On June 30, 2015, Ohio Governor John Kasich signed Ohio’s biennial budget bill into law. The bill, House Bill 64, contains appropriations for the state’s next two fiscal years as well as a number of policy changes.
Highlights of the $71 billion budget include an additional 6.3 percent reduction in personal income tax rates and a reduction to the small business income tax. The bill modifies Ohio’s school funding formula and institutes a pay raise for judges and county and township elected officials. The bill increases the maximum amount permitted in the state’s rainy day fund and creates the Ohio 2020 Tax Policy Study Commission to review Ohio’s tax policy and make recommendations for any action by the General Assembly.
With respect to Ohio’s ethics laws, one minor change was made. The bill authorizes the Ohio State Board of Education to create a “Teacher of the Year” distinction and states that, under the state’s ethics laws, a teacher recognized as “Teacher of the Year” may receive a gift or privilege as part of the recognition program. Ordinarily, Revised Code 2921.43(A) prohibits public servants (including teachers employed at public schools) from accepting additional compensation from someone or some entity other than their public employer for performing their public duties. The bill also states that a person or entity may make a voluntary contribution to the recognition program without running afoul of ethics laws.
The bill also allows a nonprofit corporation that is a tax exempt business organization — a 501(c)(6) under the Internal Revenue Code — to transfer contributions received as part of regular dues payments from its unincorporated member businesses to the organization’s political action committee (PAC). The PAC is required to itemize these contributions and, when reporting, allocate the contributions to individuals. Current law prohibits a corporation from using the corporation’s money, including dues, to aid a PAC, even the corporation’s own PAC.
Two other relevant provisions were proposed during the budget process but were not included in the final version of the bill.
A proposal was included by the House of Representatives to repeal the income tax credit for contributions to the campaign committees of candidates for statewide offices, the Ohio General Assembly and the Ohio Board of Education. The repeal would have taken place starting with tax years on or after January 1, 2015.
The executive budget, proposed by the administration, included a proposal to expand the sales and use tax to cover lobbying services as well as the research and public polling services often used by campaigns. This language was removed and not included in the final version of the bill.
The Ohio General Assembly is now on summer recess but will reconvene for session and committee hearings in late September through the end of 2015.