Week in Review 02-05-21

FY22-23 BUDGET

House hearings on the governor’s proposed FY22-23 budget began Thursday in the House Finance Committee with testimony from invited witnesses including Office of Budget and Management (OBM) Executive Director Kim Murnieks, Legislative Service Commission Executive Director Wendy Zhan and Ohio Tax Commissioner Jeff McClain. This followed Monday’s unveiling of the proposed budget by Gov. Mike DeWine and Lt. Gov. Jon Husted. The budget, which sees a 2 percent increase in General Revenue Fund (GRF) spending in FY22 over FY21 and another 3.4 percent increase in FY23, looks very different from what was anticipated a year ago when the COVID-19 pandemic closed down the state and the economy. All this without having to touch the state’s Rainy Day Fund (RDF). That is largely due, according to DeWine, to the influx of federal funds into the state in addition to steps the state took early on which included freezing and cutting spending and then refinancing the state’s debt as well as the unintended consequences of the pandemic’s shifting consumers’ buying habits from purchasing services — which are not subject to the state sales tax — to purchasing goods, which are resulting in an increase in the state’s sales tax revenue.

Gov. Mike DeWine’s second biennial budget proposal for primary and secondary education follows the broad contours of his first, proposing $1.1 billion for students’ health and social-emotional wellness but leaving the foundation formula alone in deference to the General Assembly’s work on the topic. Boosting attainment of workforce credentials and access to computer science education are also among education priorities in the budget.

During the first hearing in the House Finance Committee on the governor’s proposed budget on Thursday, Office of Budget and Management (OBM) Director Kim Murnieks said it shouldn’t be a surprise that the OBM FY22-23 revenue forecast is lower than that of the Legislative Service Commission (LSC): “It’s … pretty normal for OBM’s forecast to be more conservative than LSC’s forecast because we have to implement the budget after it’s passed. We have to live with it for two years, and live within it for two years. So it really doesn’t serve us well to be overly optimistic,” Murnieks said.

LSC Director Wendy Zhan said her agency’s higher tax revenue forecasts compared to OBM’s — $487.8 million more in FY22 and $390.3 million in FY23 — are driven substantially by LSC’s more optimistic view of how much tax revenue will grow in FY21. LSC predicts 9.6 percent growth from FY20 to FY21, while OBM predicts 7.4 percent.

EDUCATION

Teachers and staff at Ohio’s K-12 schools, including public, private, and career-tech entities, started to receive their COVID-19 vaccines necessary for in-person learning in the state beginning Monday, Feb. 1 and based on a four-week schedule spelled out by the governor. DeWine reiterated his goal to get schools in Ohio to return to either a full-time in-person or in a hybrid model by March 1.

The Senate Primary and Secondary Education Committee kicked off hearings Tuesday for Sens. Steve Wilson (R-Maineville) and Robert McColley’s (R-Napoleon) re-introduced proposal to require a half-credit of financial literacy instruction for Ohio students and a license endorsement for those providing that instruction. Under SB1, an updated version of 133-SB342 (Wilson-McColley), high schoolers entering ninth grade from the summer of 2021 and onward would need to complete a half unit of instruction in financial literacy, with the elective credits for graduation dropping from five to four-and-a-half in response. Beginning in the 2023-24 school year, those teaching the financial literacy unit would require a license validation on the subject, and the State Board of Education would need to consult an advisory committee including at least five classroom teachers before adopting rules on the license validation.

GENERAL ASSEMBLY/STATEHOUSE

House Speaker Bob Cupp (R-Lima) announced the members on the House standing committees over the week. Rep. Scott Oelslager (R-North Canton) continues as chair of House Finance with other returning chairs including Rep. Kyle Koehler (R-Springfield) for the renamed House Agriculture and Conservation Committee; Rep. Kris Jordan (R-Ostrander) for House Financial Institutions; Rep. Scott Lipps (R-Franklin) for House Health; Rep. Tom Brinkman (R-Cincinnati) for House Insurance; Rep. Scott Wiggam (R-Wooster) for House State and Local Government; and Derek Merrin (R-Monclova) for House Ways and Means.

House Speaker Bob Cupp (R-Lima) said Wednesday he hopes to pass a school funding proposal as a standalone bill and later incorporate it into the budget bill as well. The plan he and former Rep. John Patterson (D-Jefferson) developed with a working group of educators over the past few years was reintroduced Wednesday as HB1 (Callender-Sweeney) after passing the House but getting little Senate traction in the waning days of the 133rd General Assembly. A total of 68 bills were introduced this week.