Fiscal Note & Local Impact Statement

126 th General Assembly of Ohio

Ohio Legislative Service Commission

77 South High Street, 9th Floor, Columbus, OH 43215-6136 ² Phone: (614) 466-3615

² Internet Web Site: http://www.lsc.state.oh.us/

BILL:

Am. Sub. H.B. 530

DATE:

March 29, 2006

STATUS:

As Passed by the Senate

SPONSOR:

Rep. Calvert

LOCAL IMPACT STATEMENT REQUIRED:

No —

Not required for budget bills

 


CONTENTS:

To make capital reappropriations for the biennium ending June 30, 2008, to make certain supplemental and capital appropriations, and to provide authorization and conditions for the operation of state programs

 

State Fiscal Highlights

Capital Reappropriations and New Appropriations

 

STATE FUND

FY 2006

FY 2007-08 BIENNIUM

Capital Reappropriations

  General Revenue Fund

- 0 -

$1,067,747 increase

  Wildlife Fund

- 0 -

$6,687,444 increase

  Public School Building Fund

- 0 -

$46,659,933 increase

  Highway Safety Fund

- 0 -

$3,081,567 increase

  Waterways Safety Fund

- 0 -

$14,385,777 increase

  Underground Parking Garage Operating Fund

- 0 -

$966,631 increase

  Nursing Home – Federal Fund

- 0 -

$2,697,500 increase

  Army National Guard Service Contract Fund

- 0 -

$5,845,553 increase

  Special Administrative Fund

- 0 -

$18,076,956 increase

  Community Match Armories Fund

- 0 -

$4,273,922 increase

  State Fire Marshal Fund

- 0 -

$33,833 increase

  Veterans' Home Improvement Fund

- 0 -

$1,767,930 increase

  Education Facilities Trust Fund

- 0 -

$114,342,348 increase

  Clean Ohio Revitalization Fund

- 0 -

$53,910,427 increase

  Job Ready Site Development Fund

- 0 -

$30,000,000 increase

  Highway Safety Building Fund

- 0 -

$3,561,703 increase

  Administrative Building Fund

- 0 -

$101,079,856 increase

  Adult Correctional Building Fund

- 0 -

$105,036,819 increase

  Juvenile Correctional Building Fund

- 0 -

$12,269,885 increase

  Cultural and Sports Facilities Building Fund

- 0 -

$39,831,048 increase

  Ohio Parks and Natural Resources Fund

- 0 -

$47,894,047 increase

  School Building Program Assistance Fund

- 0 -

$190,205,552 increase

  Mental Health Facilities Improvement Fund

- 0 -

$40,896,474 increase

  Higher Education Improvement Fund

- 0 -

$491,713,902 increase

  Parks and Recreation Improvement Fund

- 0 -

$31,742,587 increase

  State Capital Improvements Fund

- 0 -

$262,740,460 increase

  State Capital Improvements Revolving Loan Fund

- 0 -

$65,646,475 increase

  Clean Ohio Conservation Fund

- 0 -

$43,316,386 increase

  Clean Ohio Agricultural Easement Fund

- 0 -

$5,892,856 increase

  Clean Ohio Trail Fund

- 0 -

$6,344,000 increase

New Capital Appropriations

  Clean Ohio Assistance Fund

- 0 -

$53,000,000 increase

  Job Ready Sites Fund

- 0 -

$30,000,000 increase

  Public School Building Fund

-0-

$80,000,000 increase

  Administrative Building Fund

- 0 -

$3,110,550 increase

  Adult Correctional Building Fund

- 0 -

$30,024,990 increase

  Juvenile Correctional Building Fund

- 0 -

$1,750,000 increase

  Ohio Parks and Natural Resources Fund

- 0 -

$5,050,000 increase

  School Building Program Assistance Fund

- 0 -

$585,000,000 increase

  Mental Health Facilities Improvement Fund

- 0 -

$5,500,000 increase

  Higher Education Improvement Fund

- 0 -

$53,500,000 increase

  Parks and Recreation Improvement Fund

- 0 -

$1,500,000 increase

  State Capital Improvements Fund

- 0 -

$120,000,000 increase

  State Capital Improvements Revolving Loan Fund

- 0 -

$24,100,000 increase

  Clean Ohio Conservation Fund

- 0 -

$37,500,000 increase

  Clean Ohio Agricultural Easement Fund

- 0 -

$6,250,000 increase

  Clean Ohio Trail Fund

- 0 -

$6,250,000 increase

  State Fire Marshal Fund

- 0 -

$1,908,000 increase

  Veterans' Home Improvement Fund

- 0 -

$552,500 increase

Note:  The state fiscal year is July 1 through June 30.  For example, FY 2004 is July 1, 2003 – June 30, 2004.

 

·        Capital Reappropriations.  The total amount of capital moneys reappropriated is estimated at approximately $1.8 billion ($1,751,969,618).

·        New Capital Appropriations.  New capital appropriations contained in the bill total $1.04 billion ($1,044,996,040).


Education

State Fiscal Highlights

 

STATE FUND

FY 2006

FY 2007-08 BIENNIUM

Budget Adjustments and Transfers

General Revenue Fund – Adjutant General

     Revenues

- 0 -

- 0 -

     Expenditures

Increase of up to $1,500

- 0 -

General Revenue Fund – Board of Regents

     Revenues

- 0 -

- 0 -

     Expenditures

Increase of up to $30 million

Increase of up to $30 million

General Revenue Fund of The Ohio State University

     Revenues

Increase of $247,000

Increase of $247,000

     Expenditures

- 0 -

- 0 -

National Guard Service Medal Fund (Fund 5DN) – Adjutant General

     Revenues

Gain of $1,500

Potential gain

     Expenditures

Increase of up to $1,500

Potential increase

Camp Perry Clubhouse and Rental Fund (Fund 536) – Adjutant General

     Revenues

Loss of $103,981.68

- 0 -

     Expenditures

- 0 -

- 0 -

School District Property Tax Replacement – Business Fund (Fund 047) – Department of Education

     Revenues

Possible increase or decrease

Possible increase or decrease

     Expenditures

Increase of $18,000,000

Increase of $50,946,000

General Obligations Fund (Fund 392) – Department of Health

     Revenues

Gain of $103,981.68

- 0 -

     Expenditures

- 0 -

- 0 -

 

·        Adjutant General.  Service Medal Production.  Appropriates $1,500 for FY 2006 for the newly created Fund 5DN appropriation item 745-618, Service Medal Production, which is to be used to cover start-up costs of medal production.  The bill authorizes the Director of Budget and Management to transfer up to $1,500 cash in FY 2006 from the GRF to the National Guard Service Medal Fund (Fund 5DN), which is also created in the bill to receive fees paid by eligible members purchasing the medal.  The fees are to be used to cover the future program costs.

·        Adjutant General and Department of Health.  Transfer to General Obligations Fund.  Requires the Director of Budget and Management to transfer $103,981.68 from the Adjutant General's Camp Perry Clubhouse and Rental Fund (Fund 536) to the Department of Health's General Obligations Fund (Fund 392) in FY 2006.

·        Board of Regents.  State Need-Based Financial Aid.  Allows the Director of Budget and Management to increase appropriation authority by up to $30 million in each fiscal year in order to support the distribution of state need-based financial aid.  The increased appropriation authority is to be granted only if there are insufficient unencumbered and unobligated GRF appropriation balances within the Board of Regents' budget to cover the distribution of state need-based financial aid in each fiscal year.

·        Board of Regents.  Capital Component.  Increases the appropriation to GRF appropriation item 235-552, Capital Component, by $1,003 in each fiscal year.

·        Department of Education.  School District Property Tax Replacement – Business Fund (Fund 047).  The bill replaces a specific transfer into Fund 047 of $10,010,000 in FY 2006 and $70,210,000 in FY 2007 with language that permits the Director to make transfers as necessary.  The bill also increases the appropriation from this fund by $18,000,000 in FY 2006 and $50,946,000 in FY 2007 and appropriates any additional transfers the Director finds are necessary.

·        Ohio State University.  Center for Learning Excellence.  Earmarks $247,000 in FY 2006 and FY 2007 of GRF appropriation item 200-421, Alternative Education Programs, to fund a contract with the Center for Learning Excellence at The Ohio State University.

Health and Human Services

State Fiscal Highlights

 

STATE FUND

FY 2006

FY 2007-08 BIENNIUM

Budget Adjustments and Transfers

General Revenue Fund

     Revenues

Potential loss of up to approximately $15.1 million in federal Medicaid reimbursement due to nursing facility and ICF/MR capital adjustment;

 

- 0 -



 

 

- 0 -

 

 

 

 

 

Gain in federal Medicaid reimbursement if PACE payment transfers are made from

- 0 -

 

 

 

 

 

Potential gain in federal Medicaid reimbursement due to a change in the nursing facility reimbursement rate in FY 2007;

 

Loss of approximately $13.5 million in FY 2007 in federal Medicaid reimbursement due to fund and line item realignment;

 

Gain in federal Medicaid reimbursement if PACE payment transfers are made from

 

ODA to JFS;

 

Gain of $4,163.90 due to transfer from Fund 152;

 

Loss of $5,850 due to transfer to Fund 601

ODA to JFS in FY 2007;

 

- 0 -

 

 

- 0 -

 

     Expenditures

- 0 -

 

 

 

Decrease of up to approximately $15.1 million (decrease in JFS ALI 600-525 federal share appropriation) due to nursing facility and ICF/MR capital adjustment;

 

- 0 -

 

 

 

 

 

- 0 -

 

 

 

- 0 -

 

 

 

Potential transfer of appropriations from ODA ALI 490-421 to JFS ALI 600-525 to fund state share of PACE provider payments;

 

Increase in appropriations of $1.65 million for the Ohio Veterans' Home Agency (OVH ALIs 430-100 and 430-200);

 

 

Decrease of $50,000 from GRF appropriation item 440-507, Targeted Health Care Services Over 21

Potential increase due to a change in the nursing facility reimbursement rate in FY 2007;

 

- 0 -

 

 

 

 

 

 

Decrease of approximately $22.7 million in FY 2007 (JFS ALI 600-525 state and federal share) due to fund and line item realignment;

 

Potential decrease in reimbursement from ODH to free clinics;

 

Potential increase in costs to pay for additional criminal background checks;

 

Potential transfers of appropriations from ODA ALI 490-421 to JFS ALI 600-525 to fund state share of PACE provider payments in FY 2007;

 

Increase in appropriations of $1.65 million for the Ohio Veterans' Home Agency (OVH ALIs 430-100 and 430-200) in FY 2007;

 

Increase of $50,000 in GRF appropriation item 440-507, Targeted Health Care Services Over 21, in FY 2007 for copayments for Medicare
Part D drugs

General Reimbursement Fund (Fund 106) – Attorney General

     Revenues

- 0 -

Potential gain in fee revenue generated by additional background checks

     Expenditures

- 0 -

Potential increase in costs to conduct additional criminal background checks

Mental Health Fund (Fund 151) – Department of Mental Health

     Revenues

- 0 -

Potential gain from free clinic purchases of goods and services

     Expenditures

- 0 -

Potential increase from free clinic purchases of
goods and services

Miscellaneous Revenue Fund (Fund 152) – Department of Mental Retardation and Developmental Disabilities

     Revenues

Loss of $4,163.90 due to transfer to the GRF

Potential gain of $156,000

     Expenditures

- 0 -

- 0 -

Gifts and Miscellaneous Fund (Fund 601) – Commission on Hispanic/Latino Affairs

     Revenues

$5,850 gain due to transfer from the GRF

- 0 -

     Expenditures

- 0 -

- 0 -

PASSPORT Fund (Fund 3C4) – Department of Aging

     Revenues

Loss in federal Medicaid reimbursement if PACE payment transfers to JFS
are made

Loss in federal Medicaid reimbursement if PACE payment transfers to JFS are made in FY 2007

     Expenditures

Decrease in appropriations in ODA ALI 490-621 if federal share of payments to PACE providers is made out of JFS ALI 600-525

Decrease in appropriations in ODA ALI 490-621 if federal share of payments to PACE providers is made out of JFS ALI 600-525 in FY 2007

Health Care - Federal Fund (Fund 3F0), currently Hospital Care Assurance Match Fund – Department of Job and Family Services

     Revenues

Estimated gain of $14.01 million in federal Medicaid reimbursement for targeted case management services;

 

 

- 0 -

 

 

 

 

- 0 -

 

 

 

Gain in federal Medicaid reimbursement generated by expenditure of the transfers from ODE to JFS

Estimated gain of $29.79 million in federal Medicaid reimbursement for targeted case management services in FY 2007;

 

Gain of approximately $347.8 million in FY 2007 due to Medicaid fund and line item realignment;

 

Gain of federal reimbursement for ABD Managed Care in FY 2007;

 

Gain in federal Medicaid reimbursement generated by expenditure of the transfers from ODE to JFS in FY 2007

     Expenditures

Potential $14.01 million appropriation increase (ALI 600‑623) for targeted case management services;

 

- 0 -

 

 

 

 

- 0 -

 

 

 

 

Increase in appropriation to JFS ALI 600‑623 equal to federal reimbursement generated by expenditure of the transfers from ODE to JFS

Potential $29.79 million appropriation increase in FY 2007 (ALI 600‑623) for targeted case management services;

 

Increase of approximately $347.8 million (ALI 600-623) in FY 2007 due to Medicaid fund and line item realignment;

 

Appropriation increase in FY 2007 equal to deposits of federal reimbursements for ABD Managed Care;

 

Increase in FY 2007 appropriation to JFS ALI 600‑623 equal to federal reimbursement generated by expenditure of the transfers from ODE to JFS

Interagency Reimbursement Fund (Fund 3G5) – Department of Job and Family Services

     Revenues

Estimated loss of $14.01 million due to rerouting of federal Medicaid reimbursement to Fund 3F0

Estimated loss of $29.79 million in FY 2007 due to rerouting of federal Medicaid reimbursement to Fund 3F0

     Expenditures

Estimated decrease of $14.01 million due to rerouting of federal Medicaid reimbursement to Fund 3F0

Estimated decrease of $29.79 million in FY 2007 due to rerouting of federal Medicaid reimbursement to Fund 3F0

Community Alternative Funding System Fund (Fund 3M7) – Department of Mental Retardation and Developmental Disabilities

     Revenues

Estimated loss of $14.01 million due to rerouting of federal Medicaid reimbursement to Fund 5DJ

Estimated loss of $29.79 million in FY 2007 due to rerouting of federal Medicaid reimbursement to Fund 5DJ

     Expenditures

Estimated decrease of $14.01 million due to rerouting of federal Medicaid reimbursement to Fund 5DJ

Estimated decrease of $29.79 million in FY 2007 due to rerouting of federal Medicaid reimbursement to Fund 5DJ

Children's Trust Fund (Fund 198) – Department of Job and Family Services

     Revenues

- 0 -

 

 

- 0 -

 

 

 

- 0 -

 

 

- 0 -

 

Loss of $1.5 million in FY 2007 due to transfer to Fund 5BH;

 

One-year delay of transfer of unspent cash from Fund 5BH in FY 2007;

 

Transfer in FY 2008 of unspent cash from Fund 5BH;

 

Potential delay in transfer of fee revenue in FY 2007 and FY 2008 (no change in
amount transferred)

     Expenditures

- 0 -

- 0 -

Veterans' Home Operating Fund (Fund 4E2) – Veterans' Home Agency

     Revenues

Potential gain due to transfer from Fund 604

Potential gain due to transfer from Fund 604 in FY 2007

     Expenditures

- 0 -

- 0 -

Partnerships for Success Fund (Fund 5BH) – Department of Youth Services

     Revenues

- 0 -

 

 

 

- 0 -

 

 

 

- 0 -

 

Gain of $1.5 million due to transfer from Fund 198 in FY 2007;

 

One-year delay of transfer of unspent cash to Fund 198 in FY 2007;

 

Transfer in FY 2008 of unspent cash to Fund 198

     Expenditures

- 0 -

- 0 -

Family Violence Prevention Fund (Fund 5BK) – Department of Public Safety

     Revenues

- 0 -

Potential delay in transfer of fee revenue (no change in amount transferred)

     Expenditures

- 0 -

- 0 -

State Medical Board Operating Fund (Fund 5C6) – State Medical Board

     Revenues

- 0 -

- 0 -

     Expenditures

- 0 -

Potential minimal increase to inform physicians of abortion reporting requirements

Medicaid Program Support-State Fund (Fund 5C9) – Department of Job and Family Services

     Revenues

Gain of $9.34 million due to transfer from DMR to JFS related to targeted case management services

Gain of $20.28 million in FY 2007 due to transfer from DMR to JFS related to targeted case management services

     Expenditures

Potential $9.34 million appropriation increase (JFS ALI 600-671) related to targeted case management services;

 

 

Increase in appropriation to JFS ALI 600‑671 equal to amount transferred from ODE to JFS

Potential $20.28 million appropriation increase in FY 2007 (JFS ALI 600-671) related to targeted case management services;

 

Increase in appropriation to JFS ALI 600‑671 in FY 2007 equal to amount transferred from
ODE to JFS

Military Injury Relief Fund (Fund 5DB) – Department of Job and Family Services

     Revenues

- 0 -

- 0 -

     Expenditures

- 0 -

$2.0 million appropriation increase in FY 2007 (JFS ALI 600-637)

Targeted Case Management Services Fund (Fund 5DJ) – Department of Mental Retardation and Developmental Disabilities

     Revenues

$9.34 million gain from county boards (direct or pledged
state subsidies to county
boards);

 

$23.35 million gain from JFS

$20.28 million gain from county boards in FY 2007 (direct or pledged state subsidies to county boards);

 

$50.07 million gain from JFS in FY 2007

     Expenditures

$32.69 million increase in appropriations (DMR ALIs 322‑625 and 322-626)

$70.35 million increase in appropriations in FY 2007 (DMR ALIs 322-625 and 322‑626)

Medicaid Revenue and Collections Fund (Fund 5DL) – Department of Job and Family Services

     Revenues

- 0 -

Gain of approximately $56.9 million in FY 2007 due
to Medicaid fund and line
item realignment

     Expenditures

- 0 -

Increase of approximately $56.9 million in FY 2007 (ALI 600-639) due to Medicaid fund and line item realignment

Prescription Drug Rebates Fund (Fund 5P5) – Department of Job and Family Services

     Revenues

- 0 -

Loss of approximately $359.0 million in FY 2007 due to Medicaid fund and line item realignment

     Expenditures

- 0 -

Decrease of approximately $359.0 million in FY 2007 (ALI 600-692) due to Medicaid fund and line item realignment

Veterans' Home Improvement Fund (Fund 604) – Veterans' Home Agency

     Revenues

Potential loss due to transfer to Fund 4E2

Potential loss in FY 2007 due to transfer to Fund 4E2

     Expenditures

- 0 -

- 0 -

MR/DD Community Capital Replacement Facilities Fund (NEW) – Department of Mental Retardation and Developmental Disabilities

     Revenues

- 0 -

Gain of payments from county boards or private nonprofit agencies from sale of facilities that received state funds for construction of MR/DD facilities

     Expenditures

- 0 -

Payments to county boards or private nonprofit agencies for purchase or construction of replacement facilities and new projects paid with funds from county boards or private nonprofit agencies that do not acquire a replacement facility within specified term

 

Department of Aging

·        PASSPORT Transfers.  Makes changes to the language that deals with the transfer of funds from the Department of Job and Family Services (JFS) to the Department of Aging (ODA) to reimburse ODA for PASSPORT services provided to individuals who were previously admitted to a nursing facility while they were on a waiting list for the PASSPORT program, for whom PASSPORT is appropriate, and who prefer to participate in PASSPORT rather than reside in the nursing facility.  Specifically, the language is changed from the transfer of an entire biennium's worth of estimated expenses to a quarterly transfer of actual expenditures.  Therefore, the state share from GRF line item 600-525, Health Care/Medicaid, in JFS to be transferred to GRF line item 490-403, PASSPORT, in ODA will be based on actual expenditures instead of estimated costs.  Similarly, the corresponding increases in line item 600-655, Interagency Reimbursement (Fund 3G5), in JFS and line item 490-607, PASSPORT (Fund 3C4), in ODA reflecting the federal share will be based on actual costs.  If actual expenditures are higher or lower than estimated costs, the transfers and increases in appropriations will be higher or lower than under current law.

