| Yesterday, the Ohio General Assembly passed its biennial operating budget (House Bill 1). Governor Strickland is expected to sign the bill. While the budget contains a number of controversial and well-publicized items, such as authorizing slot machines to operate in our state, the Columbus Chamber wants you to know about key portions of the budget that directly impact our ability to fulfill our economic development mission.
The highlights of the bill include:
• Preservation of tax reform. The top goal of the Columbus Chamber in this budget was to preserve the 2005 tax reform package. That is why the Columbus Chamber worked with Ohio ’s other metro chambers, the Ohio Chamber and economic development trade associations such as the Mid-Ohio Development Exchange to encourage legislators to maintain the tax reform package that was designed to facilitate economic development. Despite monumental budgetary challenges, the General Assembly and Governor Strickland refrained from increasing tax rates. The final phasing-in of a 21 percent reduction in income tax rates was allowed to occur. Additionally, the Commercial Activity Tax rate continued to be set at 0.26 percent.
• Elimination of funding for internships. In the 2008 state stimulus package enacted by the General Assembly and Governor Strickland, a program was created that was slated to provide $50 million a year, beginning in this biennium, to foster new co-ops and internships. The Columbus Chamber looked to this funding as a possible way to expand the scope and effectiveness of its existing internship program. As a result, the Chamber partnered with The Ohio State University, Columbus State Community College and many others to submit a proposal to the Ohio Board of Regents that would create hundreds of new internships. Unfortunately, the state’s severe budgetary situation caused lawmakers to cut all funding for the program. The Columbus Chamber had led a grassroots effort to try to preserve some funding for this important item in the Chamber’s Public Policy Agenda.
• Preservation of funding for important state economic development initiatives. During the state’s budgetary process, there was an attempt to divert a substantial portion of the Facilities Establishment Fund to fund other initiatives. Among other things, the State of Ohio uses the Facilities Establishment Fund to issue low-interest loans that facilitate job creating economic development deals. The Chamber worked with other organizations such as the Ohio Economic Development Association and many of our local economic development officials to keep the Facilities Establishment Fund as intact as possible. The final version of the budget eliminated the proposed fund diversions that the Chamber had opposed. There was, however, a significant decrease in the level of General Revenue Fund support of the Department of Development. In Fiscal Year 2009, the department received $1.2 billion in funding. In 2010 and 2011, the department will receive approximately $900 million a year.
If you have any questions about the budget, please contact Steve Tugend, Vice President of Government Relations, at 614-225-6943 or steve_tugend@columbus.org.
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