Your Columbus Chamber has been fighting for small businesses for 135 years. A primary pillar of our work is Government Relations, which includes local, state, and federal advocacy. We are your voice at the Statehouse, working hard to protect small business interests during the state biennial budget process.
The State Biennial Budget appropriates nearly $70 billion annually for state agencies and programs. It is the largest piece of legislation that moves through the state legislature every two-year General Assembly and will set the tone and priorities for the DeWine Administration for years to come. In addition to appropriating state funds, the budget tackles major policy issues which will inevitably touch the lives of every Ohioan, either professionally or personally, in some way.
The budget was introduced in March by Governor Mike DeWine with his initial recommendations. The House then passed their own version of the budget where they kept many of Gov. DeWine’s initial provisions and added their own. Now the House version of the budget sits in the Senate where they are taking their time to draft their own version. Once the Senate passes their own version, the bill will then go into a conference committee comprised of select members of both the House and Senate. The House, Senate, and Governor will hammer out differences in their respective versions of the budget to create an identical version that both chambers will vote on and send to the Governor for his signature. This must all happen before the constitutional deadline of June 30.
The Columbus Chamber has been focused on business-friendly provisions in three key areas within the budget —tax, workforce, and economic development—all of which would impact the Columbus region business community.
Our top priority this budget season has been to protect the Business Income Deduction. This tax deduction, which began in 2016, permits small business owners to take an income tax deduction against his or her Ohio income tax liability. The House version of the budget added damaging provisions that that would decrease the Small Business Tax Deduction to $100,000 from $250,000 and would remove the special flat 3% tax rate for business income above that threshold. This tax deduction it vital to many Chamber members and small businesses throughout the state who take advantage of the deduction to reinvest in and grow their business.
Your Chamber President and CEO, Don DePerro, testified on the importance of this deduction to the Ohio Senate Finance Committee. You can read his full testimony here, and watch it here (time: 2:58:12.) We will continue to lobby the Senate and Legislature to preserve this deduction and educate them on the value this brings to the small business community.
Ensuring that the Columbus region remains a competitive place to do business is vital for the future success of our regional. Having greater access to other business centers via direct flights will help to connect our region to the world and global economy which will help us to remain competitive and continue to grow. A priority of our Chamber is to create an Air Service Development Fund with the purpose of attracting new domestic and international flights to the region with the help of state financial support to bring them here. This would be a major economic development tool for the region, attracting new business, opening new markets for existing business, as well as helping to attract and retain young workers that want access to easy travel.
Another economic development tool the Chamber has been a strong advocate for is a state version of the federal Opportunity Zone program. The Opportunity Zone Program was created in 2017 as part of the Tax Cuts and Jobs Act in an effort to spur economic development in low-income areas and encourage long-term investments. The state has proposed its own version that would be able to be used in conjunction with the federal program. In an effort to ensure that the state version is business-friendly and easily accessible, the Chamber, in consultation with our Opportunity Zone Working Group, submitted written testimony to Columbus region legislators advocating for changes to specific provisions that would better align the state program with the current federal program and make it reasonably attainable for businesses of all sizes to utilize.
Finally, a core pillar of our work at the Chamber focuses on workforce development. There are multiple provision within this budget that would help to foster a more vibrant and well-rounded workforce in our region and state. The Chamber submitted testimony this week advocating for a few specific provisions which include: an income tax credit for employers of ex-felons; reimbursement funding for schools whose students are enrolled in career tech courses; funding for schools to establish credentialing programs where they do not currently exist; a STEM scholarship retention program to encourage students pursuing STEM education and careers; a health care workforce preparation task force; and funding for professional development for teachers in STEM fields that would be administered by our friends at the PAST Foundation.
The Chamber will continue to fight for small business interest in the budget until its final passage deadline of June 30, 2019. To learn more about the final provisions in the budget and provisions that will impact the business community, attend our upcoming Government Spotlight, State Biennial Budget: Understanding the Impact on Business, on July 17.
*Updated as of 6/27/2019
On Thursday, June 20 the Ohio Senate released and passed their Omnibus amendments to the state biennial budget. This new version of the budget included changes to state high school graduation requirements as well as a decrease in the personal income tax. Additionally, the Senate preserved the $250,000 Business Income Deduction (BID)—a top priority of our Columbus Chamber—and accepted our recommendation to delay the retroactive provisions of the House proposal that were particularly burdensome to our members. However, the flat 3 percent rate on business income above $250,000 was not restored and was instead replaced by lowering the overall personal income tax rates.
The House and Senate are now in conference committee with select member of both the House and Senate who will hammer out differences in their respective versions of the budget to create an identical version that both the House and Senate will vote on and send to the Governor for his signature. This must all happen before the constitutional deadline of June 30.
Conference committee members include: Sens. Matt Dolan (R-Chagrin Falls), Dave Burke (R-Marysville) and Sean O’Brien (D-Cortland) and Reps. Scott Oelslager (R-North Canton), Jim Butler (R-Dayton) and Jack Cera (D-Bellaire). It is expected that this final version of the budget from the legislature will be released and voted on in both Chambers on Friday, June 28. An “if-needed” session has been scheduled for Saturday, June 29 and Sunday, June 30 in case a consensus has not been reached by Friday.
The Columbus Chamber appreciates the Senate understanding the importance of the BID in ensuring small businesses in our region and state can continue to grow and thrive. Call your senators to let them know we appreciate this change and hope it will be maintained in the final version of the budget. However, work must still be done to restore the flat 3 percent tax rate on income above the $250,000 threshold. Call your House and Senate members to let them know the importance of both of these incentives on maintaining and growing your business. You can find your state legislator’s here.
*Updated as of 7/08/2019
On the evening of Sunday, June 30, the House and Senate voted to approve a 17-day interim funding budget after both Chambers failed to reach an agreement on a final version.The constitutional budget deadline is midnight on June 30, with the state fiscal year beginning July 1. This is the first time since 2009 that the legislature has not passed a budget on time.State government agencies and services will continue uninterrupted, fully funded at current FY19 levels. It has been reported that tax provisions, including the BID, is a primary source of contention between the chambers.
Both Speaker Householder and Senate President Larry Obhof have said that they hope they will not need all 17 days to reach and approve a budget agreement and deliver the nearly $69 billion two-year budget to DeWine for his signature. Negotiations were set to resume this morning, July 8.
In addition to the 17-day extension to fund the state government, the House and Senate passed a 30-day extension for the Bureau of Workers Compensation (BWC) budget that also had a deadline of June 30. An unprecedented provision that would allow workers’ comp claims for post-traumatic stress disorder (PTSD) without an underlying physical injury is delaying the BWC budget from being finalized. The Chamber is opposing this costly provision which threatens the integrity of Ohio’s workers’ compensation system at large by setting a risky precedent that could open the floodgates to a new realm of claims.
The Chamber will continue to speak with members of the House and Senate as well as the Governor’s office to advocate for maintaining the BID at its current rate and maintaining current law relating to workers’ compensation claims. To ensure that the BID is maintained and that small businesses in our region and state can continue to grow and thrive, we encourage you to call you state legislators this week let them know how important the BID is to you and your businesses, and the regional business community. You can find your state legislators here.