACC respectfully encourages state leaders and legislators to support the recommendations and include them in the upcoming capital bill.

“The commission’s recommendations, which are supported by the leaders of every public campus in Ohio, represent the best thinking in investments that position the Buckeye State as a leader in quality higher education and workforce development now and into the future.”

Mr. Alutto also praised the collaborative process.

“On behalf of Ohio State, I am proud to have joined other higher education leaders across the state in this truly collaborative budget process,” he said in a release. “The commission’s focus was to prioritize programs and initiatives that would meet the long-term needs of all Ohioans through job creation and economic development. I am grateful to Gov. Kasich for this opportunity and to my higher education colleagues for their insights in helping to chart a course for Ohio’s future.”

“Wildly supportive,” “enthusiastically endorse” and “critical economic development tool” were phrases used during proponent testimony in the House Finance Appropriations Committee on HJR9 (Kunze). If approved by voters , the resolution would reauthorize the State Capital Improvement Program for another 10 years as well as expand funding for the program.

Supporters of the bill explained how local officials are able to use program funding to draw down federal funds and create “tangible community assets.” One witness even credited the program as the model of cooperation and shared-services currently seen in local government.

The committee heard from the executive director of the County Commissioners Association of Ohio, Suzanne Dulaney; the Ohio Township Association’s executive director, Matt DeTemple; Susan Cave of the Ohio Municipal League; and Angela Van Fossen of the Ohio Contractors Association.

“For the first five years of the program renewal, the program would be funded at a level of $175 million per year, and during the second five years, the program would be funded at an increased level of $200 million per year,” said Dulaney.

“A healthy and comprehensive infrastructure is essential to continued economic development in Ohio. If Ohio and our local communities are to remain competitive, we must continue rebuilding the basic infrastructure of the state,” DeTemple added.

Cave told the committee, “Projects are selected on a competitive basis to address the districts’ most critical infrastructure needs. Eligible projects may be for improvement to the streets and roads, water, wastewater and storm water systems, bridges and solid waste disposal facilities.”

The majority of questions were directed to Dulaney and Cave, with Reps. Denise Driehaus (D-Cincinnati) and Nicki Antonio (D-Lakewood) both voicing support for the program before expressing concern whether more funds should be authorized due to “great demand.”

Rep. Dave Hall (R-Millersburg) and Dulaney discussed the need for locally elected officials in overlapping jurisdictions to work together for proper infrastructural planning, and how the program’s 10-year reauthorization would allow slower development to be done thoughtfully and cooperatively.

Dulaney also told Rep. Dan Ramos (R-Lorain) that she believed increases provided after year five were set in place, in part to account for inflation and the potential for volatility in the petroleum market.

Rep. Mike Duffey (R-Worthington) queried Cave about larger metropolitan cities like Columbus charging suburbs, including Duffey’s Worthington, higher rates for water and sewer than citizens in their own jurisdiction.

Because of a “bias of fragmentation of the system,” Duffey said, suburbs are “held captive” by higher rates, even though a person in Worthington may not be as wealthy as a Columbus resident who pays less for service.

He asked Cave to speak to the fairness of the practice and to whether public works monies such as the funds being discussed should go to them.

Explaining that she was not surprised by Duffey’s question, as they had discussed the issue many times and at length in the past, Cave told the representative, “I think I will dodge that question because I have both Worthington and Columbus as members of my association.”

As those in attendance chuckled, Duffey quipped, “No follow-up. … It seems I’ve already won.”

Van Fossen was the last to testify and said with a smile that she was glad to see the precedent had been made that “I can dodge a question,” to which Chairman Ron Amstutz (R-Wooster) responded jokingly, “Don’t push your luck.”

She said the program is “a win for everyone, providing safer travel for our families, creating jobs, and strengthening our economy.”

The chair also noted written proponent testimony had been submitted by Executive Director Donald Mader of the American Council of Engineering Companies of Ohio, Robert Guey of the County Engineer’s Association of Ohio, and Eric Luckage of the Coalition of Ohio Regional Districts.

Amstutz also said companion bill SJR6 (Bacon-Manning) is moving through the Senate more quickly than expected. Since it has language identical to HJR9, he said the resolution from the Senate will probably be the vehicle for the legislation and may be voted on next week in the House Finance and Appropriations Committee.

The Kasich administration and Republican lawmakers made good on the governor’s year-end promise Tuesday in the roll-out of a Senate joint resolution that calls for a 10-year, $1.875 billion voter reauthorization of the State Capital Improvement Program set to expire in 2016. Sponsor testimony before the Senate Finance Committee drew support from Budget Director Tim Keen, who called the bond request “reasonable and justifiable” in view of the program’s timetable and impact on job creation.

Sens. Gayle Manning (R-Ridgeville) and Kevin Bacon (R-Columbus), joint sponsors of SJR6, provided an overview of the ballot proposal to reauthorize a local funding stream first created in 1987. Director Michael Miller of the Ohio Public Works Commission also spoke. The commission administers the program but leaves project proposals to 19 Local District Public Works Integrating Committees, which may recommend improvements to roads, bridges, culverts, water supply systems, wastewater systems, storm water collection systems, and solid waste disposal facilities. 

“The role of the Public Works Commission is to ensure that key decisions are made within local communities fairly and objectively, and to maintain the state-local partnership established through the State Capital Improvement Program,” Bacon said, noting the latter receives 88 percent of bond funding while the Small Government Program and Emergency Program draw 10 percent and 2 percent, respectively.

Keen highlighted the program’s economic benefits — $1.35 billion in local public works projects under current funding. He said voter reauthorization of the bonding authority this May would maintain the program with the full faith and credit of the state and satisfy annual debt service with General Revenue funds.

“This timeframe is consistent with those in the two previous reauthorizations, providing local governments with assurance of a stable funding stream and the planning time needed to successfully implement public improvement projects. This schedule also gives the Public Works Commission and its district integrating committees the time required to solicit, review, approve and release new funding for projects in July 2016,” he said.

Keen said Gov. Kasich has voiced strong support for the “job creation, quality of life and, in many cases, public health and safety” advanced by debt-based funding of local government improvements, beginning with the governor’s announcement of the bond proposal at Republican leaders’ year-end review of 2013. 

“He views this as one of the most direct and meaningful ways for state government to support its local government partners and — with the expansion of funding proposed by SJR6 — to significantly increase that support in order to meet the needs of Ohio communities for infrastructure repairs and improvements,” said Keen.