·        Criminal Records Checks for Ombudspersons and Community-Based Long-Term Care Staff.  Expands the requirement that persons under final consideration for employment with a PASSPORT agency undergo a criminal records check.  The bill also requires that persons with the Office of the State Long-Term Care Ombudsperson Program undergo criminal records checks.  This could increase costs to the Department of Aging.  It is unknown at this time if applicants will pay for any or part of these background check costs.  LSC has assumed that any additional costs to the Department would likely be paid using GRF money already appropriated to the Department.  As a result of the requirement for additional background checks, the Bureau of Criminal Identification and Investigation (BCII) could realize an increase in workload.  However, the cost of background check fees would likely cover most of the expenses related to increased workload.  As a result, any increase to BCII will be minimal.


Department of Health

·        Free Clinic Reimbursement.  Potentially lowers the percentage of medical liability insurance premiums that the Department of Health is mandated to reimburse free clinics participating in a professional liability insurance reimbursement program from a fixed 80% of the premiums paid (up to a maximum of $20,000) to an amount that is up to 80%.

·        BCMH – Medicare Part D Copayments.  The bill decreases GRF appropriation item 440-507, Targeted Health Care Services Over 21, by $50,000 in FY 2006, and subsequently increases the appropriation item by the same amount in FY 2007.  The amount is then earmarked for essential medications and to pay the copayments for drugs approved by the Department of Health and covered by Medicare Part D that are dispensed to Bureau for Children with Medical Handicaps (BCMH) participants, in accordance with the section of Am. Sub. H.B. 530 of the 126th General Assembly entitled "BCMH – MEDICARE PART D COPAYMENTS."

Commission on Hispanic/Latino Affairs

·        Transfer from the GRF.  Allows for the transfer of $5,850 from the General Revenue Fund to Fund 601 in the Commission on Hispanic/Latino Affairs' budget prior to June 30, 2006.  The amount was mistakenly posted to the GRF at the end of FY 2005.

Department of Job and Family Services

·        Payment to Nursing Facilities for Uncompensated Capital Costs.  The bill reduces the appropriation in line item 600-525, Health Care/Medicaid, by $10 million state share and the corresponding federal share in FY 2006.  The bill also appropriates $10 million in FY 2006 to newly created line item 600-529, Capital Compensation Program, in the Department of Job and Family Services and requires that any remaining unencumbered balance in the appropriation at the end of FY 2006 be carried forward to FY 2007.  Therefore, the net effect to the GRF is zero in FY 2006 in terms of state share; however, the state will probably lose an estimated $15.1 million in federal Medicaid reimbursement.  According to JFS, the federal government is unlikely to reimburse the state for retroactive payments for capital costs to nursing facilities and intermediate care facilities for the mentally retarded.

·        FY 2007 Medicaid Reimbursement Formula for Nursing Facilities.  Requires that a nursing facility's rate as determined under the new formula be increased by a certain percentage.  Thus, the bill potentially increases the FY 2007 Medicaid reimbursement rate for nursing facilities.  The state receives reimbursement of approximately 60% of any Medicaid costs from the federal government.

·        Medicaid Fund and Line Item Realignment.

o       Creates the Medicaid Revenue and Collections Fund (Fund 5DL) into which the nonfederal share of Medicaid-related collected revenues, collections, and recoveries that are not credited to another fund are to be credited.  Renames the Hospital Care Assurance Match Fund (to which federal matching funds that are received under the Hospital Care Assurance Program are credited) the Health Care – Federal Fund and provides for the federal share of Medicaid-related revenues, collections, and recoveries (including drug rebates) that are not credited to another fund to also be credited to the fund.


o       Expressly requires that the nonfederal share of all supplemental rebates paid by drug manufacturers under the Supplemental Drug Rebate Program be credited to the Prescription Drug Rebates Fund (Fund 5P5).

o       Adjusts appropriations in line items 600-525, Health Care/Medicaid, 600-623, Health Care Federal, and 600-692, Prescription Drug Rebate – State, to reflect the changes as a result of separating the state share and the federal share of Medicaid drug rebates and third-party collections.

o       Renames line item 600-692 from "Health Care Services" to "Prescription Drug Rebate – State."

o       Creates a new line item 600-639, Medicaid Revenue and Collections, to be used by the Department of Job and Family Services for Medicaid services.

·        ABD Managed Care Funding.  Requires that federal reimbursement for the Aged, Blind, and Disabled (ABD) Managed Care Program be deposited into the Hospital Care Assurance Match Fund – Federal Fund (Fund 3F0) instead of the ABD Managed Care Program – Federal Fund (Fund 3AZ), which is being eliminated by this provision, and appropriates the amounts deposited into Fund 3F0 for the ABD Managed Care Program to line item 600-699, ABD Managed Care Program – Federal.

·        Hospital Care Assurance Match Fund.  Allows the Department of Job and Family Services to use the existing federal fund, Hospital Care Assurance Match, which is renamed Health Care – Federal in the bill (Fund 3F0), instead of the new federal fund, Fund 3BB, which was created in Am. Sub. H.B. 66 of the 126th General Assembly, to collect and distribute federal hospital care assurance funds.

·        Military Injury Relief Fund.  Creates appropriation line item 600-637, Military Injury Grants, in the Department of Job and Family Services and appropriates $2.0 million in FY 2007.  Am. Sub. H.B. 66 of the 126th General Assembly (the budget act) created the Military Injury Relief Fund, but did not provide any spending authority for the fund.

·        Children's Trust Fund – Delay in Transfer of Vital Statistics Fees.  Changes the times by which additional fees on certified copies of birth records, certifications of birth, death records, and filings for divorce decrees and decrees of dissolution are to be forwarded from local commissioners of health, local registrars of vital statistics, and courts of common pleas to the Treasurer of State for deposit into the Children's Trust Fund (Fund 198 within the Department of Job and Family Services) and the Family Violence Prevention Fund (Fund 5BK within the Department of Public Safety).  The amounts of the fees deposited into these funds are not changed; however, there could be a delay in the transfer of these moneys to Fund 198 and Fund 5BK.

·        Recovery of Medicaid Overpayments.  Eliminates the restriction that limits the Department of Job and Family Services to recovering a Medicaid overpayment to the five-year period immediately following the end of the state fiscal year in which the overpayment is made, but provides that the Department may make such a recovery only if it notifies the provider of the overpayment during that five-year period. By eliminating the restriction, the state has a greater chance to recover Medicaid overpayments.  Thus, this provision of the bill could result in savings to the state.

·        Medicaid Audits.  Allows for funds from Fund 4J5, Home and Community-Based Services for the Aged, to be used for any part of the audit of a nursing facility or intermediate facility for mental retardation and developmental disabilities.  Currently, the audits are limited to Medicaid cost reports.  Am. Sub. H.B. 66 of the 126th General Assembly (the budget act) earmarked $1 million in each fiscal year to fund the state share of audits of Medicaid cost reports.

Department of Job and Family Services and Other State Agencies

·        Assisted Living Waiver Transfers (Department of Aging).  Corrects language involving the transfer of funds from GRF line item 600-525, Health Care/Medicaid (within the Department of Job and Family Services), to GRF appropriation 490-422, Assisted Living Waiver (within the Department of Aging).  GRF line item 600-525, Health Care/Medicaid, contains both state and federal share.  The amendment would change the transfer of the state share from GRF line item 600-525, Health Care/Medicaid, to GRF line item 490-422, Assisted Living Waiver, to the certified amount rather than the estimated costs.  The amendment would also reduce GRF line item 600-525, Health Care/Medicaid, by the corresponding federal share and eliminate the language transferring the federal share from 600-525 in JFS to the Assisted Living – Federal Fund (Fund 3C4) in the Department of Aging since an appropriation has been established in Fund 3C4 for FY 2007 and because the federal share would already be passed on to the Department of Aging through JFS appropriation 600-655.  If the certified amount is higher or lower than estimated costs, the transfers and changes in appropriations will be higher or lower than under current law.

·        PACE (Department of Aging).  Provides a mechanism to transfer funds from the Department of Aging to the Department of Job and Family Services to make payments to PACE providers.

·        Disability Medical Assistance Program (Department of Mental Health).  Increases GRF line item 600-513, Disability Medical Assistance, in the Department of Job and Family Services by $4.3 million in FY 2006 and $5.7 million in FY 2007.  Decreases GRF line item 335-419, Community Medication Subsidy, in the Department of Mental Health by $4.3 million in FY 2006 and $5.7 million in FY 2007 and removes the earmark for Disability Medical Assistance Program.

·        ICF/MR Conversion Pilot Program (Department of Mental Retardation and Developmental Disabilities). The bill requires the Director of Job and Family Services to adjust an ICF/MR's franchise permit fee if the ICF/MR's certified capacity is reduced under the ICF/MR Conversion Pilot Program.  It also permits the Director to adjust an ICF/MR's franchise permit fee if the facility's certified capacity is increased after the ICF/MR Conversion Pilot Program is terminated.  If the franchise fee revenue is reduced due to a decrease in the Medicaid-certified beds, the state will receive less franchise fee revenue under its Medicaid program.

·        Partnerships for Success (Department of Youth Services).  Provides for a cash transfer of $1.5 million in FY 2007 from the Children's Trust Fund (Fund 198 in the Department of Job and Family Services) to the Partnerships for Success Fund (Fund 5BH in the Department of Youth Services) and changes the date by which the Office of Budget and Management must transfer to the Children's Trust Fund any cash that remains unspent in the Partnerships for Success Fund from January 1, 2007 to January 1, 2008.

·        Reimbursements to a School District for Medicaid Services (Department of Education).  Increases the appropriations in line item 600-671, Medicaid Program Support, and 600-623, Health Care – Federal, in the Department of Job and Family Services based on transfers from the Department of Education for Medicaid services provided in school districts and the corresponding federal match.

·        Independent Living Council (Rehabilitation Services Commission).  Increases GRF appropriation item 415-402, Independent Living Council, in the Rehabilitation Services Commission by $387,720 in FY 2007 and decreases GRF appropriation item 600-525, Health Care/Medicaid, in the Department of Job and Family Services by $387,720 state share in FY 2007.  The federal share of GRF appropriation item 600-525 is reduced by $581,580 to reflect that these moneys will now be used for a non-Medicaid purpose.

Ohio State Medical Board and Department of Health

·        Reporting Requirements.  The bill requires the Ohio State Medical Board to inform physicians of the bill's reporting requirement.  The Board is required to mail this notification with each registration renewal application.  This could result in minimal costs to develop, print, and insert this notification.  The bill also authorizes the Board to take disciplinary action against any physician who violates the reporting requirements.  However, it appears that the Board may already be able to take disciplinary action against violators, as this reporting requirement is currently in Department of Health rules.

Department of Mental Health

·        Free Clinic Consolidated Purchasing.  Potential increase in expenditures in Fund 151 if the free clinics purchase goods and services through the Office of Support Services.  The increase in expenditures would be offset by the gain in revenues when the free clinics pay for the goods and services purchased on their behalf.

Department of Mental Retardation and Developmental Disabilities

·        Targeted Case Management Services.  Creates State Special Revenue Fund 5DJ, Targeted Case Management Services, and appropriation line items 322-625, Targeted Case Management Match, and 322-626, Targeted Case Management Services, in DMR and allows the Department to enter into an interagency agreement with JFS to pay for targeted case management services.  Provides direction on how the local share of targeted case management costs should be collected from the county boards of mental retardation and developmental disabilities.  The net fiscal impact to the state will be zero.

·        Transfer of Oil and Gas Lease Revenue to the GRF.  Requires that by June 30, 2006, or as soon as possible thereafter, the Director of Budget and Management transfer $4,163.90 cash from the Miscellaneous Revenue Fund (Fund 152 in the Department of Mental Retardation and Developmental Disabilities (DMR)) to the GRF in order to fulfill the requirement of Revised Code section 5123.23 that all money received from leases, for oil and gas, of real estate owned by the state and placed under the supervision of DMR be paid into the state treasury to the credit of the GRF.

·        Land Conveyance Proceeds to Miscellaneous Revenue Fund.  The bill allows for the sale of 26 acres of vacant state-owned real estate located in the Township of Wooster in Wayne County to the Wayne County Improvement Corporation, a nonprofit economic development entity.  The appraisal value of the property is $156,000.  The net proceeds from this conveyance, in the amount of $156,000, is to be credited to the Miscellaneous Revenue Fund (Fund 152) of the Department of Mental Retardation and Developmental Disabilities.

·        Capital Replacement Facilities.  Expressly states that the Director of Mental Retardation and Developmental Disabilities must obtain the approval of the Controlling Board or Director of Budget and Management before assisting a county board of mental retardation and developmental disabilities or private, nonprofit agency with a construction project.  Establishes a process by which a county board or private, nonprofit agency may sell a facility for which the county board or agency received state funds before the terms of the agreement authorizing the state funds expires and acquire a replacement facility.  If the county board or agency sells a facility after receiving approval, the county board or agency must deposit at the state level the portion of the proceeds in the amount the Director of MR/DD determines is owed in accordance with the requirements of the bill.  Such proceeds are to be deposited in the MR/DD Community Capital Replacement Facilities Fund, which is created in the bill.  The Director is to use the money in the fund to pay the county board or agency an agreed upon percentage of the cost of acquiring a replacement facility or to provide assistance for other local MR/DD construction projects if the county board or agency fails to acquire a replacement facility.

Ohio Veterans' Home Agency

·        Increase in Appropriations for Operating.  Increases the appropriations in GRF line item 430-100, Personal Services, by $800,000 in each fiscal year and GRF line item 430-200, Maintenance, by $850,000 in each fiscal year.

·        Transfer Between Funds.  Allows the Director of Budget and Management to transfer cash from SSR Fund 604, Veterans' Home Improvement, to SSR Fund 4E2, Veterans' Home Operating, to be used for costs relating to the veterans' homes.

·        Quarterly Report on Fiscal Operations.  Requires the Ohio Veterans' Home Agency to submit a report, each fiscal quarter, on the status of the Agency's fiscal operations to the Governor, President of the Senate, Minority Leader of the Senate, Speaker of the House of Representatives, and Minority Leader of the House of Representatives.  This reporting requirement could minimally increase costs for the Agency.

Law Enforcement, Judiciary, and Corrections

State Fiscal Highlights

 

STATE FUND

FY 2006

FY 2007-08 BIENNIUM

Budget Adjustments and Transfers

General Revenue Fund and Other State Funds (Sale of Debt Owed the State) – Attorney General

     Revenues

- 0 -

Potential gain from sale of debt owed the state

     Expenditures

- 0 -

Potential decrease in collections enforcement workload and related operating expenses from sale of debt owed the state

General Revenue Fund – Public Defender Commission

     Revenues

- 0 -

Up to $80,000 or more annual gain in interest earned from investment of Legal Aid Fund (Fund 574) moneys

     Expenditures

- 0 -

- 0 -

Legal Aid Fund (Fund 574) – Public Defender Commission

     Revenues

- 0 -

Up to $80,000 or more annual loss, as all future interest earnings on fund's moneys redirected to the GRF

     Expenditures

- 0 -

Potential decrease, commensurate with revenue loss

Highway Patrol Federal Contraband, Forfeiture, and Other Fund (Abolished Fund 3BF) – Department of Public Safety

     Revenues

One-time transfer of existing cash balance estimated at roughly $2.0 million to replacement Fund 83J and Fund 83T; Fund subsequently abolished with all future revenues directed to Fund 83J and Fund 83T

     Expenditures

Fund abolished; Purposes shifted to Fund 83J and Fund 83T

Highway Patrol Justice Contraband Fund (New Fund 83J) – Department of Public Safety

     Revenues

One-time cash transfer estimated at roughly $1.98 million from Fund 3BF plus certain future criminal forfeiture proceeds received pursuant to federal law

     Expenditures

Increase, commensurate with available revenues

Highway Patrol Treasury Contraband Fund (New Fund 83T) – Department of Public Safety

     Revenues

One-time cash transfer estimated at roughly $20,000 from Fund 3BF plus certain future criminal forfeiture proceeds received pursuant to federal law

     Expenditures

Increase, commensurate with available revenues

Security, Investigations, and Policing Fund (Fund 840) – Department of Public Safety

     Revenues

Potential annual gain from certain vehicle weight violation fines

     Expenditures

- 0 -

- 0 -

Partnerships for Success Fund (Fund 5BH) – Department of Youth Services

     Revenues

- 0 -

One-time $1,500,000 cash transfer in FY 2007 from Children's Trust Fund
(Fund 198)

     Expenditures

- 0 -

Increase up to the amount of available revenue in FY 2007

 

·        Attorney General.  The fiscal effect of the sale of certain debts will be determined by how the savings in debt collections operations compares to how much the state loses in foregone debt collections revenues.  The magnitude and direction of that potential state fiscal effect is uncertain at this time.  Presumably, however, the Attorney General would not sell debts owed to the state unless:  (1) more revenue would be collected than might otherwise have been the case if the state had held onto the debts, (2) less time and money was expended on debt collection efforts than might otherwise have been the case if the state had held onto the debts, in particular for the Attorney General's Collections Enforcement Section, or (3) some combination of (1) and (2).

