Gongwer: House Poised To Begin Budget Hearings As Reactions To Spending Plan Continue

Published by Gongwer on Monday, March 18, 2019

House Poised To Begin Budget Hearings As Reactions To Spending Plan ContinueAdministration officials on Tuesday will begin making their case for Gov. Mike DeWine‘s state operating budget proposal as lawmakers and stakeholders continue digesting the details of the $150.4 billion spending plan.Gov. DeWine on Friday unveiled his executive budget proposal and the associated “Blue Book” but legislative language has yet to be released. (See Gongwer Ohio Report, March 15, 2019)

The House Finance Committee will kick off its review of the proposal at 9 a.m. Tuesday with its first informal hearing. There lawmakers will hear testimony from Office of Budget and Management Director Kim Murnieks, Legislative Service Commission Director Mark Flanders, and Tax Commissioner Jeff McClain.

Deliberations will continue Wednesday and Thursday. Over those two days, the committee is scheduled to field remarks from leaders of the departments of Medicaid, Job and Family Services, Mental Health and Addiction Services, Developmental Disabilities, Aging, Health, Education, Higher Education, Rehabilitation and Corrections, and Youth Services.

During a media call Monday organized by Innovation Ohio, some stakeholder groups applauded Mr. DeWine’s goal to invest more in areas like children’s services. (See Gongwer Ohio Report, March 15, 2019)

But that sentiment was balanced by concerns that relying solely on state economic growth to fund that investment might be a risky prospect. Ms. Murnieks has said the budget is based on “slowed but steady continued growth” with state revenues projected to rise by 3.9% in the first year and 1.7% in the second.

“The projection in the blue book itself is that the U.S. GDP is going to slow to 2.4% this year and 2% next year but we’re still projecting almost 4% growth,” said Terra Goodnight, director of policy for Innovation Ohio. “It does really make you wonder if we’re building a house of cards here.”

Nick Bates, outreach director of One Ohio Now, similarly expressed concern, opining that the budget’s goals can be realized with the state’s current revenue.

“We know investing in the fundamentals – reliable infrastructure, strong schools, healthy communities – are the building blocks for a strong Ohio. Gov. DeWine seems to recognize that,” Mr. Bates said. “But without the new revenue we will continue to fall behind other states and not be able to solve Ohio’s most pressing concerns.”

The budget plan has some stark contrasts with those of the Kasich Administration, according to policy groups. For one, it lacks much of the tax shifting policy proposals favored by the prior administration.

“The Kasich budgets always included some bigger tax policy – frequently it was tax cuts, it was also proposals to close tax breaks and sometimes you’d see a narrowing of the sales tax base or a broadening of the sales tax base,” said Wendy Patton, senior project director for Policy Matters Ohio. “In this budget we see one major tax break – the Opportunity Zone tax break – but we do not see other tax policies.”

The proposal also avoids major changes to K-12 education funding – a seeming acknowledgement from the administration that any changes they put forth would have potentially been jettisoned by lawmakers in favor of the House’s already in-the-works plan to reach a more equitable funding formula. That effort is being led by Rep. Bob Cupp (R-Lima) and Rep. John Patterson (D-Jefferson).

“(Kasich) was very aggressive on education policy,” said Stephen Dyer, education policy fellow for Innovation Ohio. “In this one it seems Gov. DeWine has ceded the heavy lift to the Ohio House, to Reps. Cupp and Patterson, which is certainly putting a lot of pressure on them.”

Tracy Najera, executive director of the Children’s Defense Fund Ohio, said she is “very encouraged” by the budget’s focus on child issues, such as expanding infant mortality resources and home visitation efforts.

Hannah Halbert, project director for Policy Matters Ohio, said she wants more information on the budget’s proposal for providing 10,000 microdegrees for in-demand fields. It’s one of several subject areas covered in the budget that warrant more details, she said.

“There seems to be a lot of workforce development lingo but not a lot of details,” Ms. Halbert said. “Microcredentials are a priority, industry sector partnerships are a priority, and both could be great, or both could be terrible. It depends on what’s actually behind those terms.”

But without new revenue to back up Gov. DeWine’s proposals, lawmakers could find themselves forced to revisit the budget somewhere down the line, Ms. Goodnight said.

Mr. Bates argued the budget plan does too little to prepare for the potential of a recession in the years to come.

“At some point there will be a recession,” Mr. Bates said. “That’s when we need to make sure we have good revenue policy, equitable tax policy in place so we can make the investments that we need.”