He added that budget fixes under the Kasich administration make it a good time for new bonding authority over and above existing annual debt of $230 million for the State Capital Improvement Program. He said total GRF-backed debt is projected to be $9.5 billion by the end of FY14.

“Given the state’s strong fiscal condition — thanks to the governor’s leadership and support of the General Assembly — this proposal’s additional annual debt service of $40 million … is clearly manageable and affordable — both in absolute terms and relative to the state’s 5 percent debt service limitation,” said Keen.

SJR6 drew questions from both sides of the aisle. Sen. Shannon Jones (R-Springboro) wondered how much debt the state would incur under program reauthorization if all programs, including Third Frontier, were under the 5 percent cap. Keen put the projected figure at 4.5 – 4.6 percent.

Sen. Charleta Tavares (D-Columbus) asked how the current proposal for $175 million in annual bond funding over the first five years and $200 million over the last five years was arrived at, in view of expiring program funding of $120 million and $150 million, respectively, over the current 10-year period.

Keen said the proposed $1.875 billion is “reasonably manageable and affordable” based on current debt service, the upcoming FY15-16 capital bill, and Third Frontier and veterans’ bonus programs — the latter two not subject to the 5 percent constitutional cap. Tavares pressed the point, asking whether the reauthorization would meet actual local government needs, if not wants.

“Demand will exceed the dollars we are providing,” Keen acknowledged, suggesting, however, that the $1.875 billion hits the “sweet spot” between existing bond obligations and debt to be incurred by the approaching capital bill.

Sen. Tom Sawyer (D-Akron) continued Tavares’ line of questioning, asking how local funding amounts are determined. Keen and Miller explained that the Public Works Commission administers a program previously laid out in statute. Sawyer said he and his Democratic colleagues would feel even better about renewed local government funding if they had had the opportunity to participate in the legislation.

”The history of this undertaking has long been bipartisan,” he said of the State Capital Improvement Program. “I’m wondering why we didn’t have the opportunity for bipartisan co-sponsorship.”

Committee Chairman Scott Oelslager (R-North Canton) pointed out that the bill currently has no co-sponsors, and that Sawyer and others will have plenty of opportunity to throw support to SJR6 in the coming weeks.

Tavares continued, asking whether there has been any discussion of shifting public works authorization to a private entity like JobsOhio, which Democrats generally oppose. Oelslager suggested her point was more commentary than question. She was assured, however, that Republicans had no such plans.

“The Ohio Public Works Commission will continue its administration of the State Capital Improvement Program and related small government and emergency programs,” Manning had added during sponsor testimony.

Sen. Bill Coley (R-Middletown) responded with an anecdotal remark of his own, asking the budget director to address a series of newspaper editorials around the state on the need for more local government funding.

”Folks need to remember: State government is essentially a pass through entity,” said Keen, putting total encumbered funding of local government interests at more than 85 percent of the biennial budget.

Lawmakers will kick off the second leg of the 130^th General Assembly with a focus on a high profile resolution that seeks a 10-year extension and expansion of the State Capital Improvement Program.

They are also set to return attention to proposals on health care, the state’s Medicaid system and the oil and gas severance tax.

Upon returning to Columbus next week, the Senate Finance Committee will begin deliberations on the priority infrastructure improvement measure (SJR6), which Governor John Kasich and legislative leaders touted during a December Ohio Chamber of Commerce event. 

The committee will hold hearings on both Tuesday and Wednesday, featuring sponsor testimony from Office of Budget and Management Director Tim Keen and Ohio Public Works Commission Director Michael Miller, as well as input from local government officials.

Senate Finance Chairman Sen. Scott Oelslager’s (R-N. Canton) office said the resolution will likely be starred for a committee vote around Jan. 14.

Senate President Keith Faber (R-Celina), who helped unveil the proposal, previously said the resolution would extend SCIP, which is up for renewal soon, for another decade, It would also increase the annual funding level to $175 million for the first five years and $200 million thereafter.

OBM has estimated that the total debt service load for the proposal to issue $1.875 billion in 20-year bonds would cost $3.01 billion. The estimate includes more than $1.13 billion in interest payments.

If approved by the General Assembly, the proposal, sponsored by Sen. Kevin Bacon (R-Minerva Park) and Sen. Gayle Manning (R-North Ridgeville), would go before voters in May 2014.

Zoos, museums, bike trails, parks, veterans’ memorials, theaters, baseball stadiums and workforce training centers are a few of the dozens of projects that could receive state funding in the upcoming capital bill.

The Kasich administration Monday released several lists of construction project funding priorities devised by eight regional economic development groups and a committee charged with vetting arts projects throughout the state.

While the groups’ funding requests don’t necessarily mean the projects will wind up in Gov. John Kasich’s capital budget when it is introduced later this winter, they reflect local stakeholders’ input on what the governor recently touted as a new bottoms up instead of top down approach to capital budget planning. 

The process marks an expansion of the governor’s decision last session to convene a group of university and college presidents charged with devising a list of priority capital projects. Since the new capital bill will, for the first time in six years, include funding for community projects, the administration asked other stakeholders from other areas for suggestions.

Regional chambers of commerce in the state’s eight major metropolitan areas were asked to identify community projects for inclusion in the capital budget, while a committee of arts organizations helped prioritize funding requests for arts projects.

Many of the Greater Cleveland Partnership’s requests totaling more than $28 million are focused on waterfront improvement projects.

They include: $9 million for the Lakefront Access project; $6 million for the Flats East Gateway and Riverfront Park project; and $4 million for Euclid waterfront improvements. Other northeastern Ohio funding priorities are: the Gordon Square Arts District; the Central Neighborhood Clinic; and Towpath Trail.

The Columbus Partnership requested $14 million for the Ohio Veterans’ Memorial project – nearly half of the region’s total $30 million submission.

Some of the regional chambers’ other capital funding requests include:

 ·       $2.5 million for the Camp Chase Trail section of the Ohio to Erie Hub.

·       $2 million for Whitehall’s multi-jurisdictional Fiber Utility.

·       $3.7 million for the Center for BITS & Atoms Project in Akron.

·       $2.5 million to renovate Akron’s Cascade Plaza.

·       $6 million for the Banks Intermodal Transit facility project in Hamilton County.