·        Public Defender Commission.  Legal Aid Fund (Fund 574).  As a result of the bill, Fund 574 would no longer retain the interest earnings from investments, the practical effect of which will be to redirect any of the fund's future interest earnings to the GRF.  Based on current market conditions, the provision will produce an annual revenue loss of approximately $80,000 in moneys that would otherwise have been credited to Fund 574 and an annual gain of the same magnitude to the GRF.  The loss of investment earnings revenue theoretically at least would translate into a reduction of corresponding magnitude in the total amount of financial assistance that might otherwise have been distributed to legal aid societies statewide.

·        Department of Public Safety.  Criminal forfeiture proceeds.  In order to comply with federal law, the bill eliminates the Department of Public Safety's Highway Patrol Federal Contraband, Forfeiture, and Other Fund (Fund 3BF) and creates the Highway Patrol Justice Contraband Fund (Fund 83J) and the Highway Patrol Treasury Contraband Fund (Fund 83T) in its place and transfers the cash balance in Fund 3BF to Fund 83J and Fund 83T as appropriate.

·        Department of Public Safety.  Vehicle Weight Violation Fine Money.  By establishing the distribution of certain vehicle weight violation fines, money collected as a result of an arrest made by the State Highway Patrol that might otherwise have been deposited in the county treasury where the violation occurred would instead be deposited in the state treasury, possibly to the credit of the Security, Investigations, and Policing Fund (Fund 840).  As of this writing, the magnitude of that potential revenue gain to the state treasury annually is uncertain.

·        Department of Youth Services.  Partnerships for Success Fund (Fund 5BH).  The bill transfers $1.5 million, in FY 2007, from the Department of Job and Family Services' Children's Trust Fund (Fund 198) to the Department of Youth Services' Partnerships for Success Fund (Fund 5BH), the purpose for which appears to be:  (1) to provide subsidies to counties to build their capacity to effectively prevent and respond to child and adolescent problem behaviors, while promoting positive youth development, and (2) to provide technical assistance and training tailored to the circumstances of each county being served.

Taxation

State Fiscal Highlights

 

STATE FUND

FY 2006

FY 2007-08 BIENNIUM

Budget Adjustments and Transfers

General Revenue Fund – National Guard Tax Deductions

     Revenues

- 0 -

Loss up to $47,500 or more in FY 2007, $45,700 or more in FY 2008

     Expenditures

- 0 -

- 0 -

General Revenue Fund – Incorporation of Changes Made to Federal Tax Laws in 2005

     Revenues

Potential loss of $2 million

Potential loss of $6 million

     Expenditures

- 0 -

- 0 -

General Revenue Fund – Administration of Insurance Taxes

     Revenues

- 0 -

Potential gain or loss

     Expenditures

- 0 -

- 0 -

General Revenue Fund – Tax Exemption for the Columbus Crew Stadium

     Revenues

- 0 -

- 0 -

     Expenditures

- 0 -

Potential increase in school district aid

General Revenue Fund – Telephone Company Refundable Tax Credit

     Revenues

Potential loss up to $1.4 million

Potential loss up to $2.8 million in FY 2007, up to $4.0 million in FY 2008

     Expenditures

- 0 -

- 0 -

 

General Revenue Fund Provisions

·        National Guard Tax Deductions.  Establishes two new deductions under the personal income tax for members of the National Guard on active duty or their designated beneficiaries.  The revenue loss from these deductions depends on the number of Guard members on active duty, which is assumed to fall as the U.S. pulls forces out of the conflict in Iraq.  The combined revenue loss from these deductions is estimated to be up to $53,000 or more in FY 2007, up to $51,000 or more in FY 2008, up to $24,000 or more in FY 2009, and up to $16,000 or more in subsequent fiscal years.  Revenue from this tax is allocated according to the following statutory formula:  89.5% to the GRF, 5.7% to the Library and Local Government Support Fund, 4.2% to the Local Government Fund, and 0.6% to the Local Government Revenue Assistance Fund.

·        Incorporation of Changes Made to Federal Tax Laws in 2005.  The bill incorporates into Ohio tax law all changes made in federal tax law in 2005.  The references to the 2005 federal tax law would reduce Ohio tax revenue collections in FY 2006 by $2 million and in FYs 2007-2008 by $6 million.

·        Administration of Insurance Taxes.

o       The bill establishes procedures for payment of interest by insurers due to late payment or underpayment of insurance taxes, or to insurers due to overpayment of taxes.  This provision, and a provision that establishes the order in which tax credits must be claimed, may increase or decrease revenue to the GRF.

o       Foreign insurers are required to make advance payment based on the previous year's taxes before credits, rather than after credits.  This would accelerate the payment of foreign insurance taxes slightly within a fiscal year.

o       Foreign insurers are required to make advance payment of taxes on fire insurance premiums.  This would accelerate payments slightly within a fiscal year to the State Fire Marshall's Fund (Fund 546).

·        Tax Exemption for the Columbus Crew Stadium.  Because the tax exemption for the Columbus Crew Stadium may reduce tax revenues to the Columbus City School District, state aid to that district may increase.

·        Community Reinvestment Areas.  Tax exemptions for dwellings constructed in Community Reinvestment Areas, whose owners are late in filing applications for these tax exemptions, generally would result in increased state aid to school districts in which these residences are located.

·        Laundry and Dry Cleaning Services.  The bill exempts from the sales and use tax certain tangible personal property items used to remove soil or dirt from articles of clothing and other fabric items supplied as part of a laundry and dry cleaning service.  This exemption reduces state sales and use tax revenues.

·        Telephone Company Refundable Tax Credit.  Converts an existing credit under the corporate franchise tax (CFT) from nonrefundable to refundable, for three years, then the credit would expire.  The credit is for telephone companies for their cost of providing network access to the communicatively impaired.  The credit is nonrefundable for tax year 2005, but the bill would make it refundable for tax years 2006, 2007, and 2008.  This provision may decrease revenue from the CFT by up to $1.4 million in FY 2006, $2.8 million in FY 2007, and $4.2 million in FY 2008.  The credit is eliminated after taxable year 2008, so that the bill may increase revenue by up to $1.4 million in FY 2009.  There would be no revenue effect after FY 2009.  Revenue from the CFT is allocated according to the following statutory formula:  95.2% goes to the GRF, 4.2% goes to the Local Government Fund (LGF), and 0.6% goes to the Local Government Revenue Assistance Fund (LGRAF).  The local government fund freeze means that the GRF experiences the full revenue loss during the current biennium.

·        Commercial Activity Tax Exclusion for Sale of Property Delivered to a Qualified Distribution Center.  The bill exempts from the commercial activity tax, receipts from sales of tangible personal property that is delivered to a "qualified distribution center."  Thus, the bill decreases CAT revenues for FY 2007 and later years.  Under current law, the GRF does not receive distributions from the CAT between FY 2007 and FY 2011.  Thus, revenue loss to the GRF would occur in FY 2012 and later years.

 

General Government

State Fiscal Highlights

 

STATE FUND

FY 2006

FY 2007-08 BIENNIUM

Budget Adjustments and Transfers

General Revenue Fund – Department of Administrative Services

     Revenues

Gain of $220,000 for county and university human resources services

Gain of $880,000 for county and university human resources services

     Expenditures

- 0 -

- 0 -

General Revenue Fund – Department of Agriculture, Department of Health

     Revenues

Gain to AGR corresponding to cost-sharing agreement with EPA and ODH for lab costs

Gain to AGR corresponding to cost-sharing agreement with EPA and ODH for lab costs

     Expenditures

Increase for AGR and ODH corresponding to share of lab maintenance costs

Increase for AGR and ODH corresponding to share of lab maintenance costs

General Revenue Fund – Auditor of State and Office of Budget and Management

     Revenues

Gain of $320,000 for Auditor's equipment purchases

$180,000 gain in FY 2007 for Auditor's equipment purchases

     Expenditures

Potential savings from direct deposit requirements

Potential increase or decrease related to transfer of WIRE Program to OBM in FY 2008;

Potential savings from direct deposit requirements

General Revenue Fund – Department of Commerce

     Revenues

- 0 -

Potential minimal gain from the issuance of D-5h, D-6, and F-7 liquor permits

     Expenditures

- 0 -

- 0 -

General Revenue Fund – Department of Development

     Revenues

- 0 -

- 0 -

     Expenditures

Slight decrease in administrative expenses

Slight decrease in administrative expenses

General Revenue Fund – General Assembly

     Revenues

- 0 -

- 0 -

     Expenditures

Potential minimal decrease

Potential minimal decrease

General Revenue Fund – Department of Natural Resources

     Revenues

Gain of $315,000 in appropriation authority to cover central support charges

Gain of $365,000 in appropriation authority to cover central support charges

     Expenditures

- 0 -

- 0 -

General Revenue Fund and Other Funds – Department of Transportation

     Revenues

- 0 -

- 0 -

     Expenditures

- 0 -

Potential one-time increase, minimal at most

Central Services Agency Fund (Fund 115) – Department of Administrative Services

     Revenues

- 0 -

Gain from the payment of licensing board services charges not to exceed $375,700

     Expenditures

- 0 -

- 0 -

Payroll Deductions (Fund 124) – Department of Administrative Services

     Revenues

- 0 -

- 0 -

     Expenditures

Potential indeterminate savings for benefit changes

Potential indeterminate savings for benefit changes

Various State Funds – Personnel Expenses

     Revenues

- 0 -

- 0 -

     Expenditures

Potential indeterminate savings for benefit changes

Potential increase in personnel expenses to provide pay raises - future pay raises uncertain; Potential indeterminate savings for benefit changes

Various State Funds – Layoff Procedures

     Revenues

- 0 -

- 0 -

     Expenditures

Potential administrative savings in administering layoffs

Potential administrative savings in administering layoffs

State Architect's Fund (Fund 131) – Department of Administrative Services

     Revenues

Potential gain from the release of escrowed funds

Potential gain from the release of escrowed funds

     Expenditures

- 0 -

- 0 -

Governor's Residence Fund (Fund 5A2) – Department of Administrative Services

     Revenues

Potential gain from endowment funds

Potential gain from endowment funds

     Expenditures

Potential increase to cover additional landscaping and administrative expenses

Potential increase to cover additional landscaping and administrative expenses

Commercial Feed, Fertilizer, Seed and Lime Inspection and Laboratory Fund (Fund 4C9) – Department of Agriculture

     Revenues

- 0 -

- 0 -

     Expenditures

Potential increase for seed fee refunds, depending on eligibility

Potential increase for seed fee refunds, depending on eligibility

Statewide Treatment and Prevention Fund (Fund 475) – Alcohol and Drug Addiction Services

     Revenues

- 0 -

Potential minimal gain from the issuance of D-5h, D-6, and F-7 liquor permits

     Expenditures

- 0 -

- 0 -

Public Audit Expense Intra-State (Fund 109) – Auditor of State

     Revenues

$2,700,000 gain

$2,700,000 gain in FY 2007 only

     Expenditures

- 0 -

- 0 -

Training Program Fund (Fund 584) – Auditor of State

     Revenues

$50,000 gain

$50,000 gain in FY 2007 only

     Expenditures

- 0 -

- 0 -

Undivided Liquor Permit Fund (Fund 066) – Department of Commerce

     Revenues

- 0 -

Potential minimal gain from the issuance of D-5h, D-6, and F-7 liquor permits

     Expenditures

- 0 -

- 0 -

Cultural and Sports Facilities Building Fund (Fund 030) – Cultural Facilities Commission

     Revenues

Administration of capital funding for various projects is redirected both within and outside of CFC, resulting in a net loss of $1,575,000 to
Fund 030

A total of $1,575,000 in capital moneys is not reappropriated to CFC

     Expenditures

Potential decrease associated with not administering various capital projects

Potential decrease associated with not administering various capital projects

Facilities Establishment Fund (Fund 037) – Department of Development

     Revenues

Loss of up to $5,475,000 transfer to Fund 5D2

- 0 -

     Expenditures

- 0 -

- 0 -

Urban Redevelopment Loans Fund (Fund 5D2) – Department of Development

     Revenues

Gain of up to $5,475,000 transfer from Fund 037

- 0 -

     Expenditures

- 0 -

- 0 -

Laboratory Services Fund (Fund 199) – Environmental Protection Agency

     Revenues

- 0 -

- 0 -

     Expenditures

Increase corresponding to share of lab maintenance costs

Increase corresponding to share of lab maintenance costs

Surface Water Protection Fund (Fund 4K4) – Environmental Protection Agency

     Revenues

Potential loss associated with extended exemption from paying section 401 water quality certification fees granted to coal mining and reclamation operations

Potential minimal loss in Section 401 fee revenue; Potential loss associated with extended exemption from paying section 401 water quality certification fees granted to coal mining and reclamation operations

     Expenditures

- 0 -

- 0 -

Environmental Protection Fund (Fund 5BC) – Environmental Protection Agency

     Revenues

- 0 -

- 0 -

     Expenditures

Increase corresponding to share of lab maintenance costs

Increase corresponding to share of lab maintenance costs

Parks and Recreation Improvement Fund (Fund 035) – Department of Natural Resources

     Revenues

Loss of $20,000 transfer to Fund 227

- 0 -

     Expenditures

- 0 -

- 0 -

Parks Capital Expenses Fund (Fund 227) – Department of Natural Resources

     Revenues

Gain from $20,000 transfer from Fund 035

- 0 -

     Expenditures

- 0 -

- 0 -

Clean Ohio Conservation Fund (Fund 056) – Public Works Commission

     Revenues

Potential gain from refunds due to project overpayments

Potential gain from refunds due to project overpayments

     Expenditures

- 0 -

- 0 -

Racing Commission Operating Fund (Fund 565) – Ohio State Racing Commission

     Revenues

- 0 -

Increase of $800,000
(FY 2007 only)

     Expenditures

- 0 -

- 0 -

Business Services Fund (Fund 599) – Secretary of State

     Revenues

- 0 -

- 0 -

     Expenditures

- 0 -

Potential increase in costs of approximately $150,000 to redact social security numbers and employee identification numbers from UCC filings

State and Federal Infrastructure Bank Fund (Fund 212 and Fund 213) – Department of Transportation

     Revenues

Potential gain from increased levels of SIB loan repayments

Potential gain from increased levels of SIB loan repayments

     Expenditures

- 0 -

- 0 -

 

·        Department of Administrative Services.  County and University Human Resources Services.  Increases GRF appropriation item 100-406, County and University Human Resources Services, by $220,000 in FY 2006 and by $880,000 in FY 2007 for County and University Human Resources Services, resulting in a total appropriation amount of $280,000 in FY 2006 and $940,000 in FY 2007.

·        Department of Administrative Services.  Central Service Agency – Professional Licensing Boards.  The bill adds $375,700 in FY 2007 to DAS appropriation item 100-632, Central Service Agency (Fund 115) to cover expenses for establishing and recovering the costs of maintaining the CAVU licensing system used by the professional licensing boards, and for the costs of supporting the licensing function in FY 2007.

·        Department of Administrative Services.  Payroll Deductions Fund (Fund 124) and Other State Funds.  The bill makes several revisions to the laws governing paid leave, health care benefits, and layoffs with regard to exempt employees, specified state employees, or state employees in general.  Any benefit savings will affect disbursements from the Payroll Deductions Fund (Fund 124) as well as various state agency funds.  Currently, an accurate estimate of the potential savings from these revisions is indeterminate.

·        Department of Administrative Services.  Unclaimed funds deposited into the State Architect's Fund.  The bill allows for a contractor's funds escrowed by DAS and held by an escrow agent for a public improvement contract to be released to the State Architect's Fund (Fund 131) if the contractor has not claimed the funds within three years and certain conditions are met.  This change will result in a revenue gain to the State Architect's Fund (Fund 131).  The amount of the gain will depend on the amount of unclaimed funds.  This amount is currently unknown.

·        Department of Administrative Services.  Governor's Residence Advisory Commission.  The Governor's Residence Fund (Fund 5A2) may experience a gain from endowment funds for the maintenance and care of the gardens on the grounds of the Governor's Residence.  If no additional endowments are received, these landscaping expenses will have to be covered with moneys available in Fund 5A2, or from some other source.  Since the bill adds two new members to the Commission, any additional actual and necessary expenses as well as additional administrative expenses that may occur would also have to be covered by moneys in Fund 5A2, or from some other source.  An estimate of these additional expenses is currently unknown.

