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Statehouse Preview: Week of April 23

April 23, 2018 by Terra Goodnight

Nothing.

That’s our preview for what will happen at the Statehouse this week.

Lawmakers have given themselves another light week as many members are locked in heated primary contests to retain their seat or seek another. As a result, no committee hearings are scheduled and the Senate session that had been planned for Wednesday was cancelled.

Instead of previewing committee action, we’ll use this opportunity to catch up on policy-related developments happening in and out of the legislature.

ECOT Rip-Off Gets Bigger

Today comes word that a whistleblower has come forward accusing ECOT (the recently-closed online charter school) of manipulating the school’s attendance data to capture more state revenue after the school was told it must repay the state $60 million for already-overstated student enrollment numbers. Our education expert, Stephen Dyer, explains how state funding levels for charter schools are determined, and how ECOT apparently gamed the system at the expense of local public schools.

Environmental Protections

Last week a study was released showing the state’s $6 million effort to curb nutrients that lead to toxic algae blooms–including one in 2014 that left Toledo without drinking water–have had no impact. Since 2011, the state has relied on voluntary measures to cut down on the nutrient load, most of which comes from farm runoff. Now, the Kasich administration admits regulation is needed, but farm groups and Republican lawmakers are not exactly embracing the proposal.

Payday Lending

Also last week, a House panel voted to advance payday lending reform legislation (HB123) out of committee. In doing so, members rejected a compromised brokered by acting House Speaker Kirk Schuring with lenders that had been panned as “watered down” reform. Members–aware of the glaring spotlight they are under thanks to an FBI investigation into improper influence of the payday lending industry–likely prefer to toss the hot potato over to the Senate to work out the details, leaving Ohio waiting relief.

Renewable Energy

On Friday, after indicating that it was a priority for passage this spring, Senate President Obhof backed off plans to pass HB114, legislation that would kill Ohio’s renewable energy standards in favor of voluntary targets, calling it a “long term project.” That’s good news, but also worrisome as Obhof had earlier said a much-needed fix to Ohio’s onerous “setback” requirements for wind energy projects would be tied up with the fate of HB114. A report, released last week, found that the inability to attract wind investment is hurting the bottom lines of many of Ohio’s rural counties.

Mission Accomplished?

“Nothing” will continue to be the primary activity of Statehouse lawmakers, at least for the immediate future. The House is currently leaderless following the resignation of Speaker Cliff Rosenberger amid revelations of an FBI corruption inquiry, and isn’t expected to select a new leader until after the May 8 primary. On the Senate side, President Obhof has effectively declared “Mission Accomplished” for this legislative term, saying: “On the priorities that we set out, we’ve tried as much as possible that we could get those done.”

That’s certainly debatable. Among the long list of unfinished business in the legislature are proposals to shore up Ohio’s unemployment compensation fund, dedicate resources for the upgrade of Ohio’s aging elections infrastructure and set up a grant program to help local school districts install safety upgrades in the wake of school shootings. Dozens more bills in both chambers remain “below the line,” meaning they have been approved by committees but have not been put before all members for an up or down vote.

As lawmakers wrap up work before taking a long summer recess on the campaign trail, we’ll be taking a closer look at other significant proposals that have stalled and just how much–or how little–the Legislature has accomplished in its two year term.

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How the ECOT Scandal Turned Potentially Criminal

April 23, 2018 by Stephen Dyer

A whistleblower is accusing officials of the Electronic Classroom of Tomorrow of intentionally inflating the school’s enrollment to keep receiving $100 million from the state. And this happened after the school was fined $60 million for … inflating the school’s enrollment.

So why are there now calls for criminal investigations? Because the whistleblower’s claims show a pretty clear intent to defraud taxpayers. But how would a software switch show that intent?

Here’s how. The way ECOT and other charter schools are paid by the state is the school submits student ID numbers of students the schools claim are attending the school. The Ohio Department of Education then pays them out of the state aid meant to go to the school district in which the student resides.

Occasionally, the state will do detailed accounting to verify the attendance records. When it did that for ECOT after the 2015-2016 school year, the department found that ECOT could only demonstrate it had about 40 percent of the students it billed the state for educating. Hence the $60 million fine.

What did ECOT do in response? According to the whistleblower, the school purchased software that would allow the school to more easily claim that they should be paid, even if the student never engaged in any learning. ECOT would thus continue to take more state aid away from school districts — every one of whom outperformed ECOT on state report cards.

So after the state nailed ECOT for inflating enrollment — and getting paid $60 million more than it should — ECOT’s remedy was to game the system so they could more easily justify full state payments for kids who never engaged in learning. They didn’t change their actions; they simply changed software so they could hide them better.