·       $3.5 million for the Port of Greater Cincinnati Development Authority’s MidPointe Crossing Swift Park project.

·       $2 million for Dayton’s Project Elwood.

·       $1.5 million for Wright State University’s Integrated Laboratory for Applied Airspace and Human Performance Simulation.

·       $1.5 million for Springfield’s downtown parking facility.

·       $3 million for redeveloping and expanding Toledo’s Promenade Park.

·       $3 million for the Fifth Third Field Sports Facility and Park expansion project in Toledo.

·       $2.7 million for the Northwest Ohio Workforce Development and Advanced Manufacturing Training Center.

·       $5 million for the Youngstown Business Incubator.

·       $1.8 million for Boardman Township’s Southern Park Historic District.

·       $8 million for Youngstown State University’s Center for Innovation in Advanced Manufacturing.

·       $3.6 million for the Great Ohio Lake-To-River Greenway in Trumbull County.

The Capital Arts & Culture Committee, which included 11 members from six regions of the state, recommended 66 projects receive a total of $33 million in the upcoming capital budget.

Northeast Ohio accounted for the largest share, $8.8 million for 16 projects with a total projected cost of $396 million.

Some of the larger arts-related funding requests include:

 ·       $750,000 for the Toledo Zoo’s Aquarium Adventure Trail Project.

·       $1 million for the Cleveland Museum of Art expansion.

·       $1 million for Karamu House, Inc.’s theater renovations project in Cleveland.

·       $800,000 for a new Museum of Contemporary Art Cleveland building.

·       $1 million for renovating Severance Hall in Cleveland.

·       $1 million for renovating the Rock and Roll Hall of Fame exhibit and theater and create new space.

·       $500,000 for expanding Stuart’s Opera House in Athens County.

·       $500,000 to restore a historic theater in Marietta.

·       $2.3 million to restore Cincinnati Music Hall.

·       $1.4 million for preserving and upgrading Hamilton County Memorial Hall.

·       $3.2 million for restoring the Cincinnati Union Terminal.

·       $2.5 million for preserving and updating the Dayton Art Institute.

·       $1.1 million for expanding the Columbus Museum of Art.

·       $1 million for expanding the Franklin Park Conservatory in Columbus.

·       $1 million for replacing the Ohio Veterans Memorial in Columbus.

The arts committee said it developed a regional allocation method based on factors like population density, prior funding history and density of cultural assets. In addition, members agreed to set aside 10% of the total “to selectively amplify funding recommendations in underserved regions or to accelerate projects targeting underserved audiences in the state.”

The committee said it received more than 170 funding applications totaling nearly $200 million.

Some of the considerations the committee used to prioritize arts funding were whether the projects: “demonstrated measurable statewide or regional importance”; advance arts education; met state goals for broad geographic distribution; were “shovel-ready”; and come with matching funds.

OBM spokesman Jim Lynch said the administration and legislature sought input from local communities, public colleges, arts organizations and others to help prioritize project spending.

“It’s clear that they’ve worked hard to make thoughtful recommendations and we appreciate their work. We will be reviewing these local recommendations carefully with the General Assembly, including any projects that have been submitted directly to members of the House and Senate,” he said.

Mr. Lynch echoed the administration’s assurances that the recovering economy has enabled the state to resume support for community projects.

“Thanks to Ohio’s improving economic health and fiscal stability, the next state capital improvements budget has room to address state and local needs in ways that will enhance our economy and the quality of life in our state,” he said.

 Tax on Architecture Still Off the Table

Ohio Senate Republicans intend to replace the 7% accros the Board Personal Income Tax Cut (PIT), included in the House Passed State Budget Bill (HB59), with a $1.4 billion targeted tax cut to small businesses–by exempting individuals’ first $375,000 of annual business income from the state income tax. The 5% tax on architectural services proposed by Governor Kasich remains off the table.

Senate President, Keith Faber, (R-Celina) said in a statement that the small business personal income tax reduction would help boost “the drivers of our economy” at http://timebusinessnews.com/.

“Our plan not only provides a critical incentive to small business creation but also allows these job creators to invest more of their hard-earned dollars into equipment needs, expansion plans, and employee payroll,” he said. “We believe this targeted tax relief will have the most direct impact on encouraging job growth in the state.”

In opting for the business tax break, the upper chamber eliminated the House plan to provide a 7% across-the-board PIT cut for all taxpayers. The House had opted for that tax reduction after removing a good chunk of the governor’s tax package, which included an expansion of the sales tax to cover services and would have generated enough new revenue to cover both the business and individual (20% over three years) reductions.

More changes are expected to emerge this week and next when the Senate expects to vote on its final version of HB 59.  Following Senate action a House/Senate Conference Committee will reconcile differences between the two versions.

 The House Economic Development and Regulatory Reform Committee took testimony May 28 on HB 135 which would authorize a nonrefundable credit against the income tax and certain business taxes for the rehabilitation of a vacant industrial site.

Several witnesses offered proponent testimony: President Mark Wagenbrenner of Wagenbrenner Development in Columbus, Vice President of Governmental Relations Michael Hartley of the Columbus Chamber of Commerce, President Dave Sobochan of the NAIOP Ohio Chapter, Principal and Chief Financial Officer Zachary Price of Triad Architects, and President Ted Graham of Marion Industrial Center.

All witnesses said the legislation would provide an important impetus for the rehabilitation of vacant industrial properties. Wagenbrenner noted his own company specializes in refurbishing of “difficult” urban spaces with the support of tax credits including Clean Ohio.

“That does not mean personal and investor capital is not the driving force of the projects — private businesses must have skin in the game for a development to be truly successful,” he said. “However, there are many projects that would never get off the ground if some risks were not mitigated with timely public support.”

Sobochan provided the hard numbers, identifying 2,101 industrial buildings in Ohio that are 100 percent vacant. He said Indiana and North Carolina have passed similar tax credits, and that HB135 has “unique elements” that should make it successful in Ohio.

Price compared the legislation to Ohio’s existing Historic Preservation Tax Credit and New Markets Tax Credit Program. He said a study by Cleveland State University’s Maxine Goodwin Levin College of Urban Affairs projects that the Historic Preservation Tax Credit will produce $10 billion in economic impact and 6,900 jobs between 2007 and 2025.

