Week in Review: June 16, 2024

CAPITAL APPROPRIATIONS

Months after the House adopted a project wish list for the one-time capital funding pool established in the biennial budget, the Senate introduced SB288 (Dolan) on Monday that includes a plan for all $700 million set aside in HB33 (Edwards). Lawmakers last year used the budget to create the $700 million One-Time Strategic Community Investment Fund (OTSCIF), a sort of mini-capital budget, but left the project particulars to further negotiations. In February, the House amended HB2 (Cutrona-Upchurch) to appropriate half the $700 million for its preferred projects as part of a broader $2 billion proposal, but the Senate balked at the time, saying it was not consulted on the spending package.

A House-passed capital spending measure from late winter appears likely to serve as the vehicle for both traditional capital appropriations and the one-time project funding pool lawmakers created in the operating budget, House Speaker Jason Stephens (R-Kitts Hill) and Senate Finance Chair Matt Dolan (R-Chagrin Falls) said Tuesday. Dolan laid out the plan during the first hearing on his SB288, which includes $700 million worth of projects supported by the One-Time Strategic Community Investment Fund (OTSCIF) created in HB33 (Edwards). Dolan said SB288 incorporates the OTSCIF projects approved by the House in February as part of HB2. Of the 655 unique projects included in SB288, 90 overlap between the House and Senate project lists. The share of funding for those overlapping projects from the two chambers varies, with some an even split and some not. "[In the budget] we gave back through tax cuts. We're now going to give back to community projects throughout the state that either improve economic opportunity and development or improve quality of life," he said. Next week, both chambers are expected to introduce capital budget bills, and the following week those proposals and SB288 projects will be combined into HB2 and sent to the floor, he said.

The Senate Finance Committee moved a bit of money around Wednesday among projects to be funded by SB288 (Dolan), the current vehicle for deliberations on the One Time Strategic Community Investment Fund (OTSCIF) that lawmakers established in the FY24-25 operating budget. The committee adopted two amendments, one developed by the House, the other by the Senate. All the changes are revenue neutral, according to Sen. Matt Dolan (R-Chagrin Falls), the committee chair.

CHILDREN/FAMILIES

Ohio ranks near the middle of the pack for the wellbeing of children but regressed on measures of preschool attendance and reading and math proficiency in the latest KIDS COUNT Data Book from the Annie E. Casey Foundation. The foundation's 2024 edition of the data book looks at academic achievement measures and links to health, poverty and other indicators of wellbeing. Ohio's overall ranking for child wellbeing in the report is 28, with sub-rankings of 24 for economic wellbeing, 18 for education, 29 for health and 33 for family and community. On overall rankings, Ohio leads neighbors Michigan (34), Kentucky (38) and West Virginia (44) but trails Pennsylvania (23) and Indiana (27).

ECONOMIC DEVELOPMENT/URBAN REVITALIZATION

The JobsOhio Board of Directors met at the University of Cincinnati Thursday, with a specific focus on the Southwest Ohio region as well as statewide workforce development and "Find Your Ohio" efforts to draw new and returning residents. Lt. Gov. Jon Husted addressed the board virtually, saying he had been in Southwest and Southern Ohio recently with visits to the GE Aerospace headquarters in Cincinnati and the Intel project's offload site in Adams County that is used for transportation of heavy equipment. Husted discussed how large companies have come to Ohio, resulting in billions of dollars in investments and support smaller supply chain businesses.

ECONOMY

The Ohio Chamber of Commerce's nascent Economic Advisor Council (EAC) marked the end of the second quarter with a "cautiously optimistic" projection for the rest of 2024 but also a slightly worse chance of recession following the council's Q1 assessment. Both reports consider a "soft landing" in the coming months the most likely outcome of the Fed's economic tightening. EAC, launched early this year, conducted its second survey of the year and found over 70 percent of respondents expect an interest rate cut in the fourth quarter of 2024 and nearly 30 percent in Q3.