Hence the calls for criminal probes.

The next question is whether the state officials who have received $1.8 million from ECOT officials over the years (with another $1 million to political parties) will undertake the necessary oversight to hold ECOT accountable for the taxpayer money lost to this school. Here is a list of all the politicians and parties who have received campaign contributions from all ECOT employees and just ECOT founder William Lager, who now lives in a multi-million dollar Key West mansion.

Given that the whistleblower reached out to the head of the State Board of Education, who punted the issue to the department’s legal team in August, who then sat on the allegations until reporters started asking about them, perhaps more people should keep demanding justice for the students and taxpayers who have been victimized by ECOT’s money making scheme?

ECOT Founder William Lager’s Key West home

Statehouse Preview: Week of April 16

April 17, 2018 by Terra Goodnight

In a relatively quiet week after last week’s turmoil, we’re watching three bills moving at the Statehouse.

Stand Your Ground

On Tuesday at 3pm, the House Federalism and Interstate Relations committee will hold its second hearing in two weeks, and 5th overall, on Representatives Johnson and LaTourette’s House Bill 228, a wide-ranging bill to change Ohio’s gun laws, the most notable change being the creation of a so-called “Stand Your Ground” provision. Last week’s hearing featured committee Republicans accepting an amendment to the bill that added a ban on “straw man” third party purchases. The bill also eliminates certain penalties for illegal carry, signage requirements at certain no-carry premeses, and the responsibility of permit holders to keep hands in plain sight when encountering police in a motor vehicle. A previously scheduled vote on the measure has been cancelled, but the committee has invited the public to testify.

HB228 Bill analysis (original version)
HB228 Comparison document (comparing the committee’s amended bill to prior amended version)

Payday Lending

Last week, with a rumored FBI investigation over lawmakers’ interactions with representatives of the payday lending industry swirling, a proposal (HB123) to crack down on predatory payday lending practices was scuttled by the House Government Accountability and Oversight committee. This week the bill, and a proposed “compromise” negotiated by acting Speaker Kirk Schuring that advocated what has been called “watered down” reform, is back and again scheduled for a vote at the committee’s Wednesday meeting

Police Incidents

Finally, a bill introduced more than a year ago, Senate Bill 13 from Senator Tavares will get its first hearing in the Senate Local Government, Public Safety and Veterans Affairs. The measure grants individuals the right to lawfully record any incident involving a state or local law enforcement officer and to maintain custody and control of that recording and the recording device

Complete House committee schedule
Complete Senate committee schedule

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Week in Review: April 13, 2018

April 13, 2018 by Terra Goodnight

Every Monday we send out an email previewing the bills scheduled for action at the Statehouse. But, sometimes, things don’t go exactly as planned. This was one of those weeks.

Starting today, as lawmakers wrap up their final six weeks of activiity before taking a long summer recess out on the campaign trail, we’re adding a weekly Friday update on what you may have missed.

Guns, Guns, Guns

Several gun bills had hearings this week. The House State and Local Government committee heard from Representative Henne about House BIll 585, which implements several reforms to Ohio’s gun laws that were recommended by a bipartisan panel convened by Governor Kasich. Committee Republicans were not particularly receptive to the plan, judging from their questions, focusing primarily on the bill’s proposed extreme risk protection order and prohibitions on gun possession by those with felony or domestic violence convinctions. In the Senate, Republicans Kunze and Eklund introduced SB288, a companion measure to Henne’s House bill.

Other gun reform proposals getting hearings were Sens Schiavoni and WIlliams’ so-called “red flag” bill (SB278), and Senator Thomas’s ban on bump stocks (SB219). Chairman Coley generated headlines when he asked why a bump stock ban was necessary when someone can use a rubber band with the same effect.

>> See our complete list of gun reform legislation.

Getting more traction were pro-gun measures. HB253, which would allow law enforcement officers to carry concealed weapons off the clock without a permit, was amended by a House committee, while the same committee postponed amendments and a vote on a Stand Your Ground bill (HB228) on that measure’s 4th hearing to date. Another Stand Your Ground bill (SB180) got its fourth hearing in the Senate, drawing opposing testimony from an Ohio Highway Patrol Colonel and the Ohio Coalition Against Gun Violence, among others. Finally, Senator LaRose’s SB234, which would prohibit rental agreements from banning firearms in subsidized housing was scheduled for a proponent hearing but no supporters came forward to speak on its behalf.

Other than that is was a slow week except for OH YEAH THE HOUSE SPEAKER RESIGNED

Elsewhere in the Statehouse, as you may have heard, a rumored FBI investigation into Republican lawmakers, lobbyists and some fancy overseas trips has led to the resignation of the House Speaker. Speculation abounds, but many suspect it involves a trip Speaker Rosenberger took to London with lobbyists for payday lenders.