·        Department of Agriculture.  Seed Fee Refunds.  The bill requires the Department of Agriculture to refund money from fees collected under the law governing the sale of vegetable and flower seeds to seed labelers who sold seeds in packages of specified sizes from January 1, 2004 to December 31, 2005.  The fees were deposited into the Commercial Feed, Fertilizer, Seed and Lime Inspection and Laboratory Fund (Fund 4C9) and will be refunded from that fund.  The Department collected approximately $20,000 to $40,000 from these fees.  Thus, there will be an increase in expenditures from Fund 4C9, the magnitude of which would depend on how many are eligible for and request the refund.

·        Auditor of State.  Replacement of Aging Equipment.  Increases the appropriation by $320,000 in FY 2006 and $180,000 in FY 2007 for GRF appropriation item 070-321, Operating Expenses, to replace aging equipment used by the Auditor's office for core functions.

·        Auditor of State.  Public Audit Expenses.  Increases the appropriation by $2,700,000 in FY 2006 and FY 2007 for appropriation item 070-601, Public Audit Expense – Intra-State, within the Public Audit Expense—Intrastate Fund (Fund 109), to pay expenses associated with performing a greater number of audits of school districts, Medicaid providers, and investments within the Bureau of Workers' Compensation.  With the increase, total appropriations would be $12,000,000 in each fiscal year.

·        Auditor of State.  Training Costs—GASB 34.  Increases the appropriation by $50,000 in FY 2006 and FY 2007 for appropriation item 070-603, Training Program, within the Training Program Fund (Fund 584), to pay expenses associated with the training of local entities needed because of the implementation of GASB 34 accounting standards.  With the increase, total appropriations for training would be $181,250 in both FY 2006 and FY 2007.

·        Office of Budget and Management.  Transfer of Warrant Writing Functions from Auditor of State.  Effective July 1, 2007, transfers the warrant writing functions, specifically the WIRE program, from the Auditor of State to the Office of Budget and Management (OBM).  This program costs approximately $1.16 million in each fiscal year.  Of this amount, approximately $1,000,000 is paid from the GRF, and the remainder is paid from the Uniform Accounting Network/Technology Improvements Fund.  Employees of the Auditor of State assigned to or responsible for this payment function will be transferred to OBM on July 1, 2007, or as soon as possible thereafter.  This function is currently GRF-funded and is expected to remain so.  GRF expenditures for this function may increase or decrease, depending on how OBM implements the program.  The Office of Budget and Management may experience savings, as all state employees (with exceptions) are required to have their paychecks directly deposited regardless of when they were hired.

·        Department of Commerce.  Liquor Permit Changes.  This bill modifies two liquor permits and creates a temporary permit.  Specifically, the bill reduces from 5,000 to 1,500 the required number of members a fine arts museum must have to qualify for a D-5h liquor permit and allows a D-6 permit, which authorizes the sale of intoxicating liquor on Sunday, to be issued to certain D-5j permit holders.  The bill also creates the F‑7 temporary liquor permit for certain qualified golf events.  Thus, there may be a minimal increase in liquor permit fee revenue.  The exact amount of the increase would depend on the number of additional permits issued as a result of these changes.  The fees for the D-5h, D-6, and F-7 permits are $1,875, $500, and $450, respectively.  Liquor permit fees are deposited into the Undivided Liquor Permit Fund (Fund 066) and distributed to the GRF and the Statewide Treatment and Prevention Fund (Fund 475) within the Department of Alcohol and Drug Addiction Services (ODADAS) for treatment and prevention programming, and local governments.

·        Department of Commerce.  Licensing Boards Consolidation.  The bill removes the intent of the General Assembly to consolidate 20 boards and commissions and provides FY 2007 appropriations for each of the boards and commissions as stand-alone entities.

·        Cultural Facilities Commission.  Transfer of Funding for Various Capital Projects.  Funding for the Goll Wood Homestead ($50,000) is transferred to the Department of Natural Resources; funding for the Robins Theatre Renovations project ($1,000,000) is cancelled and distributed between the Packard Music Hall Renovations project (under CFC) and Mosquito Lake State Park (under DNR); funding for the Madison County Historic Schoolhouse ($40,000) is redirected to the Armory Youth Center; funding for the Cleveland Institute of Art ($1,000,000), the Friendly Inn Settlement House ($250,000), and the Merrick House ($250,000) is transferred to Cleveland State University; CAP-073 is renamed "Ice Arena Development" and reappropriated a total of $5.5 million; and CAP-843 is renamed "Marina District Amphitheatre and Related Development" and reappropriated a total of $2 million.  The resulting net loss of capital appropriations and reappropriations under Fund 030 is $1,575,000.

·        Department of Development.  EDGE Bond Guarantee Program.  Slight savings in administrative expenses may be realized under the EDGE Bond Guarantee Program by allowing the Director of Development to seek Controlling Board approval once per year for each surety company that applies for bond guarantees.

·        Department of Development.  Transfer to the Urban Redevelopment Loans Fund (Fund 5D2).  The bill increases the amount of cash that may be transferred from the Facilities Establishment Fund (Fund 037) to the Urban Redevelopment Loans Fund (Fund 5D2) from $10,950,000 to $16,425,000 (an increase of $5,475,000) over the FY 2006-2007 biennium.

·        Environmental Protection Agency.  Section 401 Water Quality Certification Fee Exemption and Payment Extension.  The bill specifies that Section 401 water quality certification fees do not apply to U.S. Army Corps of Engineers projects.  This will result in a potential minimal loss of application and review fee revenue.  The bill also extends from June 30, 2006, to one year after the effective date of H.B. 530, the exemption granted to coal mining and reclamation operations from the payment of section 401 water quality certification fees.

·        General Assembly.  House and Senate Journals.  The bill permits the House and Senate Journals to be published electronically rather than printed.  This may result in a minimal decrease in expenditures from the GRF.

·        Department of Natural Resources.  Wildlife Central Support.  The bill increases GRF appropriation item 725-401, Wildlife-GRF Central Support, by $315,000 in FY 2006 and $365,000 in FY 2007, for a total of $1,315,000 in FY 2006 and $1,365,000 in FY 2007.  This would be used to pay for the Division's share of central support charges in each fiscal year.  Without this increase, it may be that other Divisions would be required to pay higher central support charges.

·        Department of Natural Resources.  Parks Capital Expenses Fund Transfer.  The bill requires the Director of Budget and Management to transfer $20,000 in start-up funds in FY 2006 from the Parks and Recreation Improvement Fund (Fund 035) to the newly created Parks Capital Expenses Fund (Fund 227).  The transfer will assist in account transaction processing.

·        Public Works Commission.  Refunds Due to Project Overpayments.  The Clean Ohio Conservation Fund may experience a potential gain in revenue from refunds received due to project overpayments.  If the Director of Budget and Management determines that project refunds are available to support additional appropriations, the bill appropriates these amounts.

·        Ohio State Racing Commission.  Exotic Wagers Tax.  Reinstates a provision of law that expired at the end of FY 2005 directing racing permit holders to pay an extra 1/4 of 1% of exotic wagers as a tax to the Tax Commissioner, who in turn pays these amounts to the Racing Commission Operating Fund (Fund 565).  Exotic wagers include all wagers other than those to win, place, or show.  In calendar year 2005, exotic wagers at all Ohio tracks totaled $314 million.  An additional 1/4 of 1% of these wagers would add about $800,000 to Racing Commission Operating Fund revenues.  The additional revenue is for FY 2007 only.

·        Secretary of State.  Redaction of Social Security/Employer ID Numbers.  Requires the Secretary of State to redact social security numbers and employee identification numbers from all financing statements filed under the Secured Transaction provisions of the Uniform Commercial Code.

·        Department of Transportation.  Ohio Transportation Task Force.  As the bill does not explicitly provide for any of the 24 members of the Task Force to be reimbursed for related travel expenses (e.g., food, mileage, lodging) incurred as a result of performing their duties, it is unknown if reimbursements would occur, or from which fund.  It is possible that since the Director of Transportation, the Director of Public Safety, and the Director of Development are members of the Task Force, either one of these agencies may cover such costs.  The Legislative Service Commission may experience minimal one-time costs to provide staff services to the Task Force; however, these costs would be absorbed within the existing budget.

·        Department of Transportation.  State Infrastructure Bank Funds.  Because the bill now allows townships to use motor fuel tax revenues as debt service on State Infrastructure Bank (SIB) loans, similar to the authority granted to counties and municipalities, State and Federal Infrastructure Bank Funds (Fund 212 and Fund 213) may experience a gain in revenue from increased levels of township SIB loan repayments on future projects.  These increased payments may provide additional funds for future projects statewide.

·        Department of Agriculture, Department of Health, Environmental Protection Agency.  Co-location of State Agency Labs.  This provision requires that the Department of Administrative Services, Department of Agriculture (ODA), Department of Health (ODH), and the Ohio Environmental Protection Agency (OEPA) enter into a memorandum of understanding for co-locating the labs of ODA, ODH, and EPA agencies on ODA's Reynoldsburg campus.  The Department of Agriculture is responsible for the labs' maintenance and care, but each occupant would share the costs for such maintenance proportionately.  It is presumed that AGR and ODH would use GRF appropriations to pay for their share of the lab's maintenance costs.  The EPA would tap either the Environmental Protection Fund (Fund 5BC) or the Laboratory Services Fund (Fund 199) to pay its share of expenses.

·        Various State Agencies.  Pay Raises.  The bill includes a 3% increase in wage and salary rates for exempt employees beginning July 1, 2006.  The bill is silent on any wage and salary increase for these employees after July 1, 2007.  Certain state agencies may experience an increase in expenditures to provide this raise for their employees.  DAS estimates that these raises may cost the state $646 million in FY 2006 and $674 million in FY 2007.  However, much of this increase is likely to have been accounted for in current appropriations.

·        Various State Agencies.  Layoff Procedures.  The bill streamlines part of the current layoff procedures that may result in potential savings in administrative costs for the Department of Administrative Services, and more immediate payroll savings for agencies instituting layoffs.


Local Fiscal Highlights

 

LOCAL GOVERNMENT

FY 2006

FY 2007-08 BIENNIUM

Local Governments (Counties, Municipalities, and Townships) – Temporary Liquor Permits

     Revenues

Potential minimal gain from the issuance of D-5h, D-6, and F-7 liquor permits

Potential minimal gain from the issuance of D-5h, D-6, and F-7 liquor permits

     Expenditures

- 0 -

- 0 -

Local Governments (LLGSF, LGF, & LGRAF) – National Guard Tax Deductions

     Revenues

- 0 -

Minimal loss

     Expenditures

- 0 -

- 0 -

Local Governments (LLGSF, LGF, & LGRAF) – Telephone Company Refundable Tax Credit

     Revenues

- 0 -

Potential loss up to $201,000 in FY 2008

     Expenditures

- 0 -

- 0 -

Counties – County Partnerships for Success Projects

     Revenues

- 0 -

Up to $1.5 million in FY 2007 state subsidy moneys to support Partnerships for Success Projects statewide

     Expenditures

- 0 -

Up to $1.5 million increase to support Partnerships for Success Projects statewide

Counties and Municipalities – Vehicle Weight Violation Fine Money

     Revenues

Potential gain for municipalities from certain vehicle weight violation fines with corresponding potential loss to county in which affected county located

Potential gain for municipalities from certain vehicle weight violation fines with corresponding potential loss to county in which affected county located

     Expenditures

- 0 -

- 0 -

Townships – State Infrastructure Bank Provisions

     Revenues

Unknown gain, if any, in future SIB loans due to additional fund leverage

Unknown gain, if any, in future SIB loans due to additional fund leverage

     Expenditures

- 0 -

- 0 -

School Districts – School Breakfast and Lunch Programs

     Revenues

- 0 -

- 0 -

     Expenditures

- 0 -

Potential increase for approximately 250 schools to establish breakfast programs

School Districts – Educational Choice Scholarship Eligibility

     Revenues

- 0 -

Some districts may have deductions from their state aid for scholarship students

     Expenditures

- 0 -

Potential decrease for districts with scholarship students

School Districts – Public Utility Property Tax Replacement

     Revenues

- 0 -

Increase of approximately $0.8 million each year for Manchester Local School District that is offset in future years

     Expenditures

- 0 -

- 0 -

School Districts – National Guard Tax Deductions

     Revenues

- 0 -

Minimal loss

     Expenditures

- 0 -

- 0 -

Columbus City School District and City of Columbus – Tax Exemption for the Columbus Crew Stadium

     Revenues

- 0 -

Possible loss of tax revenues to the school district potentially offset by increase in state aid

 

Loss of more than $183,066 per year to other units of local government

     Expenditures

- 0 -

- 0 -

Public Health Clinics – Free Clinic Reimbursement and Consolidated Purchasing

     Revenues

Potential loss in reimbursement from Department of Health

Potential loss in reimbursement from Department of Health

     Expenditures

Potential savings due to the purchase of goods and services from the Department of
Mental Health

Potential savings due to the purchase of goods and services from the Department of
Mental Health

Local Commissioners of Health, Local Registrars of Vital Statistics, and Courts of Common Pleas – Delay in Transfer of Vital Statistics Fees

     Revenues

Potential delay in transfer of fee revenue to Treasurer of State (no change in amount transferred)

Potential delay in transfer of fee

revenue to Treasurer of State (no change in amount transferred)

     Expenditures

- 0 -

- 0 -

Area Agencies on Aging – Criminal Records Checks for Ombudspersons and Community-Based Long-Term Care Staff

     Revenues

- 0 -

- 0 -

     Expenditures

Potential increase in costs to conduct criminal background checks

Potential increase in costs to conduct criminal background checks

County Alcohol and Drug Addiction Services Boards and Community Mental Health Boards – Combining the Boards

     Revenues

- 0 -

- 0 -

     Expenditures

Potential savings

Potential savings

County Boards of Mental Retardation and Developmental Disabilities – Capital Replacement Facilities

     Revenues

Potential temporary loss of proceeds from sale of facilities for which the county board originally received state funds; Potential permanent loss of proceeds from sale of facilities for which the county board originally received state funds if the county board fails to acquire a replacement facility within specified term

Potential temporary loss of proceeds from sale of facilities for which the county board originally received state funds; Potential permanent loss of proceeds from sale of facilities for which the county board originally received state funds if the county board fails to acquire a replacement facility within specified term

     Expenditures

- 0 -

- 0 -

Note: For most local governments, the fiscal year is the calendar year.  The school district fiscal year is July 1 through June 30.

 

·        Local Governments.  Liquor Permit Changes.  This bill modifies two liquor permits and creates a new temporary permit.  The bill reduces from 5,000 to 1,500 the required number of members a fine arts museum must have to qualify for a D-5h liquor permit and allows a D-6 permit, which authorizes the sale of intoxicating liquor on Sunday, to be issued to certain D-5j permit holders.  The bill also creates an F-7 temporary permit for certain qualified golf events.  Local governments receive a portion of liquor permit fee revenue.  The issuance of additional liquor permits would result in a minimal increase in liquor permit revenue for the local governments where the liquor permits are issued.

·        Local Governments.  National Guard Tax Deductions.  The tax deductions for members of the National Guard on active duty or their designated beneficiaries would reduce revenues from the state individual income tax by up to $53,000 or more in FY 2007, $51,000 or more in FY 2008, and $24,000 or more in FY 2009.  The local government funds freeze for FYs 2006 and 2007 would result in no revenue loss to the local government funds in FY 2007 from the tax changes.  In subsequent years the revenue loss would be shared by the GRF, the LLGSF, the LGF, and the LGRAF according to the statutory distribution of income tax receipts.

·        Local Governments.  Telephone Company Refundable Tax Credit.  Converts an existing credit under the corporate franchise tax (CFT) from nonrefundable to refundable, for three years, then the credit would expire.  The credit is for telephone companies for their cost of providing network access to the communicatively impaired.  The credit is nonrefundable for tax year 2005, but the bill would make it refundable for tax years 2006, 2007, and 2008.  This provision may decrease revenue from the CFT by up to $1.4 million in state FY 2006, $2.8 million in FY 2007, and $4.2 million in FY 2008.  The credit is eliminated after taxable year 2008, so that the bill may increase revenue by up to $1.4 million in FY 2009.  There would be no revenue effect after FY 2009.  The statutory formula allocates 4.2% of revenue from the CFT to the Local Government Fund (LGF), and 0.6% to the Local Government Revenue Assistance Fund (LGRAF).  The local government fund freeze means that there is no revenue loss to these funds during the current state biennium.

·        Local Governments.  Laundry and Dry Cleaning Services.  The bill exempts from the sales and use tax certain tangible personal property items used to remove soil or dirt from articles of clothing and other fabric items supplied as part of a laundry and dry cleaning service.  This exemption reduces revenues from local permissive and transit authority sales and use taxes.

·        Local Governments.  Debt for the Purpose of Pest Control.  The bill authorizes local subdivisions to issue general obligation bonds backed-by property tax revenue for the purpose of pest control under certain circumstances.  Any local government that issues new debt for this purpose will increase their debt service payments.

·        Counties.  County Partnerships for Success Projects.  Presumably, as a result of the $1.5 million cash transfer to the Department of Youth Services' Partnerships for Success Fund, up to that amount could be available in FY 2007 to disburse in the form of county subsidies, the purpose for which would be to build their capacity to effectively prevent and respond to child and adolescent problem behaviors, while promoting positive youth development.

·        Counties.  County Funding of Nonprofit Science Museums.  The bill authorizes boards of county commissioners to maintain and operate facilities to encourage the study of and promote the sciences and natural history and to levy a tax for that purpose.  The bill also authorizes them to contract with or contribute to nonprofit corporations for this purpose if the nonprofit corporations are organized to encourage study of and to promote science and natural history.

·        Counties.  Sales and Use Tax.  The bill eliminates the requirement that resolutions levying or increasing a county sales and use tax levied for general fund purposes be adopted at least 120 days before the tax or tax increase goes into effect.  The bill also refunds to a person that constructs an "impact facility" up to 75% of the county piggyback sales and use taxes collected on each retail sale for a term of up to ten years or until the person's investment in the impact facility has been realized, whichever occurs first.

·        Cuyahoga County.  Regional Arts and Cultural Districts Cigarette Tax.  The bill authorizes qualifying regional arts and cultural districts to tax cigarettes up to an amount not exceeding 30 cents per pack of cigarettes.  The bill potentially increases revenues for Cuyahoga County (the only county that qualifies) if the county decides to exercise this option.

