Oelslager Unveils House Substitute Bill

COLUMBUS—State Representative Scott Oelslager (R – North Canton) unveiled the proposed two-year state budget from the Ohio House.

“My colleagues and I have worked hard to create a budget that will work in the best interests of all Ohioans,” said Representative Oelslager. “I am glad we have been able to provide much needed tax relief for hardworking Ohio families, as well as targeted investments in education and reforms in Medicaid.” 

Below are some of the highlights of Substitute House Bill 166:

Meaningful Tax Relief: The House budget plan provides $300 million in real tax relief for low- and moderate-income Ohioans. First, the plan eliminates the personal income tax for those who earn less than $22,500, meaning the income tax rate for Ohio’s three lowest tax brackets is now zero. For those earning between $22,500 and $88,800, their state income tax rate will be cut 4.7 percent. Overall, the House proposal provides a net tax cut of $100 million.

Record Funding for Schools: The House also provides record funding for Ohio schools, targeting those resources to support at-risk students. The House budget builds on Governor Mike DeWine’s proposal by adding an additional $125 million over the biennium for the Student Success and Wellness initiative, which is designed to fund services that address non-academic barriers to student success, including mental health, family engagement and support services, and mentoring.

Medicaid PBM Reform: The House plan includes several government reform measures designed to increase accountability, transparency and protect tax dollars. Included is significant legislation increasing pharmacy benefit manager transparency and accountability within the Medicaid program.

Other highlights of the House substitute bill include:

Jobs

• Re-establishes the Rural Industrial Park Loan Program, providing $25 million for loans and loan guarantees for the development and improvement of industrial parks in rural areas of Ohio.
• Creates the Ohio Maritime Assistance Program, which would allow ports to seek grants to construct and improve cargo terminals. The bill provides $10 million in each of the next two fiscal years for the initiative.
• Increases funding for the Appalachian New Economy Partnership to $2.5 million over the biennium. The initiative promotes economic development in Appalachia Ohio through investments designed to improve the region’s IT and knowledge infrastructure. Led by Ohio University, the initiative supports public-private technology partnerships within the 32-county Appalachian region. The funding will enable the ANEP to draw down additional federal dollars.
• Provides $5 million in each of the next two years to be distributed to community colleges, state community colleges, technical colleges and Ohio Technical Centers for non-credit job-related workforce training programs.

Education

• Requires the Ohio Department of Education to establish a program requiring schools where more than 70 percent of students are eligible for free or reduced price breakfasts to offer breakfast to all students. The program would be phased in over three years. Many schools have successfully drawn down federal funding to pay for their school breakfast programs.
• Directs the state auditor to, in consultation with the Joint Education Oversight Committee, conduct a performance audit of the Ohio Department of Education.
• Establishes a new program at the Facilities Construction Commission, in partnership with the Department of Administrative Services and the Department of Public Safety, to help school districts replace old and unsafe school buses. The legislation provides $20 million for the initiative.

Higher Education

• The House plan provides increased support for Ohio’s colleges and universities, including mirroring the governor’s proposed increases for the following programs:

o State Share of Instruction – This is the state’s primary financial support for public colleges and universities, accounting for nearly 75 percent of the Department of Higher Education’s budget. It would receive an additional $21.8 million in FY 2020 and $20 million in FY 2021, an increase of 1 percent each year.

o Ohio College Opportunity Grant (OCOG) – This is the state’s main needs-based financial aid for higher education students. The House plan would increase funding for this program by 21 percent in each of the next two fiscal years to $122 million in FY 20 and $148 million in FY 21.

o Choose Ohio First – This program, which provides scholarships to students pursuing STEMM or STEMM education degrees, as well as scholarships for Patient Centered Medical Home education, would be increased by approximately $12 million in each of the next two years.

o Ohio Technical Colleges – The budget proposes an increase of 39.7 percent over the biennium (from $16 million to $23 million) for OTCs, the most significant funding level since 2003. OTCs provide postsecondary career and technical education at 54 sites across Ohio, in collaboration with secondary career centers, high schools, and joint vocational schools. OTCs are positioned to respond quickly to the needs of business and industry by providing customized training and business consultation services to companies to assist with meeting Ohio’s workforce goals.

• This fall, all incoming freshmen at four-year public universities in Ohio will have their tuition and general fees frozen – guaranteed – so what they pay for their first year will be the same for their fourth year.
• Creates a new grant $6 million grant program to help community and technical college students with the purchase of textbooks and other instructional material.

Medicaid PBM Reform

• Creates one uniform pharmacy benefits manager (PBM) contract for Medicaid managed care, ensuring that the PBM works for the State of Ohio and in the best interests of the taxpayers.

o This contract will go through the procurement process under the Department of Administrative Services and be managed the Department of Medicaid. The contract must be in place by July 1, 2020.

o The selected PBM will be required to submit to the Department of Medicaid, on a quarterly basis, all conflicts of interest in subsidiary or sister companies, all costs pertaining to drug purchasing from manufacturers, costs paid to pharmacies, any rebate dollars, and formulary changes. ODM will then be required to furnish a report to the General Assembly within 60 days and testify at the request of the Speaker and/or Senate President on such findings.

o Establishes that the chosen PBM will act as a fiduciary to the state and be required to pursue the lowest drug costs from manufacturers on behalf of the state.

o Requires all data submitted by the PBM to flow directly to the Department of Medicaid and not through a Medicaid managed care organization.

Health and Human Services

• Creates new quality incentives for Managed Care Plans to decrease costs to the Medicaid Program where they will earn dollars for averaging a lower cost for per member per month than neighboring states.
• Provides $2 million in each fiscal year to support grants to reduce infant mortality.
• Changes the age to buy tobacco and other tobacco products from 18 to 21 years.
• Requires the director of the Department of Developmental Disabilities to establish a workgroup regarding adult day support and non-medical transportation services provided under the Medicaid waivers.
• Requires managed care organizations to establish an employment connection incentive program to assist Medicaid recipients in obtaining and maintaining employment.
• Establishes the Health and Human Services Efficiencies and Alignment Study Committee to examine the state’s health and human services agencies.
• Requires the Ohio Family and Children First Cabinet Council to develop a comprehensive multi-system youth action plan.

Tax Changes

• Changes the Business Income Deduction to cover the first $100,000 of business rather than the first $250,000. Eighty-six percent of taxpayers utilizing this deduction will see no change.
• Closes a loophole in current law under which a filer using the Business Income Deduction can claim state tax benefits intended for low-income Ohioans.
• The House plan eliminates the motion picture tax credit and a tax credit for contributing to a political campaign.
• The legislation also eliminates sales tax exemptions for sales to motor racing teams, the purchase of gold coins and bullion, the purchase of flight simulators, aviation repair and maintenance as well as services to maintain and repair fractionally-owned aircraft.
• Makes changes relative to the collection of sales taxes on online purchases to conform with the U.S. Supreme Court’s Wayfair decision.
• Directs ride-sharing services, such as Uber and Lyft, to collect and remit sales taxes on behalf of the drivers.

H2Ohio

• Funds the H2Ohio initiative at the governor’s requested level for fiscal years 2020 and 2021 combined $85 million. The House is continuing its work on a long-term plan for a secure, sustainable funding source for the protection of Ohio’s bodies of water.

Miscellaneous

• Provides additional resources to Ohio Government Television and requires them to broadcast committee hearings.
• Provides $8.9 million for rape crisis centers and $2 million to help victims of domestic violence.