The U.S. Bureau of Labor Statistics (BLS) announced Friday that the nation added 272,000 jobs in May, with the unemployment rate little changed at 4 percent. Employment continued to trend up in industries such as health care; government; leisure and hospitality; and professional, scientific and technical services. The increase of 272,000 jobs was higher than the average monthly gain of 232,000 in the past 12 months. President Joe Biden issued a statement on the numbers, saying "The great American comeback continues, but we still have to make more progress. ... On my watch, 15.6 million more Americans have the dignity and respect that comes with a job. Unemployment has been at or below 4 percent for 30 months -- the longest stretch in 50 years. And a record high share of working-age women have jobs," he added. BLS said the number of unemployed people, at 6.6 million, was also little changed. Those numbers were up from May 2023, when the unemployment rate was 3.7 percent and there were 6.1 million unemployed persons.

HOUSING/HOMELESSNESS

A hearing on legislation to standardize the digitization of recorded documents Wednesday included substantial debate on whether discretionary fees included in the bill should be subject to the typical split that sends money to the Ohio Housing Trust Fund. The House Finance Committee heard testimony from all comers on SB94, Sen. Andrew Brenner (R-Delaware) and Al Landis' (R-Dover) bill to modernize records and conveyances maintained by county recorders.

JUDICIAL

The Board of Professional Conduct says it's up to the Ohio Supreme Court to create policy on how lawyers and their former law firms can resolve fee disputes. It says Rule 1.5 of the Rules of Professional Conduct only applies to joint cases involving attorneys from different firms or law offices, though it concedes that the Supreme Court has not ruled specifically on the reach of Rule 1.5. The board has been asked whether Section (f) of Rule 1.5 mandates fee arbitration or mediation between a lawyer or lawyers and the individual firm that previously employed them. The rule says the Ohio State Bar Association (OSBA) must oversee the mediation or arbitration of fee complaints but assumes disputing attorneys worked for separate firms or law offices at the outset of the joint case or legal matter. "Since no provision of Rule 1.5 expressly regulates the division of fees between departed lawyers and their former firm, it reasonably follows that R. 1.5 (f) is inapplicable to disputes that arise from such a situation," the board states.

STATE GOVERNMENT

The Joint Sunset Review Committee heard representatives of two state agencies, the Ohio Department of Insurance (ODI) and the Ohio Department of Children and Youth (DCY), ask for discontinuation of entities within their departments on Tuesday. Representing DCY, Brian Stout told the committee the Ohio Child Care Advisory Council (CCAC) has a role advising and assisting the Ohio Department of Job and Family Services (ODJFS) with the development of child care programs. However, the structure of the CCAC has a very similar mission and structure to DCY's Early Childhood Advisory Council (ECAC), which also qualifies for federal funding for its Head Start Collaboration grant. Stout therefore recommended the continuation of the ECAC and the sunsetting of CCAC, with the responsibilities of the latter able to be streamlined into the former. George McNab of ODI gave testimony to the committee on a number of agencies within that department. Citing the significant changes in the health insurance industry since the program's inception, McNab recommended the sunset of the Board of Directors of the Ohio Health Reinsurance Program. When Ohio created that program in 1993, it was specifically targeted at small employers and individuals who could not obtain traditional health insurance, functioning as a high-risk insurance pool backed by state funding. However the program was suspended in 2014 after the Affordable Care Act (ACA) was enacted federally.

TECHNOLOGY/AEROSPACE

State lawmakers, university presidents and industry experts Tuesday gathered in the Atrium of the Statehouse for the first ever Artificial Intelligence (AI) Symposium hosted by the Inter-University Council of Ohio. Keynote speakers Lt. Gov. Jon Husted and Greg Simpson, retired chief technology officer at GE and author of The Quantum Contingent, mostly highlighted the promise of AI and large language models. Husted described his first experience using ChatGPT shortly after it was released. "I remember thinking 'this is going to change everything,' and I know technology ... you know a lot of people like to overhype it, but that's not overhyping it in my mind," Husted said. "It is going to change everything and it's true."

A recent study by the organization Child Trends offered recommendations for use of artificial intelligence (AI) in contexts involving children and families, saying "stronger guidance and regulations" are needed to ensure rigorous assessment of potential harm from AI systems. While federal and state officials have weighed the need for AI regulations, Child Trends said that is not taking into account use of AI by children and their families or caregivers. This is particularly an issue as students have increasingly used AI for homework assistance and interact with AI-generated content, while caregivers, including teachers, attempt to use AI to foster child engagement.

This feature was provided by Hannah New Service and selected for you by OSCPA Government Relations Staff.