It was interesting, then, when a bill (HB123) to regulate the payday lending industry unexpectedly stalled in committee the next day. The House Government Accountability and Oversight committee had scheduled an amendment and vote on a “compromise” plan, worked out in private by the House’s 2nd-ranking Republican, Kirk Schuring, but a handful of committee Republicans, apparently reluctant to do anything to restrain the industry, balked. Democrats, too, expressed concerns about voting on anything while the FBI is sniffing around into the industry’s influence.

>> read our recap of Ohio’s recent attempts to curb abusive payday lending practices

Seniors, schools, dogs and voting machines

Also this week, a House committee voted–over objections consumer, senior and poverty advocates and all committee Democrats–to pass a measure (HB402) supported by the Telecom industry to allow landline carriers to raise rates on phone bills without approval by the Public Utilities Commission. Another House committee voted to add $10 million in school safety grant funding to a bill (HB318) to codify the qualifications for school resource officers.

The full House passed a bill (HB263) allowing dogs on restaurant patios (overturning Columbus Health Department rules-woof!), while the Senate approved $115 million in new funding (SB135) for cash-strapped counties to replace aging election equipment.

New Bills We’re Watching

HB590 from Reps. Vitale and Keller, which they call a “no duty to retreat” law looks and sounds a lot like Stand Your Ground.

HB596 from Rep. Ramos, which would allow counties operate more than one early voting location, a much-needed update to current law which limits counties to a single location regardless of size and population needs.

SB290/HB597 from Reps Faber and Sen Burke would prohibit telemarketers from spoofing local phone numbers to get you to answer their calls, which, we can all agree is super annoying (but maybe not quite as important as reducing gun violence).

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Ohio’s Payday Lending Controversy, Explained

April 11, 2018 by Chase Brown

The sudden resignation of House Speaker Cliff Rosenberger in response to an FBI inquiry has highlighted the enormous political influence of the payday lending industry at the Ohio Statehouse. News outlets are reporting that at the center of the inquiry is an overseas trip on which Rosenberger was accompanied by lobbyists for payday lenders.

The payday lending industry is active in Ohio politics and, according to the Columbus Dispatch, has made $1.6 million in Ohio campaign contributions since 2009—the vast majority of which went to Republicans. Payday lending in Ohio is as lucrative as it is powerful, thanks to Ohio’s lax regulations. This hands-off approach has led to Ohio having the highest payday lending interest rates in the nation, with a typical loan carrying a 591% annual interest rate, or APR. These exorbitant interest rates have caused many working poor Ohioans to get trapped in a cycle of debt, in which they take out new loans to pay off old ones.

Ohio has attempted to protect consumers from these predatory lending practices before. In 2008, lawmakers passed a bill setting a maximum APR for short term loans of 28% and capping loan amounts. This led to the payday lending industry launching an attempt to overturn the legislation via a referendum. The industry ultimately spent $19 million on the campaign, but was soundly defeated by Ohio voters, 64% of whom voted to uphold the law.

However, this vote proved to be a moot point as payday lenders were able to exploit loopholes in Ohio law to continue their previous predatory practices. They did so by operating under another section of the Ohio Revised Code originally intended to allow lenders to make loans to consumers to pay off credit card debt.

In March of 2017, there was cause for optimism. Lawmakers from both parties introduced House Bill 123, a proposal that would institute meaningful reform to Ohio’s payday lending laws. The proposal was lauded by groups including The Pew Charitable Trusts for its protections for Ohio consumers. Nick Bourke, the Director of Consumer Finance at Pew, called HB 123 “the best example of a workable compromise on the payday loan issue” he had seen. Despite this – or perhaps as a result – the bill stalled for most of 2017, all while, industry lobbyists were accompanying the top House Republican on overseas trips.

But when a coalition announced it would work to place a reform measure on the ballot (which has been sidelined by a ruling of the Ohio Attorney General), lawmakers began 2018 working once again to advance the bill out of committee.

Today that process hit a snag. HB123 was scheduled this morning for a committee vote after the adoption of new amendments. These amendments were largely worked out behind the scenes by Representative Kirk Schuring, the 2nd-ranking House Republican, who advocates say worked behind the scenes to water down the bill. Ultimately, the House Government Accountability and Oversight Committee took no action on the measure.

It is clear that any reforms – watered down or not – will be vehemently opposed by the payday loan industry. If the past 10 years are any indication, thanks to generous contributions to the campaigns of mostly-GOP lawmakers, the industry is likely to get their way.