·        Pike County.  Alternative Calculation for Tangible Business Property Tax Replacement Payments From the Commercial Activity Tax for Pike County.  The bill provides for an alternative computation of the tax replacement payments from the CAT for Pike County.  This provision will result in higher replacement payments than would occur under current law.

·        Counties and Municipalities.  Vehicle Weight Violation Fine Money.  By establishing the distribution of certain vehicle weight violation fines, money collected as a result of an arrest made by municipal law enforcement personnel that might otherwise have been deposited in the county treasury where the violation occurred would instead be deposited in the municipal treasury.  As of this writing, the magnitude of that potential revenue gain to a municipal treasury, and corresponding potential loss to the appropriate county treasury is uncertain.

·        Townships.  State Infrastructure Bank Provisions.  Townships may experience an unknown gain, if any, from additional SIB loans due to the ability to use state motor fuel tax revenue as debt service on SIB loans.

·        School Districts.  School Breakfast and Lunch Programs.  Expands the mandate for school districts to offer breakfast and lunch programs and includes community schools (except for e-schools) in this mandate.  Approximately 250 public schools that would fall under the expanded mandate are not currently providing a breakfast program.  These schools may incur costs related to setting up the program, although they can opt out if they cannot afford these costs.

·        School Districts.  Educational Choice Scholarship Eligibility.  Expands eligibility for the Educational Choice Scholarship Pilot Program, adding approximately 28,000 eligible students at 53 school buildings in FY 2007.  The total number of scholarships remains capped at 14,000, but the bill may increase the number of eligible students in some districts that already have eligible students and may result in eligible students in some districts that currently do not have any eligible students.  For each scholarship student, $5,200 is deducted from the resident district's state aid in FY 2007.  The resident district will not have to educate the student.

·        School Districts.  Tax to Offset Charge-Off Increases.  Permits school districts to levy, with voter approval, a property tax that approximately offsets any year-to-year decrease in state base cost funding caused by inflation in the real property component of the formula charge-off.  If a district receives approval to levy such a tax, the district may not need to pass property tax levies as frequently and will, therefore, potentially decrease expenditures on levy campaigns.

·        School Districts.  Calculation of ADM.  The bill delays until FY 2007 a provision of H.B. 66 that tends to increase the average daily membership (ADM) and state aid of districts with growing ADMs and decrease the ADM and state aid of districts with declining ADMs.

·        School Districts.  Public Utility Property Tax Replacement.  Increases public utility property tax replacement payments for Manchester Local School District by approximately $0.8 million in FY 2007 and FY 2008.  These higher payments are offset by lower payments in future years.

·        School Districts.  Exceptional Needs Program.  Expands eligibility for participating in the Exceptional Needs Program (ENP) to include school districts in the 51st through 75th percentiles.  Currently, districts in the 1st through 50th percentiles and districts with territory larger than 300 miles are eligible to participate in the ENP.  Current law allows the School Facilities Commission to spend up to 25% of its annual appropriations for the ENP.  The bill could potentially decrease ENP funding for districts in the 1st through 50th percentiles and districts with territory larger than 300 miles and increase ENP funding for districts in the 51st through 75th percentiles.

·        School Districts.  Limit on a School District's Net Indebtedness.  Allows debt that is to cover the cost of items designated by the School Facilities Commission as "required locally funded initiatives" and the cost of site acquisition associated with the Classroom Facilities Assistance Program to go beyond the statutory limits on a district's net indebtedness.  This would make it easier for school districts to issue more debt to fund those items.

·        School Districts.  National Guard Tax Deductions.  School district income tax revenues would be reduced due to a reduction in the tax base; the tax base would be reduced by the two new deductions.

·        School Districts/Local Governments.  Restoration of Tax Exemption for Certain Churches.  The bill authorizes a one-year retrospective property tax exemption for church property that qualified for exemption for tax year 2003 but did not receive the exemption because a former owner did not file an application.  School districts and other local governments would forgo tax revenues for tax year 2003 from two churches, which under current law the owners of these churches would be required to pay in order to restore the tax-exempt status of the churches.

·        School Districts/Local Governments.  Tax Exemption for Qualifying Hospital Property.  A tax exemption for qualifying hospital property would result in loss of tax revenue to school districts and other local governments.  The loss of tax revenues to schools would in most cases be partially offset by increased state aid.

·        School Districts/Local Governments.  Community Reinvestment Areas.  Units of local government may forgo tax revenue as a result of authorization for late filing of applications for tax exemption in Community Reinvestment Areas.  The loss of tax revenues to schools generally would be only partially offset by increased state aid.

·        School Districts/Local Governments.  Commercial Activity Tax Exclusion for Sale of Property Delivered to a Qualified Distribution Center.  The bill exempts from the commercial activity tax, receipts from sales of tangible personal property that is delivered to a "qualified distribution center."  Thus, the bill decreases CAT revenues for FY 2007 and later years.  Between FY 2007 and FY 2010, revenues from the CAT are distributed to the School District Tangible Personal Property Replacement Fund (SDRF, at 70%) and the Local Government Tangible Personal Property Replacement Fund (LGRF, at 30%), after which percentages vary.

·        Columbus City School District/City of Columbus.  Tax Exemption for the Columbus Crew Stadium.  The tax exemption for the Columbus Crew Stadium could reduce tax revenues to the Columbus City School District by more than $410,564 per year.  Any tax exemption is contingent on approval by the school district.  More tax-exempt property in the district would potentially increase state aid to the district.  The tax exemption would also reduce tax revenues to other units of local government by more than $183,066.

o       The bill would also provide exemption from taxation for some or all taxes owed on the property for prior years.

·        Public Health Clinics.  Free Clinic Reimbursement.  Potentially lowers the percentage of medical liability insurance premiums that the Department of Health is mandated to reimburse free clinics participating in a professional liability insurance reimbursement program from a fixed 80% of the premiums paid (up to a maximum of $20,000) to an amount that is up to 80%.

·        Public Health Clinics.  Free Clinic Consolidated Purchasing.  Potential savings if the free clinics could pay lower prices for goods and services purchased in bulk by the Office of Support Services through the Department of Mental Health.

·        Local Commissioners of Health, Local Registrars of Vital Statistics, and Courts of Common Pleas.   Delay in Transfer of Vital Statistics Fees.  Changes the times by which additional fees on certified copies of birth records, certifications of birth, death records, and filings for divorce decrees and decrees of dissolution are to be forwarded from local commissioners of health, local registrars of vital statistics, and courts of common pleas to the Treasurer of State for deposit into the Children's Trust Fund (Fund 198 within the Department of Job and Family Services) and the Family Violence Prevention Fund (Fund 5BK within the Department of Public Safety).  The amounts of the fees deposited into these funds are not changed; however, there could be a delay in the transfer of these moneys to Fund 198 and Fund 5BK.

·        Area Agencies on Aging.  Criminal Records Checks for Ombudspersons and Community-Based Long-Term Care Staff.  Expands the requirement that persons under final consideration for employment with a PASSPORT agency undergo a criminal records check.  The bill also requires that persons with Regional Offices of the Long-Term Care Ombudsperson Program also undergo criminal records checks.  This could increase costs to regional long-term care ombudspersons programs.  It is unknown at this time if applicants will pay for any or part of these background check costs.

·        County Alcohol and Drug Addiction Services Boards and Community Mental Health Boards.  Combining the Boards.  Combining the two boards (county alcohol and drug addiction services boards and community mental health boards) could result in a savings by reducing the duplication in board operations in the counties that currently have separate boards.

·        County Boards of Mental Retardation and Developmental Disabilities.  Capital Replacement Facilities.  Establishes a process by which a county board or private, nonprofit agency may sell a facility for which the county board or agency received state funds before the terms of the agreement authorizing the state funds expires and acquire a replacement facility.  If the county board or agency sells a facility after receiving approval, the county board or agency must deposit at the state level the portion of the proceeds in the amount the Director of MR/DD determines is owed in accordance with the requirements of the bill.  If the county board or agency fails to acquire a replacement facility within a specified term as determined by the Director of MR/DD, the county board or agency would lose the portion of the proceeds of the sale of the original facility to the state.  The state could then use these moneys to fund other local projects.

·        County Boards of Mental Retardation and Developmental Disabilities.  Targeted Case Management Services.  Requires the county boards of mental retardation and developmental disabilities to submit payment directly or pledge state subsidy money to cover the nonfederal portion of the funding for targeted case management services.  These provisions will affect cash flow to and from the county boards; however, the net fiscal impact to the state and county boards will be zero.



 

Detailed Fiscal Analysis

 

I.  CAPITAL REAPPROPRIATIONS

 

TOTAL REAPPROPRIATIONS1 BY FUND BY AGENCY

Fiscal Years 2007-2008

 

 

Departments

GENERAL REVENUE FUND

 

 

  Department of Administrative Services

 

$963,900

  Department of Natural Resources

 

$103,847

TOTAL GENERAL REVENUE FUND

 

$1,067,747

 

 

 

WILDLIFE FUND

 

 

  Department of Natural Resources

 

$6,687,444

 

 

 

PUBLIC SCHOOL BUILDING FUND

 

 

  School Facilities Commission

 

$46,659,933

 

 

 

HIGHWAY SAFETY FUND

 

 

  Department of Public Safety

 

$3,081,567

 

 

 

WATERWAYS SAFETY FUND

 

 

  Department of Natural Resources

 

$14,385,777

 

 

 

UNDERGROUND PARKING GARAGE OPERATING FUND

 

 

  Capitol Square Review and Advisory Board

 

$966,631

 

 

 

NURSING HOME – FEDERAL FUND

 

 

  Ohio Veterans' Home

 

$2,697,500

 

 

 

ARMY NATIONAL GUARD SERVICE CONTRACT FUND

 

 

  Adjutant General

 

$5,845,553

 

 

 

SPECIAL ADMINISTRATIVE FUND

 

 

  Department of Job and Family Services

 

$18,076,956

 

 

 

COMMUNITY MATCH ARMORIES FUND

 

 

  Adjutant General

 

$4,273,922

 

 

 

STATE FIRE MARSHAL FUND

 

 

  Department of Commerce

 

$33,833

 

 

 

VETERANS' HOME IMPROVEMENT FUND

 

 

  Ohio Veterans' Home

 

$1,767,930

 

 

 

EDUCATION FACILITIES TRUST FUND

 

 

  School Facilities Commission

 

$114,342,348

 

 

 

CLEAN OHIO REVITALIZATION FUND

 

 

  Department of Development

 

$53,910,427

 

 

 

JOB READY SITE IMPROVEMENT FUND

 

 

  Department of Development

 

$30,000,000

 

 

 

HIGHWAY SAFETY BUILDING FUND

 

 

  Department of Public Safety

 

$3,561,703

 

 

 

ADMINISTRATIVE BUILDING FUND

 

 

  Adjutant General

 

$6,076,903

  Department of Administrative Services

 

$74,933,078

  Department of Agriculture

 

$1,766,759

  Attorney General

 

$51,942

  Capitol Square Review and Advisory Board

 

$1,743,633

  Expositions Commission

 

$5,017,940

  Department of Natural Resources

 

$5,448,784

  Department of Public Safety

 

$1,932,242

  School for the Blind

 

$2,350,124

  School for the Deaf

 

$1,758,451

TOTAL ADMINISTRATIVE BUILDING FUND

 

$101,079,856

 

 

 

ADULT CORRECTIONAL BUILDING FUND

 

 

  Department of Rehabilitation and Correction

 

 

    Statewide and Central Office Projects

 

$83,605,359

    Belmont Correctional Institution

 

$28,928

    Chillicothe Correctional Institution

 

$385,188

    Correctional Reception Center

 

$2,205

    Correctional Medical Center

 

$80,895

    Corrections Training Academy

 

$913,710

    Dayton Correctional Institution

 

$462,429

    Franklin Pre-Release Center

 

$1,200

    Grafton Correctional Institution

 

$920,416

    Lebanon Correctional Institution

 

$1,393,488

    London Correctional Institution

 

$253,893

    Lorain Correctional Institution

 

$17,000

    Madison Correctional Institution

 

$1,500

    Mansfield Correctional Institution

 

$925,985

    Marion Correctional Institution

 

$153,691

    Ohio Reformatory for Women

 

$2,252,788

    Ohio State Penitentiary

 

$12,700

    Pickaway Correctional Institution

 

$12,655,918

 

 

 

    Richland Correctional Institution

 

$271,278

    Ross Correctional Institution

 

$117,063

    Southeastern Correctional Institution

 

$430,521

    Southern Ohio Correctional Facility

 

$150,664

  TOTAL Department of Rehabilitation and Corrections

 

$105,036,819

TOTAL ADULT CORRECTIONAL BUILDING FUND

 

$105,036,819

 

 

 

JUVENILE CORRECTIONAL BUILDING FUND

 

 

  Department of Youth Services

 

$12,269,885

 

 

 

CULTURAL AND SPORTS FACILITIES BUILDING FUND

 

 

  Cultural Facilities Commission

 

$39,831,048

 

 

 

OHIO PARKS AND NATURAL RESOURCES FUND

 

 

  Department of Natural Resources

 

 

    Statewide and Local Projects

 

$32,837,144

    Forestry

 

$746,018

    Natural Areas and Preserves

 

$504,324

    Parks and Recreation

 

$9,859,723

    Soil and Water Conservation

 

$75,000

    Water

 

$3,871,838

  TOTAL Department of Natural Resources

 

$47,894,047

TOTAL OHIO PARKS AND NATURAL RESOURCES FUND

 

$47,894,047

 

 

 

SCHOOL BUILDING PROGRAM ASSISTANCE FUND

 

 

  School Facilities Commission

 

$190,205,552

 

 

 

MENTAL HEALTH FACILITIES IMPROVEMENT FUND

 

 

  Department of Alcohol and Drug Addiction Services

 

$3,088,902

  Department of Mental Health

 

$20,187,765

  Department of Mental Retardation and Developmental Disabilities

 

 

    Statewide and Central Office Projects

 

$16,494,812

    Cambridge Developmental Center

 

$52,479

    Columbus Developmental Center

 

$17,294

    Gallipolis Developmental Center

 

$47,859

    Montgomery Developmental Center

 

$2,159

    Mt. Vernon Developmental Center

 

$501,122

    Northwest Ohio Developmental Center

 

$87,631

    Southwest Ohio Developmental Center

 

$222,072

    Tiffin Developmental Center

 

$46,841

    Warrensville Developmental Center

 

$77,857

    Youngstown Developmental Center

 

$69,681

  TOTAL Mental Retardation and Developmental Disabilities

 

$17,619,807

TOTAL MENTAL HEALTH FACILITIES IMPROVEMENT FUND

 

$40,896,474

 

 

 

HIGHER EDUCATION IMPROVEMENT FUND

 

 

  eTech Ohio

 

$1,941,225

  Board of Regents

 

$66,637,039

  University of Akron

 

$23,217,289

  Bowling Green State University

 

$39,827,235

  Central State University

 

$4,553,017

  University of Cincinnati

 

$15,118,748

  Cleveland State University

 

$31,462,721

  Kent State University

 

$31,628,070

  Miami University

 

$18,020,903

  Ohio State University

 

$105,955,671

  Ohio University

 

$12,372,088

  Shawnee State University

 

$3,494,827

  University of Toledo

 

$22,309,569

  Wright State University

 

$19,424,168

  Youngstown State University

 

$8,911,098

  Medical College of Ohio

 

$5,280,294

  Northeastern Ohio Universities College of Medicine

  Case Western Reserve University

 

$2,256,371

$1,544,871

  Cincinnati State Technical and Community College

 

$5,397,625

  Clark State Community College

 

$2,528,886

  Columbus State Community College

 

$5,692,058

  Cuyahoga Community College

 

$21,405,646

  Edison State Community College

 

$708,331

  Jefferson Community College

 

$456,420

  Lakeland Community College

 

$6,019,855

  Lorain County Community College

 

$10,287,582

  Northwest State Community College

 

$935,126

  Owens Community College

 

$4,656,228

  Rio Grande Community College

 

$1,460,951

  Sinclair Community College

 

$2,536,658

  Southern State Community College

 

$181,365

  Terra State Community College

 

$3,432,190

  Washington State Community College

 

$385,162

  Belmont Technical College

 

$998,351

  Central Ohio Technical College

 

$369,780

  Hocking Technical College

 

$2,782,153

  James Rhodes State College

 

$1,508,966

  Zane State College

 

$2,063,879

  Marion Technical College

 

$213,893

  North Central Technical College

 

$1,858,708

  Stark Technical College

 

$1,878,885

TOTAL HIGHER EDUCATION IMPROVEMENT FUND

 

$491,713,902

 

 

 

PARKS AND RECREATION IMPROVEMENT FUND

 

 

  Department of Natural Resources

 

$31,742,587

 

 

 

STATE CAPITAL IMPROVEMENTS FUND

 

 

  Public Works Commission

 

$262,740,460

 

 

 

STATE CAPITAL IMPROVEMENTS REVOLVING LOAN FUND

 

 

  Public Works Commission

 

$65,646,475

 

 

 

CLEAN OHIO CONSERVATION FUND

 

 

  Public Works Commission

 

$43,316,386

 

 

 

CLEAN OHIO AGRICULTURAL EASEMENT FUND

 

 

  Department of Agriculture

 

$5,892,856

 

 

 

CLEAN OHIO TRAIL FUND

 

 

  Department of Natural Resources

 

$6,344,000

 

 

 

TOTAL REAPPROPRIATIONS, ALL FUNDS

 

$1,7$1,751,969,618

1 Reappropriation amounts represent estimates of available moneys starting July 1, 2006.

 


II.  NEW CAPITAL APPROPRIATIONS

 

New capital appropriations contained in the bill total $1.04 billion.  Appropriations include:

v     Department of Agriculture:  $6,250,000 to the Clean Ohio Agricultural Easement Fund (Fund 057).

v     Capitol Square Review and Advisory Board:  $1,610,500 to the Administrative Building Fund (Fund 026) for improvements to the Statehouse cupola's gutters and roof, for sidewalk repairs, and replacement of handicap ramps.

v     Department of Commerce:  $1,908,000 to the State Fire Marshal Fund (Fund 546) for office and dormitory additions.

v     Department of Development: $53,000,000 to the Clean Ohio Assistance Fund (Fund 003) for Clean Ohio Revitalization and Clean Ohio Assistance projects; $30,000,000 to the Job Ready Sites Fund (Fund 012).

v     Expositions Commission:  $500,000 to the Administrative Building Fund (Fund 026) for "Asset Procurement."

v     Department of Mental Health: $5,500,000 to the Mental Health Facilities Improvement Fund (Fund 033) for "campus consolidation."

v     Department of Natural Resources:  $1,000,000 to the Administrative Building Fund (Fund 026) for "MARCS Equipment;"  $5,050,000 to the Ohio Parks and Natural Resources Fund (Fund 031) for "project planning" and dam rehabilitation; $1,500,000 to the Parks and Recreation Improvement Fund (Fund 035) for South Bass Island State Park; $6,250,000 to the Clean Ohio Trail Fund (Fund 061).

v     Public Works Commission:  $120,000,000 to the State Capital Improvements Fund (Fund 038) for local public infrastructure purposes; $24,100,000 to the State Capital Improvements Revolving Loan Fund (Fund 040) to be used in accordance with sections 164.01 to 164.12 of the Revised Code; $37,500,000 to the Clean Ohio Conservation Fund (Fund 056).

v     Board of Regents:  $53,500,000 to the Higher Education Improvement Fund (Fund 034) for the Ohio Library and Information Network and the Third Frontier Project.

v     Department of Rehabilitation and Correction:  $30,024,990 to the Adult Correctional Building Fund (Fund 027) for improvements to powerhouse, security, and water systems, electric system upgrades, and general building renovations.

v     School Facilities Commission:  $80,000,000 to the Public School Building Fund (Fund 021); $585,000,000 to the School Building Program Assistance Fund (Fund 032) for program assistance purposes.

v     Ohio Veteran's Home:  $552,500 to the Veterans' Home Improvement Fund (Fund 604) for roof replacement at Secrest/Veterans' Hall.

v     Department of Youth Services:  $1,750,000 to the Juvenile Correctional Building Fund (Fund 028) for fire suppression, safety, and security purposes.

