Governor outlines targeted – and expensive – priorities

By Barbara Benton, CAE, OSCPA's Vice President of Government Relations

Updated March 7 at 4:20 p.m.
In his first State of the State address, Gov. Mike DeWine on March 5 outlined his top priorities for Ohio, many of which were received with standing ovations but will require the investment of significant financial resources. Of note to the Ohio business community, DeWine proposed:

  • Help for businesses through opportunity zones (building on the already existing federal opportunity zones).
  • An upgrade for two-year community college offerings and career technology centers to help adult workers upgrade their skills and job prospects, and to create at least 10,000 new industry certificates to better match employer needs with employee skills.
  • A new public/private partnership to increase health wellness and prevention efforts, particularly for mental illness and addiction.
  • That all state universities commit to keeping the same rate of tuition for the four years a student attends that school.
  • That Ohio be an “all of the above” state in terms of options for energy production (i.e. more flexibility with wind and solar energy).
  • A substantial investment in the long-term health and protection of Lake Erie and the state’s other bodies of water.
  • Repairs and improvements to Ohio’s roads and bridges. He said his proposed $0.18 per gallon fuel tax increase is the minimum needed for state and local governments (which currently share the revenue 60/40) to maintain safe roads and bridges.

Response from Ohio legislators on DeWine’s priorities was mixed: while many supported the concepts he emphasized, they were concerned about where the funding would come from to pay for it all. Details for these and many other proposals are expected to be fleshed out at least somewhat in Gov. DeWine’s proposed General Revenue Fund budget, due out by March 15. Hearings on the proposal will begin immediately thereafter in the Ohio House and must be wrapped up and signed into law by July 1.

House takes up the gas tax

Later that same afternoon, Ohio House members put their own mark on the proposed highway funding bill (HB 62) by reducing the tax hike per gallon to a 10.7-cent increase for gasoline and upping the diesel fuel cost by 20 cents, phased in over two and three years respectively, and with no indexing for inflation. When fully implemented, this will yield around $872M annually compared to DeWine’s ask of $1.2B.

Other changes include creating annual fees of $100 and $200 respectively for hybrid and electric vehicle owners, tripling current investment in public transit to $100M per year, changing the distribution from a 60/40 split between the state and local governments to a 55/45 split, eliminating the requirement for a front license plate, and allowing municipalities to assess an additional $5 annual vehicle registration fee.

Similar gas tax discussions are just beginning in Michigan, where a proposed 45-cent increase – taking their total tax per gallon to 71.3 cents – would be phased in through 2020. This is on top of the 6% sales tax Michigan already charges on fuel purchases.

The House voted 71-27 on March 7 to pass HB 62, and it now proceeds to the Senate, where more changes are likely coming. The General Assembly needs to pass the bill by March 31.

Ohio House's proposed gas tax increase

Date

Gas tax

Diesel tax

Oct. 1, 2019

7 cents

10 cents

Oct. 1, 2020

3.7 cents

6 cents

Oct. 1, 2021

 

4 cents

 

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