Graham said after 40 years of personal involvement in the rehabilitation of industrial buildings in Ohio, the profit margin for refurbishing such properties has been reduced “almost to nothing,” and that many useful buildings are going unattended. “We need to have some incentives to redevelop it.”

Rep. Burkley asked Wagenbrenner whether projects are started on speculation, or whether there is generally an end-user in mind. The witness said the latter.   Rep. Driehaus and Chairwoman Baker asked him about the future of brownfield remediation under Clean Ohio. “The green money is still flowing through the Legislature. … The brown side has been spent down,” noted Driehaus.<image001.png>

Wagenbrenner said her concerns are valid. “A lot of low hanging fruit has been picked,” he said. “A lot of heavy lifting on the environmental side still has to be done.”

Burkley asked Sobochan to what degree credits would really spur owners or developers to rehabilitate industrial properties. He said banks have been known to offer bridge loans to projects based on the award of tax credits.

Baker told Price the committee would be interested in full information on the CSU urban study of the Historic Preservation Tax Credit. “The return on investment is what we must always consider,” she said of state tax expenditures.

Baker also asked Graham about industrial rehabilitation versus full demolition and redevelopment of unused industrial properties.

“Tearing down and rebuilding them is really not an option when your outside Franklin County,” he said, again pointing to costs and return on investment. 

 The House Commerce, Labor and Technology Committee took testimony May 9 on HB 140 which would establish licensing for  residential construction contractors. 

Rep. Patmon introduced his bill, which would require residential and nonresidential construction contractors to obtain a state license. The bill would also create the Residential Builders’ and Maintenance and Alteration Contractors’ Licensing Board to regulate licensure and performance of contractors.

Patmon listed a number of skills that would be licensed under the bill, including but not limited to: 

– Carpentry
– Concrete work
– Swimming pool installation

– Waterproofing basements – Excavation

– Masonry

– Roofing

Patmon said it is not right that the only thing a contractor must do before starting work is obtain insurance and a bond, without any other necessary qualifications.

The representative told the committee that he would get back to the members on two questions: how many other states implement what he is proposing and how much would it cost.

On the issue of cost, Patmon said that he believed the tax benefit created by deterring scammers and promoting legitimate businesses would more than offset the cost. He also talked about the exemptions in the bill, which included homeowners who wish to conduct work on their own property.  

While Ohio voters may be softening on Gov. John Kasich himself, they don’t show that same affinity to his tax plan in the introduced version of HB59 (Amstutz), the biennium budget, a new poll finds.

Quinnipiac University Polling Institute, which released a poll on Thursday showing Kasich above 50 percent in job approval rating and giving him better marks on how he handles the state budget, saw voters from that same interview mixed on various proposals in his latest budget.

By equal amounts, 48 percent to 42 percent, voters don’t like the idea of reducing the state income tax while increasing revenues from the sales tax.

Kasich has proposed a 20 percent overall income tax reduction using a mixture of new revenues from severance and sales taxes, but has also proposed reducing the state sales tax rate from 5.5 percent to 5 percent while expanding the sales/service tax to most services including architectural services. Nearly two-thirds of Republican respondents (64 percent) said the idea of decreasing the income tax and expanding the sales tax is a good idea, while 71 percent of Democrats say it is a bad idea. Independent voters split 44 percent to 43 percent.

Republicans are slightly less favorable about reducing the sales tax while expanding it, but still favor it by 55 percent majority, while 67 percent of Democrats and 49 percent of independents oppose it. Overall, 51 percent of respondents oppose the idea, while 41 percent said it is a good idea.

Higher education officials want to incorporate about $405 million for facility projects at all 37 public institutions into the upcoming capital bill.

Several college and university presidents joined Gov. John Kasich in detailing recommendations of the Ohio Higher Education Funding Commission during a conference call with reporters.

The state’s public college and university presidents have spent the last several months collaborating on the construction recommendations for the proposal. 

If approved by the legislature, the bond-backed funding would be included in the biennial capital appropriations bill that’s expected to be introduced next month.

“Members of the commission put a great deal of hard work into creating a unified list of recommendations for the administration and the General Assembly to consider,” Board of Regents Chancellor John Carey told reporters. “For the second consecutive capital budget, the commission has developed an unselfish list of recommendations for how Ohio can best spend capital dollars to meet the true needs of the entire university system.

“Before we transitioned to this collaborative process, bureaucrats at the state relied on a formula-driven capital funding process that was not a strategic way to spend limited capital resources for higher education.”

The recommendations have the support of all 37 presidents leading public universities and colleges – all of which have projects on the recommendation list – as well as the University System of Ohio, Commission Co-chairman and Ohio University President Roderick McDavis said.

“The capital projects we recommend in our report will help us stay competitive and best serve the needs of the entire university system and our great state,” he said.

Gov. Kasich said he and the legislative leaders have taken a “hasty” look at the recommendations, but that what he saw there had him “almost getting really choked up” because the proposals put the students and the state before the institutions themselves.

“They have come up with recommendations that are unique,” he said. “There are some recommendations that actually involve shared services between, for example at Wright State, between the city and the Department of Transportation. This is unbelievable stuff.”

The governor’s comments were in reference to a proposal that would spend $1 million to construct a 3,000-ton salt storage structure on the edge of Wright State University campus to be shared with ODOT District 8 and the cities of Beavercreek and Fairborn.

He said he was “delighted” to give the higher education institutions a little more money than last cycle. In 2012, the state allocated $350 million to the school projects and spent $50 million on statewide higher education projects.

Commission Co-Chairman and Southern State Community College President Kevin Boys said, “We fully understand that these are recommendations that are made to the General Assembly and would just respectfully ask our friends in the House and the Senate to support the recommendations.”

Ohio State University again leads the pack with the largest amount of recommended funding, which primarily supports its new data analytics undergraduate degree. About $37.2 million is recommended for the renovation of Pomerence Hall and another $15.6 million for the renovation of Oxley hall.

“Employers and large companies are quickly looking for experts in the emerging field of data analytics to develop new business insights, new data driven product and new business applications,” Mr. McDavis said.

OSU interim President Joe Alutto said the project goal is to provide the space to accommodate the development of additional faculty in the subject area and for additional students.

“It also gives us an opportunity to renovate and really retain two of the iconic buildings on this campus and use them for a very different purpose than they were originally designed,” he said.

The report also recommends for OSU $6.3 million for roof repair and replacement and $5.2 million for HVAC repair and replacement, among other projects.