III.  BUDGET ADJUSTMENTS, FUND TRANSFERS, AND OTHER CORRECTIONS

 

Department of Administrative Services

 

County and Human Resources Services

 

The bill increases GRF appropriation item 100-406, County and Human Resources Services, by $220,000 in FY 2006 and by $880,000 in FY 2007, for a total appropriation amount of $280,000 in FY 2006 and $940,000 in FY 2007.  This appropriation item has historically funded human resource functions for county government and state supported colleges and universities.  These services include technical support and consultation, processing personnel actions, approving position descriptions, conducting job audits and assisting with job abolishment and layoff procedures as well as performing compliance review activities.

 

Central Service Agency -- Professional Licensing Boards

 

The bill increases appropriation item 100-632, Central Service Agency (Fund 115) by $375,700 in FY 2007, to $860,878.  The Central Service Agency will use the additional appropriation to cover expenses for establishing and recovering the costs of maintaining the CAVU licensing system used by the professional licensing boards.  Earmarking requires CSA to bill the licensing boards the appropriate amounts for its services, but limits these charges to $375,700.  All payments will be deposited into Fund 115.  Also for FY 2007, any changes from the method used to calculate FY 2006 costs to be recovered via transfer of funds or any changes from the type of costs recovered through FY 2006 transfers are subject to Controlling Board approval.

 

Unclaimed Funds Deposited into the State Architect's Fund

 

The bill allows for a contractor's funds escrowed by the Department of Administrative Services (DAS) and maintained in an account with an escrow agent for a public improvement contract to be released to the State Architect's Fund (Fund 131) if the contractor has not claimed the funds within three years.  Prior to the release of the funds to DAS the bill requires (1) DAS to notify the contractor of the escrowed amount, (2) in the event a mechanics lien has been filed against the contractor, the Director shall notify the lien claimant of the existence of the escrowed amount in writing, and (3) the contractor must fail to respond to the notice within 60 days.  If these conditions are met, the money shall be released to DAS.  The bill states that the money released shall be considered an additional fee related to the administration of the contract.  This change will result in a revenue gain to the State Architect's Fund (Fund 131).  The amount of the gain will depend on the amount of unclaimed funds.  Currently, an estimate of the additional funds that may be credited to Fund 131 is unknown.

 

Governor's Residence Advisory Commission

 

The bill adds additional responsibilities to the Governor's Residence Advisory Commission, including providing for the care and placement of plants on the grounds of the Governor's residence, and establishing the grounds as a representation of Ohio's natural ecosystems.  Furthermore, the bill provides that any aesthetic materials and plants that have been acquired, donated, or loaned or otherwise obtained for the Governor's residence, must be approved by the Commission.  The bill also increases the members of the Commission from nine members to eleven members.  The two new members include the mayor of the city of Bexley and the chief executive officer of the Franklin Park Conservatory.

 

To cover the costs of these new responsibilities as well as cover any actual and necessary expenses of the two additional board members, the Governor's Residence Fund (Fund 5A2) may experience an increase in expenditures.  If there are not sufficient funds in Fund 5A2 to cover these expenses, other appropriations approved by the General Assembly may pay for these expenses.  However, some of these additional costs, if any, may be covered by any new endowments deposited into the fund.  The bill adds that the Commission may accept any endowment for the maintenance and care of the grounds on the residence in addition to currently allowable gifts, bequests, donations, or other devises.

 

Membership of the eTech Ohio Commission and Ohio Business Gateway Steering Committee

 

The bill replaces the Director of Administrative Services (DAS), or the Director's designee, as a nonvoting member of both the eTech Ohio Commission and the Ohio Business Gateway Steering Committee with the Director of the Office of Information Technology, or the Director's designee.  This change will create no fiscal impact on the operations of either the Commission or the Committee.

 

Revisions to the Laws Governing Paid Leave, Compensation, Health Care Benefits, and Layoffs

 

The bill makes several revisions to the laws governing paid leave, compensation, health care benefits, and layoffs with regard to exempt employees, specified state employees, or state employees in general.  The provisions that create no apparent fiscal effect include:  proficiency assessments being exempt from the "open for public inspection" general requirement; the right of an employee to return to a classified position after being appointed to an unclassified position; and the use of sick leave, vacation leave, personal leave, and compensatory time only if it appears on an employee's earning statement.  The provisions that do have a fiscal effect are discussed below.

 

Raises

 

The bill includes a 3% increase in wage and salary rates for exempt employees beginning July 1, 2006.  The bill is silent on any wage and salary increase for these employees after July 1, 2007.  Various state agency funds may experience an increase in expenditures to provide this raise for their employees.  DAS estimates that these raises may cost the state $646 million in FY 2006 and $674 million in FY 2007.  However, much of this increase is likely to have been accounted for in current appropriations.

 

Health Care Benefits

 

The bill allows DAS to enter into contracts with one or more insurance carriers or plans to provide the same plan of benefits, rather than contracting with only one insurance carrier or health plan as in current law.  The bill also repeals the enrollment requirement of a health insuring corporation as a condition of entering into a contract with DAS, as well as the service expansion requirements of a health insuring corporation.  Currently, it is unknown how these changes will affect the cost of providing health care to state employees or the health care premiums paid by state agencies and state employees and to what degree.

 

Direct Deposit Requirements

 

Currently, state employees hired on or after June 5, 2002 are required to have their paychecks directly deposited.  The bill requires all employees, regardless of when they were hired, to have their paychecks directly deposited, except for an employee who meets all of the following conditions:  (1) they were hired before June 5, 2002, (2) they are an employee subject to the Employee Collective Bargaining Law, and (3) their collective bargaining agreement does not require the employee be paid by direct deposit.  This change may create administrative savings for the Director of Budget and Management who would no longer issue warrants for those employees hired before June 5, 2002.  Although OBM's administrative costs would decrease, savings would be limited by the number of employees who continue to receive paper checks.  Various state agencies may also experience savings from reduced charge-backs for OBM to issue the paychecks.

 

Paper Layoffs

 

The bill allows the Director of Administrative Services to establish a paper layoff process under which employees who are laid off or displaced may be required, before the date of their paper layoff, to preselect their options for displacing other employees.  Under this process, all employees who possibly could be affected by displacement would be notified at the same time.  The agency would then make all displacements and layoffs effective on the same day.  This change may reduce the amount of staff time needed to implement the layoff process.  Additionally, payroll savings could accrue more quickly because the layoff process would be implemented in one fell swoop.

 

Adjutant General 

 

Commemorative Ohio National Guard Service Medal

 

The bill creates the Commemorative Ohio National Guard Service Medal for Ohio National Guard members who have been honorably or medically discharged or released from service.  The Adjutant General's Department is required to design the medal, determine the purchase fee for the medal, and administer the program.  Based on the costs of administering other medal programs, the Department expects start-up costs to be approximately $1,000 to $1,500, which may include designing and purchasing the initial group of medals to be purchased by eligible members.  Fees received from those members purchasing the medal are expected to cover future program costs.  The Department estimates each medal to cost between $10 and $15.  It is not known at this time how many members would be eligible for the medal; however, the Department anticipates the number to be in the tens of thousands.

 

The bill creates the National Guard Service Medal Fund (Fund 5DN), in the state treasury, to collect moneys received from those eligible members who wish to purchase a medal.  The bill also creates Fund 5DN appropriation item 745-618, Service Medal Production, and appropriates $1,500 in FY 2006 to cover the program's start-up costs.  The Director of Budget and Management is authorized to transfer up to $1,500 from the GRF to Fund 5DN in FY 2006.

 

Cash transfer to General Obligation Fund (Fund 392) 

 

The bill requires the Director of Budget and Management to transfer $103,981.68 from the Adjutant General's Camp Perry Clubhouse and Rental Fund (Fund 536) to the Department of Health's General Obligations Fund (Fund 392) in FY 2006.  The transfer corrects two depositing errors, made by the Department of Health, in which $103,981.68 was incorrectly placed into Fund 536 rather than Fund 392.

 

Department of Aging

 

PASSPORT Transfers

 

The bill makes changes to the language that deals with the transfer of funds from the Department of Job and Family Services (JFS) to the Department of Aging (ODA) to reimburse ODA for PASSPORT services provided to individuals who were previously admitted to a nursing facility while they were on a waiting list for the PASSPORT program, for whom PASSPORT is appropriate, and who prefer to participate in PASSPORT rather than reside in the nursing facility.  Specifically, the language is changed from the transfer of an entire biennium's worth of estimated expenses to a quarterly transfer of actual expenditures.  Therefore, the state share from GRF line item 600-525, Health Care/Medicaid, in JFS to be transferred to GRF line item 490-403, PASSPORT, in ODA will be based on actual expenditures instead of estimated costs.  Similarly, the corresponding increases in line item 600-655, Interagency Reimbursement (Fund 3G5), in JFS and line item 490-607, PASSPORT (Fund 3C4), in ODA reflecting the federal share will be based on actual costs.  If actual expenditures are higher or lower than estimated costs, the transfers and increases in appropriations will be higher or lower than under current law.

 

Criminal Records Checks for Ombudspersons and Community-Based Long-Term Care Staff

 

The bill expands the requirement that persons under final consideration for employment with a PASSPORT agency in a position that involves providing direct care to an older adult undergo a criminal records check to persons under final consideration with any community-based long-term care agency in a position that involves providing direct care to an individual of any age.

 

The bill also requires that persons under final consideration for employment with the Office of the State Long-Term Care Ombudsperson Program in a position that involves providing ombudsperson services to residents of long-term care facilities and recipients of community-based long-term care services, including as the State Long-Term Care Ombudsperson or the head of a regional long-term care ombudsperson program, undergo a criminal records check.

 

Lastly, the bill adds transportation services as a service that is considered to be a community-based long-term care service for purposes of state law governing ombudsperson services and certification of community-based long-term care agencies.

 

Expanding the number of people who must undergo background checks before employment may cause additional expense to the Department and to Regional Offices of Long-Term Care Ombudsperson Programs at Area Agencies on Aging.  The Ombudsperson program receives funding from state and federal sources.  It is unknown at this time if applicants will pay for any or part of these background check costs.  LSC has assumed that any additional costs to the Department would likely be paid using GRF money already appropriated to the Department.  As a result of the requirement for additional background checks, the Bureau of Criminal Identification and Investigation may have an increase in workload.  However, the cost of background check fees would likely cover most of the expenses related to increased workload.  As a result, any increase to BCII will be minimal.

 

Department of Agriculture

 

Co-location of State Agency Labs – Department of Agriculture Campus

 

This provision requires that the Department of Administrative Services (DAS), Department of Agriculture (AGR), Department of Health (ODH), and the Ohio Environmental Protection Agency (EPA) enter into a memorandum of understanding concerning the co-location of their labs on the Department of Agriculture's Reynoldsburg campus.  This memorandum or any revision is subject to OBM approval, and would require the Department of Agriculture to be responsible for the laboratories' maintenance and care, with the cost of such care being proportionately allocated among AGR, EPA, and ODH.  OBM and DAS would assist in addressing issues regarding the memorandum's implementation.

 

Currently, the Department of Agriculture's maintenance staff is paid through the GRF.  However, it may be that in the future, other funds may be used to pay for such expenses for the new building.  The Department of Health's expenses for the building would most likely also come from the GRF.  The Environmental Protection Agency's expenses may be paid out of either the Laboratory Services Fund (Fund 199) or the Environmental Protection Fund (Fund 5BC), as either fund may be used to pay its share of laboratory maintenance expenses.  The Environmental Protection Agency is in the building now, and the Department of Health is scheduled to move in by March 2006.

 

Seed Fee Refunds

 

The bill requires the Department of Agriculture to refund money from fees collected under the law governing the sale of vegetable and flower seeds to seed labelers who sold seeds in packages of specified sizes from January 1, 2004 to December 31, 2005.  The fees were deposited into the Commercial Feed, Fertilizer, Seed and Lime Inspection and Laboratory Fund (Fund 4C9) and will be refunded from that fund.  The Department of Agriculture is required to notify seed labelers that may be eligible for a refund.  Seed labelers that may be eligible are required to provide information that the Department requests in verifying that the seed labeler is eligible for a refund.  The Department collected approximately $20,000 to $40,000 from these seed labeler fees.  Thus, there will be an increase in expenditures from Fund 4C9, the magnitude of which would depend on how many are eligible for and request the refund.

 


Attorney General

 

Sale of final overdue claims

 

The bill:  (1) authorizes the selling of final overdue claims owed to the state to private parties, (2) requires the State Auditor to review state agencies' procedures for collecting debts owed to them, (3) specifies a procedure for determining when debts are due for the purpose of when the debts must be certified to the Attorney General for collection, and (4) permits the Attorney General to sell the claims through a competitive process.

 

The state fiscal effect of the sale of certain debts will likely be dependent on the following variables:  (1) the expenditures saved by reducing the Attorney General's debt collections workload, (2) the revenues lost by the sale of debts owed to the state at some price that would potentially reflect only a percentage of the value of that debt, and (3) the revenues generated from the sale of debts owed to the state.  The net state fiscal effect will be determined by how the savings in debt collections operations compares to how much the state loses in foregone debt collections revenues.  The magnitude and direction of that potential state fiscal effect is uncertain at this time.  Presumably, however, the Attorney General would not sell debts owed to the state unless:  (1) more revenue would be collected than might otherwise have been the case if the state had held onto the debts, (2) less time and money was expended on debt collection efforts than might otherwise have been the case if the state had held onto the debts, or (3) some combination of (1) and (2).  Under current law, unchanged by the bill, the Attorney General's Collections Enforcement Section is statutorily responsible for collecting past due debts owed to the state of Ohio.  The provision carries no readily apparent local fiscal effect.

 

Auditor of State

 

Operating Expenses Appropriation Increase

 

The bill increases appropriation item 070-321, Operating Expenses, by $320,000 in FY 2006 and by $180,000 in FY 2007.  This increase is to help facilitate the transfer of warrant writing functions to the Office of Budget and Management (OBM) and to replace aging equipment used by the Auditor's office for other core functions.

 

WIRE Program Transfer from Auditor of State to OBM

 

The bill transfers the warrant writing functions, specifically the WIRE program, from the Auditor of State to OBM, effective July 1, 2007.  This program costs approximately $1.16 million in each fiscal year.  Of this amount, approximately $1.0 million is paid from appropriation item 070-321, Operating Expenses, and the remainder is paid from appropriation item 070-406, Uniform Accounting Network/Technology Improvements Fund.  The employees responsible for the administration of this program will continue to do so within OBM.  Some of the program's costs may be reduced from the bill's requirement that all state employees (with exceptions) are required to have their paychecks directly deposited regardless of when they were hired.  The actual amount of savings, if any, is unknown at this time.

 


Public Audit Expense – Intra-State

 

The bill increases appropriation item 070-601, Public Audit Expense – Intra-State, by $2,700,000 in FY 2006 and FY 2007.  This increase is to pay expenses associated with performing a greater number of audits of school districts, Medicaid, and investments within the Bureau of Workers' Compensation.  With the increase, total appropriations for this activity would be $12,000,000 in FY 2006 and FY 2007.

 

Training Costs – GASB 34 Implementation

 

The bill increases appropriation item 070-603, Training Program, by $50,000 in FY 2006 and FY 2007.  This increase is to pay expenses associated with the training of local entities because of the implementation of GASB 34 accounting standards.  With the increase, total appropriations for training would be $181,250 in both FY 2006 and FY 2007.

 

Office of Budget and Management

 

WIRE Program Transfer

 

Employees of the Auditor of State assigned to or responsible for this payment function will be transferred to the Office of Budget and Management on that date or as soon as possible thereafter.  This function is currently GRF-funded through the Auditor of State and is expected to remain so after being transferred to OBM.  Depending on how OBM implements the function, there could be an increase or decrease in expenditures beginning in FY 2008.

