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Deliberations on FY23-24 capital appropriations proposal kicks off

Written on May 27, 2022

 Provided by Hannah News Service 

Consideration of the FY23-24 capital appropriations proposal kicked off Tuesday in the General Assembly as Office of Budget and Management (OBM) Director Kimberly Murnieks testified in the finance committees of both houses. 

While she provided a broad overview of the proposal, Senate Finance Committee Chair Sen. Matt Dolan (R-Chagrin Falls) explained that "a placeholder" bill has been introduced -- SB343 (Dolan). Murnieks indicated in answer to a number of questions that discussions were continuing between the administration and Legislature in areas such the state's tax structure, the scope and amount of the community projects portion of the proposal and funding for jails. There were also a number of questions around the priorities in the Ohio Facilities Construction Commission (OFCC) school construction program, with several members wondering whether the progress through the list of schools awaiting funding could be speeded up. 

Murnieks said the proposal totals $3.3 billion, with $2.7 billion of that in GRF-backed debt funding and another $594 million coming from non-GRF backed bonds and other sources, include approximately $300 million in federal American Rescue Plan Act (ARPA) funds. 

She assured the committees that the state remains "well under the constitutional five percent limitation on debt service as a percent of revenue" with the sale of bonds anticipated to support this capital proposal. She told Sen. Andrew Brenner (R-Delaware) that it stands at 3.6 percent now. 

Sen. Mark Romanchuk (R-Ontario) questioned whether it would behoove the administration to forego the sale of bonds and just fund the capital bill with some of the surplus the state has accumulated. Murnieks indicated a willingness to explore that. 

Rep. Bride Sweeney (D-Cleveland) asked if ARPA funds were being used to supplant state funds that would have been used. Murnieks said the ARPA dollars were used for investments that the state might not otherwise have been able to afford. Rep. Reggie Stoltzfus (R-Minerva) questioned whether a separate bill appropriating the ARPA funds wouldn't be "cleaner," with Murnieks explaining that those funds support the state's capital plan, which is what the bill enacts. 

Several further questions sought additional information about the use of ARPA funds, with Murnieks explaining that the U.S. Treasury guidelines do allow ARPA funds to be used for areas such as the Ohio Department of Natural Resources, Department of Rehabilitation and Correction and the animal disease lab. When pressed further about ARPA dollars by Rep. Thomas West (D-Canton), she cautioned the House committee that "when giving ARPA money, you are also giving a reporting headache." 

Several legislators asked whether the proposal takes into account inflation, supply chain issues and workers recruitment challenges, with Murnieks explaining that they are facing those same issues now in regard to current projects. Brenner asked about a predicted recession, and Murnieks said there is always a downturn in the future. 

She received a number of questions regarding funding for veterans services, with Rep. Michael O'Brien (D-Warren) urging the administration to consider constructing a veterans' home in Northeast Ohio, while Rep. Sara Carruthers (R-Hamilton) urged funds be added for veterans services, suggesting funding could come from amounts targeted for the Capital Square Review and Advisory Board (CSRAB). Murnieks said her office is willing "to engage with the General Assembly" on veterans homes and other long-term care facilities. 

Several legislators' questions crossed over into operating budget purview, which she said is not a part of this proposal. 

Among the bill's provisions that the budget director highlighted are the following: 

Higher Education 

Murnieks said the proposal includes $457 million for the Department of Higher Education and the state's institutions of higher education. This proposal was again put together by the higher ed community. 

"Led by the Inter-University Council of Ohio and the Ohio Association of Community Colleges, they delivered a strategic, comprehensive capital funding plan endorsed by each of the state’s public higher education institutions. The resulting capital budget presents the recommendations for the funding of $400 million in campus-level projects." 

She drew the committees' attention to one proposal that appropriates over $22 million for the Ohio Library and Information Network for the purchase of eBooks and journals "from the most prestigious publishers in the world to make these learning resources available to students, faculty, and researchers at every Ohio institution. It would also allow for the replacement of the 30-year-old Integrated Library System that supports the management of libraries and resources across the state." 

Ohio Facilities Construction Commission (OFCC) 

Explaining that the Ohio Facilities Construction Commission administers the state's school building construction program, the capital proposal includes over $607 million to continue the K-12 school program, the energy conservation program and the state building assessment and planning program for FY23 and FY24. Of that, $600 million goes to the construction and renovation of K-12 school district buildings. 

Public Works Commission 

Funds appropriated to the Public Works Commission finance local public infrastructure. The appropriation in this bill will support $557 million in infrastructure projects such as roads, bridges, water supply and distribution and wastewater collection and treatment. This also includes $75 million for the Clean Ohio Conservation Program to protect open spaces and watersheds. 

Department of Agriculture 

The Department of Agriculture would get $86.4 million, with $72 million of that for a new Animal Disease Diagnostic Laboratory -- "the only full service, all-species veterinary diagnostic lab in the state, and is critical in the defense against the threat of animal disease outbreaks like the African Swine Fever …." 

Department of Natural Resources 

The Department of Natural Resources would receive "a total of $515 million, which includes improvements and upgrades to lodges, cabins, campgrounds, and playgrounds. This funding would also be used to enhance the safety of our communities by providing appropriations for dam rehabilitation projects statewide, including the Muskingum locks and dams." This includes $202 million to support improvements, upgrades and repairs in the state parks. 

Department of Mental Health and Addiction Services 

"The recommended capital budget provides $74.6 million in new appropriations for the Department of Mental Health and Addiction Services to fund the general renovations at the state psychiatric hospitals and our continued support of community recovery housing and program space for the mentally ill and drug addicted." 

Department of Rehabilitation and Correction (DRC) 

"This capital proposal would provide approximately $353.3 million to support capital projects in state facilities, community-based correctional facilities, and halfway houses. This level of investment will enable DRC to move beyond general maintenance and address aging capital assets which will focus on keeping staff, inmates, and visitors safe while creating more functional program and living spaces." 

Department of Youth Services 

The capital appropriations proposal provides $103 million for improvements to youth services facilities including $95 million to replace the Cuyahoga Hills Juvenile Correctional Facility with a new, 120-bed facility. Additionally, $4.7 million would be provided for the renovation of the Circleville Medical and Administration facilities. Finally, $3.2 million would be provided for renovations at community correctional facilities and detention center projects. 

Community Projects 

Funded with a "placeholder" amount of $163.5 million, these are the projects that are brought by legislators. In answer to questions about the possibility of adding additional projects, Munieks told the House Finance Committee that this is negotiated by legislative leadership. 

She did conclude her remarks in both committees with an overview of the current state of Ohio's economy, telling the committees that, with two months to go, the state's General Revenue Fund receipts are currently running 12 percent over estimates for the year. She also noted that the state's unemployment rate of 4 percent "is a level touched in only two periods before in our history." 

Likewise, Murnieks said that the state's income tax rate "is lower than it has been in 40 years. And … our state credit rating outlook is stronger than any point in the past 40 years."