The bulk of the other projects similarly are for renovation or maintenance, Mr. McDavis said. About 85% of the projects impact existing space and 15% are new endeavors.

“We believe that, for instance, foremost we have to take care of the existing facilities and existing labs and existing spaces on our campuses,” he said. “The second priority was to look at those projects, those capital projects that focused on workforce development, or JobsOhio or things that would help economic development in Ohio.”

The OU president said the group started its work by gathering six-year capital project proposals that institutions had submitted to the Board of Regents. It then looked at the first two years of those proposals as a base line. The panel considered how much money institutions had received during the 2012 process and tried to ensure each received more this time.

Among other projects highlighted by the commission was Cleveland State University’s Center for Research and Innovation, which is proposed to receive $1.6 million.

“This project will create flexible, state-of-the-art, shared use facilities for physical science and engineering disciplines,” Mr. McDavis said.

Columbus State Community College seeks $10.5 million to expand its online course program that is also available to high school students. The funding would be used to increase network capacity, buy new hardware and software and make space modifications to allow for expansion in the number of students taking online classes.

Sinclair Community College is proposed to receive $4 million to renovate 28,000 square feet at the downtown Dayton campus to house the National Unmanned Aerial Systems Training and Certification Center. The center would allow for the consolidation and integration of academic and workforce development initiatives in aviation and UAS, according to the report.

About $2 million is proposed for Lorain County Community College’s smart center, which “will be the only resource in the Midwest for testing and packaging to support the sensor technologies,” Mr. McDavis said. It supports the processes between R&D and market entry, which represent 70% of the total cost of commercializing technology.

The University of Toledo, Northwest Community College, and Terra State Community College meanwhile plan to create with $2 million a workplace development center focused on the plastics industry. The program would allow students to work from a certificate to an associate’s degree to a bachelor’s degree on one campus.

“There are approximately 6 million plastic manufacturers in Ohio with a large percentage of these companies located in northwest Ohio,” Mr. McDavis said.

Smaller colleges meanwhile could benefit from the proposed creation of a $16 million pool that would provide funding to projects that are typically too large for the capital bill process, co-chairman and Southern State Community College President Kevin Boys said.

“The commission envisions a process that would be administered through the chancellor’s office and each funded project would require some sort of local match by the college to leverage the use of these state funds,” he said.

House Speaker, Bill Batchelder (R-Medina) said during the conference call that the proposals would produce “an outstanding result for our students.”

Senate President, Keith Faber (R-Celina), meanwhile, said the proposals were a good move going forward.

“We have to collaborate and cooperate if we’re going to be successful. We can’t keep duplicating and everyone worrying about their own turf,” he said. “Let’s keep finding efficiencies and ways to be more effective.”

Ohio Association of Community Colleges Interim President Karen Rafinski said her group supports the recommendations.

“The OACC believes that the commission’s recommendations promote smart and strategic investments in public higher education infrastructure,” she said in a statement. “As such, the OACC respectfully encourages state leaders and legislators to support the recommendations and include them in the upcoming capital bill.

“The commission’s recommendations, which are supported by the leaders of every public campus in Ohio, represent the best thinking in investments that position the Buckeye State as a leader in quality higher education and workforce development now and into the future.”

Mr. Alutto also praised the collaborative process.

“On behalf of Ohio State, I am proud to have joined other higher education leaders across the state in this truly collaborative budget process,” he said in a release. “The commission’s focus was to prioritize programs and initiatives that would meet the long-term needs of all Ohioans through job creation and economic development. I am grateful to Gov. Kasich for this opportunity and to my higher education colleagues for their insights in helping to chart a course for Ohio’s future.”

“Wildly supportive,” “enthusiastically endorse” and “critical economic development tool” were phrases used during proponent testimony in the House Finance Appropriations Committee on HJR9 (Kunze). If approved by voters , the resolution would reauthorize the State Capital Improvement Program for another 10 years as well as expand funding for the program.

Supporters of the bill explained how local officials are able to use program funding to draw down federal funds and create “tangible community assets.” One witness even credited the program as the model of cooperation and shared-services currently seen in local government.

The committee heard from the executive director of the County Commissioners Association of Ohio, Suzanne Dulaney; the Ohio Township Association’s executive director, Matt DeTemple; Susan Cave of the Ohio Municipal League; and Angela Van Fossen of the Ohio Contractors Association.

“For the first five years of the program renewal, the program would be funded at a level of $175 million per year, and during the second five years, the program would be funded at an increased level of $200 million per year,” said Dulaney.

“A healthy and comprehensive infrastructure is essential to continued economic development in Ohio. If Ohio and our local communities are to remain competitive, we must continue rebuilding the basic infrastructure of the state,” DeTemple added.

Cave told the committee, “Projects are selected on a competitive basis to address the districts’ most critical infrastructure needs. Eligible projects may be for improvement to the streets and roads, water, wastewater and storm water systems, bridges and solid waste disposal facilities.”

The majority of questions were directed to Dulaney and Cave, with Reps. Denise Driehaus (D-Cincinnati) and Nicki Antonio (D-Lakewood) both voicing support for the program before expressing concern whether more funds should be authorized due to “great demand.”

Rep. Dave Hall (R-Millersburg) and Dulaney discussed the need for locally elected officials in overlapping jurisdictions to work together for proper infrastructural planning, and how the program’s 10-year reauthorization would allow slower development to be done thoughtfully and cooperatively.

Dulaney also told Rep. Dan Ramos (R-Lorain) that she believed increases provided after year five were set in place, in part to account for inflation and the potential for volatility in the petroleum market.

Rep. Mike Duffey (R-Worthington) queried Cave about larger metropolitan cities like Columbus charging suburbs, including Duffey’s Worthington, higher rates for water and sewer than citizens in their own jurisdiction.

Because of a “bias of fragmentation of the system,” Duffey said, suburbs are “held captive” by higher rates, even though a person in Worthington may not be as wealthy as a Columbus resident who pays less for service.

He asked Cave to speak to the fairness of the practice and to whether public works monies such as the funds being discussed should go to them.

Explaining that she was not surprised by Duffey’s question, as they had discussed the issue many times and at length in the past, Cave told the representative, “I think I will dodge that question because I have both Worthington and Columbus as members of my association.”

As those in attendance chuckled, Duffey quipped, “No follow-up. … It seems I’ve already won.”