 

Department of Commerce

 

Liquor Permit Changes

 

This bill modifies two liquor permits and creates a new temporary permit.  The bill reduces from 5,000 to 1,500 the required number of members a fine arts museum must have to qualify for a D-5h liquor permit.  The bill also allows a D-6 permit, which authorizes the sale of intoxicating liquor on Sunday whether or not those sales have been approved in a local option election, to be issued to certain D-5j permit holders, which would be owners or operators of retail food establishments or food service operations licensed to sell beer and intoxicating liquor located in a community entertainment district approved by a municipal corporation between October 1 and October 15, 2005.  This provision likely applies to one particular community entertainment district located in Beavercreek, but could also apply to other districts which meet these criteria.

 

This bill creates the F-7 liquor permit to authorize certain nonprofit organizations to sell beer, wine, mixed beverages, and spirituous liquor by the individual drink at a qualified golf event being held on premises located in a political subdivision where the sale of such beverages is otherwise permitted by law on that day under certain circumstances.  For example, a qualified golf event would be a golf tournament hosted by a nonprofit organization and sanctioned by a recognized national golf organization such as the USGA, PGA, or LPGA where contributions to charity are made from the proceeds of the event that equal at least $200,000 in the aggregate.  It is uncertain how many golf events would opt for the F-7 permit, but would appear to apply to major tournaments such as the Muirfield event.  This will not likely create any substantial new local enforcement costs since, presumably, law enforcement personnel already patrol golf events.

 

As a result of these changes, there is likely to be minimal gain in liquor permit fee revenue.   The exact amount of the gain would depend on the number of additional permits issued.  The fees for the D-5h, D-6, and F-7 permits are $1,875, $500, and $450, respectively.  The F-7 permit may only be effective for not more than eight days.  A $100 processing fee, which is required for new permits and deposited into the Liquor Control Fund (Fund 043), covers the Division of Liquor Control's expenses in fingerprinting and making background checks for permanent license applications, but does not apply to temporary liquor permit applications.  Liquor permit fees are deposited into Undivided Liquor Permit Fund (Fund 066) and distributed to the GRF, the Ohio Department of Alcohol and Drug Addiction Services (ODADAS) for treatment and prevention programming, and the local governments where the liquor permits are issued.

 

Licensing Boards Consolidation

 

The bill removes the intent of the General Assembly to consolidate 20 boards and commissions.  The bill provides FY 2007 appropriations for each board and commission as a stand-alone entity.

 

Cultural Facilities Commission

 

Funding for several capital projects originally appropriated under the Cultural Facilities Commission (CFC) is either transferred to other agencies or redirected for other projects administered by the CFC.  In the case when a project is transferred to another agency, expenses associated with overseeing the project and administering the capital dollars, theoretically, also transfer to the new agency, resulting in potential savings for the CFC.

 

Goll Wood Homestead

 

Funding in FY 2006 for the Goll Wood Homestead ($50,000) is transferred from the Cultural Facilities Commission (CFC) to the Department of Natural Resources (DNR).  In so doing, CFC appropriation item CAP-862, Goll Wood Homestead is eliminated and $50,000 is added to DNR appropriation item CAP-748, Local Parks Projects – Statewide.  The project is reappropriated in FYs 2007 and 2008 under DNR.

 

Cleveland Institute of Art

 

Funding in FY 2006 for the Cleveland Institute of Art ($1,000,000) is transferred from CFC to Cleveland State University (under the Board of Regents).  In so doing, CFC appropriation item CAP-069, Cleveland Institute of Art, is eliminated and Cleveland State University appropriation item CAP-148, Cleveland State University, is established.  The project is reappropriated in FYs 2007 and 2008 under Cleveland State University.

 


Friendly Inn Settlement House and Merrick House

 

Funding in FY 2006 for the Friendly Inn Settlement House ($250,000) and the Merrick House ($250,000) is also transferred from CFC to Cleveland State University.  CFC appropriation item CAP-856, Friendly Inn Settlement House Historic Site, and CAP-857, Merrick House Historic Site, are eliminated and Cleveland State University appropriation item CAP-084, Neighborhood Centers Renovations, is established and earmarked for renovations to each house.  The projects are reappropriated in FYs 2007 and 2008 under Cleveland State University.

 

Robins Theatre, Packard Music Hall, and Mosquito Lake State Park

 

FY 2006 appropriation item CAP-063, Robins Theatre Renovations, is eliminated and $975,000 is added to appropriation item CAP-898, Packard Music Hall Renovation Project.  Additionally, $25,000 is added to DNR appropriation item CAP-089, Mosquito Lake State Park, and is earmarked for costs associated with conducting a state lodge feasibility study.  Reappropriations for the Packard Music Hall and Mosquito Lake State Park continue in FYs 2007 and 2008 at the same levels of funding.

 

Armory Youth Center

 

Funding in FYs 2006 to 2008 is redirected under CFC appropriation item CAP-822, the name for which changes from "Madison County Historic Schoolhouse" to "Armory Youth Center."

 

Marina District Amphitheatre and Ice Arena Development

 

The bill renames and alters the reappropriation amounts for two capital appropriation items within the Cultural Facilities Commission.  (1) The name of CAP-073 is changed from "Marina District/Ice Arena Development" to "Ice Arena Development" and the item is reappropriated a total of $5.5 million.  Earmarking language specifies that CAP-073 is to be used for "the development of an ice arena in the City of Toledo."  (2) The name of CAP-843 is changed from "Marina District/Ice Arena Development" to "Marina District Amphitheatre and Related Development" and the item is reappropriated a total of $2 million.  CAP-843 is to be used for "the development of an amphitheatre and related developments in the Marina District of Toledo."

 

Department of Development

 

Transfer to the Urban Redevelopment Loan Fund

 

Am. Sub. H.B. 66 of the 126th General Assembly provided for a transfer from the Facilities Establishment Fund (Fund 037) to the Urban Redevelopment Loans Fund (Fund 5D2) for up to $10,950,000 over the biennium.  The bill increases the amount of this transfer to $16,425,000 in order to cover prior-year encumbrances that will be paid in FY 2006.

 


Bond Guarantees for Minority and EDGE Businesses

 

The bill eliminates the authority of the Minority Development Financing Advisory Board to make recommendations to the Director of Development regarding the review and approval of applications submitted by surety companies under the EDGE Bond Guarantee Program.  Additionally, the Director of Development is authorized (with Controlling Board approval) to approve one application per fiscal year from each surety company for bond guarantees, up to a specified amount that is intended to cover one year's worth of activity under the program.  The intent of these provisions is, in short, to eliminate a couple of steps currently required to guarantee bonds under the EDGE program.  Currently, surety companies are required to submit individual applications to the Director for bond guarantees, and the Director is required to seek Controlling Board approval for each approved application.  In allowing the Director to seek Controlling Board approval once per year for each surety company (and reserving the right of the surety company to seek additional, individual approval for applications beyond the approved limit), the change may result in slight savings in administrative expenses for the Department.

 

Department of Education

 

Ohio State University – Center for Learning Excellence 

 

The bill decreases the earmark of GRF appropriation item 200-421, Alternative Education Programs, for grants to suburban and rural districts by $247,000 in FY 2006 and FY 2007 and uses this appropriation to fund a contract with the Center for Learning Excellence at The Ohio State University to provide technical support and evaluation of the alternative education grant program.  According to the Department of Education, four former grant recipients did not apply for grant extensions so that the reduction in the earmark will not affect the amounts received by current grantees.

 

Report on Handicapped Children

 

Current law requires the Department of Education to report to the General Assembly the number of handicapped preschool children served in the previous fiscal year disaggregated by the six categories used to calculate special education payments for school-age children.  Since these six categories are not currently used for preschool children, the Department may need to establish new procedures for categorizing these children.  The bill requires the Department to disaggregate the number by developmental deficiency, which would allow the Department to avoid the potential costs of any new procedures.

 

Proposal for Penalties for Intentionally Misreporting ADM

 

The bill requires the Department of Education to develop a proposal for an appropriate penalty for school districts and community schools that intentionally report inaccurate data regarding formula average daily membership (ADM) or community school ADM.  Creating the proposal may increase the workload of the Department, but should not result in additional costs.

 


Administration of the Educational Choice Scholarship Pilot Program

 

The bill authorizes the Director of Budget and Management to transfer up to $200,000 in FY 2006 and up to $300,000 in FY 2007 of unspent and unencumbered GRF appropriation balances within the Department of Education to GRF appropriation item 200-421, Alternative Education Programs, to be used for the administration of the Educational Choice Scholarship Pilot Program.  These funds would be in addition to $675,000 in FY 2006 and $500,000 in FY 2007 appropriated for this purpose in H.B. 66.

 

Julie Billiart School

 

The bill sets aside $250,000 in FY 2006 of GRF appropriation item 200-550, Foundation Funding, to be provided to the Julie Billiart School for operating expenses.  The bill also eliminates a set aside of $250,000 of capital appropriation item CAP-480, Community Assistance Projects, in the Department of Mental Retardation and Developmental Disabilities for the Julie Billiart School.

 

School Districts

 

School Breakfast and Lunch Programs 

 

The bill expands the mandate for school districts to offer breakfast and lunch programs to cover schools where at least one-fifth (instead of one-third, under current law) of the students are eligible under federal guidelines for free breakfasts and lunches, and also expands the program to state-mandated summer intervention programs.  The bill also includes community schools (except for e-schools) in this mandate.  The bill allows schools to opt out of the expanded mandate if they cannot afford to implement the programs and they publicly notify residents.  District schools that fall under the current one-third mandate, however, may not opt out.  According to data from the Department of Education, approximately 250 schools that would fall under the expanded mandate are not currently providing a breakfast program.  These schools may incur costs related to setting up the program, although they can opt out if they cannot afford these costs.  The programs themselves are designed to be self-sufficient with federal and state reimbursements and the price of the meals covering the cost.

 

Educational Choice Scholarship Eligibility 

 

H.B. 66 established the Educational Choice Scholarship Pilot program, beginning in FY 2007, to provide up to 14,000 scholarships to eligible students that can be used for tuition at nonpublic schools.  The bill makes two changes to the eligibility criteria for the program.  Currently, student eligibility generally requires enrollment in the previous year in a public school that has been in academic emergency for three consecutive years.  The bill expands eligibility to students enrolled in public schools that have been in either academic emergency or academic watch for three consecutive years.  Provision is also currently made for students entering kindergarten and for students enrolled in community schools.  In these cases, students are eligible if students at the public school to which they would otherwise be assigned based on their residence are eligible.  At least two districts in the state, however, have an intradistrict open enrollment policy under which students in certain grade levels are not automatically assigned to a particular school building.  The bill specifies that in the case of these districts all kindergarten and community school students who are in the grade levels covered by the policy are eligible for the scholarships if the district has been in academic emergency for three consecutive years. 

 

According to the Department of Education, students enrolled in or assigned to 49 buildings are currently eligible for scholarships in FY 2007.  These buildings had a total enrollment of 19,338 in FY 2005.  The bill's expansion of eligibility to students enrolled in or assigned to buildings that have been in either academic emergency or academic watch for three consecutive years permits students from approximately another 53 buildings to participate in the program.  These 53 buildings had a total enrollment of approximately 28,160 in FY 2005.  The number of scholarships, however, is still capped at 14,000 in FY 2007.  This change may not, therefore, result in more scholarships being awarded, but will likely spread the scholarships over more schools and more districts.  Some districts that currently have no eligible students may have eligible students under the bill.  Some other districts that already have eligible students may see an increase in the number of eligible students as a result of the bill.

 

Scholarship students are counted in the average daily membership (ADM) of the resident school district for purposes of state base cost funding.  In general, by counting the scholarship student in the resident district's ADM, the resident district's state aid will increase by the base cost per pupil ($5,451 in FY 2007 with base funding supplements) with the cost-of-doing-business factor adjustment.  The resident district will then have $5,200 per scholarship student deducted from its state aid, so that, in general, a district retains about $200 of state aid for each scholarship student.  The school funding formula, however, contains guarantee provisions that result in some districts receiving more state aid than what is calculated for their ADMs.  Such a district may not receive an increase in state funding when a scholarship student is added to its ADM, but will still have the $5,200 deducted.  School districts will not, however, have to educate the student.

 

Dayton City School District appears to be the only district with an intradistrict open enrollment policy under which all in-coming kindergarten and all high school students are not automatically assigned to a particular school building that has also been in academic emergency for three consecutive years.  Dayton will have, under this provision, more students eligible for the scholarships in FY 2007.  In fact, all incoming kindergarten students will be eligible as will all high school students currently enrolled in community schools.  Dayton receives transitional aid in FY 2006, which means that Dayton's state funding is based on the state funding received in FY 2005 and may not increase when a few students are added to its ADM as long as the FY 2006 aid calculation remains below the FY 2005 calculation.  Should Dayton continue to receive transitional aid in FY 2007, including a few additional scholarship students in the district's ADM may not result in an increase in state aid.  For each community school student resident in Dayton, the entire base cost per pupil plus any special education and career-technical education weighted funding, parity aid, and poverty-based assistance generated by the student is deducted from Dayton's state aid.  Dayton, therefore, may experience an increase in revenue if students (especially special and career-technical education students) that would otherwise have attended a community school are instead awarded a scholarship.

 

Clarification of Transitional Aid Payment

 

H.B. 66 provides transitional aid in FY 2006 and FY 2007 to school districts and joint vocational school districts (JVSDs) that prevents each district's state formula funding from falling below the funding it received in the previous fiscal year.  School districts receive 24 regular state formula funding payments in each fiscal year and JVSDs receive 12.  The data upon which the funding is calculated is generally not finalized until sometime in the following fiscal year, so a final payment adjustment is made after the regular payments.  The bill clarifies that transitional aid is based on the final payment adjustment for the preceding fiscal year as opposed to the last regular payment made in the preceding fiscal year.  Depending on the data for a given district, the final payment adjustment may reflect higher or lower total state formula funding than the last regular payment and may result, therefore, in either a higher or lower transitional aid payment.  The clarification made by the bill insures that the most accurate data for each district will be used in the calculation of each district's transitional aid.

 

School District Tuition

 

The bill makes changes to the school district tuition law regarding which district is responsible for bearing the cost of educating a disabled child receiving special education and related services.  Under these changes some districts may become responsible whereas others will no longer be responsible for bearing these costs.

 

Post-Secondary Enrollment Options 

 

The bill repeals the requirement that the state Superintendent of Public Instruction seek reimbursement of state payments if a student does not attain a passing grade in a college course under the Post-Secondary Enrollment Options Program and replaces it with a requirement that the school district, community school, or nonpublic school in which the student is enrolled seek reimbursement.  This provision shifts the administrative burden of seeking reimbursements from the state to local districts.

 

Autism Scholarship Program 

 

The bill expands eligibility, beginning in FY 2007, for the Autism Scholarship Program by including children who have been identified as having a "pervasive developmental disorder – not otherwise specified (PPD-NOS)" as well as children who have been identified as autistic.  The program provides scholarships of up to $20,000 to eligible students whose parents choose to enroll the child in a nonpublic or alternative public special education program.  Each scholarship student is counted in the average daily membership (ADM) of the student's resident district for purposes of the state funding formula, and the amount of the scholarship is deducted from the resident district's state aid.  In general, by counting the scholarship student in the resident district's ADM, the resident district's state aid will increase by the base cost per pupil ($5,451 in FY 2007 with base funding supplements) with the cost-of-doing-business factor adjustment plus a percentage of the additional special education weighted costs ($23,021 for an autistic student in FY 2007).  The percentage of the weighted cost paid with state funds is equal to the percentage of the base cost paid for by the state for each district, referred to as the district's "state share percentage."  State share percentages range from more than 80% in some low wealth districts to 0% in some very high wealth districts.  For an average wealth district the state share percentage is approximately 50%.  An average wealth district would receive, therefore, approximately $17,000 from the state for each scholarship student counted in its ADM.  Higher wealth districts would received less and lower wealth districts would receive more.  An average wealth district, therefore, could lose up to $3,000 in revenue for each student who receives a scholarship.  In FY 2005, however, the average scholarship amount was approximately $12,600 while an average wealth district received approximately $16,200 from the state for each scholarship student included in ADM, so that, on average, districts were not losing revenue under the program.  In addition, school districts will not incur the costs of educating the child.

 

Community School Enrollment 

 

The bill prohibits certain students from being included in the enrollment of a community school, including students who were enrolled in the school during the previous school year when achievement tests were administered but did not take one or more of the tests, unless the student had a statutory exemption or a waiver from the Superintendent of Public Instruction.  This provision may lead to a reduction in community school enrollment and a corresponding reduction in state funding transferred from school districts to community schools.

 

Community School Assessments

 

Beginning in the 2006-2007 school year, H.B. 66 mandates certain community schools to administer fall and spring reading and mathematics assessments, requires the State Board of Education to adopt standards for expected gains on those assessments, and establishes sanctions for certain community schools failing to meet those standards.  Under these provisions, community schools incur the costs of administering and scoring the assessments.  In addition, the sanctions could result in a community school being closed.  The bill delays these provisions until the 2007-2008 school year, thereby also delaying any fiscal effects.

 

Calculation of Average Daily Membership (ADM) 

 

Am. Sub. H.B. 66 of the 126th General Assembly modified the way average daily membership (ADM) is calculated for school districts by adding a second count in February and making 75% of the ADM dependent on the current October count and 25% dependent on the February count.  This will tend to increase the ADM and state aid of districts with growing ADMs and decrease the ADM and state aid of districts with declining ADMs.  The bill delays this provision until FY 2007 so that ADM in FY 2006 will be dependent only on the October count.

 

The bill also prohibits including in a school district's average daily membership, used for state funding purposes, any student who has graduated from a nonpublic high school.  Any reduction in the ADM of a school district will, in general, reduce the state aid received by that district.