Van Fossen was the last to testify and said with a smile that she was glad to see the precedent had been made that “I can dodge a question,” to which Chairman Ron Amstutz (R-Wooster) responded jokingly, “Don’t push your luck.”

She said the program is “a win for everyone, providing safer travel for our families, creating jobs, and strengthening our economy.”

The chair also noted written proponent testimony had been submitted by Executive Director Donald Mader of the American Council of Engineering Companies of Ohio, Robert Guey of the County Engineer’s Association of Ohio, and Eric Luckage of the Coalition of Ohio Regional Districts.

Amstutz also said companion bill SJR6 (Bacon-Manning) is moving through the Senate more quickly than expected. Since it has language identical to HJR9, he said the resolution from the Senate will probably be the vehicle for the legislation and may be voted on next week in the House Finance and Appropriations Committee.

The Kasich administration and Republican lawmakers made good on the governor’s year-end promise Tuesday in the roll-out of a Senate joint resolution that calls for a 10-year, $1.875 billion voter reauthorization of the State Capital Improvement Program set to expire in 2016. Sponsor testimony before the Senate Finance Committee drew support from Budget Director Tim Keen, who called the bond request “reasonable and justifiable” in view of the program’s timetable and impact on job creation.

Sens. Gayle Manning (R-Ridgeville) and Kevin Bacon (R-Columbus), joint sponsors of SJR6, provided an overview of the ballot proposal to reauthorize a local funding stream first created in 1987. Director Michael Miller of the Ohio Public Works Commission also spoke. The commission administers the program but leaves project proposals to 19 Local District Public Works Integrating Committees, which may recommend improvements to roads, bridges, culverts, water supply systems, wastewater systems, storm water collection systems, and solid waste disposal facilities. 

“The role of the Public Works Commission is to ensure that key decisions are made within local communities fairly and objectively, and to maintain the state-local partnership established through the State Capital Improvement Program,” Bacon said, noting the latter receives 88 percent of bond funding while the Small Government Program and Emergency Program draw 10 percent and 2 percent, respectively.

Keen highlighted the program’s economic benefits — $1.35 billion in local public works projects under current funding. He said voter reauthorization of the bonding authority this May would maintain the program with the full faith and credit of the state and satisfy annual debt service with General Revenue funds.

“This timeframe is consistent with those in the two previous reauthorizations, providing local governments with assurance of a stable funding stream and the planning time needed to successfully implement public improvement projects. This schedule also gives the Public Works Commission and its district integrating committees the time required to solicit, review, approve and release new funding for projects in July 2016,” he said.

Keen said Gov. Kasich has voiced strong support for the “job creation, quality of life and, in many cases, public health and safety” advanced by debt-based funding of local government improvements, beginning with the governor’s announcement of the bond proposal at Republican leaders’ year-end review of 2013. 

“He views this as one of the most direct and meaningful ways for state government to support its local government partners and — with the expansion of funding proposed by SJR6 — to significantly increase that support in order to meet the needs of Ohio communities for infrastructure repairs and improvements,” said Keen.

He added that budget fixes under the Kasich administration make it a good time for new bonding authority over and above existing annual debt of $230 million for the State Capital Improvement Program. He said total GRF-backed debt is projected to be $9.5 billion by the end of FY14.

“Given the state’s strong fiscal condition — thanks to the governor’s leadership and support of the General Assembly — this proposal’s additional annual debt service of $40 million … is clearly manageable and affordable — both in absolute terms and relative to the state’s 5 percent debt service limitation,” said Keen.

SJR6 drew questions from both sides of the aisle. Sen. Shannon Jones (R-Springboro) wondered how much debt the state would incur under program reauthorization if all programs, including Third Frontier, were under the 5 percent cap. Keen put the projected figure at 4.5 – 4.6 percent.

Sen. Charleta Tavares (D-Columbus) asked how the current proposal for $175 million in annual bond funding over the first five years and $200 million over the last five years was arrived at, in view of expiring program funding of $120 million and $150 million, respectively, over the current 10-year period.

Keen said the proposed $1.875 billion is “reasonably manageable and affordable” based on current debt service, the upcoming FY15-16 capital bill, and Third Frontier and veterans’ bonus programs — the latter two not subject to the 5 percent constitutional cap. Tavares pressed the point, asking whether the reauthorization would meet actual local government needs, if not wants.

“Demand will exceed the dollars we are providing,” Keen acknowledged, suggesting, however, that the $1.875 billion hits the “sweet spot” between existing bond obligations and debt to be incurred by the approaching capital bill.

Sen. Tom Sawyer (D-Akron) continued Tavares’ line of questioning, asking how local funding amounts are determined. Keen and Miller explained that the Public Works Commission administers a program previously laid out in statute. Sawyer said he and his Democratic colleagues would feel even better about renewed local government funding if they had had the opportunity to participate in the legislation.

”The history of this undertaking has long been bipartisan,” he said of the State Capital Improvement Program. “I’m wondering why we didn’t have the opportunity for bipartisan co-sponsorship.”

Committee Chairman Scott Oelslager (R-North Canton) pointed out that the bill currently has no co-sponsors, and that Sawyer and others will have plenty of opportunity to throw support to SJR6 in the coming weeks.

Tavares continued, asking whether there has been any discussion of shifting public works authorization to a private entity like JobsOhio, which Democrats generally oppose. Oelslager suggested her point was more commentary than question. She was assured, however, that Republicans had no such plans.

“The Ohio Public Works Commission will continue its administration of the State Capital Improvement Program and related small government and emergency programs,” Manning had added during sponsor testimony.

Sen. Bill Coley (R-Middletown) responded with an anecdotal remark of his own, asking the budget director to address a series of newspaper editorials around the state on the need for more local government funding.

”Folks need to remember: State government is essentially a pass through entity,” said Keen, putting total encumbered funding of local government interests at more than 85 percent of the biennial budget.

Lawmakers will kick off the second leg of the 130^th General Assembly with a focus on a high profile resolution that seeks a 10-year extension and expansion of the State Capital Improvement Program.

They are also set to return attention to proposals on health care, the state’s Medicaid system and the oil and gas severance tax.

Upon returning to Columbus next week, the Senate Finance Committee will begin deliberations on the priority infrastructure improvement measure (SJR6), which Governor John Kasich and legislative leaders touted during a December Ohio Chamber of Commerce event. 

The committee will hold hearings on both Tuesday and Wednesday, featuring sponsor testimony from Office of Budget and Management Director Tim Keen and Ohio Public Works Commission Director Michael Miller, as well as input from local government officials.

Senate Finance Chairman Sen. Scott Oelslager’s (R-N. Canton) office said the resolution will likely be starred for a committee vote around Jan. 14.

Senate President Keith Faber (R-Celina), who helped unveil the proposal, previously said the resolution would extend SCIP, which is up for renewal soon, for another decade, It would also increase the annual funding level to $175 million for the first five years and $200 million thereafter.

OBM has estimated that the total debt service load for the proposal to issue $1.875 billion in 20-year bonds would cost $3.01 billion. The estimate includes more than $1.13 billion in interest payments.

If approved by the General Assembly, the proposal, sponsored by Sen. Kevin Bacon (R-Minerva Park) and Sen. Gayle Manning (R-North Ridgeville), would go before voters in May 2014.

Zoos, museums, bike trails, parks, veterans’ memorials, theaters, baseball stadiums and workforce training centers are a few of the dozens of projects that could receive state funding in the upcoming capital bill.

The Kasich administration Monday released several lists of construction project funding priorities devised by eight regional economic development groups and a committee charged with vetting arts projects throughout the state.

While the groups’ funding requests don’t necessarily mean the projects will wind up in Gov. John Kasich’s capital budget when it is introduced later this winter, they reflect local stakeholders’ input on what the governor recently touted as a new bottoms up instead of top down approach to capital budget planning. 

The process marks an expansion of the governor’s decision last session to convene a group of university and college presidents charged with devising a list of priority capital projects. Since the new capital bill will, for the first time in six years, include funding for community projects, the administration asked other stakeholders from other areas for suggestions.

Regional chambers of commerce in the state’s eight major metropolitan areas were asked to identify community projects for inclusion in the capital budget, while a committee of arts organizations helped prioritize funding requests for arts projects.

Many of the Greater Cleveland Partnership’s requests totaling more than $28 million are focused on waterfront improvement projects.

They include: $9 million for the Lakefront Access project; $6 million for the Flats East Gateway and Riverfront Park project; and $4 million for Euclid waterfront improvements. Other northeastern Ohio funding priorities are: the Gordon Square Arts District; the Central Neighborhood Clinic; and Towpath Trail.

The Columbus Partnership requested $14 million for the Ohio Veterans’ Memorial project – nearly half of the region’s total $30 million submission.

Some of the regional chambers’ other capital funding requests include:

 ·       $2.5 million for the Camp Chase Trail section of the Ohio to Erie Hub.

·       $2 million for Whitehall’s multi-jurisdictional Fiber Utility.

·       $3.7 million for the Center for BITS & Atoms Project in Akron.

·       $2.5 million to renovate Akron’s Cascade Plaza.

·       $6 million for the Banks Intermodal Transit facility project in Hamilton County.

·       $3.5 million for the Port of Greater Cincinnati Development Authority’s MidPointe Crossing Swift Park project.

·       $2 million for Dayton’s Project Elwood.

·       $1.5 million for Wright State University’s Integrated Laboratory for Applied Airspace and Human Performance Simulation.

·       $1.5 million for Springfield’s downtown parking facility.

·       $3 million for redeveloping and expanding Toledo’s Promenade Park.

·       $3 million for the Fifth Third Field Sports Facility and Park expansion project in Toledo.

·       $2.7 million for the Northwest Ohio Workforce Development and Advanced Manufacturing Training Center.

·       $5 million for the Youngstown Business Incubator.

·       $1.8 million for Boardman Township’s Southern Park Historic District.

·       $8 million for Youngstown State University’s Center for Innovation in Advanced Manufacturing.

·       $3.6 million for the Great Ohio Lake-To-River Greenway in Trumbull County.

The Capital Arts & Culture Committee, which included 11 members from six regions of the state, recommended 66 projects receive a total of $33 million in the upcoming capital budget.

Northeast Ohio accounted for the largest share, $8.8 million for 16 projects with a total projected cost of $396 million.

Some of the larger arts-related funding requests include:

 ·       $750,000 for the Toledo Zoo’s Aquarium Adventure Trail Project.

·       $1 million for the Cleveland Museum of Art expansion.

·       $1 million for Karamu House, Inc.’s theater renovations project in Cleveland.

·       $800,000 for a new Museum of Contemporary Art Cleveland building.

·       $1 million for renovating Severance Hall in Cleveland.

·       $1 million for renovating the Rock and Roll Hall of Fame exhibit and theater and create new space.

·       $500,000 for expanding Stuart’s Opera House in Athens County.

·       $500,000 to restore a historic theater in Marietta.

·       $2.3 million to restore Cincinnati Music Hall.

·       $1.4 million for preserving and upgrading Hamilton County Memorial Hall.

·       $3.2 million for restoring the Cincinnati Union Terminal.

·       $2.5 million for preserving and updating the Dayton Art Institute.

·       $1.1 million for expanding the Columbus Museum of Art.

·       $1 million for expanding the Franklin Park Conservatory in Columbus.

·       $1 million for replacing the Ohio Veterans Memorial in Columbus.

The arts committee said it developed a regional allocation method based on factors like population density, prior funding history and density of cultural assets. In addition, members agreed to set aside 10% of the total “to selectively amplify funding recommendations in underserved regions or to accelerate projects targeting underserved audiences in the state.”

The committee said it received more than 170 funding applications totaling nearly $200 million.

Some of the considerations the committee used to prioritize arts funding were whether the projects: “demonstrated measurable statewide or regional importance”; advance arts education; met state goals for broad geographic distribution; were “shovel-ready”; and come with matching funds.

OBM spokesman Jim Lynch said the administration and legislature sought input from local communities, public colleges, arts organizations and others to help prioritize project spending.

“It’s clear that they’ve worked hard to make thoughtful recommendations and we appreciate their work. We will be reviewing these local recommendations carefully with the General Assembly, including any projects that have been submitted directly to members of the House and Senate,” he said.

Mr. Lynch echoed the administration’s assurances that the recovering economy has enabled the state to resume support for community projects.

“Thanks to Ohio’s improving economic health and fiscal stability, the next state capital improvements budget has room to address state and local needs in ways that will enhance our economy and the quality of life in our state,” he said.