 

All-Day Kindergarten 

 

The bill permits school districts receiving payments for the all-day kindergarten component of poverty-based assistance to use payments received for the other components of poverty-based assistance, including academic intervention payments, for all-day kindergarten.  This provision gives these districts more flexibility in the use of poverty-based assistance and may allow them to use local funds that would have otherwise been used for all-day kindergarten, for other purposes.

 

School District Solvency Assistance Fund

 

The bill authorizes the Director of Budget and Management to transfer cash from any fund within the Department of Education or from the General Revenue Fund to the School District Solvency Assistance Fund (Fund 5H3) to maintain sufficient cash balances in the fund in FY 2006 and FY 2007 to provide assistance and grants to school districts to enable them to remain solvent and to pay unforeseen expenses of a temporary or emergency nature that they are unable to pay from existing resources.

 

School District Property Tax Replacement – Business Fund (Fund 047)

 

H.B. 66 requires the Director of Budget and Management to transfer $10,010,000 in FY 2006 and $70,210,000 in FY 2007 from the General Revenue Fund to the School District Property Tax Replacement – Business Fund (Fund 047).  Fund 047 is used to reimburse school districts for tax revenue losses due to the phase-out of the business tangible personal property tax.  The bill replaces this specific transfer with language that permits the Director to make transfers as necessary.  The bill also increases the appropriation from this fund by $18,000,000 in FY 2006 and $50,946,000 in FY 2007 and appropriates any additional transfers the Director finds are necessary.

 

School District Property Tax Replacement – Utility

 

The bill changes the public utility property tax replacement payment schedule for Manchester Local School District in Adams County.  The change results in Manchester receiving payments in FY 2007 and FY 2008 that are approximately $0.8 million higher than under current law.  These higher payments are offset by lower payments in FY 2009 through FY 2016.

 

School District Income Tax 

 

H.B. 66 added an option for school districts wishing to levy an income tax.  Instead of the tax base being Ohio adjusted gross income, districts may choose to levy the tax on only the employment earnings portion of Ohio adjusted gross income.  The bill prohibits a district from levying taxes on both of these bases.  This change could eliminate the possibility of confusion associated with taxing on two different bases in a single district.  Of the 153 school districts with an income tax in FY 2006, one district, Circleville City (Pickaway County), has adopted the new employment-only earnings base.  No districts have levied a tax on both of the possible bases.

 

The bill also permits school districts that levy income taxes to exempt from taxation military pay and allowances received by taxpayers stationed outside Ohio to the extent it is not already exempt from Ohio adjusted gross income (combat pay, for example, is already exempt).  Any district choosing to authorize this exemption may incur a reduction in local revenues.  This reduction could be offset by state revenues if the district receives gap aid.  Approximately 8 of the 153 districts with an income tax receive gap aid in FY 2006.

 

Tax to Offset Charge-off Increases

 

The bill permits school districts to levy, with voter approval, a property tax that approximately offsets any year-to-year decrease in state base cost funding caused by inflation in the real property component of the formula charge-off.  The tax must be levied for a minimum of five years and is limited to a maximum 4% increase per year in total operating taxes from carryover real property.  If a district receives approval to levy such a tax, the district may not need to pass property tax levies as frequently and will, therefore, potentially decrease expenditures on levy campaigns.

 

Environmental Protection Agency

 

Environmental Protection – Section 401 Water Quality Certification Fee Exemption for U.S. Army Corps of Engineers and Payment Extension

 

The bill specifies that application and review fees for the issuance of Section 401 water quality certifications issued by the Ohio Environmental Protection Agency (Ohio EPA) do not apply to the U.S. Army Corps of Engineers.  This provision may result in a minimal, at most, loss in fee revenue for the Surface Water Protection Fund (Fund 4K4); however, there will be no corresponding decrease in expenditures, as the Ohio EPA will continue to review such projects.

 

The bill also extends the period of time that coal mining and reclamation operations will be exempt from paying section 401 water quality certification fees from June 30, 2006 until one year after the bill's effective date.  Am. Sub. H.B. 66 of the 126th General Assembly included a provision exempting coal mining and reclamation operations from payment of these fees until June 30, 2006.  It was estimated that the one-year exemption would result in a revenue loss of approximately $100,000 in the Surface Water Protection Fund (Fund 4K4).  Depending on when this bill is enacted, additional revenue loss to the fund could be up to $100,000.

 

General Assembly

 

House and Senate Journals

 

The bill permits the House and Senate Journals to be published electronically rather than printed.  This provision yields a potential minimal decrease in expenditures from the GRF.

 

Department of Health

 

Free Clinic Reimbursement

 

The bill potentially lowers the percentage of medical liability insurance premiums that the Department of Health is mandated to reimburse free clinics participating in a professional liability insurance reimbursement program from a fixed 80% of the premiums paid (up to a maximum of $20,000) to an amount that is up to 80%.

 

BCMH – Medicare Part D Copayments

 

The bill decreases GRF appropriation item 440-507, Targeted Health Care Services Over 21, by $50,000 in FY 2006 and subsequently reduces the earmark for essential medications for the cystic fibrosis program in FY 2006 by the same amount.  GRF appropriation item 440-507, Targeted Health Care Services Over 21, is also increased by $50,000 in FY 2007.  The $50,000 increase in FY 2007 in GRF appropriation item 440-507, is then earmarked to be used to provide essential medications and to pay the copayments for drugs approved by the Department of Health and covered by Medicare Part D that are dispensed to Bureau for Children with Medical Handicaps (BCMH) participants, in accordance with the section of Am. Sub. H.B. 530 of the 126th General Assembly entitled "BCMH – MEDICARE PART D COPAYMENTS."  The section requires the Department of Health, for FY 2007 only, to pay a BCMH pharmacy provider for a copayment assessed by a BCMH participant's Medicare Part D plan on a drug that is (1) approved by the Department, (2) a "covered Part D drug" under federal law, and (3) on the formulary of the participant's plan.

 

Choose Life Fund

 

The bill allows the Director of Health to distribute money from the Choose Life Fund to eligible (private, nonprofit) organizations located in a contiguous county if no eligible organization located within that county applies for the funding allocated to that county.  It also allows an organization to apply for funding in a contiguous county if it provides services for pregnant women residing in that contiguous county.  The Choose Life Fund consists of contributions from Choose Life license plates.  The provision shall have no fiscal impact to state or local governmental entities.  The total amount of money distributed is not changed.

 

Women's Health Services Grants

 

The Director of Health is authorized to make grants for women's health services from funds appropriated for that purpose by the General Assembly.  The bill specifies that funds received through grants for women's health services are not to be used to provide abortion services or for counseling for, or referrals for, abortion, except in the case of a medical emergency.  Funds are to be distributed by the Director to programs that ODH determines will provide services that are physically and financially separate from abortion-providing and abortion-promoting activities.  The bill goes on to list what women's health services are included, and requires the Director to adopt rules regarding reasonable eligibility standards that must be met to receive the state funding and regarding reasonable methods by which a grantee wishing to be eligible for federal funding may comply with these requirements for state funding without losing eligibility for federal funding.  The Director must give priority to grant requests from local departments of health for women's health services that will be provided directly by personnel of the local department.  The bill specifies the procedures for grant request proposals, as well as some principles for selection of grant awards.  Finally, the bill specifies that if funding remains after grants have been awarded to local departments of health, the Director may make grants to other applicants.

 

These provisions codify existing uncodified language in Am. Sub. H.B. 66 of the 126th General Assembly.  Therefore, there should be no fiscal impact.

 

Sewage Treatment System Rules

 

The bill requires that the rules governing sewage treatment systems that the Public Health Council must adopt to be adopted not sooner than July 1, 2007, rather than not later than May 6, 2006 as in current law.

 


Sub. H.B. 231 of the 125th General Assembly, among other things, required the Public Health Council to promulgate rules governing the household sewage treatment system and small flow on-site sewage treatment systems in Ohio.  The bill specified that the Council is to adopt rules by May 6, 2006 that, among other things:  (1) require a local board of health to approve or disapprove the use of a sewage treatment system if it is not connected to a sanitary sewerage system, (2) establish standards for the siting, design, installation, operation, monitoring, maintenance, and abandonment of household sewage treatment systems and small flow on-site sewage treatment systems that may be used in Ohio, (3) prescribe criteria and procedures under which boards of health must issue installation and operation permits for sewage treatment systems, and (4) require the board of health to register sewage system installers, service providers, and septage haulers that work in the health district.  The bill also required local boards of health to perform a site inspection prior to installation of a household sewage treatment system and another inspection within 18 months after installation to ensure compliance.  The bill also allowed local boards of health to regulate the siting, design, installation, operation, monitoring, maintenance, and abandonment of small flow on-site sewage treatment systems.

 

Since the rules mentioned above have not been adopted and will not be adopted any sooner than July 1, 2007 (as specified in Am. Sub. H.B. 530 of the 125th General Assembly), responsibilities relating to Sub. H.B. 231 are therefore delayed, along with any increased costs associated with the bill.

 

Commission on Hispanic/Latino Affairs

 

Transfer from the GRF

 

The bill allows the Director of Budget and Management to transfer $5,850 in cash from the General Revenue Fund to Fund 601, Gifts and Miscellaneous, in the Commission on Hispanic/Latino Affairs' budget prior to June 30, 2006.  The amount was mistakenly posted to the GRF at the end of FY 2005.

 

Department of Job and Family Services

 

Payments to Nursing Facilities and ICFs/MR for Uncompensated Capital Costs

 

The bill requires that the Director of Job and Family Services make, in FYs 2006 and 2007, monthly payments to qualifying nursing facilities and intermediate care facilities for the mentally retarded for new facilities, capital projects, change of provider agreements, activities, and renovations.

 

The bill reduces the appropriation in line item 600-525, Health Care/Medicaid, by $10 million state share and the corresponding federal share in FY 2006.  The bill also appropriates $10 million in FY 2006 to newly created line item 600-529, Capital Compensation Program, in the Department of Job and Family Services and requires that any remaining unencumbered balance in the appropriation at the end of FY 2006 be carried forward to FY 2007.  Therefore, the net effect to the GRF is zero in FY 2006 in terms of state share; however, the state will probably lose an estimated $15.1 million in federal Medicaid reimbursement.  According to JFS, the federal government is unlikely to reimburse the state for retroactive payments for capital costs to nursing facilities and intermediate care facilities for the mentally retarded.  The bill earmarks the $10 million for payments to nursing facilities and intermediate care facilities for the mentally retarded for uncompensated capital costs.

 

FY 2007 Medicaid Reimbursement Formula for Nursing Facilities

 

The FY 2007 reimbursement rate for nursing facilities (NFs) is to be determined in accordance with the new statutory formula in Am. Sub. H.B. 66 of the 126th General Assembly.  However, the budget act also provided that if an NF's rate as determined under the new formula is more than 102% of the rate the facility is paid on June 30, 2006, JFS must reduce the facility's 2007 rate so that the rate is no more than 102% of its June 30, 2006 rate.  If an NF's 2007 rate as determined under the new formula is less than 98% of its June 30, 2006 rate, JFS is required to increase the facility's rate so that the rate is no less than 98% of its June 30, 2006 rate.

 

The bill requires that a nursing facility's rate as determined under the new formula be increased by a certain percentage.  Thus, the bill potentially increases the FY 2007 Medicaid reimbursement rate for NFs.  The state receives reimbursement of approximately 60% of any Medicaid costs from the federal government.

 

Nursing Facilities' Quality Incentive Payments

 

Am. Sub. H.B. 66 of 126th General Assembly established a quality incentive payment for each nursing facility placed in the first, second, third, or fourth quality tier groups provided for by the budget act.  The mean payment, weighted by Medicaid days, is to be 2% of the average rate for all nursing facilities calculated under the nursing facility reimbursement formula, excluding the part of the formula regarding the quality incentive payment.

 

The Department of Job and Family Services was required to place each nursing facility in one of the four tier groups annually.  Which group a nursing facility is placed in depends on how many quality points the facility earns.  The first group is to consist of the quarter of nursing facilities individually awarded the most number of quality points.  The second, third, and fourth groups are to consist of the quarters of nursing facilities individually awarded the second, third, or fourth most number of quality points.

 

The bill eliminates the requirement that the Department of Job and Family Services place nursing facilities in quality tier groups for the purpose of paying the facilities a quality incentive payment.  Instead, the bill requires JFS to annually award points to nursing facilities based on criteria outlined in the bill.  The amount of a quality incentive payment paid to a nursing facility for a fiscal year is based on the number of points the nursing facility is awarded for that fiscal year.

 

The bill also requires that the mean quality incentive payment for FY 2007 be $3 per Medicaid day and that the Department adjust the mean payment for subsequent fiscal years by the same adjustment factors the Department uses to adjust other parts of the nursing facilities' Medicaid reimbursement rate.  According to the Department of Job and Family Services, the adjustment using $3 per Medicaid day is approximately equivalent to the adjustment using the 2% of the average rate as required by the budget act.

 


Adjustment of Nursing Facilities' Medicaid Rates

 

Am. Sub. H.B. 66 of 126th General Assembly required that ODJFS adjust the rate determined for a nursing facility as directed by the General Assembly through the enactment of law governing Medicaid payments to nursing facilities.  This was to include any law that (1) establishes factors by which the rates are to be adjusted and (2) establishes a methodology for phasing in the rates from the FY 2006 amount to rates determined for subsequent fiscal years.  The rate determined for a nursing facility was defined as sum of all of the following:

 

(1)   The rate for direct care costs;

(2)   The rate for ancillary and support costs;

(3)   The rate for tax costs;

(4)   The rate for franchise permit fees;

(5)   The quality incentive payment;

(6)   The median rate for capital costs.

 

The bill removes franchise permit fees and quality incentive payments from the components of a nursing facility's Medicaid reimbursement rate that are to be adjusted as directed by the General Assembly through the enactment of law governing Medicaid payments to nursing facilities.

 

Long-Term Care Insurance Partnership Program

 

The bill requires that the Director of Job and Family Services establish, consistent with federal law enacted as part of the Deficit Reduction Act of 2005, a qualified state long-term care insurance partnership program not later than September 1, 2007.  An individual participating in the program who is subject to the Medicaid estate recovery program is eligible for certain reduced adjustment or recovery.  The state may experience a reduction in revenue under the Medicaid estate recovery program.  However, the state may, on the other hand, experience a reduction in Medicaid costs as a result of potential qualified Medicaid enrollees participating in a long-term care insurance partnership program.

 

Medicaid Fund and Line Item Realignment

 

The bill realigns Medicaid funds and line items.  Specifically, the bill does the following:

 

·        Creates the Medicaid Revenue and Collections Fund (Fund 5DL) into which the nonfederal share of Medicaid-related collected revenues, collections, and recoveries that are not credited to another fund are to be credited.  Renames the Hospital Care Assurance Match Fund (to which federal matching funds that are received under the Hospital Care Assurance Program are credited) the Health Care – Federal Fund and provides for the federal share of Medicaid-related revenues, collections, and recoveries (including drug rebates) that are not credited to another fund to also be credited to the fund.

·        Expressly requires that the nonfederal share of all supplemental rebates paid by drug manufacturers under the Supplemental Drug Rebate Program be credited to the Prescription Drug Rebates Fund (Fund 5P5).

·        Adjusts appropriations in line items 600-525, Health Care/Medicaid; 600-623, Health Care Federal; and 600-692, Prescription Drug Rebate – State, to reflect the changes as a result of separating the state share and the federal share of Medicaid drug rebates and third party collections.

·        Renames line item 600-692 from "Health Care Services" to "Prescription Drug Rebate – State."

·        Creates a new line item 600-639, Medicaid Revenue and Collections, to be used by the Department of Job and Family Services for Medicaid services.

 

ABD Managed Care Funding

 

The bill requires that federal reimbursement for the Aged, Blind, and Disabled (ABD) Managed Care Program be deposited into the Hospital Care Assurance Match Fund – Federal Fund (Fund 3F0) instead of the ABD Managed Care Program – Federal Fund (Fund 3AZ), which is being eliminated by this provision, and appropriates the amounts deposited into Fund 3F0 for the ABD Managed Care Program to line item 600-699, ABD Managed Care Program – Federal.

 

Hospital Care Assurance Match Fund

 

The bill allows the Department of Job and Family Services to use the existing federal fund, Hospital Care Assurance Match, which is renamed Health Care – Federal (Fund 3F0) in the bill, instead of the new federal fund, Fund 3BB, which was created in Am. Sub. H.B. 66 of the 126th General Assembly, to collect and distribute federal hospital care assurance funds.

 

Military Injury Relief Fund

 

Am. Sub. H.B. 66 of the 126th General Assembly (the budget act) created the Military Injury Relief Fund, but did not provide any spending authority for the fund.  The bill creates appropriation line item 600-637, Military Injury Grants, in the Department of Job and Family Services and appropriates $2.0 million in FY 2007.

 

Children's Trust Fund - Delay in Transfer of Vital Statistics Fees

 

The bill changes the times by which additional fees on certified copies of birth records, certifications of birth, death records, and filings for divorce decrees and decrees of dissolution are to be forwarded from local commissioners of health, local registrars of vital statistics, and courts of common pleas to the Treasurer of State for deposit into the Children's Trust Fund (Fund 198 within the Department of Job and Family Services) and the Family Violence Prevention Fund (Fund 5BK within the Department of Public Safety).  Under current law, these fees are to be forwarded to the Treasurer of State not later than the tenth day of the immediately following month.  The bill requires these fees to be forwarded to the Treasurer of State not later than 30 days following the end of each quarter for certified copies of birth records, certifications of birth, and death records and not later than 20 days following the end of each month for divorce decrees and decrees of dissolution.  The amounts of the fees deposited into these funds are not changed; however, there could be a delay in the transfer of these moneys to Fund 198 and Fund 5BK.

 


Recovery of Medicaid Overpayments

 

The bill eliminates the restriction that limits the Department of Job and Family Services to recovering a Medicaid overpayment to the five-year period immediately following the end of the state fiscal year in which the overpayment is made but provides that the Department may make such a recovery only if it notifies the provider of the overpayment during that five-year period.  By eliminating the restriction, the state has a greater chance to recover Medicaid overpayments.  Thus, this provision of the bill could result in savings to the state.