 Tax on Architecture Still Off the Table

Ohio Senate Republicans intend to replace the 7% accros the Board Personal Income Tax Cut (PIT), included in the House Passed State Budget Bill (HB59), with a $1.4 billion targeted tax cut to small businesses–by exempting individuals’ first $375,000 of annual business income from the state income tax. The 5% tax on architectural services proposed by Governor Kasich remains off the table.

Senate President, Keith Faber, (R-Celina) said in a statement that the small business personal income tax reduction would help boost “the drivers of our economy” at http://timebusinessnews.com/.

“Our plan not only provides a critical incentive to small business creation but also allows these job creators to invest more of their hard-earned dollars into equipment needs, expansion plans, and employee payroll,” he said. “We believe this targeted tax relief will have the most direct impact on encouraging job growth in the state.”

In opting for the business tax break, the upper chamber eliminated the House plan to provide a 7% across-the-board PIT cut for all taxpayers. The House had opted for that tax reduction after removing a good chunk of the governor’s tax package, which included an expansion of the sales tax to cover services and would have generated enough new revenue to cover both the business and individual (20% over three years) reductions.

More changes are expected to emerge this week and next when the Senate expects to vote on its final version of HB 59.  Following Senate action a House/Senate Conference Committee will reconcile differences between the two versions.

 The House Economic Development and Regulatory Reform Committee took testimony May 28 on HB 135 which would authorize a nonrefundable credit against the income tax and certain business taxes for the rehabilitation of a vacant industrial site.

Several witnesses offered proponent testimony: President Mark Wagenbrenner of Wagenbrenner Development in Columbus, Vice President of Governmental Relations Michael Hartley of the Columbus Chamber of Commerce, President Dave Sobochan of the NAIOP Ohio Chapter, Principal and Chief Financial Officer Zachary Price of Triad Architects, and President Ted Graham of Marion Industrial Center.

All witnesses said the legislation would provide an important impetus for the rehabilitation of vacant industrial properties. Wagenbrenner noted his own company specializes in refurbishing of “difficult” urban spaces with the support of tax credits including Clean Ohio.

“That does not mean personal and investor capital is not the driving force of the projects — private businesses must have skin in the game for a development to be truly successful,” he said. “However, there are many projects that would never get off the ground if some risks were not mitigated with timely public support.”

Sobochan provided the hard numbers, identifying 2,101 industrial buildings in Ohio that are 100 percent vacant. He said Indiana and North Carolina have passed similar tax credits, and that HB135 has “unique elements” that should make it successful in Ohio.

Price compared the legislation to Ohio’s existing Historic Preservation Tax Credit and New Markets Tax Credit Program. He said a study by Cleveland State University’s Maxine Goodwin Levin College of Urban Affairs projects that the Historic Preservation Tax Credit will produce $10 billion in economic impact and 6,900 jobs between 2007 and 2025.

Graham said after 40 years of personal involvement in the rehabilitation of industrial buildings in Ohio, the profit margin for refurbishing such properties has been reduced “almost to nothing,” and that many useful buildings are going unattended. “We need to have some incentives to redevelop it.”

Rep. Burkley asked Wagenbrenner whether projects are started on speculation, or whether there is generally an end-user in mind. The witness said the latter.   Rep. Driehaus and Chairwoman Baker asked him about the future of brownfield remediation under Clean Ohio. “The green money is still flowing through the Legislature. … The brown side has been spent down,” noted Driehaus.<image001.png>

Wagenbrenner said her concerns are valid. “A lot of low hanging fruit has been picked,” he said. “A lot of heavy lifting on the environmental side still has to be done.”

Burkley asked Sobochan to what degree credits would really spur owners or developers to rehabilitate industrial properties. He said banks have been known to offer bridge loans to projects based on the award of tax credits.

Baker told Price the committee would be interested in full information on the CSU urban study of the Historic Preservation Tax Credit. “The return on investment is what we must always consider,” she said of state tax expenditures.

Baker also asked Graham about industrial rehabilitation versus full demolition and redevelopment of unused industrial properties.

“Tearing down and rebuilding them is really not an option when your outside Franklin County,” he said, again pointing to costs and return on investment. 

 The House Commerce, Labor and Technology Committee took testimony May 9 on HB 140 which would establish licensing for  residential construction contractors. 

Rep. Patmon introduced his bill, which would require residential and nonresidential construction contractors to obtain a state license. The bill would also create the Residential Builders’ and Maintenance and Alteration Contractors’ Licensing Board to regulate licensure and performance of contractors.

Patmon listed a number of skills that would be licensed under the bill, including but not limited to: 

– Carpentry
– Concrete work
– Swimming pool installation

– Waterproofing basements – Excavation

– Masonry

– Roofing

Patmon said it is not right that the only thing a contractor must do before starting work is obtain insurance and a bond, without any other necessary qualifications.

The representative told the committee that he would get back to the members on two questions: how many other states implement what he is proposing and how much would it cost.

On the issue of cost, Patmon said that he believed the tax benefit created by deterring scammers and promoting legitimate businesses would more than offset the cost. He also talked about the exemptions in the bill, which included homeowners who wish to conduct work on their own property.  

While Ohio voters may be softening on Gov. John Kasich himself, they don’t show that same affinity to his tax plan in the introduced version of HB59 (Amstutz), the biennium budget, a new poll finds.

Quinnipiac University Polling Institute, which released a poll on Thursday showing Kasich above 50 percent in job approval rating and giving him better marks on how he handles the state budget, saw voters from that same interview mixed on various proposals in his latest budget.

By equal amounts, 48 percent to 42 percent, voters don’t like the idea of reducing the state income tax while increasing revenues from the sales tax.

Kasich has proposed a 20 percent overall income tax reduction using a mixture of new revenues from severance and sales taxes, but has also proposed reducing the state sales tax rate from 5.5 percent to 5 percent while expanding the sales/service tax to most services including architectural services. Nearly two-thirds of Republican respondents (64 percent) said the idea of decreasing the income tax and expanding the sales tax is a good idea, while 71 percent of Democrats say it is a bad idea. Independent voters split 44 percent to 43 percent.

Republicans are slightly less favorable about reducing the sales tax while expanding it, but still favor it by 55 percent majority, while 67 percent of Democrats and 49 percent of independents oppose it. Overall, 51 percent of respondents oppose the idea, while 41 percent said it is a good idea.